On Tuesday, the Canada Energy Regulator released its long-term energy outlook. In it, the agency forecasts an increase in wind and solar production as well as a 50 per cent increase in Canadian crude production.
The long-term energy outlook explores how new technologies, infrastructure development and climate policy will impact Canada’s energy consumption and production trends to 2040 and is based on climate and energy policies that are currently in place or sufficiently detailed.
According to the report, domestic fossil fuel consumption growth will slow, however, production of crude oil and natural gas will increase. Potential LNG exports will drive natural gas production while oil production growth will be led by new phases of existing oil sands SAGD production.
CER notes that Canadian oil pricing and production trends will continue to rely heavily on the availability of export pipeline and rail capacity.
According to CER, if approved pipeline projects, including Trans Mountain, Keystone XL, Line 3, proceed as announced, along with continued volumes of crude by rail, there will be sufficient takeaway capacity to accommodate production growth over the next 20 years.
On Thursday, the Canada Energy Regulator announced it has approved application from Chevron Canada for a 40-year licence to export natural gas from the proposed Kitimat LNG project.
Across the country, regional differences continue to drive the diversity of Canada’s electricity production.
Natural gas and renewables will be used to displace coal-fired electricity generation, which in turn will help lower Canada’s electricity emissions over the next 20 years. Installed capacity of wind and solar nearly doubles over the outlook period, but hydro will remain the dominant source of renewable electricity energy in 2040.
By 2040, CER predicts energy use per person in Canada will drop by over 15 per cent and wind and solar will make up nearly 10 per cent of the country’s electricity generation. Also by 2040, the share of non-emitting electricity generation will increase to 83 per cent from 81 per cent.
CER forecasts Canadian crude oil production will rise to 7 million barrels per day (b/d) and natural gas output will increase by about 30 per cent to over 20 billion cubic feet per day in the coming 20 years.
By 2040, total fossil fuel use grows less than 1 per cent from current levels, but growth varies significantly across the different fuel types. Natural gas use, the least GHG-intensive fossil fuel, increases by 18 per cent. Oil product use declines by 7 per cent, while coal use is expected to decline by nearly 75 per cent.
Natural gas and renewables will displace coal-fired generation in Alberta, Saskatchewan and Nova Scotia. Canada’s large base of hydro power will continue to produce electricity in British Columbia, Manitoba, Quebec and Newfoundland and Labrador.