A new CAPP report finds rising global energy demand is a significant opportunity for Canada, if we address competitiveness challenges.
The world’s thirst for energy is on the rise and Canada has an opportunity to meet the growing global demand for energy in an environmentally and socially responsible manner. However, we can only take advantage of this opportunity with effective regulatory policies and increased market access, according to Canada’s Role in the World’s Future Energy Mix, the second in a series of economic reports released by the Canadian Association of Petroleum Producers (CAPP).
“A healthy oil and natural gas sector creates jobs and prosperity for Canadians, but the positive impact of our energy industry on the global stage could, and should be, broader,” says CAPP president and CEO Tim McMillan.
The report notes that forecasts such as the International Energy Agency’s World Energy Outlook 2017 anticipates the demand for all forms of energy—oil and natural gas as well as renewables and nuclear – will continue to increase as the global population grows to 9.2 billion by 2040. Emerging economies and urbanization in countries such as India, China and throughout Southeast Asia, along with rising gross domestic product, will increase total energy demand by 30 per cent from today.
Although the world’s energy mix is changing, oil will continue to grow and be the predominant energy source to 2040, while natural gas production grows to become the world’s second-largest energy source overall, both essential to the development of emerging economies.
The report notes that rising energy demand offers Canada an opportunity to become the world’s energy supplier of choice—serving global markets with responsibly produced energy that displace production from countries with poorer environmental performance.
However, this can only be achieved if Canada’s oil and natural gas industry remains competitive—attracting investment, spurring innovation, and gaining access to global markets to leverage our leadership position in environmental stewardship and responsible energy production.
“It’s time to be realistic about Canada’s future. We have an opportunity to be a global supplier but we are limiting our opportunity to meet global demand with policies that constrict future growth,” says McMillan. “Government costs and regulatory barriers are on the rise—making it harder to grow our industry and support employment for Canadians.”
Adds McMillan, “Competitiveness continues to be one of our biggest challenges. Investment in Canada’s energy industry, and jobs for Canadians, will continue to leave for other countries unless there are changes to regulatory policies to enable growth industry can build on.”
CAPP’s report calls on the federal government to help define Canada’s vision for the future of oil and natural gas to meet the world’s growing energy needs. This vision includes:
Collaboration between industry and government to create an effective policy and regulatory environment that encourages investment and access to world markets;
Cultivating support among Canadians for the responsible development of our natural resources; and,
Adopting environmental policies that compete favourably with other jurisdictions, encouraging the types of innovation and investment that grow our brand as the global energy supplier of choice.
“We operate in one of the world’s most stringent regulatory environments. It’s important we have a robust regulatory framework that meets environmental goals, but we must pay attention to added costs, delays and inefficiencies so we do not risk falling behind,” says McMillan
Did You Know?
How much oil and natural gas will we need in the future?
Even with increasing use of renewables and nuclear energy, more oil and natural gas will be needed to meet the needs of a growing world.
Did you know that in 2016, the world consumed 94 million barrels of oil per day? That met about 32 per cent of the world's energy demand. According to the International Energy Agency's (IEA) 2017 World Energy Outlook, increasing production of other forms of energy, such as renewables, nuclear and natural gas will cause oil's share of the global energy mix to fall to 27 per cent by 2040. However, an overall increase in global energy demand means that we'll actually need more oil by 2040 than we produce today: about 105 million barrels of oil per day.
As well, in 2016, the world consumed about 129 trillion cubic feet of natural gas. Increasing use of natural gas, which is abundant and the cleanest burning hydrocarbon, means that global consumption of this energy source will jump 45 per cent to 199 trillion cubic feet of natural gas in 2040 according to the IEA. This will move natural gas past coal to become the second-most used energy source, meeting 25 per cent of the world's energy needs.