We could see US$100 oil by the end of this year: Eric Nuttall
Canada will face challenges in retaining its status as a global oil and gas power in a world transitioning toward net zero carbon emissions by mid-century, the International Energy Agency said.
The country, holder of the world’s third-largest oil reserves, seeks to remain “a major global oil and gas supplier” beyond 2050 even as countries, including Canada itself, push toward emission cuts, the agency said in its Canada 2022 Energy Policy Review Thursday.
Canada’s largest oil producers pledged to zero out carbon emissions from their operations by the middle of the century, primarily through the use of carbon capture and storage, in a bid to preserve the sector. But those targets don’t include anything about the much larger volumes of emissions that result from burning the fuel they produce by refineries, factories, vehicles and homes.
While the IEA lauded Canada’s leadership in policies to cut emissions, it added the country “should pay close attention to shifting demand for oil and gas globally.”
“Canada must focus on significantly decarbonizing its oil and gas sectors while at the same time ensuring competitiveness in increasingly well-supplied world markets,” the agency said.
Worldwide oil consumption will have to decline “substantially” in the coming decades from the 100 million barrels a day currently, but output will not fall to zero, Fatih Birol, IEA director, said in a webinar.
“I would like to get this oil from good partners, like Canada, who want to reduced emissions from oil and gas,” he said.
Birol recommended that the country define a specific pathway for achieving its net zero emissions goal by 2050 and said that carbon capture, a key technology for reducing emissions in the oil sands, will be essential for achieving climate goals.
The country’s own oil sands will pose a further challenge even as “Canada scores well on overall ESG indicators relative to many other oil and gas producers,” the IEA said. In recent years, many funds and banks have pulled funding from the Canadian oil sands sector, where some of the most carbon intensive oil in the world is extracted.
“The environmental profile of oil sands production, in particular, will become a greater focus for importing countries and warrants action,” the IEA said.