Abstract

The Canadian petroleum industry has made impressive gains since the discovery at Leduc in 1947. Rapid growth prior to the Suez crisis of1956 was followed by a period of adjustment culminating in a Royal Commission and the introduction of the National Oil Policy in 1961. During the ‘sixties’, a rapidly expanding domestic economy and this penetration of United States markets resulted in further strong gains in allsectors of the industry. The next five years will witness further impressive gains but also some important changes. While demand for Canadian crude in Canada will rise to over one million barrels a day by 1975, export demand will outstrip domestic demand to reach a level of about 1.3 million barrels a day. Consequently, crudeproduction in Canada will rise by over fifty per cent in the next five years. Explicit in the forecast will be the free access of Canadian crude to United States markets to meet the deteriorating energy position in the United States. To meet future demands, both in Canada and in the United States, considerable investment in theexploration and development of new reserves and additional distribution and refining facilities, will be required. The implications of the forecast include increasing Canadian self-sufficiency in petroleum and a tripling of last year's Canadian foreign trade surplus in crude andrefined products. Beyond 1975 lie such dramatic developments as the exploitation of potential Arctic and East Coast offshore supplies, a pipeline through the Mackenzie Valley, and the tapping of the tar sands. A large proportion of the capital requirements will continue to be imported. The issue of control, however, should not be permitted to inhibit the realization of potential development for Canadians can exercise ultimate control of development through their elected representatives.

Introduction

The Canadian petroleum industry is about to embark upon one of the most interesting phases since the discovery at Leduc. The large number of issues that face the industry, most of which will be difficult to resolve, makes the exactdestination unsure, but the basic direction will be for Canada's oil to playa much larger role in North America's energy needs than ever before. In the medium term, however, the implications of trends already in progress enable us to project with a rather high degree of certainty the overall prospectsof the industry both within the Canadian market and within its adjacent United States markets. This medium term outlook for the industry was the subject of the Toronto Dominion Bank's sixth biennial study of the industry which was published late last year.

As the author of that study, I propose to summerize it; findings, taking into consideration where necessary those events which have since cast more light on the industry's prospective development in the first half of the 1970's. To set the stage for my views as to the industry's prospects to 1975 I would like to review with you its three post-Leduc developmental phases.

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