Squeeze the industry to please his party’s green base or keep output, revenue and high-paying employment flowing?
Talk at the latest climate-change shindig in Dubai has centred around the future of the oil industry and whether countries should pledge to phase out oil and gas production entirely or simply transform the industry in decades to come. Canada always talks a deep-green game at these affairs but are we really ready to nail shut the oil and gas coffin?
Maybe not. In Dubai Canada announced a cap-and-trade approach to oil and gas emissions but argued it won’t actually stop oil and gas production outright. The provinces, who yet again weren’t consulted, may not agree. Besides, promises are one thing. The record is another.
It also emerged in Dubai that the Emirates, seventh largest oil producer, is expecting to increase its production by a million barrels a day (mbd) by 2030. This is not a new trend. According to the U.S. Energy Information Service, the UAE increased production of oil and hydrocarbon liquids like coal oil by 15.3 per cent between 2015 and 2022, from 3.7 mbd to 4.2, fourth-most of all oil-producing economies. That’s much faster than world output, which was up only 3.6 per cent since 2015, reaching 100.1 mbd last year.
The irony — maybe even the hypocrisy — is that three countries in the Americas have increased their petroleum output even more than this Middle Eastern oil sheikhdom has: the U.S., Brazil and, yes, us: Canada.
The Biden administration, which is promising 2030 emissions will be half 2005 levels, has so far failed to stymie oil and gas development. U.S. petroleum and liquids production has soared by 33.9 per cent since 2015, reaching 20.3 mbd in 2022. Two-fifths of the increase has been on Biden’s watch. The U.S., not Saudi Arabia, is now the world’s leading oil producer, accounting for fully 20 per cent of global supply.
The Trudeau government has pledged that 2030 oil and gas emissions will be 42 per cent lower than in 2005. This has led to tensions with the oil- and gas-producing provinces, which are resisting emissions caps for oil, gas and electricity. Ottawa’s opposition to liquefied natural gas sales even as the U.S. and Qatar are making great inroads in the world market has had industry leaders scratching their heads. Even so, since the Liberals came to power in 2015, Canada’s oil and gas production has grown second fastest globally, at 26.7 per cent, to reach 5.6 mbd last year. Much of this growth is due to big investments in the oil sands before 2015 but the production increase has been accommodated by pipeline expansion, with the federally-owned TMX soon to come on stream.
Neither Biden nor Trudeau is attending COP28 but Brazil’s president, Lula de Silva, stormed in at the head of a delegation of 2000 to repeat a pledge to cut 2030 emissions to less than half 2005 levels. Much of reduction results from reforestation, however, not phasing out oil and gas. And, to the surprise of attendees, Lula announced that Brazil will align itself more closely with OPEC. No shock there. Since 2015, Brazil’s oil and gas production has risen by 20 per cent, making it the 8th largest producer in the world at 3.8 mbd last year. It now evidently sees itself as a player.
Besides the U.S. Canada, Brazil and UAE, only Iraq (at 10.4 per cent) and Kazakhstan (at 4.5 per cent) have seen their oil production grow faster than the world average since 2015. The rest have had little growth, with seven countries registering declines, including 22.4 per cent in Mexico and 36.7 per cent in Nigeria, the biggest drop anywhere.
The standstill or even loss in oil and gas production in many oil-producing countries since 2015 is due to several factors. Oil prices dropped by three-fifths after 2014 and the pandemic caused another crash. More recently, Saudi Arabia and Russia have persuaded OPEC+ to constrain production and push prices to over US$80 per barrel — mainly in order to replenish their treasuries. In some places, including Ghana, the U.K. and Norway, old fields are depleting. Elsewhere, but especially in Africa and Mexico, crime and political instability continue to discourage development. Finally, in the face of lagging demand, investors have encouraged companies to distribute profits rather than invest in greenfield oil and gas projects.
But top producers like the U.S. and Canada are not holding back and governments aren’t stopping them. Phase-out is all short-term cost in pursuit of climate gains that won’t be realized for decades, if at all. Nor are politicians willing to eliminate the tax revenues and high-paying jobs the industry generates. With energy security crucial in an increasingly dangerous world, oil-consuming countries are finding that intermittent renewable energy and other high-cost energy sources are no substitute for fossil fuels.
As the federal Liberals sink in the polls, they face a many-ways existential choice. Do they pursue their climate promises and phase out oil and gas? Or do they secure the benefits of oil and gas production for years to come? Or, a third option: do they say one thing but quietly do the other? Is it all, as Shakespeare would say, “much ado about nothing”?
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The Department of Energy (DOE) touted a report on Wednesday which states that America broke records in liquefied natural gas (LNG) exports.
The U.S. became the first country to export over 10 million metric tonnes of LNG in one month in October, Reuters reported on Monday, citing preliminary data from the financial firm LSEG. The DOE posted on X on Wednesday that “there are big opportunities ahead for U.S. natural gas” and has consistentlychampioned LNG in a sharp departure from former President Joe Biden’s crackdown on the resource.
“The fact that America’s oil and gas industry was able to pass this stunning milestone is impressive considering all the roadblocks to progress which were thrown up by the Biden administration,” David Blackmon, an energy and policy writer who spent 40 years in the oil and gas business, told the Daily Caller News Foundation. “It is a testament to both the resilience and innovative mindset of the industry and to the phenomenal wealth of America’s natural gas resource.”
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🗣️RECORD BREAKING: For the first time, U.S. LNG exports are projected to surpass 10 million metric tons in a single month. There are big opportunities ahead for U.S. natural gas!
Two facilities in Louisiana and Texas are responsible for the LNG export surge, according to Reuters. The U.S. LNG industry emerged as an energy sector giant in recent decades, with America now leading the world in LNG exports after being projected to be a net importer as late as 2010, according to S&P Global.
The Biden administration enacted a freeze on new LNG export permits and “intentionally buried a lot of data and released a skewed study to discredit the benefits of American LNG,” the DCNF previously reported. The environmental lobby applauded Biden’s January 2024 freeze on new LNG export terminals, though critics argued that the policy stalled investment, would not reduce emissions and undermined America’s global strategic interests.
In contrast, President Donald Trump sought opportunities to bolster LNG and reversed the new permit pause through a day-one executive order. Some energy policy experts told the DCNF that the reported milestone highlights the resiliency of the industry and the benefit of Trump’s “American energy dominance” agenda.
“By expediting LNG terminal expansion and signing off on export agreements, the Trump administration is rapidly powering the world while simultaneously keeping his commitment for U.S. energy dominance,” Sterling Burnett, director of the Arthur B. Robinson Center on Climate and Environmental Policy at The Heartland Institute, told the DCNF. “The world wants U.S. gas, and under Trump they are getting it, in the process showing the world what a market economy can do when unfettered by unnecessary, duplicative, regulations that stifle growth.”
“The only thing that has held the U.S. economy and our energy independence and dominance back over the decades is Democratic administration’s pushing inane, futile, climate policies, restricting fossil fuel use,” Burnett continued. “New LNG export data shows those days are over and what America can accomplish for itself and the world, when a President puts America first.”
Despite the state of our economy and the ongoing threat of U.S. tariffs, NDP BC Premier David Eby says he will not support a new pipeline from Alberta.
Has he not learned from the Trans Mountain pipeline fiasco, which has cost taxpayers close to $50 billion because of the antics of the BC NDP government?
Dan McTeague says Eby should either put up, shut up, or pay up.
