Oil, Gas Will Remain in Canada’s Energy Future: Regulator
Canada’s use of oil and natural gas will decline over the next 30 years, the federal Canada Energy Regulator (CER) said in a new report released November 24, but fossil fuels will still make up more than 60% of the country’s fuel mix by 2050 without more aggressive energy transition policies.
The report, Canada’s Energy Future 2020: Energy Supply and Demand Projections to 2050 (EF2020), presents two scenarios for how policies and energy use could evolve as Canada heads towards its net-zero aspirations for 2050. In the reference case scenario, fossil fuel consumption is relatively unchanged due largely to steady improvements in energy efficiency; in the evolving scenario, fossil fuel consumption has already peaked and will fall 35% by 2050.
In the evolving scenario, Canadian natural gas production, driven largely by growing LNG exports, peaks at about 18.4bn ft3/day by 2040 and then declines slowly over the next decade. Crude oil production peaks at 5.8mn b/d in 2039 before declining through to 2050.
Renewables and nuclear will take a larger share of the fuel mix, the report says, while electricity will fill a greater role in meeting end-use energy demand, including in the passenger vehicle sector.
But, the CER says, “achieving net-zero greenhouse gases (GHG) emissions in Canada within the next 30 years will require stronger policies and greater adoption of low-carbon technologies.”
Across three key sectors of energy consumption – passenger vehicles, oil sands production and fuel use in remote and northern communities – continued low-carbon technology development will be important.
But it is policy development, EF2020 says, that will drive Canada towards net-zero.
“Without policy signals that provide a requirement, or value for reducing and/or eliminating GHG emissions, the required changes are unlikely to be made,” it says, adding that other factors – consumer preferences, investor and ESG considerations, and energy market development – will also factor in.