A Canadian Press article published over the weekend grossly misrepresents the International Energy Agency’s findings about Canada in its latest global oil outlook.
The article incorrectly claims the IEA “suggests demand for Canada’s oil will fall before the end of this decade,” states the Canadian Energy Centre.
This is entirely untrue. The report says nothing about demand for Canadian oil. What it does show is that global oil demand continues to grow, and that producing countries have a choice in how they participate. Here are the facts.
Global oil demand to keep growing
The IEA outlook projects that global oil demand will continue to increase to 2030 and then stay steady through to 2050, despite the growing role of renewable energy in global markets.
In the agency’s base case scenario, which takes into account countries’ stated policies for greenhouse gas emissions reductions, oil demand increases to 103 million barrels per day, from 87.9 million barrels per day in 2020.
At the same time, the share of renewable energy in power demand will more than double, to 60 per cent in 2050 from 28 per cent in 2020.
While it does not address demand for Canadian oil, the IEA report does estimate future Canadian oil supply.
Keep in mind that Canada has the world’s third-largest oil reserves, so there is essentially no end to production potential as global demand continues.
In the IEA’s base case scenario, Canadian oil supply increases by 700,000 barrels per day by 2030.
In the agency’s scenario taking into account countries’ more aggressive emissions reduction plans, Canadian oil supply decreases by about 100,000 barrels per day by 2030.
Canada is the only major oil producer to see a decrease in this second scenario, which is not a forecast.
Canada’s oil sector is doing more than others to reduce emissions
In Canada’s oil sands, where two-thirds of the country’s oil is produced, companies are working harder than other major global oil producers to reduce emissions in the fight against climate change, according to research by BMO Capital Markets.
Oil sands average emissions per barrel decreased by 27 per cent since 2013, while at the same time other major oil producers around the world reduced intensity by just 13 per cent, BMO reports.
Put another way, analysts estimate that since 2013 the average oil sands barrel has shaved off more than 22 kilograms of emissions, compared to just five kilograms per barrel for other major global oil producers.
Several oil sands projects now have emissions per barrel lower than the global average.
The Government of Canada acknowledges the success in its latest submission to the United Nations Framework Convention on Climate Change.
Oil sands emissions intensity “declined steadily” from 91 kilograms of CO2 equivalent per barrel in 2005 to 80 kilograms of CO2 equivalent per barrel in 2019, Canada reports.
Oil sands companies representing 90 per cent of the industry have jointly committed to reach net zero emissions by 2050, meaning that any emissions from production will be balanced by emissions removed from the atmosphere.
Canada has a global oil opportunity
The Canadian Press article misrepresents expectations for the future, with one source suggesting it is time for Canada “to manage the decline of the oil industry and the growth of alternatives.”
As the IEA outlook shows, the growth of renewable energy sources does not mean the end of oil demand.
Canadians have the opportunity to benefit from the ongoing demand by supplying the world’s most responsible oil in terms of environmental, social and governance (ESG) metrics like emissions intensity, water use, Indigenous participation, diversity and inclusion, safety, and regulatory processes.
(CEC)
