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A Matter of Fact: Environment Minister Steven Guilbeault’s future view of Canada’s oil and gas sector is unrealistic

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Canadian Minister of the Environment and Climate Change, Steven Guilbeault, speaks at the China pavilion during the United Nations Conference of the Parties (COP15) in Montreal, Quebec, on December 14, 2022. Getty Images photo

From the Canadian Energy Centre Ltd. 

Canada could play a key role in lowering global emissions by unlocking our LNG industry and helping Asian countries replace coal

Federal Environment and Climate Change Minister Steven Guilbeault is continuing to plot a painful course toward a short-sighted phase out of Canada’s world class oil and gas sector based on an unrealistic view of world’s future energy mix. 

In an interview with Euractiv, Guilbeault said he supports the phase out of unabated fossil fuels, those without the technology to minimize emissions, by 2050 to align with the International Energy Agency’s Net Zero Scenario, a path that is largely out of touch with the current global reality. 

Based on that increasingly unlikely scenario, the minister said he anticipates Canada’s oil and gas sector will follow suit with a 50% to 75% reduction in the production of oil and gas by 2050, which would be devastating for our economy, hurt our economic allies, and make little to no progress towards reducing global emissions. 

Here are the facts. 

Fact: The IEA’s Net Zero Scenario is largely aspirational, not practical 

Guilbeault’s vision of a massive global reduction of fossil fuel usage is growing even less likely amid a lingering energy crisis prompted by several years of declining investment in oil and gas followed by Russia’s invasion of Ukraine. 

The fact is, this year the world will use more oil and more coal than any time in human history. 

According to the IEA’s latest short-term outlook, global oil use will hit a record high of 102 million barrels per day this year and is expected to grow to 106 million barrels per day by 2028. Last week, OPEC forecasted that by 2045, global oil demand will reach 110 million barrels per day 

Meanwhile, demand for natural gas, particularly liquefied natural gas (LNG) is soaring. 

By 2040, global LNG demand – driven primarily by growing Asian economies – is expected to reach 700 million tonnes, a more than 75 per cent increase from 2022. Demand for LNG is expected to outpace supply by the middle of this decade. 

Relying on the IEA’s Net Zero scenario, Guilbeault said he believes oil use will decline to between 25-30 million barrels per day, a 75 per cent reduction. Rapid deployment of renewables, he said, would fill that void despite some significant hurdles that could hinder a sweeping transition.  

The bottom line is pretty clear. In the IEA’s most likely scenario, oil and gas will still account for 47 per cent of the global energy mix in 2050, a reduction of 5 per cent from 2021. While the share of renewables will more than double, it is still expected only to account for 29 per cent of the world’s energy mix in 2050. 

Fact: A rapid phase out of oil and gas would hurt Canada and its allies 

Canada’s oil and gas sector is a critical part of our economy, supporting hundreds of thousands of jobs from coast-to-coast, including thousands of jobsin manufacturing, environmental, and financial services tied to the industry, especially in Ontario and Quebec. 

A recent analysis by commodity data firm S&P Global focused specifically on the oil sands suggests that efforts to meet federal emissions targets for 2030 would likely force the industry to slash production by up to 1.3 million barrels per day. 

According to the analysis, that could result in the elimination of between 5,400 and 9,500 jobs. With just over 54,000 oil and gas extraction jobs in Canada, that would mean the elimination of as much as 17% of the workforce. 

In addition to jobs, the industry is also an economic bulwark, generating $168 billion in GDP in 2021, about 7.2 per cent of Canada’s economic activity. Oil and gas also accounted for nearly a third of Canada’s exports in 2021, injecting $140 billon into the economy. 

Amid the ongoing global energy crisis, some of Canada’s international allies have turned to Canada to be a potential key supplier as they look for stable and responsible suppliers to replace Russian oil and gas. 

The leaders of Germany and Japan made direct appeals to Canada to supply more LNG to help meet their energy needs. 

Yamanouchi Kanji, Japan’s ambassador to Canada, made it clear that some of our Asian allies see Canada as a key player in the world’s future energy, particularly when it comes to LNG. 

“The world is waiting for Canada,” he said earlier this year. “Canada can and should play a very important role to support the energy situation not only in Japan and South Korea, but the world.” 

Fact: Reducing global emissions starts with Canadian natural gas 

If Canada is truly serious about tackling global greenhouse gas emissions, we could make a much bigger impact by supplying energy-hungry Asian countries with some of the cleanest LNG on the planet to replace coal. 

Climate change is a global issue, not a local one. 

Despite being one of the world’s largest energy producers, Canada is still only responsible for about 1.6 per cent of total global emissions 

Developing Asian counties, particularly China, have turned to coal to help power their growing economies. A switch to natural gas to generate power reduces emissions by 50 per cent on average, according to the IEA. Canadian natural gas shipped as LNG could perform even better, reducing emissions from coal by about 65 per cent, according to Energy for a Secure Future. 

With analysts expecting world LNG demand to double over the next two decades, Canada could make a real measurable impact on lowering global emissions by unlocking its LNG potential. 

A recent study by Wood Mackenzie found that Canadian LNG exports could reduce net emissions in Asia by 188 million tonnes per year through 2050. Put another way, that would be the annual equivalent of removing the emissions of all vehicles on Canadian roads, or wiping out nearly three time’s B.C.’s total emissions. 

Meanwhile, a coalition of six companies representing 95 per cent of Canada’s oil sand production have jointly committed to achieve net zero emissions by 2050. The Pathways Alliance is looking to harness emerging technology like carbon capture and storage as well as small modular nuclear reactors to reach that target. 

The reality is that if Canada significantly curtails its oil and gas industry, other national producers, some of which lack Canada’s commitment to democratic ideals and the environment, will fill that void. This could see bad actors like Russia continue to maintain a strategic and economic advantage over Europe by maintaining European reliance on its energy. 

Fact: Phasing out oil and gas would hurt Indigenous communities 

Over the last decade, Indigenous communities have emerged as key players in Canada’s energy sector, allowing First Nations in many cases to create intergenerational opportunity for their people. 

From pipelines to LNG terminals, dozens of Indigenous communities have entered into ownership agreements on major oil and gas projects. 

In B.C., 16 First Nations will acquire a 10 per cent stake in the Coastal GasLink pipeline once it’s completed later this year. In Alberta, another 23 First Nation and and Métis communities are now approximately 12 per cent owners of seven operating Enbridge oil sands pipelines, the largest Indigenous energy transaction ever in North America. 

And in northwest B.C., the Haisla Nation is 50 per cent owner of the proposed Cedar LNG project, which would be the first Indigenous-owned LNG terminal in the world. 

“When Europeans, Asians and Americans think of Canada’s Indigenous peoples, they often think we oppose all energy development. We aren’t victims of development. Increasingly we are partners and even owners in major projects,” Haisla Nation Chief Councillor Crystal Smith said during an April press conference after leading a delegation of Indigenous leaders to meet key international diplomats. 

Indigenous employment in Canada’s oil and gas sector has continued to grow, rising by more than 20 per cent since 2014 to reach an estimated 10,400 jobs in 2020. 

Indigenous-owned businesses also benefit from the industry, with three major projects – the Trans Mountain Expansion, Coastal GasLink, and LNG Canada – spending some $9 billion with Indigenous- and locally-owned businesses.   

 

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Alberta

New red tape reporting website will help ramp up housing construction in Alberta

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Helping builders by putting an end to housing delays

Alberta’s new Stop Housing Delays online portal will allow developers, municipalities and other housing partners to report red tape and unnecessary home-building delays.

Alberta’s government is focused on ensuring Albertans have access to the housing they need, and that means working to streamline processes, cut red tape and reduce delays that are slowing housing construction down. As part of this work, government has launched a new online portal to help in these efforts.

The Stop Housing Delays online portal is now available for developers and municipal authorities to help identify areas that are preventing fast and efficient residential construction. This portal will help government identify and address barriers to building homes across the province.

“The Stop Housing Delays portal will allow Alberta’s government to hear directly from developers, municipalities and other partners on where delays are happening in the construction process. This will help identify and remove barriers, ultimately getting homes built faster and continuing Alberta’s record home-building pace.”

Jason Nixon, Minister of Seniors, Community and Social Services

“Alberta’s government will continue to work with municipalities and find solutions to speed up the home-building process. The Stop Housing Delays portal will give us another tool to inform those discussions and identify areas where we can improve the pace of home building.”

Ric McIver, Minister of Municipal Affairs

Once developers, municipalities or industry partners have submitted their issue using the online form, government will collect and assess the information provided. Alberta’s government will be taking a collaborative, cross-ministry approach to ensure the appropriate departments are working together to find solutions where possible. Solutions may range from minor changes to policy reform.

Alberta’s government continues to support builders and encourage new residential housing construction by reducing red tape, incentivizing housing construction and supporting innovative strategies to build homes faster than ever.

“This webpage is an excellent opportunity to gather knowledge and further eliminate red tape. Government has been persistent in our approach of cutting red tape and removing roadblocks, and this will help to speed up residential construction. I look forward to hearing from developers and our other partners on how we can help get projects moving and Albertans in homes.”

Dale Nally, Minister of Service Alberta and Red Tape Reduction

Alberta continues to see strong housing starts and increases while other provinces across Canada are seeing a reduction in housing starts. The first half of 2024 saw 9,903 apartment unit starts in the province. This marks the highest amount in any half year in Alberta’s history, breaking the previous record of 9,750 set in 1977. Albertans will benefit from 33,577 new housing starts from January through September 2024, up 35 per cent from the same period last year. Alberta’s government remains focused on working with industry and non-profit partners to ensure that the province’s growing population has access to the housing it needs.

“This portal is a valuable tool for industry to highlight gaps, barriers and delays that may need to be prioritized and addressed by either local or provincial governments. Real solutions can only emerge through transparency, open communication and collaboration. This is an important step toward identifying the unique challenges each region and municipality faces in delivering attainable housing.”

Scott Fash, chief executive officer, BILD Alberta Association

Quick Facts

  • Housing starts for January – September 2024 compared with January – September 2023
    • Provincewide: 33,577 compared with 24,904 (up 35 per cent)
    • Edmonton: 13,359 compared with 9,099 (up 47 per cent)
    • Calgary: 17,414 compared with 14,141 (up 23 per cent)
    • Lethbridge: 599 compared with 148 (up 305 per cent)
    • Red Deer: 314 compared with 146 (up 115 per cent)
  • Data shows Alberta had 10,699 purpose-built rentals, making up 32 per cent of all housing starts.
  • Since 2019, Alberta’s government has invested almost $850 million to build more than 5,100 units and close to 900 shelter spaces. This includes projects we have committed to, that are in progress and that are complete.
  • Together with its partners, Alberta’s government is supporting $9 billion in investments into affordable housing to support 25,000 additional low-income households by 2031.

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Alberta

Turning resources into new jobs and products

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(Left to right: Stéphane Germain, president of GHGSat; John Adams, president and CEO, NGIF Capital and NGIF Accelerator and managing partner of Cleantech Ventures; Rebecca Schulz, Minister of Environment and Protected Areas; Scott Volk, director of emissions and innovation, Tourmaline Oil; Justin Riemer, CEO of Emissions Reduction Alberta)

New funding will advance technologies that turn Alberta’s natural resources, such as bitumen, into materials of the future.

Alberta is Canada’s third-largest producer of manufactured goods and materials and first in clean technology innovation. At the same time, manufacturing companies around the world are looking for ways to make products like concrete, plastics, food, wood, chemicals and machinery more efficient, more durable, easier to recycle and better for the environment.

Alberta’s government is investing $40 million from the industry-funded Technology Innovation and Emissions Reduction (TIER) program to advance technologies that will turn everyday items that would otherwise be wasted or dumped in landfills into modern, low-emission products. These technologies will help create jobs, reduce emissions and help Alberta’s manufacturing industry lead the world.

“We have the resources, expertise and entrepreneurs needed to create some of the most advanced materials in the world. This funding competition will help develop new and exciting technologies that reduce emissions, create jobs, reuse waste and keep growing our economy.”

Rebecca Schulz, Minister of Environment and Protected Areas

Advanced materials are increasing in global demand. They are new or significantly improved materials that provide a distinct advantage in performance when compared to conventional materials. Advanced materials have already been used to create new construction materials, improved batteries and fuel cells and lighter, stronger aircrafts, bicycles and golf clubs, among other products.

Led by Emissions Reduction Alberta, Alberta’s new funding competition will support scale-up, pilot, and demonstration and first-of-kind commercial technologies that improve the extraction, production, manufacturing, and performance of new and existing materials and products in Alberta. It is open to a wide a range of applicants including researchers, businesses, municipalities and Indigenous communities.

“Enhancing existing products and developing new materials with superior performance while embracing circular economy strategies will help deliver deeper emissions reductions, enhance supply chain resiliency and strengthen industrial competitiveness. This funding, sourced from Alberta’s TIER regulation, is critical and the possibilities are endless.”

Justin Riemer, CEO, Emissions Reduction Alberta

The focus of this funding is to help create technologies that turn resources into modern, new products. This includes emerging technologies extracting high value metals like vanadium, titanium and lithium found within natural resources such as bitumen and creating novel, carbon-absorbing materials. These can then be used to improve everything from construction material and consumer electronics to aircrafts and hockey sticks.

“Emerging technology solutions, such as creating advanced carbon products from bitumen, are critical to lowering emissions and creating jobs in the province. Alberta Innovates is pleased to support this call and work closely with Emissions Reduction Alberta to realize a new future for Albertans.”

Dr. Michael Mahon, CEO, Alberta Innovates

“By transforming our abundant natural resources into advanced, low-carbon materials, we are not only driving emissions reductions but also creating valuable opportunities for industry growth and export potential. The Government of Alberta’s investment through Emissions Reduction Alberta’s Advanced Materials Challenge demonstrates a commitment to building a resilient economy that harnesses Alberta’s strengths in new and sustainable ways.”

Md Golam Kibria, co-founder and scientific director, CarboMat Inc.

Quick facts

  • Applications for the Advanced Materials Challenge close on Wednesday, January 22, 2025, at 5 PM MST.
  • Successful applicants are eligible for up to $5 million.
  • Applications are open to innovators, technology developers, commercial and industrial building owners, municipalities, Indigenous communities, small and medium-sized businesses, research and development organizations, universities, and not-for-profit organizations.
  • Applications are open to emerging technologies. While technology solutions can originate from anywhere globally, they must be piloted, demonstrated or deployed in Alberta.
  • The TIER system uses industry dollars to help Alberta facilities find innovative ways to reduce emissions and invest in clean technology to stay competitive and save money.
  • Full details on the Advanced Materials Challenge can be found on Emissions Reduction Alberta’s website.

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