Alberta
Five ways Canada’s oil and gas industry showed improved environmental performance in 2023
Natural gas processing facility in Alberta. Photo courtesy Alberta Energy Regulator
From the Canadian Energy Centre
Data shows work industry is doing to reduce its environmental footprint
New data released in 2023 shows the progress Canada’s oil and gas industry is making to reduce its environmental footprint.
From emissions to water use and reclamation, here are some key performance statistics.
1. Methane emissions reduction target achieved three years ahead of schedule
Photo courtesy Tourmaline
The Alberta Energy Regulator (AER) released data in November showing that oil and gas producers in the province achieved the target of reducing methane emissions by 45 per cent compared to 2014.
The milestone was achieved in 2022, three years ahead of the 2025 government deadline.
Reducing methane emissions comes primarily from reducing small leaks from valves, pump seals, and other equipment, as well as reducing flaring and venting.
2. Oil sands emissions stay flat despite production growth
Oil sands steam generators. Photo courtesy Cenovus Energy
An updated study by S&P Global in August found oil sands emissions did not increase in 2022 even though production grew.
It’s a significant first that indicates oil sands emissions may start decreasing sooner than previously expected, said Kevin Birn, S&P Global’s vice-president of Canadian oil markets.
Total oil sands emissions were 81 megatonnes in 2022, nearly flat with 2021 despite a production increase of about 50,000 barrels per day.
In 2022, S&P Global predicted peak oil sands emissions around 2025. The new findings indicate it could happen faster.
3. Producers spend millions more than required on oil and gas cleanup
Photo courtesy Alberta Energy Regulator
Oil and gas producers in Alberta spent significantly more than required in 2022 cleaning up inactive wells, facilities and pipelines, the AER reported in October.
The regulator’s industry-wide minimum “closure” spend for 2022 was set at $422 million. But the final tally showed producers spent $685 million, or about 60 per cent more than the regulator required.
Industry abandoned 10,334 inactive wells, pipelines and facilities in 2022 – nearly double the amount abandoned in 2019 and 2020, the AER reported.
Reclamation activity also accelerated, with the AER issuing 461 reclamation certificates, an increase of one third compared to 2021.
The regulator reports that 17 per cent of licensed wells in Alberta are now considered inactive, down from 21 per cent in 2019. And about 30 per cent of licensed wells are now considered reclaimed, up from 27 per cent in 2019.
4. Oil sands reclaimed land growing
Wetland in reclaimed area in the Athabasca oil sands region. Photo by Greg Halinda for the Canadian Energy Centre
Data released by Canada’s Oil Sands Innovation Alliance highlights the growing spread of the industry’s reclaimed land.
As of 2021, oil sands operators had permanently reclaimed 10,344 hectares, the equivalent area of more than 20,000 NFL football fields – a 16 per cent increase from 2019.
Of this, 1,296 hectares (about 2,500 NFL football fields) is permanently reclaimed to wetlands and aquatics.
5. Fresh water use per barrel declining
Photo courtesy Cenovus Energy
New data on water use in Alberta’s oil and gas industry released in December shows producers continue to reduce the use of fresh water from lakes, rivers and shallow groundwater
The oil and gas industry used less than one per cent of Alberta’s available fresh water in 2022, the AER reported.
Thanks primarily to increased water recycling, fresh water use per barrel in Alberta oil and gas has decreased by 22 per cent since 2013.
Overall, 82 per cent of water used in Alberta oil and gas in 2022 was recycled; 80 per cent in oil sands mining, and 90 per cent in drilled or “in situ” oil sands production.
Premier Danielle Smith issued the following statement on the April 2, 2025 U.S. tariff announcement:
“Today was an important win for Canada and Alberta, as it appears the United States has decided to uphold the majority of the free trade agreement (CUSMA) between our two nations. It also appears this will continue to be the case until after the Canadian federal election has concluded and the newly elected Canadian government is able to renegotiate CUSMA with the U.S. administration.
“This is precisely what I have been advocating for from the U.S. administration for months.
“It means that the majority of goods sold into the United States from Canada will have no tariffs applied to them, including zero per cent tariffs on energy, minerals, agricultural products, uranium, seafood, potash and host of other Canadian goods.
“There is still work to be done, of course. Unfortunately, tariffs previously announced by the United States on Canadian automobiles, steel and aluminum have not been removed. The efforts of premiers and the federal government should therefore shift towards removing or significantly reducing these remaining tariffs as we go forward and ensuring affected workers across Canada are generously supported until the situation is resolved.
“I again call on all involved in our national advocacy efforts to focus on diplomacy and persuasion while avoiding unnecessary escalation. Clearly, this strategy has been the most effective to this point.
“As it appears the worst of this tariff dispute is behind us (though there is still work to be done), it is my sincere hope that we, as Canadians, can abandon the disastrous policies that have made Canada vulnerable to and overly dependent on the United States, fast-track national resource corridors, get out of the way of provincial resource development and turn our country into an independent economic juggernaut and energy superpower.”
From the Fraser Institute
By any measure, Alberta is an energy powerhouse—within Canada, but also on a global scale. In 2023, it produced 85 per cent of Canada’s oil and three-fifths of the country’s natural gas. Most of Canada’s oil reserves are in Alberta, along with a majority of natural gas reserves. Alberta is the beating heart of the Canadian energy economy. And energy, in turn, accounts for one-quarter of Canada’s international exports.
Consider some key facts about the province’s energy landscape, as noted in the Alberta Energy Regulator’s (AER) 2023 annual report. Oil and natural gas production continued to rise (on a volume basis) in 2023, on the heels of steady increases over the preceding half decade. However, the dollar value of Alberta’s oil and gas production fell in 2023, as the surging prices recorded in 2022 following Russia’s invasion of Ukraine retreated. Capital spending in the province’s energy sector reached $30 billion in 2023, making it the leading driver of private-sector investment. And completion of the Trans Mountain pipeline expansion project has opened new offshore export avenues for Canada’s oil industry and should boost Alberta’s energy production and exports going forward.
In a world striving to address climate change, Alberta’s hydrocarbon-heavy energy sector faces challenges. At some point, the world may start to consume less oil and, later, less natural gas (in absolute terms). But such “peak” consumption hasn’t arrived yet, nor does it appear imminent. While the demand for certain refined petroleum products is trending down in some advanced economies, particularly in Europe, we should take a broader global perspective when assessing energy demand and supply trends.
Looking at the worldwide picture, Goldman Sachs’ 2024 global energy forecast predicts that “oil usage will increase through 2034” thanks to strong demand in emerging markets and growing production of petrochemicals that depend on oil as the principal feedstock. Global demand for natural gas (including LNG) will also continue to increase, particularly since natural gas is the least carbon-intensive fossil fuel and more of it is being traded in the form of liquefied natural gas (LNG).
Against this backdrop, there are reasons to be optimistic about the prospects for Alberta’s energy sector, particularly if the federal government dials back some of the economically destructive energy and climate policies adopted by the last government. According to the AER’s “base case” forecast, overall energy output will expand over the next 10 years. Oilsands output is projected to grow modestly; natural gas production will also rise, in part due to greater demand for Alberta’s upstream gas from LNG operators in British Columbia.
The AER’s forecast also points to a positive trajectory for capital spending across the province’s energy sector. The agency sees annual investment rising from almost $30 billion to $40 billion by 2033. Most of this takes place in the oil and gas industry, but “emerging” energy resources and projects aimed at climate mitigation are expected to represent a bigger slice of energy-related capital spending going forward.
Like many other oil and gas producing jurisdictions, Alberta must navigate the bumpy journey to a lower-carbon future. But the world is set to remain dependent on fossil fuels for decades to come. This suggests the energy sector will continue to underpin not only the Alberta economy but also Canada’s export portfolio for the foreseeable future.
Jock Finlayson
Senior Fellow, Fraser Institute
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