What Canada Needs to Do to Capture the Energy Market
Energy is critical to our way of life and it’s only going to get more important, especially as we try to figure out how to square our demands for energy with the impacts of climate change
Lately there has been a lot of talk about Canada being too heavily dependent on the energy industry, along with a fair bit of scoffing at the idea that we should want to become an energy superpower.
But why would we not want to be an energy superpower? Energy is critical to our way of life and it’s only going to get more important, especially as we try to figure out how to square our demands for energy with the impacts of climate change. The world uses a lot of energy today, and it is going to use more going forward.
The International Energy Agency published a report before the December 2015 climate conference in Paris, which showed that global energy demand is going to increase 30 percent by 2040. In the same report, they predicted that investment in the global energy sector will be $68 trillion from 2015 to 2040.
Thirty-seven percent of this investment will be in oil and gas, 29 percent in power and 32 percent in efficiency. If we want to continue to provide a great place to live and to immigrate to, we would be foolish not to chase this opportunity.
Canada is perfectly positioned to capture this market. We have an abundance of natural resources and we would be remiss not to use them responsibly for the benefit of ourselves and our future generations. We have a well-educated society, which puts us in good stead for both figuring out the most economical and environmentally sustainable ways of producing energy, and capitalizing on the opportunities for improving energy efficiency.
Finally, and most importantly, we are a very stable country. By and large, ups and downs in the energy markets are attributable to critical energy supplies being located in unstable areas. We should be a supplier of choice.
What do we need to do in order to capitalize on the market?
Diversify our products: We have lots of opportunities. We are among the top 10 countries in the world in oil, uranium and coal reserves, top 20 in natural gas reserves, and top five in potential for generating wind and hydroelectric power. We also have the longest coastline in the world, which should put us in good shape to produce tidal energy when this technology advances further. Canada should be able to offer up the most complete package of energy products anywhere.
Diversify our markets: Right now our only market (outside of our own domestic one) is the United States, and this is a big weakness. Our recent Keystone XL experience speaks to the perils of having one customer, especially one who is close to being the top oil producer in the world. President Barack Obama refused Keystone XL on the basis that it didn’t “serve the national interests” of the U.S. Bottom line, this was predictable, and at the end of the day, probably a rational decision for an American president to make.
The fact is that the United States simply does not need the 832,000 b/d of Canadian oil that Keystone XL was to transport. That represents only a small percentage (approximately 4 percent) of the oil that they consume, and they have plenty of other options to make up the difference.
Make our products more marketable: How can we encourage other markets to buy Canadian? Get the price down and reduce emissions. Our goal should be to have the lowest-cost energy, with the lowest carbon footprint. This will require investment in research and education.
Don’t forget about adapting to climate change: There is probably little ability to reverse what has happened already, and I think everyone believes that more is likely to occur before we get our emissions under control. At the same time, we should remember that natural forces have contributed to climate change over history, and will undoubtedly continue to do so. So our ability to maintain a sustainable society needs to include both learning how to adapt to a changing climate, as well as emitting fewer greenhouse gases into the atmosphere.
So, times may be tough right now, but these are the times when leaders are made. Let’s take the blinders off, recognize the plethora of energy assets that we have, develop them responsibly and get them to market.