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Police investigate the blocked road leading to the Gidimt'en checkpoint near Houston B.C., Jan. 9, 2020. The irony of recent domestic protests is that future global energy needs will be met by dirtier energy sources such as coal instead of Canada's natural gas.

JASON FRANSON/The Canadian Press

Harris Fricker is president of investment bank and research services firm Stifel GMP.

The domestic debate over Canada’s place in the global energy future has become so polarized and riven by regional issues that it fails to incorporate a reasoned assessment of the future energy needs of the planet. It is essential that we ground the discussion regarding Canada’s energy strategy, both domestically and as a constructive player on the global stage, in just such an assessment.

The definitive study on the world’s future energy needs is produced by the International Energy Agency (IEA), which predicts that the world’s population will increase by almost two billion to 9.2 billion in 2040 with the bulk of that population growth occurring in countries that are not members of the Organisation for Economic Co-operation and Development (OECD). Global energy demand is projected to increase by 27 per cent with the greatest growth coming in India (109 per cent), Southeast Asia (67 per cent), the Middle East (62 per cent) and Africa (57 per cent). Oil will remain the dominant energy source at 27 per cent (compared with 32 per cent currently) with natural gas growing rapidly into the No. 2 spot at 25 per cent (compared with 22 per cent currently). Sadly, the IEA projects that the third major source of energy will continue to be coal, albeit dropping to 22 per cent from its current 27-per-cent weighting. Hydro, biomass, bio-energy and renewables (including wind/solar) combined will represent less than 20 per cent (currently 15 per cent) of the global weighting with nuclear as the only other major factor at 6 per cent (currently 5 per cent).

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Most people are surprised by the data relating to the low projected penetration of renewables, particularly wind and solar. But the reality is that wind and solar are now mature technologies butting up against their theoretical efficiency limits and, despite decades of government-subsidized commercial deployment, still represent less than 3 per cent of the global energy grid. Even with the IEA projecting a fourfold increase in wind energy and a tenfold increase in solar, the projected overall growth in energy demand means they will still represent only 6 per cent of global energy needs in 2040. I will leave it to others to debate the profound scale and environmental implications of the mining extraction that will need to be undertaken to supply the vast quantities of cobalt, lithium, copper, graphite and rare earths to produce the lithium batteries needed to provide the accompanying storage component for wind and solar.

The stark reality, then, is that the notion of a world on a near-term pathway to a hydrocarbon-free future is simply not accurate. And yet, we as a country appear to be building our energy infrastructure strategy directly upon this false construct.

There is, however, an obvious opportunity staring out at us from the IEA data – it’s called coal. Coal is easily the least attractive source of energy in the carbon world and currently represents about half of total annual global emissions of carbon dioxide (CO2). While coal usage is projected to decline greatly in OECD countries by 2040, it is projected to remain the main energy source in non-OECD countries and, in fact, is poised for considerable growth.

So, if hydrocarbons are going to be the linchpin of the global power grid in 2040 and beyond, should not Canada’s strategy as an energy superpower be to supply the most environmentally viable hydrocarbons via an extraction, production and transportation process that is the gold standard for societal and environmental stewardship? Should we not be moving in dramatic fashion to combat the continuing consumption of the most polluting forms of carbon and to replace them with much cleaner sources? Clearly, if coal is the near-term problem, then liquified natural gas (LNG) is a key part of the solution. LNG is abundant, cost-effective, easily and safely transportable and is a full 50-per-cent cleaner than coal.

What country with our abundance of natural gas and a geographic advantage in accessing markets in both Asia and Europe would not be hard at work building out this capacity to meet this global opportunity/need? And yet here we sit, more than a full decade into the LNG debate, without a single functioning LNG export facility. Astoundingly, we don’t even have the ability to pipe product to tidewater on either coast and thus have no access to global markets. Our only major pipeline infrastructure runs south into the United States (a rapidly emerging LNG export superpower), where we are a pure price-taker from what is now our major energy competitor, which is projected to cut its net natural gas imports from Canada (currently 5.9 billion cubic feet a day) to zero by 2040. So, we have but one end-market for the single most important product in our economy, the demand for which is rapidly declining as the U.S. heads to energy self-sufficiency via shale gas. That noise you just heard was Adam Smith rolling over in his grave.

To those who believe the blocking of energy infrastructure projects in our country is a moral imperative, I ask this: How is the world going to meet the energy needs of 9.2 billion people in 2040 and what do we tell the 1.2 billion in the developing world that the IEA projects will have no access to a dependable source of electricity? The answer would appear to be: Let them eat coal.

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