Climate, technology seen as main forces in Canada's energy future

Jan. 29, 2018
Rapidly evolving climate policies and technological breakthroughs appear likely to have the biggest impacts in Canada's energy future, forecasters from that country's National Energy Board suggested on Jan. 23.

Rapidly evolving climate policies and technological breakthroughs appear likely to have the biggest impacts in Canada's energy future, forecasters from that country's National Energy Board suggested on Jan. 23.

"Obviously, economic growth will be a key energy demand determinant. But demand will depend on whether efficiency takes off in many sectors," NEB Energy Integration Director Abha Bhargava said during a discussion at the Center for Strategic & International Studies.

Bhargava noted that Canada's Energy Future 2017: Energy Supply & Demand Projections to 2040, which NEB issued last fall, outlined climate policy developments including announcement of a pan-Canadian framework in fall 2016, coal being phased out to generate electricity by 2030, and carbon pricing of $10/tonne in 2018 which grows yearly by that amount to $50/tonne by 2022.

Last fall's report marked 50 years of NEB's issuing Canadian energy outlooks, observed Matthew Hansen, the report's technical leader. "In the first 1967 report, the themes of energy, technology, and the environment intersected. Fifty years later, the 2017 report included scenarios on oil prices, pipeline export capacity, and LNG export volumes," he said.

"This was the first energy future report where we had fossil fuel prices peak in the reference case," added Chris Doleman, the report's co-project manager. "It is expected to plateau in 2019, largely because of increased energy efficiency improvements in all economic sectors, including heavy-duty vehicles for the first time; phasing out of coal, first in several provinces and eventually nationwide; and continued recovery from the 2008 financial crisis."

Hansen said for crude oil, a steady $40 (Can.)/bbl base price appears likely through 2040 even though the global price is expected to remain lower because of improved production and vehicle technology. "For natural gas, prices are expected to increase over time due to uncertain climate action and technology developments," he added.

"Gas is the lone fossil fuel that grows over the projection period, largely due to power generation although its demand to produce oil from sands will decline as those operations grow more efficient," said Doleman.

Hansen said, "Much of the gas production increases in the forecast are in British Columbia and Alberta. For the crude oil case, we looked at whether four major crude oil export pipelines would be built. If many of them aren't, the crude would need to be exported by rail at a higher price."