by Brad Tennant
The International Energy Agency released its 2017 World Energy Outlook report last week and to nobody’s great surprise demand for fossil fuels is going nowhere but up.
Way, way up.
The Paris-based IEA concluded oil and gas will continue to be the planet’s number one and two energy sources well into this century and beyond. Between now and 2040, China will need to add the current electrical generation capacity of the entire United States in order to meet demand. India is in the same boat, requiring the equivalent of the European Union’s power system over the next two decades.
The IEA predicts renewable generation will mostly displace coal-fired electricity, accounting for about two-thirds of all new power plant investment. However, as the report notes, renewable generation has yet to achieve enough cost certainty and reliability to displace fossil fuels, leaving it to oil and gas to power the planet.
This should be fantastic news for Canada. We are the world’s fifth-largest oil-producing country and we’re sitting on the third-largest known oil and gas reserves, behind only Venezuela and Saudi Arabia.
So why, then, is the IEA so bullish on a country like Australia—that accounts for only 0.3% of the world’s energy reserves—while raising red flags on energy-rich Canada?
The IEA forecasts Australia’s energy exports to double over the next 20 years, with 70% of that country’s total natural gas products leaving its shores for other, energy-hungry parts of the world. Most of this is attributable to liquified natural gas. While Canada has allowed its fledgling LNG industry to wither to the point of near death, Australia has capitalized in a big way and is now the world’s largest LNG exporter.
Canada, meanwhile, remains the subject of consternation in global circles. The IEA acknowledges the capital flight out of Alberta’s oil sands, noting downsizing from the likes of Statoil, Royal Dutch Shell and ConocoPhillips, while citing Canada’s ongoing inability to expand its pipeline network.
“There is also the unresolved question about how oil is transported to demand centres in light of delays in the development of transmission and export pipelines,” the IEA stated.
It doesn’t take much reading between the lines to get the message. If Canada somehow can’t make the most of the energy fortune under its feet, there are other countries who will—even if they have much less to offer.
The difference between Canada and Australia is strictly one of public policy and political will. While Australia has seized an opportunity when presented with one, Canada seems content to let opportunity pass it by.
And at what cost? It’s not merely oil and gas we’re choosing to strand underground. It’s jobs and livelihoods. It’s better health care outcomes. It’s new schools and more roads. It’s a stronger, more prosperous country for our children and grandchildren.
If Canada continues down the path it is on, allowing critical energy projects like Energy East and Trans Mountain to fail, there will come a time when we will have to answer for our foolishness.
Future generations will ask us why we did nothing when the world was begging for our energy, why we squandered the opportunity to invest in them and their success.
I want to be able to face them knowing I did all I could. I know you do too.
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Don’t let Canada miss this extraordinary opportunity.