Mission and Vision

Our mission is to provide relevant, independent and objective economic research in energy and environmental issues to benefit business, government, academia and the public.

The Institute envisaged by the Board of Directors is a unique research-focussed organization whose output and staff are very highly regarded and respected both in Canada and abroad.

CERI's economic studies are highly relevant and objective and the analysis and advice contained therein are sought by government and business planners and decision-makers.

CERI is envisaged as being a premier centre in its field in Canada and one of the most prestigious energy economics research institutes in the world. Because of its reputation, the Institute is often represented on national and international advisory panels and at conferences and symposiums deliberating energy and related environmental issues.

Members of the research team are proud to belong to an organization which is sought after by Canadian and foreign organizations because of its analytical capabilities and the insight and knowledge which it brings to a wide range of issues. Potential staff members are attracted to CERI literally from around the globe because of the challenging issues being addressed at the Institute and its reputation.

Mission
  • Narrow screen resolution
  • Wide screen resolution

Commodity Report - Crude Oil

CERI Commodity Report - Crude Oil
Dinara Millington, Editor-in-Chief


CERI Commodity Report - Crude Oil is an original, thought provoking publication focusing on short-term developments (including geopolitical ones) in the world oil market, as well as issues impacting the oil market in the longer term. The outlook section provides information and analysis pertaining to the oil market eight quarters into the future. This includes forecasted (and historical) supply, demand and inventory information, comparisons with other organizations' forecasts, information pertaining to OPEC behavior and the forward market, as well as CERI's oil price forecast. The Data Appendix provides in-depth information on the world, US and Canadian oil markets. This publication is released monthly.  Click on the link below to get the latest edition.

Crude Oil Report

 

Commodity Report - Natural Gas

CERI Commodity Report - Natural Gas

Dinara Millington, Editor-in-Chief

CERI Commodity Report - Natural Gas is a monthly publication that examines near-term North American natural gas market fundamentals. Coverage includes the key drivers of natural gas activity, supply, demand, and storage, as well as weather expectations, and their impacts on natural gas prices. The report comments on a broad range of elements: active rig count, well licensing, completions, production volumes, Canadian system receipts, LNG imports, energy commodity prices, and so on. The basic elements are consistent from issue to issue. Additional topical articles and reports vary with the marketplace annual cycle, gas industry activity, impacts of other energy sectors, and global issues affecting North American natural gas.  

Click on the link below to see the latest edition.

Natural Gas Report

PDF Print E-mail

CERI_Study_136_Update_CoverConventional Natural Gas Supply Costs in Western Canada - An Update
Released December 2013

The abundance of shale gas developments in the United States has led to sustained low natural gas prices across North America, making the majority of Canada’s dry gas resources uneconomic to develop. The exception is those resources that contain significant amounts of natural gas liquids (NGLs).

The presence of liquids improves the economics of gas extraction. The analysis shows that the dry-gas portion of the supply cost can decline significantly in the presence of liquids. In some cases, the dry-gas costs are almost completely offset by revenues from the liquids.

This report updates CERI Study No. 136, Conventional Natural Gas Supply Costs in Western Canada released in June 2013 to include the supply cost of producing gas on a liquids-basis (that is, including the revenues and costs for both dry gas and NGLs) for numerous areas across Western Canada. Previously, the study only looked at supply costs on a dry-gas basis, effectively ignoring the liquids component.

The supply cost calculation provides an indicator of the economic viability of producing gas in each of the study areas. With the inclusion of NGLs in the analysis, this update presents a more realistic evaluation of the economic viability of natural gas production in liquids-rich areas across Western Canada.

 
PDF Print E-mail

Foreign_Investment_Study_CoverRecent Foreign Investment in the Canadian Oil and Gas Industry
October 2013

This report reviews recent Mergers and Acquisitions by foreign corporations in the Canadian oil and gas industry, noting the sums invested, the number and size of deals transacted by State-Owned Enterprises (SOE’s), the most popular regions of the country for investors, and some of the reasons why Canada has been and continues to be a popular destination for energy investment.   It also notes how the Government of Canada evaluates these transactions under the Investment Canada Act.

 
PDF Print E-mail

Study_138_CoverNorth American Natural Gas Pathways
Released August 2013

The North American natural gas market has been transformed by the emergence of unconventional gas developments. With significant natural gas continental supplies the question has become “How can industry, government and others work together to grow natural gas demand in the coming decades?” The Canadian Energy Research Institute (CERI), in collaboration with ICF International, whatIf? Technologies Inc., and Scenarios to Strategy Inc. (S2S) developed four plausible views of the future depicting the influence of high/low natural gas usage for power generation, and high/low liquefied natural gas (LNG) export scenarios for both the United States (US) and Canada on the North American natural gas market.

 
PDF Print E-mail

Study_137_CoverUnited States Oil Industry and Liquid Supply-Demand to 2022
Released June 2013 

Crude oil production in the US is on the rise as the technology was able to unlock unconventional shale and tight oil resource plays. With rising production, crude oil imports into the US have been declining. The political buzz in Washington is "oil self-sufficiency within the next 10 years". Is this possible and what would that mean for Canadian crude exports and Canadian production? It is important to understand the potential of rising US production in order to establish the level of crude imports (if any) needed in the US and by extension the potential for Canadian crude oil and bitumen to fulfill that deficiency. For Canada, the potential for expanded exports to the US carries a special interest to the industry and governments based on difficulties in accessing global markets for Canadian energy.

The key question becomes: "looking out to the year 2022, in the face of rising domestic tight oil entering the market, and accounting for the potential of energy conservation and fuel switching in the transportation sector, what does the North American oil market look like, and of more importance, what role does Canada play in this picture?"

The objective of this report is to investigate the development trends for domestic shale oil production within the United States and couple that with a forecast of Canadian and Mexican imports to establish the level of foreign crude oil imports, if any, out to the year 2022.

 

 


 
PDF Print E-mail

Study_136_CoverConventional Natural Gas Supply Costs in Western Canada
Released June 2013

Conventional natural gas production in Western Canada has been on a downward trend since 2005. Drilling activity has slowed markedly over that time because depressed gas prices are making the economics of producing natural gas challenging. Production out of the Marcellus and Utica shale developments in the United States has dramatically increased North American natural gas supply and is the main reason why natural gas prices have remained so low.

The fleet of drilling rigs in Canada is dominated by oil-targeted rigs, with natural gas drilling rigs making up only 27 percent of the drilling rig fleet. The majority of natural gas drilling rigs are now horizontal, with technological advances and cost reductions over the past few years enabling a shift towards these deeper and more capital-intensive wells.

The analysis shows that on average, new wells drilled in 2012 across the Western Canadian Sedimentary Basin (WCSB) would not recover their full costs or earn a positive rate of return at current natural gas price levels. Weighted average supply costs for the WCSB were estimated to be $4.79/mcf for vertical wells and $5.71/mcf for horizontal wells.

This analysis covers the revenues and costs associated with producing natural gas. Any revenues and costs associated with the production of natural gas liquids (NGLs) has not been included in these estimates. Many producers have switched investment towards liquid-rich gas resources to take advantage of the additional revenues that can be generated through NGLs.

 
PDF Print E-mail

Study_135_CoverV1Conventional Oil Supply Costs in Western Canada
Released June 2013

Conventional oil production in Western Canada has experienced a resurgence in the past few years thanks to new drilling and completion methods. Since 2010, light and medium conventional oil production has increased, reversing the downward trend that had been in place since the 1970s.

This renewed production growth was underpinned by strong drilling activity, especially in horizontal wells combined with multi-stage hydraulic fracturing technology.  Technological advances, cost reductions in drilling technologies and recent oil price levels have helped to unlock resources that were once considered too expensive to commercialize.

This report assesses the economic viability of oil production across each of the study areas of Western Canada by examining the supply costs of new wells drilled in 2012.

 

 
PDF Print E-mail

Study_134_Cover

Heavy-Duty Diesel Vehicles:
Their Carbon-Constrained Future Role Within The North American Economy

Released May 2013

Recent technological breakthroughs in natural gas drilling and production have been an unexpected gift to North American consumers and legislators concerned over the issue of energy security.  Abundant supplies of natural gas have suppressed the commodity’s price for several years now, and there are no indications of dramatic surges or spikes for the immediate future.  This period of relative price stability has people talking.  What about moving away from crude-based fuels to power the transportation sector with natural gas?  Natural gas is more than just cheap and plentiful; it is cleaner than gasoline and diesel, too.   In addition, natural gas vehicle technology is advanced and in widespread use throughout much of the rest of the world.

There will be increasing use of natural gas for transport, but all indications are that it will happen slowly, especially in the heavy-duty vehicle category that consumes so much fuel.  Diesel-powered vehicles, long the transportation backbone for the North American economy, are set to stay at the centre of the continent's shipping needs for many years to come.  The North American economic system, with its numerous large container ports, complex, well-maintained highway system, and comprehensive vehicle refuelling infrastructure, is designed for this kind of transport; as long as crude-based fuel prices remain relatively low, or until carbon constraints become economically onerous, diesel highway transport will remain the preferred means of shipping goods throughout the continent.

This study examines the past of the heavy-duty diesel category in order to estimate what the future holds.  It considers how new fuel and emissions regulations for the category, the first such standards in history, will affect fuel consumption and the size of the vehicle fleet, both in Canada and the United States.  Four scenarios for economic growth have been modeled, with the results showing that heavy-duty diesels will drive land-based transportation to 2030, no matter which direction the economy heads.  The study concludes with some ideas on how natural gas-powered heavy duty vehicles will make their eventual entry into the transportation sector.

 
PDF Print E-mail

Study_133_Cover

Canadian Oil Sands Supply Costs and Development Projects (2012-2046)
Released May 2013

Another year has passed and 2012 was a year of growth for the oil sands amid transportation issues, lack of market diversification, increasing production of tight oil in the US and Canada, and on-going skilled labour shortages and rising project costs. It is clear that among all these hurdles, one dominated the most – transportation challenges.  While the skilled labour shortage remains a significant concern, the new oil sands projects will not come online due to pipeline constraints regardless of whether or not there are enough skilled personnel to work on these projects. Hence, when the US government rejected TransCanada’s Keystone XL project, originally intended as a 700,000-900,000 barrel per day (BPD) line to carry mainly oil sands streams from Hardisty, Alberta to the Gulf Coast via Cushing, it was a major impediment for the industry and provincial economy and has become a focal point of the political and environmental pro- and anti-oil sands debate in the US. In the meantime, the future of Enbridge’s Northern Gateway project that would initially take 525,000 BPD of heavy oil sands streams west to British Columbia’s port of Kitimat – and then to markets mainly in Asia – has become the centre of heated support and intense resistance in Canada. Given current constraints and opposition to expansion of existing pipeline capacity and new pipeline developments, companies have been proactive at exploring other transport options such as rail. While rail is emerging as a serious option to pipeline transportation, it is subject to limited availability of rail cars, terminals, and storage capacity, not to mention that rail, as pipelines, has a finite capacity along with safety and environmental concerns.

Last year’s report concluded that collaboration within the industry as well as with other stakeholders is of paramount importance to see this industry flourish. This year we would like to add that the future growth of provincial and federal economies as well as the industry’s growth may become increasingly uncertain if market opportunities are seized or strained, social license to operate is revoked, and the debate over the future of oil sands among Canadians, governments and industry is unproductive.

This is the Canadian Energy Research Institute’s (CERI) eighth annual oil sands industry update, examining production, supply costs, and constraining factors for oil sands development. CERI monitors and reviews all the oil sands projects (used in the unconstrained case), and also develops a more realistic assessment – the CERI Reference Case Scenario – based on likely timing conflicts, contingencies, and project delays and deferrals. From the Reference Case Scenario stems the projections of production, investment, royalties, natural gas requirements, GHG emissions and demand for diluent, as well as supply costs for primary recovery, SAGD, surface mining recovery, and bitumen upgrading.

To view the data behind the report, please click here

 
PDF Print

Study_132_CoverPotential Economic Impacts of Developing Quebec's Shale Gas
Released March 2013

The profound impact of shale gas cannot be understated, and the impact is truly global. With natural gas being the energy source of choice across various sectors, demand continues to increase. Declines in conventional gas production both in Canada and the US have brought attention to various unconventional natural gas resources, particularly shale gas. In Canada, production from Alberta and British Columbia’s shale and tight gas will likely play a large role in mitigating the effects of declining conventional production on total production. In the past five years, the Utica Shale in Québec has received attention from a number of companies seeking to extract natural gas between Montreal and Québec City. The provincial government in Québec has since placed a moratorium on oil and gas activity, halting development at least until the completion of a Strategic Environmental Assessment, expected in late 2013.

The economic impacts of two hypothetical scenarios are investigated in this study. In the first scenario, drilling takes place to build and maintain a production level of approximately 500 million cubic feet per day (MMCFPD) – Québec’s current consumption of natural gas. In the second scenario, drilling takes place to build and maintain a production level of approximately 1,500 MMCFPD, which would allow for 1,000 MMCFPD of export capacity on top of Québec’s own consumption needs. Each of the scenarios assumes that the moratorium on oil and gas activities is lifted, and makes the assumption that the cost of drilling reflects the cost of field development, rather than exploratory wells. Results for GDP, employment, tax and royalty revenue are calculated using an I/O model and are presented for each province across Canada.


 
 
PDF Print E-mail

Study_131_Cover

Global LNG:  Now, Never, or Later?
Released January 2013
 

Low continental prices and an abundance of natural gas have generated interest both publically and privately to look into exporting liquefied natural gas (LNG). Of particular interest are the Asian markets where North American exporters hope to arbitrage high Asian prices against low continental prices. However, North American LNG exporters are not alone in trying to access the Asian gas premium. Australia has committed to considerable LNG export capacities and other gas producing countries are following suit.  Concurrently, the abundance of continental gas supplies has increased domestic natural gas end-user demand within the utility, petrochemical, industrial and transportation sectors as well as sparked a debate on whether the United States should export large amounts of LNG. Thus, exporting LNG has significant challenges and North American exporters face considerable risks. With multiple pressures facing the North American LNG industry, many have been wondering if the window of opportunity for North American exports has vanished. This study summarizes current regasification and liquefaction capacities, explains LNG pricing, and reviews some of the risks for North American LNG exporters. The study concludes with addressing the question of whether there is room for North American LNG exporters in an Asian-Pacific market.