Connect with us

Canadian Energy Centre

Energy year in review 2023: The world doubles down on energy security and reliability

Published

18 minute read

From the Canadian Energy Centre

By Shawn Logan

As global demand for oil and gas surges, pragmatism returns to the energy discussion

Faced with soaring costs that rippled across economies, governments around the world embraced the critical need for energy security in 2023, adopting a more pragmatic approach to achieving climate goals. 

The world used more crude oil and coal in 2023 than anytime in human history, while global demand for liquefied natural gas (LNG) continued to grow as a vital fuel source, primarily in Europe and Asia. 

Europe in particular stepped back from some of its more aggressive timelines for reducing its reliance on oil and gas, with some nations striking long-term supply deals for LNG, returning to burning coal, or renewing investment in oil and gas exploration. 

Economic powerhouses China and India increasingly turned to coal to power their developing economies, spurring global growth of the most emissions-intensive fuel, while the U.S. maintained its lead as the world’s largest producer of oil and gas, setting new high water marks for both. 

Canada, meanwhile, saw steady progress on some key energy projects, completing construction of the Coastal GasLink pipeline, achieving major milestones on the LNG Canda export terminal, seeing the Trans Mountain pipeline expansion near completion, and the approval of a new major oil sands project for the first time in five years. 

The following is a recap of some of the key events from 2023, outlining how oil and gas have once again taken centre stage in the aftermath of Russia’s 2022 invasion of Ukraine, and the global energy crisis that it made worse: 

January 

  • Japanese Prime Minister Fumio Kishida visits Canada to make a personal appeal for more access to LNG. Like German Chancellor Olaf Scholz just five months earlier, Kishida is essentially rebuffed by Prime Minister Justin Trudeau. 
  • The International Energy Agency predicts that global oil demand will reach a record high in 2023, an increase of 1.9 million barrels per day from 2022’s previous peak. 
  • With LNG emerging as a critical resource to deal with the lingering global energy crisis, the United States catches up to Qatar as the world’s largest exporter.  

Prime Minister of Japan Fumio Kishida speaks during the G7 summit at Schloss Elmau, Germany on June 26, 2022 as (L-R) Canadian Prime Minister Justin Trudeau and German Chancellor Olaf Schulz look on. Getty Images photo

February 

Remo Benzi, owner of the Hop brewery lights candles for the candlelit dinner at “Hop-Mangiare di Birra” restaurant and brewery on October 4, 2022 in Alessandria, Italy. Every Tuesday evening, since a month, the restaurant turns off the lights and lights the candles as a reaction to the high energy prices. The Italian Business Confederation estimates that nearly 120,000 companies are threatened with bankruptcy due to energy price hikes. Getty Images photo

March 

  • China shows signs of economic resurgence after re-opening from its sweeping “zero-Covid” policies. The IEA projects China will account for nearly half of all projected growth in oil demand in 2023. 
  • In the U.S., the Biden Administration approves a massive new oil project in Alaska, expected to produce as much as 180,000 barrels per day of crude oil over the course of 30 years. The project is also estimated to create some $17 billion in revenue for the U.S. federal government. 
  • A new report by the UK-based Energy Transitions Commission finds that global investments in green energy would need to increase to $3.5 trillion per year in order to reach global net zero targets by 2050. That would add up to $110 trillion in new spending by 2050, more than the world’s current combined GDP. 

A man walks towards a ferry as the Wujing coal-electricity power station is seen across the Huangpu River in the Minhang district of Shanghai. Getty Images photo

April 

Indigenous leaders meet with U.S. ambassador to Canada David Cohen. Photo courtesy Energy for a Secure Future

May 

  • Recognizing the growing need for energy security across Europe and the world, Norway says oil and gas companies have a “social responsibility” to find more oil and natural gas resources in the northern Barents Sea adding they should “leave no stone unturned” in the pursuit of the critical resources. A month later Norway approves $18.5 billion to develop 19 offshore oil and gas projects. 
  • Skyrocketing demand for oil, led primarily by China’s economic surge, forces the IEA to recalculate its predictions for the year, upgrading its demand growth estimate to 2.2 million barrels per day to further increase record usage around the world. 
  • Canada’s Public Policy Forum estimates phasing out the country’s oil and gas industry in an effort to reduce emissions will lead to the loss of some $100 billion to the nation’s economy by 2050, with Alberta bearing the brunt of the blow. “This essentially amounts to a deep recession without a recovery ever materializing,” the authors wrote. 

Norway Minister of Petroleum and Energy Terje Assland and Equinor vice-president Grete B. Haaland at the official reopening of the Njord field on May 15th, 2023. Photo courtesy Equinor

June 

Qatar Minister of State for Energy Affairs and QatarEnergy CEO Saad Sherida Al-Kaabi tours sites related to the North Field East project in March 2023. Photo courtesy QatarGas

July 

A liquefied natural gas (LNG) tanker in Japan’s Tokyo Bay. Getty Images photo

August 

  • Independent researchers announce that China continues to ramp up coal power use, permitting 52 gigawatts of new capacity over the first six months of 2023. The additional plants would increase China’s coal burning capacity by 23 per cent. 
  • Independent analysis by S&P Global finds that Canada’s oil sands emissions remained flat in 2022, despite production growth, a positive sign that measures to reduce emissions  are working. 
  • For the second year in a row, Pakistan is forced out of the pricey LNG market, putting the impoverished country at high risk of a national energy crisis. 

Workers at the Sunrise oil sands project in northern Alberta. Photo courtesy BP

September 

  • Meeting in India, leaders of the G20 highlight the importance of energy security, and while agreeing to triple renewable capacity by 2030 avoid any language calling for a phase out of fossil fuels. Fault lines emerge between the West and developing nations that want to harness oil, natural gas and coal to grow their economies. 
  • The IEA releases its updated road map for reaching net zero, suggesting global demand for fossil fuels will peak before 2030. The stance is blasted by OPEC as one that could lead to global “energy chaos” and ignores the IEA’s own acknowledgement that one the world’s current trajectory, oil, gas and coal will still account for 62 per cent of the world’s energy mix in 2050, compared to 78 per cent in 2021. 
  • Saudi Aramco, one of the world’s largest oil producers, announces its intention to enter the burgeoning LNG industry, buying a minority stake in MidOcean Energy, which is looking to obtain stakes in four Australian LNG projects. 

A natural gas processing plant in Saudi Arabia. Photo courtesy Saudi Aramco

October 

View of the “Peace Monument” sculpture outside the headquarters of Venezuelan state-owned oil company PDVSA, in Caracas. Getty Images photo

November 

Coastal GasLink has surpassed 60 per cent overall project completion. Photo courtesy Coastal GasLink

December 

Russian President Vladimir Putin and executives with state oil company Rosneft present a major shipbuilding complex to Indian Prime Minister Narendra Modi. India will be an investor in a new US$157 billion oil project in the Russian Arctic. Photograph courtesy Rosneft

Todayville is a digital media and technology company. We profile unique stories and events in our community. Register and promote your community event for free.

Follow Author

Alberta

For second year in a row, Alberta oil and gas companies spend more than required on cleanup

Published on

From the Canadian Energy Center

By Grady Semmens

$923 million spent cleaning up inactive wells, sites and pipelines in 2023

As a business owner, Ryan Smith values few things more than predictability when it comes to the oil and gas market and the demand for his company’s services.

That’s why knowing that next year in Alberta, the regulator requires at least $750 million worth of work cleaning up inactive oil and gas wells and other legacy energy infrastructure is tremendously helpful for the CEO of Calgary-based 360 Engineering & Environmental Consulting.

“Having a minimum spend in place for the province makes the market more predictable and consistent, which in turn helps our clients and our business plan for the future, which is a good thing,” says Smith, whose company has completed more than 5,000 site closure activities in Canada and internationally since 2015.

“Site closure has really emerged as a growth market over the last decade, especially in Western Canada where the regulatory systems for oil and gas are more advanced than anywhere else we are exposed to. It is an integral part of the energy lifecycle, and if it is done well it adds a lot of value to the industry.”

The Alberta Energy Regulator (AER) introduced an industry-wide minimum “closure” spending requirement in 2022, part of Alberta’s Inventory Reduction Program to accelerate the remediation of inactive oil and gas wells, facilities and pipelines across the province.

The mandatory quota determines the minimum level of work a company must conduct primarily to decommission and reclaim a proportion of its inactive inventory.

Inactive wells are defined as those that have not been used for six months or a year, depending on what they are being used for. When a company decides that they will not reactivate an inactive well they decommission it through a process called abandonment.

A well is considered successfully abandoned after it is cleaned, plugged with cement, cut to a minimum of one meter below the surface and covered with a vented cap. After abandonment comes remediation and reclamation, where the land around the well is returned to the equivalent of its original state.

The first two years under the new rules saw Alberta’s energy industry significantly exceed the minimum closure requirements.

In 2022, companies spent more than $696 million, about 65 per cent more than the initial threshold of $422 million. The AER increased the minimum spend to $700 million in 2023, which producers surpassed by 22 per cent with total expenditures of $923 million.

The 2024 minimum remains at $700 million, while in July the regulator announced that the minimum spend for 2025 was raised to $750 million.

This closure work does not include remediation of oil sands mining sites, which is handled under the Mine Financial Security Program, nor does it include the closure of orphan wells (wells without a legal owner) managed by the industry-funded Orphan Well Association.

Gurpreet Lail, CEO of Enserva, an industry association representing energy service companies, suppliers and manufacturers, says there was an initial rush of closure work when the quotas were first put in place, but activity has since become more even as companies develop long-term closure plans.

“A lot of the low-lying fruit has been taken care of, so now companies are working on more complex closure files that take more time and more money,” Lail says.

Facility owners say that Alberta’s rules provide direction for planning closure and remediation work, which in the past may have been put on hold due to the ups and downs of the oil and gas market.

“When commodity prices are up, everyone is focused on drilling more wells and when prices are down, budgets are strained for doing work that doesn’t bring in revenue. Having a minimum spend makes sure closure work happens every year and ensures there is longer-term progress,” says Deborah Borthwick, asset retirement coordinator for Birchcliff Energy, an oil and natural gas producer focused in Alberta.

Over the last few years, Birchcliff has budgeted more than $3 million for annual facility closure work, far above its required minimum spend.

The company completed 11 well abandonments and decommissioned 23 facilities and pipelines in 2022, according to its latest environmental, social and governance report.

Borthwick says having the closure quota for 2025 already set has allowed it to plan ahead and line up the necessary service companies well in advance for next year’s remediation work.

Continue Reading

Alberta

Heavy-duty truckers welcome new ‘natural gas highway’ in Alberta

Published on

Clean Energy Fuels CEO Andrew Littlefair, Tourmaline CEO Mike Rose, and Mullen Group chairman Murray Mullen attend the opening of a new Clean Energy/Tourmaline compressed natural gas (CNG) fuelling station in Calgary on Oct. 22, 2024. Photo courtesy Tourmaline

From the Canadian Energy Centre

By Deborah Jaremko

New compressed natural gas fueling stations in Grande Prairie and Calgary join new stop in Edmonton

Heavy-duty truckers hauling everything from restaurant supplies to specialized oilfield services along one of Western Canada’s busiest corridors now have more access to a fuel that can help reduce emissions and save costs.

Two new fuelling stations serving compressed natural gas (CNG) rather than diesel in Grande Prairie and Calgary, along with a stop that opened in Edmonton last year, create the first phase of what proponents call a “natural gas highway”.

“Compressed natural gas is viable, it’s competitive and it’s good for the environment,” said Murray Mullen, chair of Mullen Group, which operates more than 4,300 trucks and thousands of pieces of equipment supporting Western Canada’s energy industry.

Right now, the company is running 19 CNG units and plans to deploy another 15 as they become available.

“They’re running the highways right now and they’re performing exceptionally well,” Mullen said on Oct. 22 during the ribbon-cutting ceremony opening the new station on the northern edge of Calgary along Highway 2.

“Our people love them, our customers love them and I think it’s going to be the way for the future to be honest,” he said.

Heavy-duty trucks at Tourmaline and Clean Energy’s new Calgary compressed natural gas fuelling station. Photo courtesy Tourmaline

According to Natural Resources Canada, natural gas burns more cleanly than gasoline or diesel fuel, producing fewer toxic pollutants and greenhouse gas emissions that contribute to climate change.

The two new CNG stops are part of a $70 million partnership announced last year between major Canadian natural gas producer Tourmaline and California-based Clean Energy Fuels.

Their deal would see up to 20 new CNG stations built in Western Canada over the next five years, daily filling up to 3,000 natural gas-fueled trucks.

One of North America’s biggest trucking suppliers to businesses including McDonald’s, Pizza Hut, Subway and Popeye’s says the new stations will help as it expands its fleet of CNG-powered vehicles across Canada.

Amy Senter, global vice-president of sustainability with Illinois-based Martin Brower, said in a statement that using more CNG is critical to the company achieving its emissions reduction targets.

For Tourmaline, delivering CNG to heavy-duty truckers builds on its multi-year program to displace diesel in its operations, primarily by switching drilling equipment to run on natural gas.

Between 2018 and 2022, the company displaced the equivalent of 36 Olympic-sized swimming pools worth of diesel that didn’t get used, or the equivalent emissions of about 58,000 passenger vehicles.

Tourmaline CEO Mike Rose speaks to reporters during the opening of a new Tourmaline/Clean Energy compressed natural gas fuelling station in Calgary on Oct. 22, 2024. Photo courtesy Tourmaline

Tourmaline CEO Mike Rose noted that the trucking sector switching fuel from diesel to natural gas is gaining momentum, notably in Asia.

A “small but growing” share of China’s trucking fleet moving to natural gas helped drive an 11 percent reduction in overall diesel consumption this June compared to the previous year, according to the latest data from the U.S. Energy Information Administration.

“China’s talking about 30 percent of the trucks sold going forward are to be CNG trucks, and it’s all about reducing emissions,” Rose said.

“It’s one global atmosphere. We’re going to reduce them here; they’re going to reduce them there and everybody’s a net winner.”

Switching from diesel to CNG is “extremely cost competitive” for trucking fleets, said Clean Energy CEO Andrew Littlefair.

“It will really move the big rigs that we need in Western Canada for the long distance and heavy loads,” he said.

Tourmaline and Clean Energy aim to have seven CNG fuelling stations operating by the end of 2025. Construction is set to begin in Kamloops, B.C., followed by Fort McMurray and Fort St. John.

“You’ll have that Western Canadian corridor, and then we’ll grow it from there,” Littlefair said.

Continue Reading

Trending

X