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Given how long it takes to get a pipeline built in Canada, does it make any sense to be planning more, to be dreaming of something that might not be built for seven, eight, nine years?

Nati Harnik/The Associated Press

The International Energy Agency has released a new forecast for when it expects oil demand to plateau: 2030.

In its long-term energy outlook analysis, the agency said that it expects the market to be robust to about 2025, but growth “slows to a crawl,” after that. Only last year, the same agency predicted oil demand wouldn’t begin levelling off until 2040.

The agency also envisages demand in China, the country that drove crude prices to record heights over the past decade, will effectively grind to a halt in the 2030s.

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The report wasn’t all bad news for energy producers, however. It predicted that even as demand slows, depleted oil reserves will need to be replaced. Prices should rise through to 2040. There still remains tremendous uncertainty, however, around exactly how much oil will be needed and whether product that has high extraction and production costs – hello oil sands – will begin feeling downward pressure before less expensive types do. Almost certainly it will.

I mention this, of course, in the context of the current debate (screaming match?) taking place in Canada around our energy future. There seems to be little acknowledgment of the fact that the world’s energy needs are changing faster than previously thought.

Alberta and Saskatchewan want more pipelines, and fast. I understand and appreciate the desperation. But decisions such as these can’t take place in the complete absence of underlying facts and present-day realities.

Construction of the Trans Mountain Pipeline expansion is already under way. The Line 3 pipeline to the United States is nearing completion and is expected to handle 390,000 barrels of oil a day from Canada. Construction of the Keystone XL Pipeline is expected to resume next year, after being stalled in court. Once completed, it is forecast to move 830,000 barrels a day. The TMX project is expected to add 590,000 barrels a day of capacity to that oil line.

That is a ton of extra volume that Alberta is going to have at its disposal pretty soon. I get that we sell our oil to the U.S. at a discount, but we always have and Alberta has made out pretty well over the years with this arrangement – at prices admittedly higher than we’re seeing currently.

My point is, there is an awful lot happening on the pipeline front amid a backdrop that is looking increasingly grim for the oil industry. There is likely an economic case to be made for the Trans Mountain expansion, but is there for another beyond that? For another pipeline to B.C. and a second to the east coast?

Doubtful.

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That is what is so maddening about this entire conversation; it’s been so swamped by partisan rancour that it’s almost impossible to consider things objectively. Even the Saudis can see the writing on the wall and are acknowledging what the International Energy Agency and others are now saying: The end is nigh. Not the end-end, but the end of the oil fever we have known.

According to an assessment included in the prospectus for Saudi Aramco’s initial public offering, oil demand will peak in 2035. This is significant, because inside the kingdom the notion that there is a pending crisis for the industry has been consistently dismissed as overblown nonsense.

Everywhere you turn, it’s the same verdict: DNV GL, a major international energy adviser, suggests in its most recent analysis of the energy landscape that oil demand will peak in three years, plateau in 2030 and decline sharply after that.

Why the suddenly dire forecasts? The International Energy Agency says global renewable energy capacity is set to rise 50 per cent in five years.

The oil industry is also facing another challenge: Financial backers are changing course. Recently, 130 banks from 49 countries representing US$47-trillion in assets signed on to the UN Environment Programme Finance Initiative’s Principles for Responsible Banking, committing themselves to aligning their business strategies with the Paris Climate Agreement.

International investors are also dumping stocks associated with the fossil fuel industry.

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Of course, you won’t hear proponents for more pipelines talk much about any of this. All you hear is: Full steam ahead! More pipelines! Well, there are more pipelines coming, maybe more than enough to fill a need that is quickly diminishing.

Given how long it takes to get a pipeline built in Canada, does it make any sense to be planning more, to be dreaming of something that might not be built for seven, eight, nine years? That might be coming onstream as demand has plateaued or has started to contract at an inexorable rate?

Probably not.

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