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Canadian Energy Centre

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

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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

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Canadian Energy Centre

Saskatchewan Indigenous leaders urging need for access to natural gas

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Piapot First Nation near Regina, Saskatchewan. Photo courtesy Piapot First Nation/Facebook

From the Canadian Energy Centre

By Cody Ciona and Deborah Jaremko

“Come to my nation and see how my people are living, and the struggles that they have day to day out here because of the high cost of energy, of electric heat and propane.”

Indigenous communities across Canada need access to natural gas to reduce energy poverty, says a new report by Energy for a Secure Future (ESF).

It’s a serious issue that needs to be addressed, say Indigenous community and business leaders in Saskatchewan.

“We’re here today to implore upon the federal government that we need the installation of natural gas and access to natural gas so that we can have safe and reliable service,” said Guy Lonechild, CEO of the Regina-based First Nations Power Authority, on a March 11 ESF webinar.

Last year, 20 Saskatchewan communities moved a resolution at the Assembly of First Nations’ annual general assembly calling on the federal government to “immediately enhance” First Nations financial supports for “more desirable energy security measures such as natural gas for home heating.”

“We’ve been calling it heat poverty because that’s what it really is…our families are finding that they have to either choose between buying groceries or heating their home,” Chief Christine Longjohn of Sturgeon Lake First Nation said in the ESF report.

“We should be able to live comfortably within our homes. We want to be just like every other homeowner that has that choice to be able to use natural gas.”

At least 333 First Nations communities across Canada are not connected to natural gas utilities, according to the Canada Energy Regulator (CER).

ESF says that while there are many federal programs that help cover the upfront costs of accessing electricity, primarily from renewable sources, there are no comparable ones to support natural gas access.

“Most Canadian and Indigenous communities support actions to address climate change. However, the policy priority of reducing fossil fuel use has had unintended consequences,” the ESF report said.

“Recent funding support has been directed not at improving reliability or affordability of the energy, but rather at sustainability.”

Natural gas costs less than half — or even a quarter — of electricity prices in Alberta, British Columbia, Ontario, Manitoba and Saskatchewan, according to CER data.

“Natural gas is something NRCan [Natural Resources Canada] will not fund. It’s not considered a renewable for them,” said Chief Mark Fox of the Piapot First Nation, located about 50 kilometres northeast of Regina.

“Come to my nation and see how my people are living, and the struggles that they have day to day out here because of the high cost of energy, of electric heat and propane.”

According to ESF, some Indigenous communities compare the challenge of natural gas access to the multiyear effort to raise awareness and, ultimately funding, to address poor water quality and access on reserve.

“Natural gas is the new water,” Lonechild said.

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Alberta

The beauty of economic corridors: Inside Alberta’s work to link products with new markets

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From the Canadian Energy Centre

Q&A with Devin Dreeshen, Minister of Transport and Economic Corridors

Devin Dreeshen, Alberta’s Minister of Transportation
and Economic Corridors.

CEC: How have recent developments impacted Alberta’s ability to expand trade routes and access new markets for energy and natural resources?

Dreeshen: With the U.S. trade dispute going on right now, it’s great to see that other provinces and the federal government are taking an interest in our east, west and northern trade routes, something that we in Alberta have been advocating for a long time.

We signed agreements with Saskatchewan and Manitoba to have an economic corridor to stretch across the prairies, as well as a recent agreement with the Northwest Territories to go north. With the leadership of Premier Danielle Smith, she’s been working on a BC, prairie and three northern territories economic corridor agreement with pretty much the entire western and northern block of Canada.

There has been a tremendous amount of work trying to get Alberta products to market and to make sure we can build big projects in Canada again.

CEC: Which infrastructure projects, whether pipeline, rail or port expansions, do you see as the most viable for improving Alberta’s global market access?

Dreeshen: We look at everything. Obviously, pipelines are the safest way to transport oil and gas, but also rail is part of the mix of getting over four million barrels per day to markets around the world.

The beauty of economic corridors is that it’s a swath of land that can have any type of utility in it, whether it be a roadway, railway, pipeline or a utility line. When you have all the environmental permits that are approved in a timely manner, and you have that designated swath of land, it politically de-risks any type of project.

CEC: A key focus of your ministry has been expanding trade corridors, including an agreement with Saskatchewan and Manitoba to explore access to Hudson’s Bay. Is there any interest from industry in developing this corridor further?

Dreeshen: There’s been lots of talk [about] Hudson Bay, a trade corridor with rail and port access. We’ve seen some improvements to go to Churchill, but also an interest in the Nelson River.

We’re starting to see more confidence in the private sector and industry wanting to build these projects. It’s great that governments can get together and work on a common goal to build things here in Canada.

CEC: What is your vision for Alberta’s future as a leader in global trade, and how do economic corridors fit into that strategy?

Dreeshen: Premier Smith has talked about C-69 being repealed by the federal government [and] the reversal of the West Coast tanker ban, which targets Alberta energy going west out of the Pacific.

There’s a lot of work that needs to be done on the federal side. Alberta has been doing a lot of the heavy lifting when it comes to economic corridors.

We’ve asked the federal government if they could develop an economic corridor agency. We want to make sure that the federal government can come to the table, work with provinces [and] work with First Nations across this country to make sure that we can see these projects being built again here in Canada.

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