According to findings from ATB Financial, Alberta set an annual record for oil production last year with an output of approximately 3.73 million barrels daily in crude oil.
The data reveal that the province officially beat its previous oil production record set in 2021 and nearly doubled the amount of oil it produced in 2010.
Conventional oil production rose by 12% yearly, while oilsands production rose 2% compared to the previous year. For December, oil output for the region rose 4.4% higher compared to the same time last year.
The note said that Alberta is also expected to ship out an additional 500,000 barrels per day upon completing the Trans Mountain Pipeline Expansion Project in the third quarter of 2023.
In 2018, the federal government initially paid $4.5 billion to own the Trans Mountain pipeline expansion project in a bid to almost triple the amount of crude oil moving from Alberta to customers overseas.
The 980km expansion is twinning the existing 1,150-kilometre pipeline between Strathcona County, Alberta and Burnaby, B.C. It will bolster the pipeline's capacity from roughly 300,000 barrels per day to 890,000 barrels per day.
On June 18, 2019, the feds approved the project as Canada's only pipeline transporting oil from Alberta to the west coast.
The existing pipeline will carry refined products, synthetic crude oils, and light crude oils with the capability for heavy crude oils.
The new pipeline will carry heavier oils with the capability to transport light crude oils.
But the limitations on pipeline capacity and the reality that new energy projects take longer than a year to get off the ground remain a continued concern.
Canada's controversial Bill C-69, the Impact Assessment Act, has given Canadian and international investors a hard time getting shovels in the ground on their projects, even after securing regulatory approval.
For the Trans Mountain Expansion, the Canada Energy Regulator enforced 156 conditions for the twinning of the original 1953 pipeline.
"Policies matter, and when investors are indicating they would rather invest in American states instead of Canadian provinces, policymakers should take note," said Julio Mejia, a policy analyst at the Fraser Institute.
However, senior energy executives criticized Canada's "unpredictable provincial governments" for discouraging significant capital investment into energy infrastructure.
Last February, the federal government said it would no longer subsidize the Trans Mountain pipeline expansion project, with its new projected price tag skyrocketing to $21.4 billion.
The company blamed the surging cost projections for the project on the COVID pandemic and the effects of the November 2021 flood in B/C.
Deputy Prime Minister Chrystia Freeland said Trans Mountain Corp. would need third-party funding to complete the project through banks or public debt markets.
The project has created 28,810 short- and long-term jobs during its construction while increasing government royalties across different levels of government.
Independent estimates conclude that oil producer revenues will increase by $73.5 billion over 20 years of operations. Canada will earn $46.7 billion in additional taxes and royalties to federal and provincial governments, with Alberta receiving $19.4 billion.
"While Alberta is not experiencing a boom, the positive prospects for our oil and gas sector are providing a significant boost that will continue into 2023," said ATB Financial Deputy Chief Economist Rob Roach.
Alberta's UCP government delivered a balanced budget last February due to high oil prices — the second time it has done so in over a decade. It also provided a $12.3 billion surplus recently.
A previous economic forecast last fall said the province will see real GDP growth of 2.8% in 2023 and 2.2% in 2024.
According to the forecast, Alberta's economy would overcome the looming global recession, with the province producing 3.9 million barrels of oil per day in September — the highest level in its history. It conveyed that oil prices are high enough for companies to increase their capital spending plans.
Roach expects a 20% jump in oil and gas extraction capital spending next year and another 5% in 2024. However, he expects investment to "hit [the] wall after next year" because "without more pipelines, you just can't keep expanding production."
Roach said this is likely the last significant capital investment in the province's energy sector for the foreseeable future.