Canadian Energy is Going Through a Transformation, and It’s Kind of a Big Deal

by | June 2023

Let’s talk about energy, but set a few ground rules first.

No politics. No jargon. No finger-pointing. No subjective opinions. These conversations are much more constructive if we stick to looking at the data.

What we will add into the mix is a bit of context and insight from some experts we’ve chatted with. We also want to consider how Canadian energy is connected to the lives that we all lead at home, at work, and everywhere else.

Even if you don’t work in the energy industry or know someone who does, this conversation is still hugely relevant to you — and comes back to your everyday life, we promise.

Canadian energy is changing, and it’s changing for the better. In fact, the change is so profound that we think it’s nothing short of a transformation.

Let’s unpack this…

How it started:

Canada’s energy industry is well established. We sit on abundant oil and gas reserves, the industry is highly regulated and aligned around Canada’s strong ethical standards, and we are so fortunate we can keep up with energy needs driven by our own population growth and have infrastructure to support export demand.

We already have a diverse energy mix — petroleum, natural gas, coal, nuclear power, hydroelectricity, and a host of renewable resources.

Fun facts: Canada has the third-largest oil reserves in the world, and enough natural gas to meet the country’s needs for at least 300 years at today’s rate of consumption.

Most of the energy used globally comes from traditional sources such as oil, gas, and coal. And that’s not going to change any time soon (for those wondering, only 11.2% of global energy consumed for heating, power, and transportation in 2019 came from renewables). But as the world’s energy needs continue to grow, the mix is evolving and every source is working at getting cleaner, safer, more reliable, and more affordable.

How it’s going:

We’re fortunate as a country, because much of our prosperity has direct links back to Canadian energy. The industry also has the capacity to do more for current and future generations who are concerned about climate change, and specifically emissions that can be an unwanted by-product of energy production and use.

For those who may not hear much about what’s being done to improve environmental performance, you’ll be thrilled (and maybe a bit relieved) to know and learn more about how the sector is already raising the bar.

Responsible energy development, strong environmental performance, technology and innovation, and regulation and monitoring, are setting a new standard for oil and natural gas.

And Canada is a global leader in this.

Canadian Energy is already reducing emissions

Oil and natural gas in and of itself isn’t our big climate change challenge — greenhouse gas emissions are. Which is why the industry has heavily invested in research, technology and innovation to reduce carbon emissions during oil and gas extraction and delivery to end users.

We won’t turn this article into a chemistry lesson, but science, technology and innovation are making our energy transformation a big deal, so we want to highlight a few examples.

Remember high school chemistry class? Most of us had the opportunity to mix solvents in a beaker to watch chemical reactions. Our job was to study reactions, and control or change the experiments until we got the outcome we wanted.

The process and business of producing and delivering oil and gas is no different, and science and chemistry are a big part of it. A by-product of the industrial processes required is CO₂ and engineers are focused on reducing that. It can be a complex process that requires technology and innovation, and change takes time. But the transformation of oil and gas-based energy to an ever-cleaner molecule is well underway — today.

Carbon Capture and Storage (CCS)

CCS is the process of capturing carbon dioxide that is released while creating energy (or during industrial activities like making steel or cement), and then transporting and storing it deep underground.

As the International CCS Knowledge Centre notes, Canada is already a leader in CCS: “We are home to five of the world’s 30 commercial CCS facilities, and we account for approximately 15% of current global CCS capacity even though our country generates less than 2% of global CO₂ emissions.”

Canadian facilities have safely stored some 44 million tonnes of CO₂ — the equivalent of removing more than 9.4 million cars from our roads.

When we look at Alberta where much of the oil extraction process takes place (and where a lot of the technology and innovation is being deployed), carbon reduction investments are well underway.

According to Alberta’s Emissions Reduction and Energy Development Plan: “Based on currently available technology, up to 90% of the carbon dioxide emissions produced from the use of fossil fuels in industrial activities can be captured, stored and/or used, depending on facility and technology deployment,” the plan says.

While the report is clear that more work needs to be done, it also highlights just how far Alberta has come and accomplished when it comes to carbon reduction.

To quantify some success metrics from the province:

  • Methane emissions from oil and gas were reduced by 44% between 2015 and 2021. Alberta is on track to meet or surpass its goal of a 45% reduction by 2025.
  • Thanks to CCUS projects, oil and gas companies are on track to cut GHG emissions by nearly 30% by 2030 and a further 35% by 2040.
  • Investment in technology demonstrates the Canadian energy industry’s commitment to meet emission reduction goals by 2050, while continuing to provide Canadians with the power they need to live their daily lives.

Canadian LNG

In Canada, export of Liquified Natural Gas (LNG) — which we have in abundance — plays an increasingly important role in providing the world with an ethical, cleaner, more sustainable supply of energy.

When you replace coal-based electricity generation with natural gas you can reduce greenhouse gas emissions by 50%. Because of our natural gas resource base and know-how, Canada has a tremendous opportunity to supply emerging economies with cleaner, affordable, reliable natural gas in the form of LNG. Doing so would be a massive win for the global atmosphere and an out-sized win for Canadian prosperity.

Not all LNG supply is made equal, in terms of production standards. Strong regulations and policies in Canada ensure our country’s LNG products are as safely and responsibly produced as possible.

As an example, consider the first Indigenous-majority-owned LNG export facility in Canada: the Cedar LNG project, located in Kitimat, British Columbia.

Not only will the project and its resulting facility employ hundreds of people, a BC provincial government news release said Cedar LNG will be one of the lowest-emitting LNG facilities in the world.

“There are 250 conditions that come with the [project’s] approval, including requirements to reach net-zero greenhouse gas emissions by 2050 and develop a plan to mitigate marine shipping impacts in the area,” BNN Bloomberg reported earlier this year.

Innovation, for the win

The path of carbon emissions reduction is a marathon, not a sprint. And Canada’s oil and gas sector is off and running, actively implementing both short- and long-term solutions to progress that journey.

Canadian energy is already being transformed to not only meet the expansive power needs of an ever-growing national and global population, but to protect our environment and reduce emissions in the global atmosphere as well. The energy mix is evolving and diversifying, and every form of energy is getting cleaner thanks to technology and innovation.

Fortunately, Canada has some of the brightest minds working together on this challenge, and we are already on a path to a low emissions future.

That’s kind of a big deal.