There is a list of key moments when the world started to look differently at the future of fossil fuels.
A prominent early milestone was 1988, when NASA scientist James Hansen warned of a hotter future. It was front-page news – an early alarm sounded – but the burning of fossil fuels only escalated. More recently, the United Nations in 2018 outlined what it would take to limit climate heating to 1.5 degrees C – “rapid, far-reaching and unprecedented changes.” And last year, the International Energy Agency, founded in 1974 by Western countries to plan for adequate oil supplies, mapped out net zero greenhouse gas emissions by 2050. That included the argument the world did not need to spend money on new oil and natural gas fields.
Like Mr. Hansen long ago, the UN’s climate science and the IEA have been, in part, ignored. Fossil fuels remain as central as ever to daily life. There has been, however, a cumulative shift away from old thinking, when the imagined future output of oil and gas would always be higher, year by year. Now, a peak is seen, relatively soon, and thereafter a slow decline, at least. The expected direction has decisively changed.
At home, the Canada Energy Regulator had often mirrored the IEA. It would reliably predict increases for the country’s oil in its annual outlooks. The first was published in 1967. As recently as 2019, the CER still pictured a steady climb, up to about 7 million barrels of oil a day by 2040. (The current level is roughly 5 million b/d.)
In 2020, the CER laid out a new scenario that saw oil production peak around 2040 at 5.8 million b/d. One insight was that new pipeline capacity after the Trans Mountain expansion wasn’t necessary.
Last December, even after the IEA took a new approach, the CER mostly stuck with its usual formula. How the CER takes on these questions is important, because its work is a central reference document for everyone from governments and academics to industry and energy think tanks. If the CER map is off course, its ill-conceived directions get everyone lost.
Yet despite Canada’s climate policies to slash domestic emissions, the CER’s view last year of the future foresaw a lot of oil. In 2050, by the CER’s reckoning, Canada would be producing about as much oil as it does today.
This page was critical. We argued that a true look at net zero, and how to get there, was glaringly absent in the report. Others saw the same flaw. Jonathan Wilkinson, freshly installed as natural resources minister, asked the CER to recalibrate its “pivotal role” in “helping both Canadians and policy-makers see what a net-zero world looks like.” The CER took the advice.
Normally, the CER’s annual outlook comes out around this time of year. With the overhauled approach, the new version is set for next spring. The CER has consulted a range of experts. Predicting the future, obviously, has never been easy. There are many questions and complications. And in the end, so many reports do nothing more than collect dust. But this one will be closely scrutinized. The details will matter – especially in a country that is among the world’s leading oil and gas producers.
In the IEA’s report, net zero in 2050 will be propelled most of all by solar and wind power, but it doesn’t mean zero oil and gas. The IEA envisioned oil production at 25 per cent of today’s level, and natural gas at about half. Coal will be almost completely gone.
Canada hopes to maintain its market share in such a future. Reducing emissions is essential. The recent past is positive: Oil and gas emissions have fallen slightly since the mid-2010s, as production rose. In the oil sands, the major companies plan to spend $24-billion – with about 30 per cent subsidized by taxpayers – to cut their emissions by a third, or 22 megatonnes a year, by 2030. And across the oil and gas industry, slashing methane emissions is a big opportunity.
But consider LNG. In British Columbia, the country’s first export plant will emit 4 MT starting in 2025. An expansion would mean even more – wiping out a big chunk of reductions in the oil sands.
Then there’s the reality of 2050 – when the world needs to hit, or come close to, net zero.
Canada has greatly profited from fossil fuels. How the country grapples with these shifts to a much different future will not be easy, but there’s promise, too. A clear map from the CER, of the challenges and the possibilities, is overdue.