A massive oil find in the heart of west Texas is adding a sense of urgency to Canada's quest for new oil markets.

"We watch all discoveries and question what that means for Alberta," says Alberta Energy Minister Margaret McCuaig-Boyd.

Alberta Energy Minister Margaret McCuaig-Boyd says Alberta is exploring potential oil markets in India, Asia and Europe. (Jeff McIntosh/Canadian Press) "It just shows us that it's critical for us, for Alberta and Canada indeed to diversify our markets and get Canadian pipelines to Canadian ports and Canadian tidewater."

The Wolfcamp formation is estimated to contain 20 billion barrels of oil, 16 trillion cubic feet of natural gas and 1.6 billion barrels of natural gas liquids, according to the United States Geological Survey.

Though the find is not expected to have a significant effect on prices or markets for Canadian oil in the short term, the Alberta government is paying attention.

The find is another reason why the province is losing interest in the Keystone XL pipeline, which was intended to move Alberta's oil to refineries along the Gulf of Mexico.

While government and industry are still assessing what is best when it comes to Keystone XL, it's clear that shipping vast quantities of oil to the United States is no longer the preferred option, McCuaig-Boyd said.

"They were our biggest customer at one time. They've now become our biggest competitor."

Federal Natural Resources Minister Jim Carr said last week the Keystone XL pipeline has become less of a priority as governments move to expand export markets.

Three times size of North Dakota formation

Wolfcamp is three times the size of the massive Bakken formation that spans North Dakota and parts of Montana, Saskatchewan and Manitoba.

"It is the largest continuous oil assessment that the USGS has done in the U.S. to date," said Stephanie Gaswirth, a geologist with the agency.

(U.S. Geological Survey) The formation, which surrounds Midland, Texas, near the border with New Mexico, has produced conventional oil for decades.

The new assessment reveals how much more oil and gas can be produced through hydraulic fracturing.

"Now that industry has the technology to go in with horizontal wells and can hydraulically frack those wells, it makes it feasible to recover the resource in this manner," Gaswirth said.

Canadian oil markets safe for now

Experts on both sides of the border said the Wolfcamp formation will not cause any major disruptions to Canadian oil markets in the immediate term.

Robert Skinner, an energy policy expert at the University of Calgary's school of public policy, called the Wolfcamp news "an overcooked announcement."

The USGS finding is an assessment of potential extractable oil, not a known reserve, he said.

"It's not a discovery of new oil. What it is, is an announcement by a government agency that's looked at some of the shale formations," he said. "It's not going to be a significant jump in production from this. It's just, 'Here's more of this same old oil.' "

But Bernard Weinstein, associate director of the Maguire Energy Institute in Dallas, sees it as a far more significant finding that will benefit all of North America.

"Indeed, if you put Canada, the United States and Mexico together and you look at our reserves and our potential output — we're another OPEC."

Weinstein said Alberta oil will have a role to play in the U.S. energy market regardless of the Wolfcamp development.

The Gulf Coast refineries where some of Alberta's bitumen is refined are specifically designed to handle heavy oil, he said.

Weinstein said the unknown factor is the cost of producing oil from the Wolfcamp formation.

Because of the downturn in prices, Alberta oilsands producers have worked to reduce the cost of producing oil, and those lower costs may be of benefit as more so-called unconventional oil is poised to enter the marketplace.