{"id":6144,"date":"2023-06-21T12:35:44","date_gmt":"2023-06-21T12:35:44","guid":{"rendered":"http:\/\/roydadnaft.ir\/English\/?p=6144"},"modified":"2023-06-21T12:45:10","modified_gmt":"2023-06-21T12:45:10","slug":"canadas-oil-output-would-plummet-by-2050-in-a-net-zero-world-new-modelling-shows","status":"publish","type":"post","link":"https:\/\/roydadnaft.ir\/English\/6144\/","title":{"rendered":"Canada\u2019s oil output would plummet by 2050 in a net-zero world, new modelling shows"},"content":{"rendered":"
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New modelling from the Canada Energy Regulator suggests that Canadian oil production will plummet by 2050.<\/p>\n\n\n\n

New modelling from the Canada Energy Regulator suggests Canadian oil production will plummet by 2050 \u2014 and large portions of Alberta\u2019s oilsands facilities will be shut down \u2014 if the world is successful in reaching net-zero greenhouse gas emissions within that time.<\/p>\n\n\n\n

The scenario is one of three laid out in a report released Tuesday and marks the first time the regulator has presented a long-term outlook for Canadian energy using net-zero as a baseline.<\/p>\n\n\n\n

In an interview, federal natural resources minister Jonathan Wilkinson cautioned against focusing too much on the most dramatic scenario, adding that the regulator\u2019s report also paints a picture of an alternate future in which progress to net-zero occurs at a slower pace.<\/p>\n\n\n\n

But he said the report makes it very clear that in order for Canada\u2019s energy sector to remain competitive on the world stage, it will need to act quickly to reduce emissions.<\/p>\n\n\n\n

\u201cThis report helps us in the context of the argument I have been making publicly for some time \u2014 which is, it is strongly in the economic interest of the oil and gas sector, which is an important economic sector for Canada, to focus on decarbonization,\u201d Wilkinson said.<\/p>\n\n\n\n

\u201c(And) to partner with the government, for provinces to partner with the federal government, to drive that as fast as we possibly can.\u201d<\/p>\n\n\n\n

According to the Canada Energy Regulator report, if the world is successful in reaching the goals established at the Paris climate conference and holding global temperatures to 1.5 degrees Celsius of warming through government policy, global fossil fuel use will drop by 65 per cent from 2021 to 2050.<\/p>\n\n\n\n

That would prompt a collapse in global oil prices, to as low as US$35 per barrel by 2030 and US$24 per barrel by 2050, it said.<\/p>\n\n\n\n

The report concludes that as a result of these low prices, much of Canada\u2019s crude oil production would become uneconomic, causing companies to reduce output to 1.2 million barrels per day by 2050, 76 per cent below 2022 levels.<\/p>\n\n\n\n

The regulator modelled two other scenarios \u2014 one in which Canada achieves net-zero by 2050, but large developing countries like China and India move at a slower pace.<\/p>\n\n\n\n

In that version \u2014 which most closely represents the commitments made by international governments to this point \u2014 the CER said global oil prices will likely remain above US$60 per barrel all the way to 2050, with Canadian oil production declining by just 22 per cent.<\/p>\n\n\n\n

The report also looked at what would happen in a \u201cbusiness as usual\u201d case, which assumes no additional efforts to reduce emissions beyond what is already in place, and no further attempts to reach Paris climate targets.<\/p>\n\n\n\n

In that scenario, Canadian oil production would actually rise to reach 6.1 million barrels per day by 2050 \u2014 20 per cent higher than in 2022.<\/p>\n\n\n\n

Canada Energy Regulator chief economist Jean-Denis Charlebois told reporters the three scenarios laid out are models, not forecasts, and the regulator has not made any predictions about which is most likely to become reality.<\/p>\n\n\n\n

\u201cAt the end of the day, we don\u2019t comment or opine on the likelihood of it happening,\u201d he said.<\/p>\n\n\n\n

\u201cIt remains to be seen whether it will actually look that way in the real world.\u201d<\/p>\n\n\n\n

Even in the most dramatic scenario, some demand remains for oil, Wilkinson said. But he said Canadian companies will have to decide where the future is headed as they decide how to invest their capital going forward.<\/p>\n\n\n\n

\u201cThey have to build their own business case. And that includes looking at the future they believe to be the most likely future,\u201d he said.<\/p>\n\n\n\n

In the report\u2019s most aggressive climate-action scenario, Alberta\u2019s oilsands are drastically affected. The report states that the comparatively high emissions intensity of oilsands production compared with conventional oil and gas drilling could make the sector too expensive to continue in the long-term.<\/p>\n\n\n\n

In the report\u2019s global-net-zero-by-2050 scenario, only the lowest-cost oilsands facilities will still be producing by then, with the most costly facilities starting to shut down in the early 2030s.<\/p>\n\n\n\n

The Pathways Alliance \u2014 an industry group of six of Canada\u2019s largest oilsands producers \u2014 was quick to rebut that possibility on Tuesday.<\/p>\n\n\n\n

\u201cThese are scenarios, they\u2019re not forecasts,\u201d said Pathways spokesman Mark Cameron in an interview.<\/p>\n\n\n\n

\u201cIn fact, global oil demand was at a record level in 2022. We haven\u2019t yet seen the world changing its oil demand.\u201d<\/p>\n\n\n\n

Cameron pointed out that in the Canada Energy Regulator\u2019s more moderately paced scenario \u2014 in which oilsands production declines less and more slowly \u2014 companies rely heavily on carbon capture and storage technology to reduce emissions and stay competitive for longer.<\/p>\n\n\n\n

This is in line with the Pathways Alliance\u2019s own net-zero plan, which proposes that member companies invest in a yet-to-be-committed-to massive carbon capture and storage network in northern Alberta, at a cost of $16.5 billion.<\/p>\n\n\n\n

\u201cThe Pathways plan is assuming that there is a continuing market for oil and gas, and we want to provide to that market in as low-emissions a way as possible,\u201d Cameron said.<\/p>\n\n\n\n

In a statement, Canadian Association of Petroleum Producers CEO Lisa Baiton said oil and gas markets can shift rapidly, as has been proven by recent events such as the COVID-19 pandemic and the war in Ukraine.<\/p>\n\n\n\n

\u201cWhat we know today is global demand for oil and natural gas is rising,\u201d Baiton said.<\/p>\n\n\n\n

\u201cCanada has an important role to play in ensuring a secure supply of reliable energy is available to Canadians as well as our trading partners and allies around the world.\u201d<\/p>\n\n\n\n

But Greenpeace senior energy strategist Keith Stewart said he believes it\u2019s time for oil and gas companies to recognize that the future growth of their industry is incompatible with a net-zero future.<\/p>\n\n\n\n

\u201c(This report) should be the final nail in the coffin of those who argue for expanding oil and gas production, because it is clear that is only profitable in a future where the current climate change-fueled wildfires and heat waves are thought of as the good old days,\u201d Stewart said. <\/p>\n

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