The Canada Energy Regulator has peered into the future – out to 2050, the year the country has promised to achieve net-zero emissions – and from the vantage of the CER, the future includes a lot of oil.
Canada’s current oil production is five million barrels a day, which ranks fourth in the world. Despite Ottawa’s pledge to slash emissions, the CER’s new forecast – which was released this past week, and which takes into account climate change policies – predicts oil production will rise 16 per cent, to a peak of 5.8 million barrels in 2032.
By 2050, the promised finish line of net zero, oil output will still be 4.8 million barrels a day, barely lower than today.
Organizations such as CER, a federal agency, have forever focused their annual energy outlooks on oil production: how much of it there is, and how much there will be.
Two years ago, basically ignoring fossil fuel-caused global warming, the CER forecast 7.1 million barrels of oil a day by 2040. The past year, for the first time, the CER didn’t predict oil production would keep on rising. But the agency’s shift is far too slow – as this year’s report again shows.
The CER’s outlook is supposed to be a road map for the future. Instead, it remains rooted in the past. The report, in one example, still includes an imaginative scenario in which no additional climate policies emerge beyond what already exist. In this outlook, Canada’s oil output will peak at 6.7 million barrels a day in 2044, as climate heating accelerates.
Why the CER wastes its time on such a scenario is hard to understand. This is especially so because of what is glaringly absent from this year’s report: a true look at net zero, and how to get there.
Last year’s report mentioned net zero as a footnote. This year, it again skirts the question.
What is the purpose of a map? It’s not a trick question. A good one is designed to help you figure out where you’re going. Canada has pledged to cut climate-heating emissions by 40 per cent by 2030. Ottawa has enacted the Net-Zero Emissions Accountability Act. These should be the guideposts on the map produced by the CER. Instead, there are too many fossil-fuel detours.
Other similar organizations have evolved faster – at the pace the challenge of climate heating dictates. The International Energy Agency in Paris, founded by Western countries in the mid-1970s to deal with the oil supply crisis, was always all about oil.
That started to change a few years ago. This year, in May, the IEA issued its landmark Net Zero by 2050 road map. Spoiler alert: It did not forecast oil production in 2050 at the same level as today.
Net zero doesn’t mean zero oil – the IEA and the CER say carbon capture will play an important role – but some of the CER’s predictions, even when climate policies are included, are worrisome.
One example is transportation. The CER forecasts that gasoline in 2050 will still account for more energy used than electricity. This appears to underestimate the rapid shift to electric vehicles – in 2021, one out of 10 new car sales, globally, are EVs, double the past year.
Where the CER does provide insight is in its outlook for electricity.
The CER’s base scenario – as it should be for the whole report – is net zero. This is key, because electrification is essential to reduce emissions.
In this future, intriguing ideas emerge. The CER sees the current 82 per cent clean-power grid reach 95 per cent by 2050. It’s still too slow and not enough – such as, is Canada really burning full-emissions natural gas in 2050, as the CER predicts?
But the CER does highlight the tremendous potential of wind, which could generate the majority of power in Alberta, Saskatchewan and Nova Scotia within nine years. This is the kind of sketch of what’s possible that we need.
The CER’s work on power generation is valuable, but it also exposes how its report as a whole falls short. It’s too timid. While it looks at things such as hydrogen to fuel industry and transportation, the report essentially suggests Canada won’t deliver on its climate promises.
What the CER needs to do is take a cue from the IEA. The E is supposed to stand for all energy sources, not just oil and natural gas. Canada needs a better guide for the future, not a map leading it off course.
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