Canada is lagging behind other oil producers in tapping its offshore oil and gas resources because of the moratorium on drilling in its Arctic waters in place since 2016 and up for review in 2021, according to Paul Barnes, Atlantic Canada and Arctic director for the Canadian Association of Petroleum Producers (CAPP).
In December 2016, Canada's Prime Minister Justin Trudeau announced that Canadian Arctic waters are indefinitely off limits to new offshore oil and gas licensing, and this ban would be reconsidered every five years through a science-based review.
The recent moves by the U.S. Administration to re-open Arctic Alaska to drilling means that Canada faces "lost opportunities" in exploring its own Arctic waters, The Canadian Press quoted CAPP's Barnes as saying.
The Arctic drilling moratorium creates uncertainties in the Canadian oil industry and deprives the country of the chance to compete for investment in exploration, according to Barnes.
Yet, Canada's Northern Affairs minister Dominic LeBlanc says that the ban is necessary to allow extensive consultations and ensure development that respects environment, The Canadian Press reports.
Just yesterday, CAPP said in a new report that Canada's abundance of natural resources can help the country's economy, but only if Canada overcomes the current market challenges by building new pipelines and other energy infrastructure.
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The shortage of oil pipelines and liquefied natural gas (LNG) infrastructure "are crippling our ability to compete for global market share," CAPP said.
"Global energy demand is growing," CAPP president and CEO Tim McMillan said. "However, Canada is losing the race to claim a piece of the high-growth market overseas. Without new pipelines, Canada's oil and natural gas industry can't compete for a share of the global market," McMillan noted.
"Before they will invest in Canada, global investors need to see that the Canadian federal and provincial governments are firmly committed to resource development," said McMillan.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
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