Counting down the Canadian energy industry’s 2015 lowlights

How bad was 2015 for the Canadian energy industry? Try a 42 percent decline in oil export revenues. Or perhaps an 88 percent drop in propane prices. Even wind and solar capacity had an unremarkable year, despite the policy momentum within their favour.

The National Energy Board’s “Highlights of 2015” published Friday, documents the woes of the Canadian energy industry. Some factoids in the report:

HOW THE MIGHTY HAVE FALLEN

Last year, the Western Canadian oil industry eked out its smallest growth in production in six years, rising to 3.66 million barrels each day. Forest fires and facility shutdowns did little to improve sentiment. Storage levels also reached an all-time high last August and remained in an elevated level throughout 2015.

As prices plunged, oil export revenues also declined 42 per cent compared to 2014, to $41.2 billion.

Major players retreated from planned projects within the oilsands as well as abandoned drilling program in the Beaufort Sea. However, the New england would be a rare bright spot with Shell Canada commencing an exploration program in Quebec in October – the very first in the region since 2005.

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LOSING STEAM

The born-again phenomena of oil being transported on trains lost momentum last year, declining 12 percent to 173,000 bpd. The decline was largely due to low oil prices squeezing rail’s economic viability.

“In 2014, roughly half of all Canadian crude by rail exports were delivered to the U.S. East Coast and one-third were delivered to the U.S. Gulf Coast,” the NEB sad. “In 2015, the share of exports sent to the Gulf Coast increased to one-half, while the share towards the East Coast declined to one-third.”

LIQUIDS PULVERIZED

If you thought oil was having a terrible year, gas liquids fared a lot worse. Annual average prices for propane, butane and condensate in the Edmonton NGL price hub declined by 87, 54, and 46 per cent, respectively, during the year.

“The propane market has experienced significant turbulence in recent years, in the crop drying and Polar Vortex-driven demand shock of 2013/14 to swelling U.S. supply and storage overhangs in 2015,” the NEB said.

GAS PAINS

Canadian natural gas exports to the U.S. Midwest continue to get displaced by U.S. shale resources, falling seven per cent in 2015. Canadian exports towards the Midwest have declined approximately 30 per cent since 2011, the NEB said. Overall, total Canadian gas exports in 2015 remained flat at 7.4 bcfd.

UNLIKELY CLIMATE CHANGE LEADER

Canada’s reputation as a global warming pariah may not be entirely deserved. With all the carbon pricing policies being proposed or implemented, as much as 90 per cent of Canada’s population will soon have instituted broad-based carbon pricing, the NEB estimates.

ELECTRICITY SUPERPOWER?

Canada’s electricity exports to the neighbour down south reached the record degree of 55 terrawatt hours this past year.

“New U.S. initiatives to increase electricity generation from cleaner sources could create opportunities for Canadian producers,” the NEB said.

While President Barack Obama’s Clean Power Plan continues to be put on hold through the U.S. Top court, the march to de-carbonize power plants rarely is in impeded.

RENEWABLES

Canada’s renewable energy capacity grew this past year, but in a slower rate. Solar capacity expanded 11 per cent during the year, compared to the galloping 48 per cent increase seen the prior year. Similarly, wind capacity grew eight per cent in 2015, only shadow from the robust 23 percent development of 2014.

“This slowdown in capacity additions can be related to slower demand growth, affordable prices, and changing incentives,” the NEB said.

yhussain@nationalpost.com
@YAD_FPEnergy