Economy
Wrapping Up Canadian Energy 2023 – Prosperity, Power Struggles, Pipelines, EV Promises and “Pie in the Sky” Politics
From EnergyNow Media
By Deidra Garyk
2023 was an optimistic year in the Canadian oil patch. The +15 walkway system in downtown Calgary has been buzzing with the energy of people hurrying to business meetings and networking events.
Some of those scurrying about were headed to talk multi-billion-dollar merger and acquisition (M&A) deals that the patch continued to experience throughout the year. Traditional oil companies also bought alternative energy and carbon tech companies. Carbon capture, utilization and storage (CCUS) was the investment decision of the year.
Oil and gas prices remained relatively high. Not great, but not in the toilet like the dark years of 2015 to 2021. That meant government coffers filled, easing some of the debt burden accumulated during COVID. Oil and gas companies, producers and the many service providers who support the production, were able to continue paying down debt and providing returns to patient shareholders.
Canadian majors Suncor, Cenovus, and Enbridge went through leadership changes at the top. I wish these men success and courage. They are going to need it to embolden pragmatism at all levels of government.
The Canadian federal government continues to be all-in on climate and green energy, seemingly to the exclusion of traditional, reliable energy sources. Although, since climate change has taken a backseat to affordability and energy security for the voting public – the only people politicians really care about – the Liberals have had to rebrand some programs to get buy-in.
One example is renaming the “Just Transition” the Sustainable Jobs Plan. Other than the name, not much has changed. There is still a push for unionized, non-oil and gas jobs.
The feds “invested” (their word, not mine) billions of dollars in EV battery plants, continuing to go all-in on 100 percent EV car sales in twelve years. Senior bureaucrats at Transport Canada even touted the nearness of EV heavy-duty commercial transportation and equipment. (Someone should tell them it will not work well in remote locations with no charging infrastructure.) Energy and Natural Resources Minister Jonathan Wilkinson lauded the day when agricultural equipment goes all electric, fantasizing about the economic boon that will bring. (Someone else should tell him it will not be experienced by farmers who have to spend their hard-earned dollars on equipment replacements.)
Joe Biden visited Ottawa in March. I happened to be there for a conference, so I got to experience the pomp and circumstance first-hand. I have never seen so much security, and I have travelled to places under military control and lived in a country that remains perpetually under the threat of foreign invasion.
Biden’s motorcade is a long, emissions-belching row of vehicles. I did not see any EVs. It includes two “Beasts” (one used as a decoy while the other transports the President), an ambulance, and several tricked-out SUVs. It is quite a spectacle.
As expected, topping the list of topics on the visit’s agenda, President Biden and Prime Minister Trudeau talked about energy and climate, as outlined in their joint statement.
Global sustainability reporting standards were released in June and come into effect January 1, 2024. Publicly traded companies are waiting for Canada to release jurisdiction-specific regulations to understand the magnitude of what will be required. In the Fall Economic Update, released November 22, the feds said rules will be put in place to extend mandatory climate reporting to private companies. That is a big hint at what all companies should expect, at a minimum.
You can listen to my podcast on the subject with energy analyst Dr. Tammy Nemeth here.
On the topic of climate, Bill S-243, An Act to enact the Climate-Aligned Finance Act and to make related amendments to other Acts passed second reading in the Senate in June. You may think this is just some boring Senate bill, but oil and gas boards and employees need to be aware of it.
The bill aims to restrict investment in hydrocarbons, forces companies to set climate commitments, and dictates who has to be part of a company’s board of directors. Worse, section 13(1) Appointment – restriction outlines who cannot be a board member – anyone who works in or owns shares in a fossil fuel company.
It goes as far as to include: “And whereas investment in energy efficiency, clean energy and clean technologies and the incentivization of innovation and behavioural change must replace investments in greenhouse-gas-emission-intensive activities for effective action against climate change.” It targets “fossil fuel activity” in the definition of “emissions-intensive activities”.
Alignment with climate commitments requires that companies:
- take into consideration vulnerable groups, communities and ecosystems, including the biodiversity of those ecosystems,
- make decisions based on equity and the best available science and
- do not promote, foster or exacerbate food insecurity or inequalities in society; and
- do not cause significant harm to social and environmental obligations recognized by Canada.
This bill should trouble any rational person, and it is not getting enough attention. It ramps up climate hysteria and enshrines it into all financial decision making. It is ideological to its core.
I encourage you to read the bill here.
Fortunately, two major, necessary egress projects – Coastal GasLink and Trans Mountain – are well underway before Bill S-243 can stop them. Coastal GasLink reached major milestones of 100 percent pipeline installation and mechanical completion, ahead of schedule. Unfortunately, the federally owned Trans Mountain pipeline has continued to experience delays and a cost increase to $30.9 billion. Although, it was about 80 percent complete in March and expected to be in service in the first quarter of 2024, the project has been delayed due to issues over the route and may not be completed until the end of 2024.
Canada’s summer wildfire season had environmental activists hot and bothered, blaming one thing, and one thing only – climate change!
Calgary hosted the 24th World Petroleum Congress and world energy leaders in September. The torch was passed on to Saudi Arabia to host next. Based on their booth, it will be an extravaganza that will undoubtedly proudly display their oil and gas development. Energy and Natural Resources Minister Jonathan Wilkinson dutifully kept to the Liberal’s script and was challenged to mention the words “oil” and “gas” during his speech at the World Petroleum Congress. This caused the ire of Alberta Premier Danielle Smith, who has had it with the feds’ attitude towards oil and gas.
She has now invoked the Alberta Sovereignty Act in an attempt to prevent the federal government from being able to enact the Clean Electricity Standard by 2035. She has taken a lot of heat for it, but Saskatchewan’s Premier Scott Moe did it first with the colloquially named Saskatchewan First Act. When adversarial Environment and Climate Change Canada Minister Steven Guilbeault threatened to criminalize the use of coal-fired power generation past 2030, Moe puffed out his chest and said, “come get me!”
For all the partisan naysayers attacking the Premiers, I recommend reading Electricity Canada’s response to the Clean Electricity Regulations. It is emotionless and objective, and it sides with the Premiers.
Good thing there is serious discussion about the electricity grid and reliability happening in the Edmonton Legislature because Alberta’s grid operator AESO has issued several warnings in the last year, on both hot and cold days. This has me impatiently waiting for the 2,700 megawatts of new natural gas-powered generation to come on in 2024.
November was all about the carbon tax fight. The feds doubled down on the importance of carbon taxes in the fight against global warming, but not in regions where their sitting MPs risk losing their seats (i.e. their jobs) in the next election. If you think it was not political, you are fooling yourself. They are still fighting over the applicability of a tax on farmers. As someone who eats, I would like it removed to keep the cost of food down.
Premier Moe will not charge Saskatchewan residents carbon tax on natural gas and electricity used to heat homes. This seems reasonable considering that it gets really, really, really cold in Saskatchewan for many days in the winter and reliable energy is a must.
In a hotter region of the world, Dubai, United Arab Emirates hosted COP28 in December. It is the twenty eighth UN climate conference, and yet we appear no closer to solving the thing they say is a crisis – rising emissions. The globe reached the height of emissions in 2023, even though coal use is down and renewable energy capacity and investment is up, up, up, according to the International Energy Agency.
As expected, Canada made various expensive pledges. Minister Guilbeault bounces to the podium for a photo op, drops a climate pledge or two, and the rest of us are left trying to figure out how to meet the commitment. The most contentious for Alberta and Saskatchewan was the oil and gas emissions cap that has been called a de facto production cap.
GEOPOLITICS
With energy security remaining a priority for citizens, nuclear is no longer a bad word. Countries and regions are expanding existing nuclear infrastructure and there is increasing public acceptance for small modular reactors. The false fear tactics used by the anti-nuclear activists have finally been shown for what they are – exaggerated and untrue.
The BRICS alliance expanded with the addition of six new members: Iran, Saudi Arabia, Egypt, Ethiopia, Argentina, and the United Arab Emirates.
Not only are the BRICS nations population and economic power players, they hold the keys to unlocking vast reserves of reliable energy. Total oil production from BRICS nations will be between 40-45 percent of global oil production, more than OPEC’s 35-40 percent. In addition, the members hold vast reserves of the minerals needed for any future energy transformation.
Forty other countries applied to join, demonstrating an interest in the group. Western leaders and NGOs would be wise to pay attention to the growing influence of the BRICS, even if they dislike some of the members.
BRICS is my geopolitical story of the year as it continues to disrupt global energy markets. In 2022, India increased purchases of discounted Russian oil by forty percent. This year, India purchased oil from the United Arab Emirates in rupees, their local currency. These are two examples of the shifts that are happening but are seemingly ignored by the West.
Overall, it appears that pragmatism and realism are influencing political energy decisions, and 2024 is expected to be another positive year for the Canadian oil patch.
All the best for the new year. May you enjoy peace and prosperity.
About Deidra Garyk
Deidra Garyk has been working in the Canadian energy industry for almost 20 years. She is currently the Manager, ESG & Sustainability at an oilfield service company. Prior to that, she worked in roles of varying seniority at exploration and production companies in joint venture contracts where she was responsible for working collaboratively with stakeholders to negotiate access to pipelines, compressors, plants, and batteries.
Outside of her professional commitments, Deidra is an energy advocate and thought leader who researches, writes, and speaks about energy policy and advocacy to promote balanced, honest, fact-based conversations.
Business
The world is no longer buying a transition to “something else” without defining what that is
From Resource Works
By Stewart Muir
Even Bill Gates has shifted his stance, acknowledging that renewables alone can’t sustain a modern energy system — a reality still driving decisions in Canada.
You know the world has shifted when the New York Times, long a pulpit for hydrocarbon shame, starts publishing passages like this:
“Changes in policy matter, but the shift is also guided by the practical lessons that companies, governments and societies have learned about the difficulties in shifting from a world that runs on fossil fuels to something else.”
For years, the Times and much of the English-language press clung to a comfortable catechism: 100 per cent renewables were just around the corner, the end of hydrocarbons was preordained, and anyone who pointed to physics or economics was treated as some combination of backward, compromised or dangerous. But now the evidence has grown too big to ignore.
Across Europe, the retreat to energy realism is unmistakable. TotalEnergies is spending €5.1 billion on gas-fired plants in Britain, Italy, France, Ireland and the Netherlands because wind and solar can’t meet demand on their own. Shell is walking away from marquee offshore wind projects because the economics do not work. Italy and Greece are fast-tracking new gas development after years of prohibitions. Europe is rediscovering what modern economies require: firm, dispatchable power and secure domestic supply.
Meanwhile, Canada continues to tell itself a different story — and British Columbia most of all.
A new Fraser Institute study from Jock Finlayson and Karen Graham uses Statistics Canada’s own environmental goods and services and clean-tech accounts to quantify what Canada’s “clean economy” actually is, not what political speeches claim it could be.
The numbers are clear:
- The clean economy is 3.0–3.6 per cent of GDP.
- It accounts for about 2 per cent of employment.
- It has grown, but not faster than the economy overall.
- And its two largest components are hydroelectricity and waste management — mature legacy sectors, not shiny new clean-tech champions.
Despite $158 billion in federal “green” spending since 2014, Canada’s clean economy has not become the unstoppable engine of prosperity that policymakers have promised. Finlayson and Graham’s analysis casts serious doubt on the explosive-growth scenarios embraced by many politicians and commentators.
What’s striking is how mainstream this realism has become. Even Bill Gates, whose philanthropic footprint helped popularize much of the early clean-tech optimism, now says bluntly that the world had “no chance” of hitting its climate targets on the backs of renewables alone. His message is simple: the system is too big, the physics too hard, and the intermittency problem too unforgiving. Wind and solar will grow, but without firm power — nuclear, natural gas with carbon management, next-generation grid technologies — the transition collapses under its own weight. When the world’s most influential climate philanthropist says the story we’ve been sold isn’t technically possible, it should give policymakers pause.
And this is where the British Columbia story becomes astonishing.
It would be one thing if the result was dramatic reductions in emissions. The provincial government remains locked into the CleanBC architecture despite a record of consistently missed targets.
Since the staunchest defenders of CleanBC are not much bothered by the lack of meaningful GHG reductions, a reasonable person is left wondering whether there is some other motivation. Meanwhile, Victoria’s own numbers a couple of years ago projected an annual GDP hit of courtesy CleanBC of roughly $11 billion.
But here is the part that would make any objective analyst blink: when I recently flagged my interest in presenting my research to the CleanBC review panel, I discovered that the “reviewers” were, in fact, two of the key architects of the very program being reviewed. They were effectively asked to judge their own work.
You can imagine what they told us.
What I saw in that room was not an evidence-driven assessment of performance. It was a high-handed, fact-light defence of an ideological commitment. When we presented data showing that doctrinaire renewables-only thinking was failing both the economy and the environment, the reception was dismissive and incurious. It was the opposite of what a serious policy review looks like.
Meanwhile our hydro-based electricity system is facing historic challenges: long term droughts, soaring demand, unanswered questions about how growth will be powered especially in the crucial Northwest BC region, and continuing insistence that providers of reliable and relatively clean natural gas are to be frustrated at every turn.
Elsewhere, the price of change increasingly includes being able to explain how you were going to accomplish the things that you promise.
And yes — in some places it will take time for the tide of energy unreality to recede. But that doesn’t mean we shouldn’t be improving our systems, reducing emissions, and investing in technologies that genuinely work. It simply means we must stop pretending politics can overrule physics.
Europe has learned this lesson the hard way. Global energy companies are reorganizing around a 50-50 world of firm natural gas and renewables — the model many experts have been signalling for years. Even the New York Times now describes this shift with a note of astonishment.
British Columbia, meanwhile, remains committed to its own storyline even as the ground shifts beneath it. This isn’t about who wins the argument — it’s about government staying locked on its most basic duty: safeguarding the incomes and stability of the families who depend on a functioning energy system.
Resource Works News
From the Fraser Institute
By Matthew Lau
Canada’s lagging productivity growth has been widely discussed, especially after Bank of Canada senior deputy governor Carolyn Rogers last year declared it “an emergency” and said “it’s time to break the glass.” The federal Liberal government, now entering its eleventh year in office, admitted in its recent budget that “productivity remains weak, limiting wage gains for workers.”
Numerous recent reports show just how weak Canada’s productivity has been. A recent study published by the Fraser Institute shows that since 2001, labour productivity has increased only 16.5 per cent in Canada vs. 54.7 per cent in the United States, with our underperformance especially notable after 2017. Weak business investment is a primary reason for Canada’s continued poor economic outcomes.
A recent McKinsey study provides worrying details about how the productivity crisis pervades almost all sectors of the economy. Relative to the U.S., our labour productivity underperforms in: mining, quarrying, and oil and gas extraction; construction; manufacturing; transportation and warehousing; retail trade; professional, scientific, and technical services; real estate and rental leasing; wholesale trade; finance and insurance; information and cultural industries; accommodation and food services; utilities; arts, entertainment and recreation; and administrative and support, waste management and remediation services.
Canada has relatively higher labour productivity in just one area: agriculture, forestry, fishing and hunting. To make matters worse, in most areas where Canada’s labour productivity is less than American, McKinsey found we had fallen further behind from 2014 to 2023. In addition to doing poorly, Canada is trending in the wrong direction.
Broadening the comparison to include other OECD countries does not make the picture any rosier—Canada “is growing more slowly and from a lower base,” as McKinsey put it. This underperformance relative to other countries shows Canada’s economic productivity crisis is not the result of external factors but homemade.
The federal Liberals have done little to reverse our relative decline. The Carney government’s proposed increased spending on artificial intelligence (AI) may or may not help. But its first budget missed a clear opportunity to implement tax reform and cuts. As analyses from the Fraser Institute, University of Calgary, C.D. Howe Institute, TD Economics and others have argued, fixing Canada’s uncompetitive tax regime would help lift productivity.
Regulatory expansion has also driven Canada’s relative economic decline but the federal budget did not reduce the red tape burden. Instead, the Carney government empowered cabinet to decide which large natural resource and infrastructure projects are in the “national interest”—meaning that instead of predictable transparent rules, businesses must answer to the whims of politicians.
The government has also left in place many of its Trudeau-era environmental regulations, which have helped push pipeline investors away for years. It is encouraging that a new “memorandum of understanding” between Ottawa and Alberta may pave the way for a new oil pipeline. A memorandum of undertaking would have been better.
Although the government paused its phased-in ban on conventionally-powered vehicle sales in the face of heavy tariff-related headwinds to Canada’s automobile sector, it still insists that all new light-duty vehicle sales by 2035 must be electric. Liberal MPs on the House of Commons Industry Committee recently voted against a Conservative motion calling for repeal of the EV mandate. Meanwhile, Canadian consumers are voting with their wallets. In September, only 10.2 per cent of new motor vehicle sales were “zero-emission,” an ominous18.2 per cent decline from last year.
If the Carney government continues down its current path, it will only make productivity and consumer welfare worse. It should change course to reverse Canada’s economic underperformance and help give living standards a much-needed boost.
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