Canada’s energy future – A path forward, by Dave Wilkin and Tim Lutton

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A mini-series on the future of energy
By Dave Wilkin, P. Eng., M.Eng. and Tim Lutton, BSc., MBA

This is the final commentary in our future energy series. Let’s summarize the key insights and messages we have relayed so far:
  1. Four plus billion people striving to join the middle-class in developing nations drives global energy demand growth, outstripping energy efficiency gains and low-carbon energy growth combined. Population growth and increased immigration intensifies the challenges. The world will need all forms of energy to meet future energy demand.  It is not solar vs natural gas, or hydro vs oil etc.  Instead, we will need oil and gas, hydro, nuclear plus renewables.
  2. Transition to a lower-carbon energy future will take many decades, but it needs to happen before low-cost oil and gas reserves are depleted, likely within the next 50 years. Looking forward, we need to develop hydrocarbon-based reserves to not only meet incremental demand, but to also replace declining reserves that are currently being produced. As recoverable reserves begin to decline, expect increasing exploration in environmentally sensitive places, such as the Arctic.
  3. No ‘silver-bullet’ technology replaces the world’s 85 per cent carbon-based energy, wind/solar included (given its inherent limitations). Many energy sources/technologies and importantly more nuclear energy will be needed to meet growing global demand. The era of relatively cheap energy is coming to an end.
  4. Geopolitics, underpinned by national self-interest, drives country energy policies and actions. This will only intensify as carbon, oil and gas reserves begin to decline.
  5. Of the world’s major oil and gas producers, only Canada contemplates actively destroying its energy sector (and economy along with it). It would accomplish nothing, as non-democratic carbon-energy exporting countries, possessing 85-90 per cent of global reserves (and weaker environmental standards) would fill the gaps, at higher costs while placing Canada in the ranks of the energy insecure nations.
  6. Despite two decades of green-energy subsidies and high carbon-energy prices/taxes, Europe’s oil and gas consumption still grew two per cent over the period. Don’t expect similar policies to work any better here – carbon taxes won’t get the job done, despite what so-called ‘experts’ claim.
  7. Canada’s 30 per cent emissions reduction target by 2030 is not achievable. Zero global emissions by 2040/50 is unrealistic. Impossible targets damage credibility, feed mistrust and grow skepticism.
We offer the following recommendations that should be at the core of Canada’s future energy roadmap:
  1. Get tough with China now. China is the largest global energy user and does the most environmental damage. They have become a model for many other fast-growing nations, so without changes there, the rest won’t matter. They cheat on trade and have little respect for rule-of-law. Canada’s weak responses has had zero impact. We must join the US and other nations to bring long overdue change. Import tariffs and much tougher trade policy/restrictions would be a good start.
  2. Major investment in our electric-power grids. This means investing in a national, integrated power grid. It must be intelligent, secure with expanded bi-directional power-flow with US states. This technology could be a huge Canadian export opportunity.
  3. Continue critical oil and gas sector investments – Without continuing investments, Canadian energy supplies would quickly fall into decline, with serious consequences to our economy. Canadian oil must not be sold to the US at fire-sale prices. This means constructing new pipelines to tide-water on both coasts, opening new lucrative oil/LNG markets to energy-insecure Europe and Asia in particular. They all need other options to Russian and OPEC energy supplies.
  4. Government-business investment partnerships. Substantial R&D investments/incentives for sectors where we have proven expertise and competitive advantage – electrical grids, advanced nuclear power, new cleaner carbon-energy technologies.
  5. Expand development in our North, exerting real sovereignty there before other unfriendly nations recklessly exploit its resources.
  6. Reset Canada’s emission reduction target to something that is achievable – It will build credibility.

Measured against these recommendations, we believe the Conservative Party’s platform is best aligned, but more is still required from them too. Misguided national policies jeopardize our future, and catchy political sound-bites (such as declaring “climate emergencies“, “taxing pollution”, “growing the economy and fighting climate change go hand-in-hand”) accomplish nothing.  Barring some technological revolution, future energy costs are headed much higher. Governments must not place disproportionate burdens on those least able to pay or cripple Canadian businesses under the banner of ‘fighting climate-change’.

The Bottomline: Canada’s annual CO2 emissions contribution, which is less than two per cent of global emissions, is exceeded each year by developing countries’ growth.  If we are serious about making a global measurable difference, it will be as a leading, reliable source of cleaner energy and technology. On the domestic energy front, we can’t wait until our economically recoverable carbon energy production falls into serious decline before transitioning to a diversified, sustainable energy portfolio plus related infrastructure.

We hope you found our mini-series informative.  An energy transition is underway, and Canada’s future depends on getting it right. Please stay informed, remain wary of ‘silver-bullet’ solutions, misleading political rhetoric, and fake news.  And finally, choose wisely!

Previous articles in this series –
A mini-series on the future of energy, by Dave Wilkin and Tim Lutton
The Energy big picture, by Dave Wilkin and Tim Lutton
Growth, the global energy driver ~ by Dave Wilkin and Tim Lutton
The Geopolitics of Energy ~ by Dave Wilkin and Tim Lutton
The greener technologies offer no silver bullet ~ by Dave Wilkin and Tim Lutton
Consider this scenario and its disastrous consequences ~ by Dave Wilkin and Tim Lutton

Dave Wilkin is a Professional Engineer who lives in Huntsville. He is an electrical engineer with a career spanning 35 years in IT, banking and consulting.
Tim Lutton worked in the natural gas and LNG industry for 32 years; with Imperial Oil in Canada, and ExxonMobil in the USA, Australia and Qatar and now lives in Huntsville.

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7 Comments

  1. Thank You Dave And Tim I have to say this is the first time that I agree with you on almost all points. Now if we could just get our politicians to read this and agree that it’s about the first thing written in the last few months that makes any sense at all. As far as global warming I still don’t think it is going to stop any time soon but if we can stop polluting the air and water we may have a chance to adapt to a warmer world at any rate I’m to old to have to worry much about it but I hate to leave this mess to my grand children and great grand children.

  2. Congratulations Dave and Tim.
    So refreshing to read a well thought out series which has no political motivation.
    The current state of Canada’s approach to the energy file is beyond a tragic joke.
    The present crop politicians are simply not up to the job.
    The legislative foundation which enables the courts to intervene in democratic decision making must be changed.
    Clearly much more revenue is required to fund necessary social programs and pay down debt. This could be generated by exporting Canada’s energy as is now successfully done by Quebec. ( But Quebec blocks other provinces from doing the same ! )
    Things need to change in a hurry. The tooth fairy isn’t coming. We need to smarten up!
    Good work guys.

  3. I agree with all said with the following exceptions:
    1. Since 11 years 2008, Alberta’s emissions grew 15% during a stagnant economy. During the same period, the revenue-neutral carbon tax kept emissions growth to zero in BC even though their economy grew at the fastest rate in the country. We must mitigate consumption of fossil fuels with incentives for electric transportation and incentives for more energy-efficient buildings. A price on carbon does that. Dumping total responsibility for emissions reduction on the energy providers just makes their task longer and more expensive. Energy producers and big polluters in general only make what we consume. Too bad both the Liberals and Conservatives waste so much time and energy arguing. We need the best ideas from both parties.

    2. We need to increase oil consumption from 4.5 million barrels per day in 2018 to 6 million barrels per day. Going beyond that rate would deplete our proven reserves too quickly and put short-term profits ahead of long-term energy and financial security. Finishing the Trans-Mountain pipeline expansion will add 0.59 m b / day. Building the Eagle Spirit Energy Corridor from Fort McMurray to Prince Rupert will add 1 m b /day. Together they provide the capacity to move from 4.5 to 6 m b / day and avoid the US price discounts.

    3. The allegation that Quebec and Ottawa killed the Energy East pipeline is incorrect. The simple truth is that (as much as Trans-Canada hates to admit it) their competitor, Enbridge, beat Trans Canada to the punch by reversing their existing Line 9 (in operation since 1976) enabling the shipment of more Alberta Oil to Montreal than Quebec can use. Atlantic Canada can get more than enough oil by ship from their off-shore rigs. Trans-Canada dropped their Energy East proposal in a record short time when it became obvious that the challenge of building a pipeline over or under two of the world’s widest and deepest rivers (the Ottawa and the St Lawrence) simply posed to much environmental and financial risk. But regardless, their competitor was clearly going to beat them to the punch. After Trans-Mountain is complete, the best option for moving oil to tidewater is the 1,500 km Eagle Spirit Pipeline that is 1/3rd the length of the 4,500 km Energy East pipeline and has support from 95% of the mostly First Nations population along the route.

  4. Murray Christenson on

    Gentlemen, thank you for putting this series out there. I can imagine the hours of work that went into this and you should be applauded for helping to inform the public in what is increasingly a world filled with misinformation and political rhetoric.
    From my perspective, as someone who has been investing in and hence, learning about renewable energy and climate change for some time, I agree with virtually everything you’re saying here. My hope is that people…particularly young people, will take the time to read not just this series but also take the time to continue their education through non partisan sources and not rely on sound bites and internet memes to form an opinion.
    For anyone interested, I’d suggest a good place to start is with BNEF (Bloomberg New Energy Finance) . They do a good job of staying on top of trends across the globe because, as you say, climate is global
    A link to their 2019 New Energy Outlook is below. Thanks again.

    https://about.bnef.com/new-energy-outlook/?utm_medium=Newsletter&utm_campaign=BNEF&utm_source=Email&utm_content=wirjune19&mpam=21051&bbgsum=DG-EM-06-19-M21051&elqTrackId=9a70a7582b904004bae4b97099f8d834&elq=9d15f9fedc5741c4a893401e6b6ef9ee&elqaid=19620&elqat=1&elqCampaignId=10867

  5. Messrs Wilken and Lutton:
    .
    The only “silver bullet” that I’ve noted (other than small fail-safe nuclear plants, favoured by Mr. Holland) is CO2 recapture. I’ve mentioned it before in this space, but Mr. Holland finds it to be a small-scale solution. On the other hand, Carbon Engineering, who own the technology, feel that it could be a global solution.
    .
    In a nutshell (if you are unaware of the details), CO2 is recaptured from the atmosphere. Then it is mixed with hydrogen (separated from water using renewable energy sources) to produce gas, diesel and Jet-A. Using these fuels, will result in far cleaner emissions; and the CO2 which is emitted will, of course, be recaptured. The process is carbon-neutral and the price point is realistic.
    .
    Disclaimer: I have zero funds invested in Carbon Engineering: Apparently, I’m just an old dude crying in the wilderness.

  6. Rob, Carbon Engineering is exactly the kind of company governments should be encouraging and supporting. The thing in particular that is attractive to me about this technology is that if it can scale effectively, it could help address the energy storage requirement gap that plagues wind/solar energy today. It also doesn’t require totally new infrastructure to deliver. Its downside, obviously, is some CO2 footprint is still there, but at least it is sustainable long term, unlike conventional oil and gas.

    CCS is also a possibility, but the storage part remains very expensive, and in some early smaller pilots, questionable if it really stays put in the underground storage areas long term. None-the-less, with the rate that Asia/developing world is building new coal plants, without some kind of viable CCS system, things will only get much worse, and quickly.

    I hope politicians are paying more attention to the physical realities of energy … is that too much to hope for?? Probably yes for so many of them …

  7. Thanks all for all of your supportive and helpful comments. Tim and I did put a lot of research, time and thought into this series. We felt it is such an important topic and the amount of misinformation/political noise around it is very disturbing, so this is what motivated us to write it. With the federal election fast approaching, the time was also right to try to help raise the level of discourse for readers, and share what we have learned through our long careers and recent research.

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