Guilbeault is wrong. Canada’s oil and gas can help save the world

Misleading Canadians about what we can do to help our allies and the world

Deborah JaremkoFederal Environment Minister Steven Guilbeault said recently that Canada isn’t the solution to the energy security crisis caused by Russia’s invasion of Ukraine.

He’s wrong and he’s misleading Canadians about what we can do to help our allies and the world.

Guilbeault is a former Greenpeace activist vehemently opposed to Canadian oil and gas. Here is my response to three things he said.

“We can’t help Europe with oil.”

Wrong. We can. Just not tomorrow. But this is about long-term energy solutions.

Europe will continue to require substantial volumes of crude oil in the decades to come, even as more renewable energy comes online. According to the International Energy Agency’s latest outlook, Europe will consume 10 million barrels of oil per day in 2030 and six million barrels per day in 2050.

But the European market can’t be viewed in isolation. It’s part of the global oil trade, where, driven by emerging economies in Asia and Africa, overall demand is expected to increase to 103 million barrels per day in 2030, from 97 million barrels per day in 2019. In 2050, the IEA expects the world will still consume 103 million barrels per day.

The Trans Mountain pipeline expansion being built to the B.C. coast is a step in the right direction to help reduce global reliance on Russia for oil, but with its vast resources and commitment to responsible development, Canada can do more.

Canada can also help with natural gas. Although liquefied natural gas (LNG) shipments from Canada’s West Coast would likely be destined for Asia, any increased supply on global markets could help reduce reliance on natural gas from Russia.

Consider that this winter, facing natural gas shortages, Europe was able to buy LNG shipments that otherwise could have gone to Asia by offering a higher price, according to analytics firm RBN Energy.

And then there are the proposed LNG terminals on Canada’s East Coast that could directly supply European markets.

Canada’s federal government can change course to fast-track and champion major oil and gas export projects, signalling investors that Canada is the world’s energy solution.

“We’re building a pipeline. It’s just going in the wrong direction.”

Wrong. The Trans Mountain expansion is going in the right direction. Enabling Canadian oil exports to Asia can have a global impact.

Guilbeault misunderstands that oil and gas markets are a worldwide ecosystem, and an increase in supply from one region can have a ripple effect on supply and demand in others.

Oil demand in the Asia-Pacific region is expected to increase to 39 million barrels per day in 2050, up from 32 million barrels per day in 2019, according to the IEA.

Much like the situation for LNG, oil tankers from Canada can help meet demand in Asia and divert more supply to Europe, potentially displacing Russian oil exports.

The world needs reliable oil suppliers. Once Canadian oil gets on ocean tankers, it can go wherever the buyers take it.

And those tankers don’t have to just be loaded on Canada’s West Coast. In addition to connecting Western oil with Eastern Canadian consumers, displacing foreign oil imports from places like Russia, the Energy East pipeline would have ended at an ocean terminal in New Brunswick that could ship directly to Europe.

Canada still needs a west-east pipeline.

“The solution to global energy problems is not to increase our dependency on fossil fuels.”

Misleading. The energy security challenge the world faces today isn’t about increasing demand for oil and gas. It’s about satisfying demand that already exists and, in many cases, is expected to grow, while reducing environmental impacts like greenhouse gas emissions.

Canada is a reliable oil and gas supplier and a leader in environmental protection. According to BMO Capital Markets, Canadian oil producers are doing more to reduce emissions than any other region. Major oil sands producers have jointly committed to reaching net-zero emissions, and Canada’s oil and gas sector spends more on energy cleantech than any other sector in the country.

And Canadian natural gas, exported as LNG, can make a difference in reducing global emissions by replacing coal power.

On average, switching from coal to natural gas for electricity generation reduces emissions by 50 per cent, according to the IEA. But switching to Canadian natural gas specifically could reduce emissions by up to 62 per cent, according to a June 2020 study published in the Journal for Cleaner Production.

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Renewable energy is playing a growing role in global energy markets, but the reality is these technologies aren’t yet capable of providing the scale of energy the world needs. Recall that the energy crisis in Europe prior to Russia’s invasion of Ukraine was partly due to overreliance on wind power when the wind simply wasn’t blowing.

Oil and gas will co-exist with renewable energy in the mix for as far out as any credible forecast can see. Canada’s leadership needs to champion our resources so the world can benefit from our reliable, responsible production while Canadians benefit at the same time.

According to United Nations forecasts, the world’s population is expected to grow by two billion people by 2050, reaching 9.7 billion, driven primarily by growth in India.

It is unfair to expect developing countries to stop using fossil fuels, Indian Energy Minister Raj Kumar Singh told a 2021 meeting hosted by the IEA.

“You have 800 million people who don’t have access to electricity. … You can’t say that they have to go to net zero. No, sorry, they have the right to develop … they want to build skyscrapers and have a higher standard of living, and you can’t stop it,” he said.

Deborah Jaremko is director of content for the Canadian Energy Centre, an Alberta government corporation funded in part by taxes paid by industry on carbon emissions. For interview requests, click here.


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