CANADIAN OIL INDISPENSABLE
Canada's Oil Industry Will Be Indispensable For Decades To Come By Irina Slav - Nov 29, 2020, 6:00 PM CST Canadas oil industry has been among those hardest hit by the coronavirus pandemic. Already struggling with low oil prices brought about by transport capacity shortage, Canadian oil producers this year had to contend with the slump in demand that the pandemic caused and a strong political push towards more renewable energy. And yet, according to a new report, oil is set to remain Canadas main source of energy in 2050. Canadas fossil fuel consumption peaked last year, according to Canadas Energy Future 2020 report released this week by the countrys energy regulator. This year alone, production of oil is set to fall by 7 percent, or 335,000 bpd, because of lower energy demand, and electricity generation will decline by 3 percent as overall energy demand falls by 6 percent. But these are the short-term effects of the pandemic. Over the next 20 years, the use of fossil fuels will gradually decline in Canada as it will in other places with ambitious net-zero plans for 2050, according to the Canada Energy Regulator report. Even so, in 2050, they will still account for two-thirds of all energy sources. The report looks at two scenarios for energy developments over the next two decades: a reference scenario and an evolving scenario. Under the first onethe reference scenariocurrent efforts to curb greenhouse gas emissions are not being built on. This means oil and gas use will remain relatively stable even after its peak, with this stable demand driving prices higher, to $75 a barrel in 2050. Under the second scenario, oil consumption will be declining over the next two decades. By 2030, it would be 12 percent lower than it is now, and by 2050 it would be 35 percent lower than it is now. Of course, the decline in oil demand will not mean a decline in energy demand, so renewablesand nuclearwill flourish under this scenario. Electricity will displace a lot of oil as a source of energy, accounting for 27 percent of end-use energy demand in 2050, up from 16 percent at the moment. The evolving scenario of the Canada Energy Regulator is based on several assumptions that all energy forecasts seem to make. These include much lower battery prices for electric vehicles and a continued strong decline in the costs associated with solar and wind power generation. Yet even with these assumptions, which will see EVs come to account for half of all car sales by 2050, oil and gas will still continue to satisfy two-thirds of Canadas energy demand. Canada is the worlds fifth-largest oil producer and home to the third-largest oil reserves. Yet, the Trudeau government is determined to reduce the countrys emissions substantially over the next three decades, in tune with the European Union, which has also pledged net zero emissions by 2050.