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Alberta

25 facts about the Canadian oil and gas industry in 2023: Facts 1 to 5

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From the Canadian Energy Centre

One of the things that really makes us Albertans, and Canadians is what we do and how we do it.  It’s taking humanity a while to figure it out, but we seem to be grasping just how important access to energy is to our success.  This makes it important that we all know at least a little about the industry that drives Canadians and especially Albertans as we make our way in the world.

The Canadian Energy Centre has compiled a list of 25 (very, extremely) interesting facts about the oil and gas industry in Canada. Over the 5 days we will post all 25 amazing facts, 5 at a time. Here are facts 6 to 10. 

The Canadian Energy Centre’s 2023 reference guide to the latest research on Canada’s oil and gas industry

The following summary facts and data were drawn from 30 Fact Sheets and Research Briefs and various Research Snapshots that the Canadian Energy Centre released in 2023. For sources and methodology and for additional data and information, the original reports are available at the research portal on the Canadian Energy Centre website: canadianenergycentre.ca.

Environment

1. Canada’s share of Global CO2 emissions is dropping

Since the Kyoto Summit in 1997, Canada’s share of the world’s CO2 emissions has fallen from 2.2 per cent to 1.6 per cent. Canada’s share of world CO2 emissions decreased by 25 per cent from the Kyoto climate summit to the recent Dubai climate summit.

 

Source: CEC Research, Calculation from Various Database (2023)

2. Canadian natural gas is getting cleaner

Emissions intensity is the emission rate of a given pollutant relative to the intensity of a specific activity or industrial production process. Emissions intensity is determined by dividing the number of absolute emissions by some unit of output, such as GDP, energy used, population, or barrel of oil produced. Between 2010 and 2021, the CO2 emissions intensity of Canadian natural gas production fell from 63.5 kilograms CO2e per barrel of oil equivalent to 44.5 kilograms CO2e per barrel of oil equivalent, a decline of nearly 30 per cent.

Source: Derived from Rystad Energy

3. Canadian oil sands production is getting cleaner

Between 2000 and 2021, the emissions intensity of the oil sands subsector fell from 111.8 kilograms CO2e per barrel to just under 79.3 kilograms CO2e per barrel, a decline of over 29 per cent. As GHG emissions intensity in the upstream oil sector continues to decline and because Canada’s ESG performance remains highly rated, Canadian oil has the potential to become the barrel of choice on the world stage.

Source: Derived from Rystad Energy

4. Canada’s oil and gas sector is doing its part to reduce methane emissions

Gas flaring is the burning off of the natural gas that is generated in the process of oil extraction and production. It is a significant source of greenhouse gas emissions (GHGs). In 2022, 138,549 million cubic meters (m3) (or 139 billion cubic meters (bcm)) of flared gases were emitted worldwide, creating 350 million tonnes of CO2 emissions annually. At 945 million m3 in 2022, Canada was the eighth lowest flarer among the world’s top 30 oil and gas producers (23rd spot). Canada decreased its flaring emissions by 320 million m3 from its 2012 level of 1,264 million m3, a 25 per cent drop. In 2022, Canada contributed just 0.7 per cent of the global amount of gas flaring despite being the world’s fourth largest oil producer.

Source: World Bank (undated)

5. Environmental spending by Canada’s oil and gas sector remains high

Canadian businesses spent $28.6 billion on environmental protection between 2018 and 2020. When capital and operating expenses on environmental protection are combined, out of that $28.6 billion the oil and gas sector spent $9.4 billion, or nearly 33 per cent. In 2020 alone, when capital and operating expenses on environmental protection are combined, the oil and gas sector spent $2.7 billion, or 27 per cent of all Canadian business spending on the environment that year.

Source: Derived from Statistics Canada, Table 38-10-0130-01

CEC Research Briefs

Canadian Energy Centre (CEC) Research Briefs are contextual explanations of data as they relate to Canadian energy. They are statistical analyses released periodically to provide context on energy issues for investors, policymakers, and the public. The source of profiled data depends on the specific issue. This research brief is a compilation of previous Fact Sheets and Research Briefs released by the centre in 2023. Sources can be accessed in the previously released reports. All percentages in this report are calculated from the original data, which can run to multiple decimal points. They are not calculated using the rounded figures that may appear in charts and in the text, which are more reader friendly. Thus, calculations made from the rounded figures (and not the more precise source data) will differ from the more statistically precise percentages we arrive at using the original data sources.

About the author

This CEC Research Brief was compiled by Ven Venkatachalam, Director of Research at the Canadian Energy Centre.

Acknowledgements

The author and the Canadian Energy Centre would like to thank and acknowledge the assistance of an anonymous reviewer for the review of this paper.

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Alberta

Low oil prices could have big consequences for Alberta’s finances

Published on

From the Fraser Institute

By Tegan Hill

Amid the tariff war, the price of West Texas Intermediate oil—a common benchmark—recently dropped below US$60 per barrel. Given every $1 drop in oil prices is an estimated $750 million hit to provincial revenues, if oil prices remain low for long, there could be big implications for Alberta’s budget.

The Smith government already projects a $5.2 billion budget deficit in 2025/26 with continued deficits over the following two years. This year’s deficit is based on oil prices averaging US$68.00 per barrel. While the budget does include a $4 billion “contingency” for unforeseen events, given the economic and fiscal impact of Trump’s tariffs, it could quickly be eaten up.

Budget deficits come with costs for Albertans, who will already pay a projected $600 each in provincial government debt interest in 2025/26. That’s money that could have gone towards health care and education, or even tax relief.

Unfortunately, this is all part of the resource revenue rollercoaster that’s are all too familiar to Albertans.

Resource revenue (including oil and gas royalties) is inherently volatile. In the last 10 years alone, it has been as high as $25.2 billion in 2022/23 and as low as $2.8 billion in 2015/16. The provincial government typically enjoys budget surpluses—and increases government spending—when oil prices and resource revenue is relatively high, but is thrown into deficits when resource revenues inevitably fall.

Fortunately, the Smith government can mitigate this volatility.

The key is limiting the level of resource revenue included in the budget to a set stable amount. Any resource revenue above that stable amount is automatically saved in a rainy-day fund to be withdrawn to maintain that stable amount in the budget during years of relatively low resource revenue. The logic is simple: save during the good times so you can weather the storm during bad times.

Indeed, if the Smith government had created a rainy-day account in 2023, for example, it could have already built up a sizeable fund to help stabilize the budget when resource revenue declines. While the Smith government has deposited some money in the Heritage Fund in recent years, it has not created a dedicated rainy-day account or introduced a similar mechanism to help stabilize provincial finances.

Limiting the amount of resource revenue in the budget, particularly during times of relatively high resource revenue, also tempers demand for higher spending, which is only fiscally sustainable with permanently high resource revenues. In other words, if the government creates a rainy-day account, spending would become more closely align with stable ongoing levels of revenue.

And it’s not too late. To end the boom-bust cycle and finally help stabilize provincial finances, the Smith government should create a rainy-day account.

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Alberta

Governments in Alberta should spur homebuilding amid population explosion

Published on

From the Fraser Institute

By Tegan Hill and Austin Thompson

In 2024, construction started on 47,827 housing units—the most since 48,336 units in 2007 when population growth was less than half of what it was in 2024.

Alberta has long been viewed as an oasis in Canada’s overheated housing market—a refuge for Canadians priced out of high-cost centres such as Vancouver and Toronto. But the oasis is starting to dry up. House prices and rents in the province have spiked by about one-third since the start of the pandemic. According to a recent Maru poll, more than 70 per cent of Calgarians and Edmontonians doubt they will ever be able to afford a home in their city. Which raises the question: how much longer can this go on?

Alberta’s housing affordability problem reflects a simple reality—not enough homes have been built to accommodate the province’s growing population. The result? More Albertans competing for the same homes and rental units, pushing prices higher.

Population growth has always been volatile in Alberta, but the recent surge, fuelled by record levels of immigration, is unprecedented. Alberta has set new population growth records every year since 2022, culminating in the largest-ever increase of 186,704 new residents in 2024—nearly 70 per cent more than the largest pre-pandemic increase in 2013.

Homebuilding has increased, but not enough to keep pace with the rise in population. In 2024, construction started on 47,827 housing units—the most since 48,336 units in 2007 when population growth was less than half of what it was in 2024.

Moreover, from 1972 to 2019, Alberta added 2.1 new residents (on average) for every housing unit started compared to 3.9 new residents for every housing unit started in 2024. Put differently, today nearly twice as many new residents are potentially competing for each new home compared to historical norms.

While Alberta attracts more Canadians from other provinces than any other province, federal immigration and residency policies drive Alberta’s population growth. So while the provincial government has little control over its population growth, provincial and municipal governments can affect the pace of homebuilding.

For example, recent provincial amendments to the city charters in Calgary and Edmonton have helped standardize building codes, which should minimize cost and complexity for builders who operate across different jurisdictions. Municipal zoning reforms in CalgaryEdmonton and Red Deer have made it easier to build higher-density housing, and Lethbridge and Medicine Hat may soon follow suit. These changes should make it easier and faster to build homes, helping Alberta maintain some of the least restrictive building rules and quickest approval timelines in Canada.

There is, however, room for improvement. Policymakers at both the provincial and municipal level should streamline rules for building, reduce regulatory uncertainty and development costs, and shorten timelines for permit approvals. Calgary, for instance, imposes fees on developers to fund a wide array of public infrastructure—including roads, sewers, libraries, even buses—while Edmonton currently only imposes fees to fund the construction of new firehalls.

It’s difficult to say how long Alberta’s housing affordability woes will endure, but the situation is unlikely to improve unless homebuilding increases, spurred by government policies that facilitate more development.

Tegan Hill

Director, Alberta Policy, Fraser Institute

Austin Thompson

Senior Policy Analyst, Fraser Institute
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