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How oil and gas support food security in Canada and around the world

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General view of the ‘TD Canadian 4-H Dairy Classic Showmanship’ within the 101st edition of Royal Agricultural Winter Fair at Exhibition Place in Toronto, Ontario, on November 6, 2023. The Royal is the largest combined indoor agriculture fair and international equestrian competition in the world. Getty Images photo

From the Canadian Energy Centre

By Mario Toneguzzi

‘Agriculture requires fuel, and it requires lubricants. It requires heat and electricity. Modern agriculture can’t be done without energy’

Agriculture and oil and gas are two of Canada’s biggest businesses – and they are closely linked, industry leaders say.  

From nitrogen-based fertilizer to heating and equipment fuels, oil and gas are the backbone of Canada’s farms, providing food security for Canadians and exports to nearly 200 countries around the world.  

“Canada is a country that is rich in natural resources, and we are among the best, I would even characterize as the best, in terms of the production of sustainable energy and food, not only for Canadians but for the rest of the world,” said Don Smith, chief operating officer of the United Farmers of Alberta Co-operative.  

“The two are very closely linked together… Agriculture requires fuel, and it requires lubricants. It requires heat and electricity. Modern agriculture can’t be done without energy, and it is a significant portion of operating expenses on a farm.” 

The need for stable food sources is critical to a global economy whose population is set to reach 9.7 billion people by 2050. 

The main pillars of food security are availability and affordability, said Keith Currie, president of the Canadian Federation of Agriculture (CFA). 

“In Canada, availability is not so much an issue. We are a very productive country when it comes to agriculture products and food products. But food affordability has become an issue for a number of people,” said Currie, who is also on the advisory council for the advocacy group Energy for a Secure Future. 

The average price of food bought in stores increased by nearly 25 per cent over the last five years, according to Statistics Canada. 

Restricting access to oil and gas, or policies like carbon taxes that increase the cost for farmers to use these fuels, risk increasing food costs even more for Canadians and making Canadian food exports less attractive to global customers, CFA says. 

“Canada is an exporting nation when it comes to food. In order for us to be competitive we not only have to have the right trade deals in place, but we have to be competitive price wise too,” Currie said. 

Under an incredible Saskatchewan sky, a farmer walks toward his air seeder to begin the process of planting this year’s crop. Getty Images photo

Canada is the fifth-largest exporter of agri-food and seafood in the world, exporting approximately $93 billion of products in 2022, according to Agriculture Canada.  

Meanwhile, Canadians spent nearly $190 billion on food, beverage, tobacco and cannabis products in 2022, representing the third-largest household expenditure category after transportation and shelter. 

Currie said there are opportunities for renewable energy to help supplement oil and gas in agriculture, particularly in biofuels.  

“But we’re not at a point from a production standpoint or an overall infrastructure standpoint where it’s a go-to right away,” he said.  

“We need the infrastructure and we need probably a lot of incentives before we can even think about moving away from the oil and gas sector as a supplier of energy right now.” 

Worldwide demand for oil and gas in the agriculture sector continues to grow, according to CEC Research.  

Driven by Africa and Latin America, global oil use in agriculture increased to 118 million tonnes of oil equivalent (Mtoe) in 2022, up from 110 million tonnes in 1990.  

Demand for natural gas also increased — from 7.5 Mtoe in 1990 to 11 Mtoe in 2022.   

Sylvain Charlebois, senior director, in the Agri-Food Analytics Lab at Dalhousie University, said food security depends on three pillars – access, safety, and affordability.   

“Countries are food secure on different levels. Canada’s situation I think is envious to be honest. I think we’re doing very well compared to other countries, especially when it comes to safety and access,” said Charlebois. 

“If you have a food insecure population, civil unrest is more likely, tensions, and political instability in different regions become more of a possibility.” 

As a country, access to affordable energy is key as well, he said.  

“The food industry highly depends on energy sources and of course food is energy. More and more we’re seeing a convergence of the two worlds – food and energy… It forces the food sector to play a much larger role in the energy agenda of a country like Canada.” 

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Agriculture

Restoring balance between renewable energy, agricultural land and Alberta’s iconic viewscapes

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Alberta is known around the world for many things – some of the most breathtaking and iconic scenery on earth, a world-class agricultural industry that puts high-quality food on tables across the globe and a rich history of responsible energy development. Alberta is a destination of choice for millions of visitors, newcomers and investors each year.

To ensure Alberta’s continued prosperity, it is imperative that future energy development is balanced with environmental stewardship, protecting Albertans’ ability to use and enjoy their property, and safeguarding agriculture for continued food security.

Alberta’s renewable energy sector has grown rapidly over the past decade, yet the rules to ensure responsible development have not kept up. As a result, municipalities, agricultural producers and landowners across the province raised concerns. Alberta’s government is fulfilling its duty to put Albertans first and restore the balance needed for long-term success by setting a clear path forward for responsible renewable energy development.

“We are doing the hard work necessary to ensure future generations can continue to enjoy the same Alberta that we know and love. By conserving our environment, agricultural lands and beautiful viewscapes, our government is protecting and balancing Alberta’s long-term economic prosperity. Our government will not apologize for putting Albertans ahead of corporate interests.”

Nathan Neudorf, Minister of Affordability and Utilities

Amendments to the Activities Designation Regulation and Conservation and Reclamation Regulation provide clarity for renewable energy developers on new and existing environmental protections.

These changes will create consistent reclamation requirements across all forms of renewable energy operations, including a mandatory reclamation security requirement. Albertans expect renewable power generation projects to be responsibly decommissioned and reclaimed for future generations. Alberta’s government stands firm in its commitment to protect landowners and taxpayers from being burdened with reclamation costs.

“We want to protect landowners, municipalities and taxpayers from unfairly having to cover the costs of renewable energy reclamations in the future. These changes will help make sure that all renewable energy projects provide reasonable security up front and that land will be reclaimed for future generations.”

Rebecca Schulz, Minister of Environment and Protected Areas

Alberta’s government committed to an ‘agriculture first’ approach for future development, safeguarding the province’s native grasslands, irrigable and productive lands. The protection of agricultural land is not only essential to food production, but to environmental stewardship and local wildlife protection.

The Electric Energy Land Use and Visual Assessment Regulation follows this ‘agriculture first’ approach and enhances protections for municipalities’ most productive lands, establishing the need to consider potential irrigability and whether projects can co-exist with agricultural operations. These changes are critical to minimizing the impacts of energy development on agricultural lands, protecting local ecosystems and global food security. With these new rules, Alberta’s farmers and ranchers can continue to produce the high-quality products that they are renowned for.

“Our province accounts for nearly 50 per cent of Canada’s cattle, produces the most potatoes in the country, and is the sugar beet capital of Canada. None of this would be possible without the valuable, productive farmland that these new rules protect. Understanding the need for an ‘agriculture first’ approach for energy development is as simple as no farms, no food.”

RJ Sigurdson, Minister of Agriculture and Irrigation

The new Electric Energy Land Use and Visual Assessment Regulation also establishes specific guidelines to prevent projects from impacting pristine viewscapes. By establishing buffer zones and visual impact assessment zones, Alberta’s government is ensuring that industrial power projects the size of the Calgary Tower cannot be built in front of UNESCO World Heritage sites and other specified viewscapes, which will support the continued growth and success of Alberta’s tourism sector.

As Alberta’s population and economy grows, it is critical that the province has the additional power generation needed to meet increasing demand. Power generation must be developed in a balanced and responsible manner that promotes environmental stewardship, ensures the continued enjoyment of Alberta’s beautiful landscapes, and safeguards food security by protecting Alberta’s valuable agricultural lands. By encouraging the responsible development of additional power generation with these new regulations, Alberta’s government is listening to Albertans and ensuring the electricity grid is affordable, reliable and sustainable for generations to come.

Summary of Policy Changes

Following the policy direction established on February 28, 2024, Alberta’s government is now implementing the following policy and regulatory changes for renewable power development:

Agricultural lands

The new Electric Energy Land Use and Visual Assessment Regulation takes an “agriculture first” approach.
• Renewable energy developments will no longer be permitted on Land Suitability Rating System (LSRS) Class 1 and 2 lands unless the proponent can demonstrate the ability for both crops and/or livestock to coexist with the renewable generation project,

• In municipalities without Class 1 or 2 lands, Class 3 lands will be treated as Class 1 and 2.

• An irrigability assessment must be conducted by proponents and considered by the AUC.

Reclamation security

Amendments to the Activities Designation Regulation and Conservation and Reclamation Regulation create consistent reclamation requirements across all forms of renewable energy operations, including a mandatory reclamation security requirement. There will be a mandatory security requirement for projects located on private lands.

• Developers will be responsible for reclamation costs via a mandatory security or bond.

• The reclamation security will either be provided directly to the province or may be negotiated with landowners if sufficient evidence is provided to the AUC.

Viewscapes

The Electric Energy Land Use and Visual Assessment Regulation ensures pristine viewscapes are conserved through the establishment of buffer zones and visual impact assessment zones as designated by the province.

• New wind projects will no longer be permitted within specified buffer zones.

o Other proposed electricity developments located within the buffer zones will be required to submit a
visual impact assessment before approval.

• All proposed electricity developments located within visual impact assessment zones will be required to submit a visual impact assessment before approval.

Municipalities

The AUC is implementing rule changes to:

• Automatically grant municipalities the right to participate in AUC hearings.

• Enable municipalities to be eligible to request cost recovery for participation and review.

• Allow municipalities to review rules related to municipal submission requirements while clarifying consultation requirements.

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Agriculture

Saskatchewan potash vital for world food

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From Resource Works

Fertilizer Canada says the fertilizer industry contributes $23 billion a year to Canada’s economy and provides over 76,000 jobs.

A small potash extraction company in Manitoba calls Saskatchewan “the Niagara Falls of potash in Canada.”

The current 10 mines in Saskatchewan produced around 13 million tonnes in 2023, accounting for some 33% of global potash production, and exported 95% of it to more than 75 countries.

Potash mine No. 11 in Saskatchewan is working toward production in late 2026. That’s the $14-billion Jansen mine, owned by BHP, located 140 kilometres east of Saskatoon. It aims to produce around 8.5 million tonnes a year to start, and as much as 16–17 million tonnes a year in future stages.

With potash used primarily in agricultural fertilizers, Saskatchewan’s output is a key ingredient in global food security. Fertilizer is responsible for half of the world’s current food production.

As Real Agriculture points out: “Fertilizer production is not only an economic driver in Canada, but it is also a critical resource for customers around the world, especially in the United States.”

This is particularly important as Russia’s war on Ukraine has raised doubts about reliable supplies of potash from Russia, the world’s No. 2 producer, which produced 6.5 million tonnes in 2023.

In fertilizers, the potassium from potash increases plant growth and crop yields, strengthens roots, improves plants’ water efficiency, and increases pest and disease resistance. It improves the colour, texture, and taste of food. Natural Resources Canada adds: “Potassium is an essential element of the human diet, required for the growth and maintenance of tissues, muscles and organs, as well as the electrical activity of the heart.”

Canada’s federal government has included potash as one of 34 minerals and metals on its list of critical minerals.

Fertilizer Canada says the fertilizer industry contributes $23 billion a year to Canada’s economy and provides over 76,000 jobs.

The potash operations in Saskatchewan are in the Prairie Evaporite Deposit, the world’s largest known potash deposit, formed some 400 million years ago as an ancient inland sea evaporated. The deposits extend from central to south-central Saskatchewan into Manitoba and northern North Dakota. These deposits form the world’s largest potash reserves, at 1.1 billion tonnes.

Manitoba’s first potash mine is close to bringing its product to market. The PADCOM mine is 16 kilometres west of Russell, Manitoba, near the Manitoba-Saskatchewan border. The Gambler First Nation has acquired a one-fifth stake in the project.

PADCOM injects a heated mixture of water and salt underground to dissolve the potash, which is then pumped to the surface and crystallized. CEO Brian Clifford says this process is friendlier to the environment than the conventional method of mining underground and extracting ore from rock deposits.

Saskatchewan’s northern potash deposits are about 1,000 metres below the surface and are extracted using conventional mining techniques. To the south, deposits are anywhere from 1,500 to 2,400 metres deep and are mined using solution techniques.

PADCOM aims to produce 100,000 tonnes of potash per year, eventually growing to 250,000 tonnes per year. However, PADCOM president Daymon Guillas notes that across the Manitoba-Saskatchewan border, the Nutrien potash mine near Rocanville, Saskatchewan, produces five to seven million tonnes per year.

“In 36 hours, they produce more than we do in a year. Saskatchewan is the Niagara Falls of potash in Canada. Our little project is a drip, just a small drip out of the faucet.”

(New Brunswick once had a small potash mine, but it closed in 2016.)

Real Agriculture says: “Canadian-produced potash remains vital to the U.S.’s ability to produce enough corn for feed, ethanol production, and export requirements, at a time when the U.S. heightens its focus on reducing exposure to international integrated supply chains in favour of U.S. domestic supply chains.”

Writer Shaun Haney continues: “For the U.S. corn farmer, Canadian-produced potash is critical for achieving the top yields. According to StoneX, over the past three years, Canada accounts for roughly 87 per cent of potash imports by the U.S., while Russia sits at 9.5%.”

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