Canadian oil production will expand for nearly two more decades, slowing the country’s progress toward achieving Prime Minister Justin Trudeau’s goal of net-zero emissions by 2050, the Canada Energy Regulator (CER) forecast on Nov. 24.
Fossil fuels will make up more than 60% of Canada’s fuel mix in 2050, even though domestic consumption likely peaked in 2019, the CER said.
The outlook is based on an assumption that global actions against climate change will continue to increase.
The forecast echoes what many oil producers said this month—that while a global energy transition is underway, fossil fuel demand will remain strong for many years to come.
Unlike European oil producers that are shifting to greater renewable energy production, Canadian companies have focused on reducing emissions per barrel.
Canada, the world’s fourth-largest producer, exports most of its crude. Canadian output looks to peak at 5.8 million barrels per day (MMbbl/d) by 2039 from around 4.4 MMbbl/d currently.
Oil production will expand based on an expected global price rebound after the pandemic to $55 per barrel from $48 currently, triggering expansion in the oil sands, CER Chief Economist Darren Christie said.
Even so, by 2050, half of Canada’s passenger vehicle sales will be electric, Christie said.
CER did not recommend options for the government to achieve its net-zero goal, CEO Gitane De Silva said. The regulator completed its analysis before Canada last week unveiled measures to reach the goal.
Spokespeople for Trudeau and Canada’s environment minister were not immediately available.
Export pipelines currently under construction will be enough to handle all forecast additional output, the CER said. The largest project, Keystone XL, faces opposition from President-elect Joe Biden, who has promised to revoke its permit.
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