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The following summary facts and data were drawn from 30 Fact Sheets and Research Briefs and various Research Snapshots that the Canadian Energy Centre released in 2023. For sources and methodology and for additional data and information, the original reports are available at the research portal on the Canadian Energy Centre website: canadianenergycentre.ca.

Environment

1.

Canada’s share of Global CO2 emissions is dropping

Since the Kyoto Summit in 1997, Canada’s share of the world’s CO2 emissions has fallen from 2.2 per cent to 1.6 per cent. Canada’s share of world CO2 emissions decreased by 25 per cent from the Kyoto climate summit to the recent Dubai climate summit.

Source: CEC Research, Calculation from Various Database (2023)

2.

Canadian natural gas is getting cleaner

Emissions intensity is the emission rate of a given pollutant relative to the intensity of a specific activity or industrial production process. Emissions intensity is determined by dividing the number of absolute emissions by some unit of output, such as GDP, energy used, population, or barrel of oil produced. Between 2010 and 2021, the CO2 emissions intensity of Canadian natural gas production fell from 63.5 kilograms CO2e per barrel of oil equivalent to 44.5 kilograms CO2e per barrel of oil equivalent, a decline of nearly 30 per cent.

Source: Derived from Rystad Energy

3.

Canadian oil sands production is getting cleaner

Between 2000 and 2021, the emissions intensity of the oil sands subsector fell from 111.8 kilograms CO2e per barrel to just under 79.3 kilograms CO2e per barrel, a decline of over 29 per cent. As GHG emissions intensity in the upstream oil sector continues to decline and because Canada’s ESG performance remains highly rated, Canadian oil has the potential to become the barrel of choice on the world stage.

Source: Derived from Rystad Energy

4.

Canada’s oil and gas sector is doing its part to reduce methane emissions

Gas flaring is the burning off of the natural gas that is generated in the process of oil extraction and production. It is a significant source of greenhouse gas emissions (GHGs). In 2022, 138,549 million cubic meters (m3) (or 139 billion cubic meters (bcm)) of flared gases were emitted worldwide, creating 350 million tonnes of CO2 emissions annually. At 945 million m3 in 2022, Canada was the eighth lowest flarer among the world’s top 30 oil and gas producers (23rd spot). Canada decreased its flaring emissions by 320 million m3 from its 2012 level of 1,264 million m3, a 25 per cent drop. In 2022, Canada contributed just 0.7 per cent of the global amount of gas flaring despite being the world’s fourth largest oil producer.

Source: World Bank (undated)

5.

Environmental spending by Canada’s oil and gas sector remains high

Canadian businesses spent $28.6 billion on environmental protection between 2018 and 2020. When capital and operating expenses on environmental protection are combined, out of that $28.6 billion the oil and gas sector spent $9.4 billion, or nearly 33 per cent. In 2020 alone, when capital and operating expenses on environmental protection are combined, the oil and gas sector spent $2.7 billion, or 27 per cent of all Canadian business spending on the environment that year.

Source: Derived from Statistics Canada, Table 38-10-0130-01

6.

Alberta among top provincial spenders on environmental protection

Industries are not alone in spending money on environmental protection; provincial governments do as well. Total provincial government spending on environmental protection between 2008 and 2021 was nearly $143.5 billion. In 2021, Alberta spent $22.6 billion or 15.7 per cent of all provincial expenditures on the environment, while its proportion of the national population was 11.6 per cent.

Source: Statistics Canada, Tables 10-10-0005-01 and 17-10-0005-01; and authors’ calculations

Economics of the Oil and Gas Sector

7.

Revenue contribution from the oil and gas sector: $578.7 billion between 2000 and 2021

The gross revenue contribution to federal, provincial, and municipal governments received exclusively from the oil and gas sector was $578.7 billion between 2000 and 2021, an average of $26.3 billion per year. The $578.7 billion figure includes $461.6 billion in direct provincial revenues, $99.6 billion in direct federal revenues, and $17.3 billion in indirect federal, provincial, and municipal taxes.

Sources: Statistics Canada, 2022 (a, b, c, d), Statistics Canada 2023 (a,b), and CAPP, 2022

8.

Projected government revenues from Canada’s oil sands sector: US$231 billion from 2023 to 2032

Government revenues from Canada’s oil sands sector (which includes provincial royalties and federal and provincial corporate taxes) are expected to rise from US$17.1 billion in 2023 to US$28.7 billion in 2032—nearly US$231 billion cumulatively—assuming the price of oil is a flat US$80 per barrel. Both projections would be about 20 per cent more in Canadian dollars at the current exchange rate.

Source: Derived from Rystad Energy

9.

Projected capex from Canadian oil sands sector: nearly US$113 billion over the next decade

Capex from the Canadian oil sands sector is projected to reach US$112.7 billion over the next decade. Assuming a flat US$80 per barrel for the price of oil, oil sands sector capex is expected to rise from US$10.1 billion in 2023 to US$14.2 billion in 2032. Those projections would be about 20 per cent more in Canadian dollars at the current exchange rate.

Source: Derived from Rystad Energy

10.

Canadian overall upstream oil sector supply costs have declined over 35% since 2015

The cost of supply for the Canadian upstream oil sector is the minimum constant dollar price needed to recover all capital expenditures, operating costs, royalties, taxes, and earn a specified return on investment. Supply costs indicate whether the upstream oil sector is economically viable.

Supply costs within Canada’s upstream oil sector declined significantly between 2015 and 2022. At the end of 2015, the Canadian upstream oil sector’s weighted average breakeven price was nearly US$76.00 per barrel of Brent. By the end of 2022, that weighted average breakeven price was US$49.09 per barrel of Brent, a decline of US$26.91 per barrel, or over 35 per cent since 2015. This number incorporates different phases of oil production including producing, under development, and discovery.

Source: Derived from Rystad Energy

11.

Breakeven costs in Canadian natural gas sector fifth lowest in the world

The Canadian natural gas sector had a weighted average breakeven gas price of US$2.31 per thousand cubic feet (mcf) in 2022, fifth lowest among major natural gas producing countries. Only in Saudi Arabia (US$1.09 per mcf), Iran (US$1.39 per mcf), Qatar (US$1.93 per mcf), and the United States (US$2.22 per mcf) was the breakeven gas price lower. The weighted average breakeven costs for Canada‘s natural gas sector in 2022 were lower than in Russia, Norway, Algeria, China, and Australia.

Source: Derived from Rystad Energy

12.

Natural gas prices have skyrocketed

Natural gas prices have skyrocketed around the world in the last two years. In 2021, the price of natural gas in Asia was US$18.60 per million British thermal units (mmbtu) compared to US$4.40 per mmbtu in 2020—an increase of 323 per cent in just one year. By comparison, in 2021 natural gas sold for US$2.80 per mmbtu on Alberta’s AECO-C trading hub; in Asia it was US$15.88 per mmbtu more (or 564 per cent higher). Between 2019 and 2021, the price gap between Henry Hub in the US and AECO-C natural gas fluctuated from a high of 98 per cent in 2019 to a low of 26 per cent in 2020. In 2021, U.S. natural gas sold for US$3.84 per mmbtu, 40 per cent higher than the US$2.75 per mmbtu average price for AECO-C natural gas that year.

Sources: BP Statistical Review of World Energy and International Monetary Fund

13.

Projected government revenues from the Canadian natural gas sector: over US$227 billion through 2050

Government revenues from the Canadian natural gas sector are projected to reach over US$227 billion through 2050. Under a Henry Hub price for natural gas of US$3.00 per thousand cubic feet (kcf), government revenues from the country’s natural gas sector are expected to rise from US$1.4 billion in 2023 to US$3.4 billion in 2050. Should the Henry Hub price reach US$4.00 per kcf, government revenues from the country’s natural gas sector would be projected to rise from US$2.0 billion in 2023 to US$10.0 billion in 2050.

Source: Derived from Rystad Energy

14.

Small business plays a key role in the oil and gas sector

Small business plays a key job creation role in Canada’s economy. Statistics Canada defines small businesses as those with between one and 99 paid employees. Medium-size enterprises are those with 100 to 499 employees, while large enterprises have 500 or more employees. In 2022, of the oil and gas firms in Canada, 96.0 per cent were small, 3.5 per cent were medium-sized, and 0.6 per cent were large companies.

With the exception of construction, the oil and gas sector in Canada has a higher proportion of small businesses than other major industries. As of 2022, 96.0 per cent of all oil and gas energy firms had between 1 and 99 employees compared with 93.2 per cent in manufacturing, 89.6 per cent in utilities, and 99.0 per cent in the construction sector. The all-industry average is 98.0 per cent.

Source: Authors’ calculation based on Statistics Canada Table 33-10-0661-01

15.

Canada’s oil and gas sector has an impact on key industries across the Canadian economy

In 2019, the activities of the Canadian oil and gas sector were indirectly responsible for significant portions of the GDP created by other key industries across Canada. The sector’s activities generated $100.9 million in GDP in the food and beverage merchant wholesalers industry that year and nearly $4.1 billion in GDP in architectural, engineering, and related services. In 2019, the top five industries whose GDP was most affected by their association with Canada’s oil and gas sector included:

• Architectural, engineering, and related services: $4.1 billion
• Machinery, equipment, and supplies merchant wholesalers: $3.4 billion
• Banking and other depository credit intermediation: $2.1 billion
• Computer systems design and related services: $1.7 billion
• Electrical power generation, transmission, and distribution: $1.5 billion

Source: Statistics Canada

16.

Employment and wages in the oil and gas sector remain high

In 2021, the oil and gas sector directly employed 147,371 Canadians. The number of direct jobs in the sector rose from 158,483 in 2009 to 185,393 in 2014, then fell to 134,939 in 2016, the result of the sharp decline in energy prices, before rising to 160,379 in 2019 as energy prices gradually recovered. The onslaught of COVID-19 in 2020 saw oil and gas sector jobs fall back to 135,475, before recovering to 147,371 in 2021. The average salary of a worker in the Canadian oil and gas sector in 2021 was $133,293. The average salary for a worker in the sector had risen from $103,448 in 2009 to $133,776 in 2015, before leveling off to $129,716 in 2019 due to the energy price slump. However, between 2009 and 2021, the average annual wage of a worker in the Canadian oil and gas sector increased by nearly 29 per cent.

Source: Statistics Canada

Social and Governance

17.

Women’s employment in Canada’s oil and gas sector is recovering

The number of females employed in the oil and gas sector reached a high of 42,440 in 2013, dipping to 30,285 in 2020 due to COVID-19, and then recovering somewhat to 33,068 in 2021. Between 2009 and 2021, the average wage for a female worker in the Canadian oil and gas industry increased by over 53 per cent.

Source: Statistics Canada

18.

Diversity increasing in the oil and gas sector

Between 2009 and 2021, workers in the Canada’s oil and gas sector who identified as Indigenous increased by nearly 17 per cent. Between 2009 and 2021, the average salary of an Indigenous person employed in Canada’s oil and gas sector increased by over 39 per cent.

Source: Statistics Canada

19.

More new Canadians working in the oil and gas sector over the long term

In 2021, 24,931 immigrants were directly employed in the Canadian oil and gas sector. The number of immigrants employed in the oil and gas industry reached 28,469 by 2014, declining to 21,622 in 2016 before recovering to 26,569 in 2019. Between 2009 and 2021, immigrant employment in the Canadian oil and gas sector increased by over 9 per cent. Between 2009 and 2021, the average wage and salary of an immigrant employed in the Canadian oil and gas sector increased by nearly 25 per cent.

Source: Statistics Canada

Carbon Capture, Utilization and Storage (CCUS)

20.

Carbon Capture, Utilization and Storage (CCUS) growing across the world

At the end of 2022, there were 65 commercial carbon capture, utilization and storage (CCUS) projects in operation globally capable of capturing nearly 41 million tonnes per annum (mtpa) of CO2 across various industries, including the oil and gas sector. There are another 478 projects in various stages of development around the world that will be capable of capturing roughly another 559 mtpa of CO2. These projects are in various stages of development: some are at the feasibility stage while others are in the concept and construction phases. If all projects move ahead as scheduled, by 2030 it is estimated that nearly 500 CCUS projects could be operating worldwide, having the ability to capture 623.0 mtpa of CO2. In fact,  between 2023 and 2030, global carbon capture capacity could grow from 43.5 mtpa to 623.0 mtpa, an increase of over 1,332 per cent.

Source: Derived from Rystad Energy

21.

Projected Carbon Capture, Utilization and Storage (CCUS) in Canada has a bright future

Global carbon capture capacity and worldwide spending trends to date underline the fact that the future is bright for Canadian investments in CCUS. Assuming that appropriate government policies and regulations are put in place, Canada can expect to see further project announcements and increased investment in the technology. Canada will likely emerge as a CCUS heavyweight given the prevailing policy environment and the existential need for oil sands players to decarbonize. Rystad Energy estimates that Canada alone could account for around 20 per cent of cumulative carbon capture demand between 2023 and 2030.

Source: Derived from Rystad Energy

Nuclear and Renewables

22.

Nuclear energy a stable source of electricity production in Canada

Nuclear power plants have been producing electricity in Canada since the 1960s. As of 2022, four nuclear power plants operate in Canada: three in Ontario and one in New Brunswick. Canada’s share of nuclear electricity production has remained relatively stable over the past few decades. In 1990, nuclear energy accounted for about 14.8 per cent of Canada’s electricity production; by 2021, this share had decreased only slightly to about 14.3 per cent.

Source: International Atomic Energy Agency

23.

Canada’s trade in renewable products is modest

Trade is an essential component of Canada’s economic activity, accounting for about two-thirds of the economy and employing 3.3 million people. In 2021, Canada imported solar panel products with a value of CAN$653 million and wind turbine products with a value of CAN$91 million. The value of the solar panels and wind turbines Canada imported was much higher than the CAN$260 million export value for both products.

Source: Government of Canada, Trade Data Online

Liquefied Natural Gas (LNG)

24.

Global LNG production projected to rise

Global liquefied natural gas (LNG) production is expected to reach nearly 720 million tonnes by 2035. That year the United States is projected to be the world’s leading LNG producer at 259 million tonnes, followed by Qatar at 121 million tonnes, and Australia at 78 million tonnes. Russian LNG supply was expected to grow to 54 million tonnes by 2035, but this is now in question, leaving opportunities for countries such as Canada to fill the void. In fact, by 2035, Canada could be the fifth largest LNG producer at nearly 33 million tonnes of LNG.

Source: Derived from Rystad Energy

25.

Canadian LNG exports could help reduce global emissions

Asia is a significant source of CO2 emissions. Canadian LNG exports can help in reducing emissions from the Asian energy mix. If Canada increases its LNG export capacity to Asia, by 2050 net global emissions could decline by 188 million tonnes of CO2 equivalent per year. That would have the annual impact of taking 41 million cars off the road.

CEC Research Briefs

Canadian Energy Centre (CEC) Research Briefs are contextual explanations of data as they relate to Canadian energy. They are statistical analyses released periodically to provide context on energy issues for investors, policymakers, and the public. The source of profiled data depends on the specific issue. This research brief is a compilation of previous Fact Sheets and Research Briefs released by the centre in 2023. Sources can be accessed in the previously released reports. All percentages in this report are calculated from the original data, which can run to multiple decimal points. They are not calculated using the rounded figures that may appear in charts and in the text, which are more reader friendly. Thus, calculations made from the rounded figures (and not the more precise source data) will differ from the more statistically precise percentages we arrive at using the original data sources.

About the author

This CEC Research Brief was compiled by Ven Venkatachalam, Director of Research at the Canadian Energy Centre.

Acknowledgements

The author and the Canadian Energy Centre would like to thank and acknowledge the assistance of an anonymous reviewer for the review of this paper.

Creative Commons Copyright

Research and data from the Canadian Energy Centre (CEC) is available for public usage under creative commons copyright terms with attribution to the CEC. Attribution and specific restrictions on usage including non-commercial use only and no changes to material should follow guidelines enunciated by Creative Commons here: Attribution-NonCommercial-NoDerivs CC BY-NC-ND.

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Introduction

High energy prices, inflation, war, and the ongoing economic recovery from the pandemic has highlighted the general worldwide demand for electricity, particularly in Asia and Europe. The growing demand for electricity on these two continents has led some electricity producing plants to rely increasingly heavily on coal as a power source.

The electricity sector accounts for 34 per cent of the world’s energy-related carbon dioxide (CO2) emissions. In this Fact Sheet, we detail recent trends in electricity production and demand across the globe as well as CO2 emissions from the electricity sector worldwide.

Carbon dioxide emissions from the world’s top ten emitters between 2000 and 2022

A total of 38.2 gigatonnes (Gt) of energy-related CO2 was emitted globally in 2022, an increase of 53 per cent from 2000. However, the increase is not consistent for all countries; between 2000 and 2023, CO2 emissions trends diverged. Emissions from China, India, and Indonesia more than doubled in the last two decades, whereas emissions for other countries remained relatively consistent or even declined.

In 2022, Canada’s total energy-related CO2 emissions were 0.62 Gt, or 1.6 per cent of the global total. That compares to emissions of 0.64 Gt in South Korea, 1.09 Gt in Japan, 2.8 Gt in India, 5.0 Gt in the United States, and 13.0 Gt in China (see Figure 1).

Sources: IEA World Energy Statistics database and Enerdata

Demand for electricity and sources of emissions

Global domestic electricity consumption increased from 13,188 terawatt-hours (TWh) in 2000 to 25,681 TWh in 2022 and estimates are that global demand for electricity will rise to 35,000 TWh by 2040.¹

That is a jump of 94 per cent, or 12,492 TWh, between 2000 and 2022. During the same period, electricity consumption in Asia rose a whopping 280 per cent. In Africa the demand for electricity increased by 90 per cent (see Figure 2). Coal remains the world’s largest source of fuel for electricity generation, with approximately 10,317 terawatt-hours of electricity generated by coal-fired plants in 2022 (see Figure 3).

1. The IEA’s Electricity Market Report 2022 states that nearly all of the increase is attributable to growing electricity consumption in developing countries across southeast Asia and Africa.

Sources: IEA World Energy Statistics database and Enerdata

Sources: IEA World Energy Statistics database and Enerdata

In recent years, electricity generated from the combustion of coal declined in Canada, the United States, Europe, and Africa. However, electricity generated from coal combustion has continued to grow in China, India, and other parts of Asia.

Between 2000 and 2022, the share of coal-powered electricity generation in Asia increased from 49.8 to 56. 3 per cent, while in Canada it decreased from 19.4 per cent to less than 5 per cent.

Sources: IEA World Energy Statistics database and Enerdata

Source of emissions in the electricity sector

The electricity sector accounts for 34 per cent of the carbon dioxide emitted across the world. The sector emitted 13.05 gigatonnes of CO2 in 2022, an increase of 5.01 Gt from 2000. In Asia, between 2000 and 2022, CO2 emissions from the electricity sector increased from 2.5 Gt to 8.3 Gt and the sector’s share of carbon dioxide (CO2) emissions increased from just over 32 per cent to well over 40 per cent (see Figure 5).

Sources: IEA World Energy Statistics database and Enerdata

Coal burned to generate electricity accounts for the majority of the CO2 emitted in power generation. In 2022, coal-fired electricity\ generation accounted for 9.89 Gt, or nearly 76 per cent of the worldwide CO2 emissions from the electricity sector. The share was even higher in Asia where 92 per cent of emissions from the electricity sector come from coal combustion. Asian coal-fired plants accounted for 7.62 Gt of the total 8.26 Gt of emissions from the sector on that continent (see Figure 6).

Sources: IEA World Energy Statistics database and Enerdata

Conclusion

The global electricity sector, and particularly the sector in Asia, is a major source of CO2 emissions. Relative to Canada’s existing carbon emissions, emissions from the coal-fired power plants worldwide will make any reductions in Canada’s carbon emissions and resulting job losses, higher taxes, and higher costs for consumers and businesses—meaningless.

As 56 per cent of the electricity in Asia is generated by coal-fired plants, a transition from coal- to gas-fired electricity generation in the region could lead to significant reductions in CO2 emissions, reducing emissions by 50 per cent on average. The corollary is that there is a potential market in Asia for natural gas extracted in and exported from Canada. Canada has an opportunity to play a useful and meaningful role in reducing CO2 emissions from the electricity sector by encouraging and contributing to the global natural gas market.

Notes

This CEC Fact Sheet was compiled by Ven Venkatachalam at the Canadian Energy Centre (www.canadianenergycentre.ca). The author and the Canadian Energy Centre would like to thank and acknowledge the assistance of an anonymous reviewer in reviewing the data and research for this Fact Sheet.

References (live as of November 2, 2023)

Canadian Energy Centre (November 7, 2022), Canadian LNG has massive opportunity in Asia: report <https://tinyurl.com/2p9525j6>; Enerdata (2022), Power Plant Tracker database <https://bit.ly/3xfgOdF>; IEA (2022), Electricity Market Report – January 2022 <https://bit.ly/3M0723j> IEA (Undated), World Energy Statistics Database <https://tinyurl.com/ytz789m4>

Creative Commons Copyright

Research and data from the Canadian Energy Centre (CEC) is available for public usage under Creative Commons copyright terms with attribution to the CEC. Attribution and specific restrictions on usage including non-commercial use only and no changes to material should follow guidelines enunciated by Creative Commons here: Attribution-NonCommercial-NoDerivs CC BY-NC-ND.

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Overview

This Fact Sheet details spending on environmental protection by the oil and gas sector, other industries, and provincial governments. The comparisons are made using the most recent data from Statistics Canada.

As the data makes clear, Canada’s oil and gas sector spent more than any other industry in Canada on environmental protection—$9.4 billion cumulatively from 2018 to 2020— accounting for 33 per cent of total environmental protection expenditures made by business across Canada in those years.

As the data also shows, the Alberta government spent $22.6 billion on environmental protection between 2008 and 2021.

Environmental protection spending by industry

Figure 1 shows that Canadian businesses spent $28.6 billion on environmental protection between 2018 and 2020. When capital and operating expenses on environmental protection are combined, out of the $28.6 billion spent between 2018 and 2020, the oil and gas sector spent $9.4 billion.

Source: Derived from Statistics Canada, Table 38-10-0130-01

In 2020, when capital and operating expenses on environmental protection are combined, the oil and gas sector spent $2.7 billion, which constituted 27 per cent of all Canadian business spending on the environment that year (see Figure 2).

Other major industries also spent money on environmental protection including primary metal manufacturing ($2.1 billion), mining and quarrying (about $1 billion), electric power generation, transmission, and distribution ($0.6 billion), and paper manufacturing ($0.5 billion), and chemical manufacturing (also $0.5 billion).

Source: Derived from Statistics Canada, Table 38-10-0130-01

Breakdown by capital and operating spending

Capital expenditures¹

In 2018, the oil and gas sector was responsible for 41 per cent ($1.5 billion) of all capital spending on environmental protection. All other industries combined spent 59 per cent ($2.2 billion). In 2019, the oil and gas sector spent $1.8 billion, 48 per cent of the all-industry spending on environmental protection. In 2020, the oil and gas sector spent $1.4 billion, 42 per cent of the all-industry spending on environmental protection (see Table 1).

Operating expenses²

In 2018, the oil and gas sector was responsible for 34 per cent ($2 billion) of all operating expenditures allocated to environmental protection. All other industries combined spent 66 per cent ($3.8 billion) of the operating expenditures directed to environmental protection. For 2019, there was no data available on the oil and gas industry’s operating expenses on environmental protection. In 2020, the oil and gas sector was responsible for 20 per cent ($1.3 billion) of all operating expenditures for environmental protection.

1. Capital expenditure includes outlays on machinery and equipment and for the construction of non-residential facilities, among others. 
2. Operating expenses includes expenses incurred for labour, materials and supplies, and maintenance and repair, among others.

Source: Derived from Statistics Canada, Table 38-10-0130-01

Environmental spending by the provinces, 2008-2021

Industries are not alone in spending money on environmental protection; provincial governments do as well. Table 2 shows that total provincial government spending on environmental protection between 2008 and 2021 was nearly $143.5 billion.

Alberta spent $22.6 billion or 15.7 per cent of all provincial expenditures on the environment, while its proportion of the national population was 11.6 per cent in 2021. Ontario spent $55.8 billion or 38 per cent of all provincial expenditures, more or less in line with its 38.7 per cent of the population in 2021. Nova Scotia and Saskatchewan spent a higher proportion on the environment relative to their share of the national population.

Two of the largest provinces spent less on the environment than their share of the national population: Quebec and British Columbia. Quebec’s government spent $27.2 billion or 18.9 per cent of all provincial environmental expenditures between 2008 and 2021, significantly below its 22.5 per cent share of the national population in 2021.

Source: Statistics Canada, Tables 10-10-0005-01 and 17-10-0005-01; and authors’ calculations

Conclusion

Environmental spending highest by oil and gas industry, and highest by Alberta in relation to its population

Between 2018 and 2020, the oil and gas sector spent $9.3 billion, or 33 per cent of the amount spent by all businesses combined on environmental protection.

Data available from 2008 to 2021 show that Alberta’s provincial government spent significantly more than its share of Canada’s population ($22.6 billion or 15.7 per cent of all provincial spending even as its share of the national population was 11.6 per cent).

Notes

This CEC Fact Sheet was compiled by Ven Venkatachalam and Lennie Kaplan at the Canadian Energy Centre: www.canadianenergycentre.ca. The authors and the Canadian Energy Centre would like to thank and acknowledge the assistance of two anonymous reviewers in reviewing the data and research for this Fact Sheet. All percentages in this report are calculated from the original data, which can run to multiple decimal points. They are not calculated using the rounded figures that may appear in charts and in the text, which are more reader friendly. Thus, calculations made from the rounded figures (and not the more precise source data) will differ from the more statistically precise percentages we arrive at using source data.

References (All links live as of October 2, 2023)

Statistics Canada (2023), Table 38-10-0130-01: Capital and operating expenditures on environmental activities by industry <https://bit.ly/3OERIKi>; Statistics Canada (2022), Table 10-10-0005-01: Canadian Classification of Functions of Government <https://bit.ly/2ZEkp2W>.

Creative Commons Copyright

Research and data from the Canadian Energy Centre (CEC) is available for public usage under creative commons copyright terms with attribution to the CEC. Attribution and specific restrictions on usage including non-commercial use only and no changes to material should follow guidelines enunciated by Creative Commons here: Attribution-NonCommercial-NoDerivs CC BY-NC-ND.

To sign up to receive the latest Canadian Energy Centre research to your inbox email: inbox@canadianenergycentre.ca

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Overview

This Fact Sheet analyzes the upstream oil industry’s record on flaring in Canada relative to other top oil-producing countries. Gas flaring is the burning off of the natural gas that is generated in the process of oil extraction and production. Flaring is relevant because it is a source of greenhouse gas emissions (GHGs) (see Appendix).

In 2022, 138,549 million cubic meters (m3) (or 139 billion cubic meters (bcm)) of flared gases were emitted worldwide, creating 350 million tonnes of CO2 emissions annually. Canada is a significant oil producer; it has the third-largest proven crude oil reserves and is the fourthlargest crude oil producer in the world (Natural Resources Canada, undated), and so contributes to flaring.

Flaring comparisons

This Fact Sheet uses World Bank data to provide international comparisons of flaring. It also draws on U.S. Energy Information Administration (EIA) crude oil production data to compare flaring among the top 10 crude oil producing countries.

Table 1 shows gas flaring volumes in 2012 and 2022. In absolute terms, Russia recorded more flaring than any other country at 25,495 million m3 (25.4 bcm) in 2022, which was 1,628 million m3 (7 per cent) higher than in 2012.

The four countries that are the top GHG emitters through flaring (Russia, Iraq, Iran, and Algeria) accounted for 50 per cent of global gas flaring in 2022.

At 945 million m3, Canada was the eighth lowest flarer in 2022 (23rd spot out of the top 30 countries). It decreased its flaring emissions by 320 million m3 from the 2012 level of 1,264 million m3, a 25 per cent drop.

In 2022, Canada contributed just 0.7 per cent of the global amount of gas flaring despite being the world’s fourth largest oil producer (see Table 1).

Sources: World Bank (undated)

Flaring declined worldwide between 2012 and 2022

Figure 1 shows the change in flaring volumes between 2012 and 2022. Nine countries flared more in 2022 than in 2012, while 21 countries flared less. In the last decade, the global flaring volume decreased by 3 per cent.

• The three countries that most significantly increased flaring between 2012 and 2022 were the Republic of the Congo (65 per cent), Iran (56 per cent), and Iraq (41 per cent).
• The three countries that most significantly decreased flaring between 2012 and 2022 were Uzbekistan (-76 per cent), Columbia (-75 per cent) and Kazakhstan (-74 per cent).
• As noted earlier, flaring fell by 25 per cent in Canada between 2012 and 2022.

Sources: World Bank (undated)

Comparing flaring to increased production

The decreases in flaring in Canada between 2012 and 2022 shown in Table 1 and Figure 1 understate the magnitude of the decline in flaring in the country. That is because Canada’s crude oil production increased by 45 per cent in that period, even as absolute flaring decreased by 25 per cent (see Table 2).

Canada compares very favourably with the United States, which increased crude oil production by 82 per cent and decreased flaring by 16 per cent.

Sources: World Bank (undated) and EIA (2023)

Largest oil producers and flaring intensity

To fully grasp how much more effective Canada has been than many other oil producers in reducing flaring, Table 3 compares both flaring intensity (gas flared per unit of oil production) and crude oil production among the top 10 oil producing countries (which account for 73 per cent of the world oil production).

Canada is the fourth-largest producer of crude oil, and its gas flaring intensity declined by 48 per cenft between 2012 and 2022. Four of the top 10 oil producers witnessed their flaring intensity increase between 2012 and 2022.

Sources: World Bank (undated) and EIA (2023)

Conclusion

Gas flaring contributes to greenhouse gas emissions. However, it is possible for countries to both increase their oil production and still reduce flaring. Canada is one noteworthy example of a country that has significantly reduced flaring not only compared to its increased production of crude oil, but also in absolute terms.

Appendix

Background

Flaring and venting are two ways in which an oil or natural gas producer can dispose of waste gases. Venting is the intentional controlled release of uncombusted gases directly to the atmosphere, and flaring is combusting natural gas or gas derived from petroleum in order to dispose of it.¹ As Matthew R. Johnson and Adam R. Coderre noted in their 2012 paper on the subject, flaring in the petroleum industry generally falls within three broad categories:

• Emergency flaring (large, unplanned, and very short-duration releases, typically at larger downstream facilities or off-shore platforms);
• Process flaring (intermittent large or small releases that may last for a few hours or a few days as occurs in the upstream industry during well-test flaring to assess the size of a reservoir or at a downstream plant during a planned process blowdown); and
• Production flaring (may occur continuously for years while oil is being produced).

To track GHGs from flaring and venting, Environment Canada (2016) defines such emissions as:

• Fugitive emissions: Unintentional releases from venting, flaring, or leakage of gases from fossil fuel production and processing, iron and steel coke oven batteries, or CO2 capture, transport, injection, and storage infrastructure.
• Flaring emissions: Controlled releases of gases from industrial activities from the combustion of a gas or liquid stream produced at a facility, the purpose of which is not to produce useful heat or work. This includes releases from waste petroleum incineration, hazardous emission prevention systems, well testing, natural gas gathering systems, natural gas processing plant operations, crude oil production, pipeline operations, petroleum refining, chemical fertilizer production, and steel production.
• Venting emissions: Controlled releases of a process or waste gas, including releases of CO2 associated with carbon capture, transport, injection, and storage; from hydrogen production associated with fossil fuel production and processing; of casing gas; of gases associated with a liquid or a solution gas; of treater, stabilizer, or dehydrator off-gas; of blanket gases; from pneumatic devices that use natural gas as a driver; from compressor start-ups, pipelines, and other blowdowns; and from metering and regulation station control loops.

1. Many provinces regulate flaring and venting including Alberta (Directive 060) British Columbia (Flaring and Venting Reduction Guideline), and Saskatchewan (S-10 and S-20). Newfoundland & Labrador also has regulations that govern offshore flaring.

Notes

This CEC Fact Sheet was compiled by Ven Venkatachalam and Lennie Kaplan at the Canadian Energy Centre: www.canadianenergycentre.ca. All percentages in this report are calculated from the original data, which can run to multiple decimal points. They are not calculated using the rounded figures that may appear in charts and in the text, which are more reader friendly. Thus, calculations made from the rounded figures (and not the more precise source data) will differ from the more statistically precise percentages we arrive at using source data. The authors and the Canadian Energy Centre would like to thank and acknowledge the assistance of an anonymous reviewer in reviewing the data and research for this Fact Sheet.

References (All links live as of September 23, 2023)

Alberta Energy Regulator (2022), Directive 060: Upstream Petroleum Industry Faring, Incinerating, and Venting <https://bit.ly/3AMYett>; BC Oil and Gas Commission (2021), Flaring and Venting Reduction Guideline, version 5.2 <https://bit.ly/3CWRa0i>; Canada-Newfoundland and Labrador Offshore Petroleum Board (2007), Offshore Newfoundland and Labrador Gas Flaring Reduction <https://bit.ly/3RhKpKu>; D&I Services (2010), Saskatchewan Energy and Resources: S-10 and S-20 <https://bit.ly/3TBrVGJ>; Johnson, Matthew R., and Adam R. Coderre (2012), Compositions and Greenhouse Gas Emission Factors of Flared and Vented Gas in the Western Canadian Sedimentary Basin, Journal of the Air & Waste Management Association 62, 9: 992-1002 <https://bit.ly/3cJRqPd>; Environment Canada (2016), Technical Guidance on Reporting Greenhouse Gas Emissions/Facility Greenhouse Gas Emissions Reporting Program <https://bit.ly/3CVQR5C>; Natural Resources Canada (Undated), Oil Resources <https://bit.ly/3oWWhW0>; U.S. Energy Information Administration (undated), Petroleum and Other Liquids <https://bit.ly/2Ad6S9i>; World Bank (Undated), Global Gas Flaring Data <https://bit.ly/3zXuxGX>.

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Introduction

While it is well known that the oil and gas sector is an important generator of high paying jobs within the Canadian economy, some of the key demographic characteristics of workers directly employed in the sector are less well known.

In this CEC Fact Sheet, we examine some of the key demographic characteristics of workers directly employed in the oil and gas sector between 2009 and 2021, using the Statistics Canada Natural Resources Satellite Account (NRSA)-Human Resource Model (HRM).

For the purposes of our research, we define the oil and gas sector in Canada as the sum of conventional oil and gas extraction, non-conventional oil and gas extraction, support activities for oil and gas extraction, pipeline transportation of natural gas, crude oil and other pipeline transportation, and petroleum refineries. This is different definition of the oil and gas extraction sector than was used previously by the CEC, because it also includes the pipeline transportation and petroleum refineries sub-sectors. Revisions to the data between 2009 and 2021 also occurred due to the incorporation of the results from the 2020 census. There were also some adjustments to the methodology used to link census years together.

Previously, the data was linked at the level of employment, but it has now moved to linking the demographic ratios instead. The former method led to occasional breaks in the data series.

The conventional and non-conventional oil and gas extraction sector includes establishments engaged primarily in operating oil and gas field properties. This includes the production and extraction of oil from oil shale and oil sands. Support activities for oil and gas extraction include establishments primarily engaged in providing support services, on a contract or fee basis, for the extraction of oil and gas. Pipeline transportation of natural gas comprises establishments primarily engaged in the pipeline transportation of natural gas, from gas fields or processing plants to local distribution systems. Crude oil and other pipeline transportation comprises establishments primarily engaged in the pipeline transportation of crude oil. Petroleum refining involves the transformation of crude oil by such processes as cracking and distillation (Statistics Canada, 2023a).

Natural Resources Satellite Account (NRSA)-Human Resource Model (HRM)

The Natural Resources Satellite Account (NRSA) is an analytical framework used to present Statistics Canada’s existing time series data for the natural resource sector at an increased level of detail. The extraction of energy from natural resources, such as crude oil and natural gas, is included under the NRSA framework (Statistics Canada, 2017).

While the NRSA provides information on the number of jobs generated by the energy sector at the national level, the aim of the Human Resource Module (HRM) is to provide timely and reliable statistics on the human resource dimension of natural resources sub-sectors, such as the oil and gas sector in Canada (Statistics Canada, 2021).

Analysis

The Canadian oil and gas sector directly employs over 147,300 Canadians

In 2021, the oil and gas sector directly employed 147,371 Canadians. The number of direct jobs in the oil and gas sector rose from 158,483 in 2009 to 185,393 in 2014, then fell to 134,939 in 2016, the result of the sharp decline in energy prices, before rising to 160,379 in 2019 as energy prices gradually recovered. The onslaught of COVID-19 in 2020 saw oil and gas sector jobs fall back to 135,475, before recovering to 147,371 in 2021 (see Figure 1).

Source: Derived from Statistics Canada (2023c)

At $133,293 in average annual wage and salary in 2021, Canadian oil and gas sector jobs continue to pay very well

The average wage and salary of a worker in the Canadian oil and gas sector in 2021 was $133,293. The average wage and salary for an oil and gas worker rose from $103,448 in
2009 to $133,776 in 2015, before leveling off to $129,716 as of 2019 due to the energy price slump. However, between 2009 and 2021, the average annual wage and salary of a worker in the Canadian oil and gas sector increased by nearly 29 per cent (see Figure 2).

Source: Derived from Statistics Canada (2023c)

The average annual wage and salary for female employees in Canada’s oil and gas sector has increased by over 53% since 2009

The number of females employed in the oil and gas sector reached a high of 42,440 in 2013, dipping to 30,285 in 2020 due to COVID-19, and then recovering to 33,068 in 2021 (see Figure 3).

Source: Derived from Statistics Canada (2023c)

In 2021, the average wage and salary for a female directly working in the Canadian oil and gas sector was $106,865. The average wage and salary for a female working in the oil and gas sector reached a high of $110,111 in 2020 before declining to $106,865 in 2021. Between 2009 and 2021, the average wage and salary for a female worker in the Canadian oil and gas industry increased by over 53 per cent (see Figure 4).

Source: Derived from Statistics Canada (2023c)

Average annual wages and salaries for immigrants working in Canada’s oil and gas sector are on the rise, reaches $138,439 in 2021

In 2021, 24,931 immigrants were directly employed in the Canadian oil and gas sector. The number of immigrants employed in the oil and gas industry reached 28,469 by 2014, declining to 21,622 in 2016 before recovering to 26,569 in 2019. Between 2009 and 2021, immigrant employment in the Canadian oil and gas sector increased by over 9 per cent (see Figure 5).

Source: Derived from Statistics Canada (2023c)

The average wage and salary of an immigrant directly employed in the Canadian oil and gas sector was $138,439 in 2021. The average wage and salary of an immigrant employed in the oil and gas sector increased to $143,339 by 2015, declining to $132,266 in 2018 before recovering to $138,439 in 2021. Between 2009 and 2021, the average wage and salary of an immigrant employed in the Canadian oil and gas sector increased by nearly 25 per cent (see Figure 6).

Source: Derived from Statistics Canada (2023c)

Indigenous employment in Canada’s oil and gas sector has increased by nearly 17% since 2009, and average annual wages and salaries reached $111,037 in 2021, an increase of over 39% since 2009

Indigenous direct employment in the oil and gas sector reached 10,934 in 2014, declining to 8,016 in 2016 before recovering to 9,683 in 2021. Between 2009 and 2021, workers in the Canadian oil and gas sector identified as Indigenous increased by nearly 17 per cent (see Figure 7).

Source: Derived from Statistics Canada (2023c)

The average wage and salary of an Indigenous person directly employed in the Canadian oil and gas sector reached $113,976 by 2020 before declining to $111,037 in 2021. However, between 2009 and 2021, the average wage and salary of an Indigenous person employed in the Canadian oil and gas sector increased by over 39 per cent (see Figure 8).

Source: Derived from Statistics Canada (2023c)

Over 21% of workers in the Canadian oil and gas industry identified as visible minorities, earning an average wage and salary of $121,174 in 2021

The number of direct workers in the Canadian oil and gas sector identified as members of a visible minority reached 34,091 in 2014, declining to 25,992 in 2016 before recovering to 33,066 in 2019. Then, visible minority workers in the Canadian oil and gas sector fell to 28,570 in 2020, before recovering to 31,195 in 2021. Between 2009 and 2021, the number of workers in the Canadian oil and gas sector identified as members of visible minorities increased by nearly 17 per cent (see Figure 9).

Source: Derived from Statistics Canada (2023c)

In 2021, direct workers identified as members of visible minorities comprised over 21 per cent of total employment in Canada’s oil and gas sector, compared to nearly 17 per cent in 2009. The average wage and salary of workers identified as members of visible minorities in the Canadian oil and gas sector was $121,174 in 2021. This represents an increase of over 30 per cent since 2009 (see Figure 10).

Source: Derived from Statistics Canada (2023c)

Notes

This CEC Fact Sheet was compiled by Lennie Kaplan at the Canadian Energy Centre (www.canadianenergycentre.ca). The author and the Canadian Energy Centre would like to thank and acknowledge the assistance of Philip Cross and two anonymous reviewers in reviewing the original data and research for this Fact Sheet.

References (All links live as of September 11, 2023)

Statistics Canada, 2017. The Natural Resources Satellite Account: Sources and Methods, <https://bit.ly/2VZ1th4>; Statistics Canada, 2021. Natural Resources Satellite Account: Human Resource Module, 2009 to 2019. <https://bit.ly/3zAwcPu>; Statistics Canada, 2023a. North American Industry Classification System (NAICS) Canada. <https://bit.ly/3rPAnp3>; Statistics Canada, 2023b. Natural Resources Satellite Account: Human Resource Module, 2009 to 2021. <https://bit.ly/47YOjkj>; Statistics Canada, 2023c. Natural Resources Satellite Account: Human Resource Module, 2009 to 2021. Special Tabulation.

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Overview

As news reports and interest about the Canadian oil sands continues, it is a good time to evaluate the sector’s progress in reducing carbon dioxide (CO2) emissions intensity.

In this CEC Fact Sheet, we use data on projected direct upstream CO2 emissions intensity drawn from Rystad Energy’s UCube and EmissionsCube to assess trends in the CO2 emissions intensity of Canada’s oil sands sector between 2000 and 2022.

Background on Rystad Energy’s UCube and EmissionsCube

Rystad Energy is an independent energy research company providing data, analytics, and consultancy services to clients around the globe.¹

UCube is Rystad Energy’s global upstream database. It includes production and economics (costs, revenues, and valuations) for more than 85,000 assets covering the portfolios of more than 3,500 companies. Policymakers use the UCube dataset to study all parts of the global exploration and production (E&P) activity value chain, including operational costs, investment (capex and opex), fiscal terms, and net cash flows for projects and companies, both globally and by country (Rystad, 2023b).

Rystad’s EmissionsCube enables the study of CO2e emissions from upstream activity down to the asset level.

Through the EmissionsCube, countries, companies, assets, basins, and fields can be compared with each other on their upstream emissions and emissions intensity. Specifically, EmissionsCube can help policymakers:

• Compare companies in order to understand their emission performance and assess risks.
• Understand the relative ranking of countries, operators, and companies (taking ownership into account) globally, and the changes or initiatives that will improve emission performance.
• Identify the high-emitting parts of an operation and, from that, develop ESG strategies to both meet increasing demands for disclosure and emission reduction goals.
• Assess the impact of emissions on various companies’ competitiveness (Rystad, 2023a).

1. The written content in this report was prepared by the authors at the Canadian Energy Centre (CEC) and does not represent the views of Rystad Energy

Examining oil sands CO2 emissions intensity

This Fact Sheet defines upstream CO2 emissions as those originating from on-site emissions, both extraction and flaring. Extraction includes production drilling; all emissions related to on-site processing; and gathering and boosting.

This Fact Sheet defines CO2 emissions intensity as the amount of CO2 emitted, expressed in kilograms (kg), per barrel of oil equivalent (boe) produced (i.e., kg CO2 per boe produced). A declining CO2 emission intensity figure means that less CO2 is being created per boe produced.

Focusing on emissions per boe produced is a realistic means of establishing a meaningful target for the oil sands industry in Canada.

Average CO2 emissions per oil sands barrel produced in Canada has declined by over 32% since 2000

Canada’s oil sands sector has made considerable progress in reducing its CO2 emissions intensity since 2000.

The overall rate fell from 101.7 kg CO2 per boe produced in 2000 to 68.7 kg CO2 per boe produced in 2022, a decline of 32.4 per cent (see Figure 1).

Source: Derived from the Rystad Energy UCube and EmissionsCube

Average oil sands (mining) CO2 emissions per barrel produced in Canada declines by over 40% since 2000

An examination of upstream oil sands CO2 emissions intensity by type reveals some interesting trends.

The average emissions intensity of oil sands (in-situ) fell from 89.2 kg CO2 per boe produced in 2000 to 72.9 kg CO2 per boe produced in 2022, a decline of 18.3 per cent.

Meanwhile, the average emissions intensity of oil sands (mining) fell from 107.0 kg CO2 per boe produced in 2000 to 63.8 kg CO2 per boe produced in 2022, a decline of 40.4 per cent (see Figure 2).

Source: Derived from the Rystad Energy UCube and EmissionsCube

Notes

This CEC Fact Sheet was compiled by Lennie Kaplan at the Canadian Energy Centre (www.canadianenergycentre.ca). The author and the Canadian Energy Centre would like to thank and acknowledge the assistance of two anonymous reviewers in reviewing the original data and research for this Fact Sheet.

References (All links live as of August 28, 2023)

Rystad Energy (2023a). EmissionsCube. Emissions Solution. <https://bit.ly/3eAyIAs>; Rystad Energy (2023b). UCube. Upstream Solution. <https://bit.ly/3JTk2JK>; S&P Global Commodity Insights (2023). Canadian Oil Sands Continue Their Trend of GHG Intensity Reductions in 2022 — Down 23% Since 2009. <https://bit.ly/3sobIeV>.

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“The Canadian banking system is well-known for its strength and stability and the sector is an essential contributor to the country’s economic growth and well-being. Canadians rely on sound, stable banks to help them purchase a home, save for retirement, support the growth of small businesses, and drive the economy, which generates economic benefits to all Canadians.” 

— Canadian Bankers Association 

But what happens when the banks follow ideologies and policies that hurt a sector that is central to Canada’s economy and prosperity? Over the past several years, shareholder proposals calling for the banks to stop all investments in oil and gas have been presented by activist shareholders and well-funded non-profit organizations.  

To counter these, this year InvestNow stepped up and presented our own shareholder proposals to three Canadian banks, asking for explicit commitments to continue to invest in and finance Canadian oil and gas and to step away from policies that hurt the sector. This is the first time shareholder proposals of this nature have been presented to Canadian banks.     

The shareholder proposal is one of the most common and most powerful tools available to influence corporate policy. Shareholders submit proposals for consideration at a corporation’s annual general meeting, allowing them to have a say in board direction and management positions and policies. 

We believe strongly that our banks cannot be part of a scheme designed to strangle a sector of vital importance, not only to our citizens, but the democratic world. The Canadian oil and gas sector fuels our economy. It provides livelihoods not only for the hundreds-of-thousands across Canada who work in the sector, but the millions – that is all of us – who depend on it in so many ways. 

Encouraging divestment puts our economy at risk. Moreover, it will result in the growing demand for oil and gas around the world being met by other less democratic, less environmentally responsible suppliers.  

The dogmatic narrative that eliminating our oil and gas sector is going to somehow “help” Canada and reduce CO2 emissions couldn’t be more wrong. Over eighty percent of the  primary energy needs of the world are met by oil, natural gas, and coal. Global demand  is increasing, not decreasing. The International Energy Agency just reported that world oil demand is scaling record highs. 

If our banks go down the divestment path, Canada will lose its ability to influence the global energy conversation and we will see direct hardship for everyday Canadians. Our economy will be hobbled, industry will shut down, people will lose their jobs, and energy poverty will grow. 

Canadians live the way we do because we have one of the most productive, innovative, and responsible energy industries in the world. Our shareholder proposals called on the banks to come onside and to signal to the investment community, and to the world, that they are committed to the Canadian oil and gas sector. In fact, they have an economic and moral imperative to do so.  

Nothing happens without oil and gas. This sector is essential for the functioning of the economy, for jobs, for innovation – and for global emissions reductions. 

InvestNow will continue fighting for investment in Canada’s oil and gas sector through shareholder proposals and other work. 

Gina Pappano is executive director of  InvestNow Inc., a non-profit dedicated to demonstrating that investing in Canada’s resource sectors helps Canada and the world. Join the movement and pass the InvestNow resolution at investnow.org. 

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Five northern Alberta First Nation and Metis communities have acquired a 43 per cent interest in the Wolf Midstream Access NGL pipeline system. The transaction was facilitated by the Alberta Indigenous Opportunities Corporation (AIOC), a provincial crown corporation that provided a $103 million loan guarantee. 

Participating communities are the Buffalo Lake Métis Settlement, Kikino Métis Settlement, Heart Lake First Nation #469, Saddle Lake Cree Nation #125, and Whitefish Lake First Nation #128. 

“We’ve become very focused and sophisticated in our economic development portfolios,” says Tony Bagga, a Heart Lake First Nation executive and president of the Northern Lakeland Indigenous Alliance – a recently created entity that will manage the ownership on behalf of the bands.  

“We are looking to advance our vision of self-sustainability and prosperity. Transactions such as this will bring multigenerational revenue to the communities involved which we can put to use in underfunded community initiatives such as infrastructure, healthy living, cultural events, etcetera.” 

The Access NGL pipeline system connects Wolf Midstream’s recently constructed natural gas liquids (NGL) recovery facility near Mariana Lake southwest of Fort McMurray to its NGL separation facility north of Edmonton.  

Location map of Wolf Midstream Access NGL pipeline system. Image courtesy Wolf Midstream

NGLs like ethane, propane and butane are recovered during oil and gas processing. They have a variety of uses including as a petrochemical feedstock for generating everyday products, as well as heating, cooking and blending for vehicle fuel. 

Acquiring an ownership stake in the Wolf Midstream NGL system “will help support the foundation of our Nations,” Bagga says. 

“The proceeds from this transaction will support our pillars such as promotion and retention of Indigenous culture, education, recreation, health, and promoting programming for our youth and Elders,” he says.   

“We a see this as a step in the right direction to economic reconciliation. Our communities will see direct benefits from the proceeds of this project, which will uplift our communities and support future generations. We are in hopes that this will inspire future participation for us and others.” 

The Indigenous Resource Network (IRN) is calling for a national loan guarantee program like want is offered by the AIOC to help more communities take ownership of resource projects. This would help address what the IRN calls a “crisis-level lack of opportunity” for Indigenous communities across Canada. 

“We’re incredibly excited and pleased that there’s another investment, another opportunity, and more communities brought in,” says IRN executive director John Desjarlais.  

“The loan guarantee program works; it helps to de-risk. It’s governments engaging and facilitating good, affordable access to capital that helps to drive economic reconciliation. It’s very much a success in terms of what we hope to see on a national level.” 

The AIOC was created in 2019 to cultivate Indigenous prosperity through investment in Alberta’s natural resource, agriculture, telecommunication, and transportation sectors. The organization mandate is to deliver up to $1 billion in investment support for qualified Indigenous communities that make a minimum $20 million investment. 

So far, the AIOC has delivered $513 million in loan guarantees through five transactions – with the Cascade Power Project, Northern Courier Pipeline, Lindbergh Cogeneration Facility, Enbridge oil sands pipeline system, and the Wolf Midstream Access NGL pipeline system. 

Twenty-seven Indigenous communities have developed project ownership through the AIOC, including 17 Alberta First Nations and 10 Métis communities. 

“Stronger Indigenous communities make for a stronger Alberta and a stronger Canada,” says Chana Martineau, CEO of the AIOC.  

“If you think about the ripple effect in a pond, as those communities strengthen, they then grow and invest and impact all the communities around them.”    

AIOC projects are creating consistent, multigenerational revenue streams, she says. In addition to local projects and infrastructure, Indigenous communities can invest funds to pursue additional profit-generating ventures, says Martineau, who is from the Frog Lake First Nation. 

“To build whatever the community most needs enables them to achieve their own goals,” she says. “All of our projects are designed to provide immediate return to Indigenous communities and Canadian corporations are increasingly valuing these partnerships.” 

Indigenous ownership of major energy projects is also ramping up in British Columbia. 

The proposed $3 billion Cedar LNG facility in Kitimat, 50 per cent owned by the Haisla Nation, would be the first Indigenous-owned LNG terminal in the world and could be in operation by 2027. The project holds significant potential for economic and social transformation in the region, say stakeholders.   

Also on the west coast, the Nisga’a Nation near Prince Rupert and its partners have proposed the $10 billion Ksi Lisims LNG terminal on Pearse Island – the project has entered B.C.’s environmental review process.  

Sixteen Indigenous communities along the $14.5 billion Coastal GasLink pipeline, which will feed natural gas from northeast B.C. to LNG Canada and Cedar LNG, have signed a 10 per cent ownership stake once the project is completed in 2023. 

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Canada’s carbon capture and storage (CCS) industry is an important tool in the global quest to reduce emissions, says an industry expert who was among 40 researchers who recently participated in a CCS summer school in Regina. 

In July, Eadbhard Pernot, and colleagues from 29 countries participated in the International Energy Agency Greenhouse Gas R&D Programme CCS Summer School in Regina. The draw to Saskatchewan’s capital – the fourth such event – was the International CCS Knowledge Centre and an opportunity to obtain hands-on CCS experience with experts at SaskPower’s Boundary Dam Carbon Capture Project near Estevan, Saskatchewan. 

Canada has five of the world’s 30 commercial CCS operations, including at the coal-fired Boundary Dam Power Station. It’s the world’s first and only CCS facility operating in tandem with a commercial power plant – which has captured and stored over 5 million tonnes of carbon dioxide (CO2) since 2014. 

“The lessons learned from the Boundary Dam facility are going to be really important for countries that have recently built coal power plants,” says Pernot, a policy manager with Boston-based Clean Air Task Force, which promotes zero-emissions technology and policies.  

“The project has consistently performed at its capacity. And I think that’s really something Canada should be proud of.” 

Eadbhard Pernot at SaskPower’s Boundary Dam Carbon Capture Project near Estevan, Sask. Photo courtesy the International CCS Knowledge Centre

Summer school participants studied all aspect of CCS, including the capture, transportation and storage of CO2, industrial uses of CO2, costs and economic potential of CCS, regulations, policy and GHG accounting, public communication and health and safety. 

“As far as storage, we’ve been injecting fluids and gases into the subsurface for decades,” says Eadbhard. 

“So, the science is pretty clear in the sense that we can put all of these things together. We can capture emissions and transport and store them permanently in the subsurface.” 

More CCS projects are being developed in Canada, including through Pathways Alliance, a group comprised of the six largest oil sands producers representing 95 per cent of production that plans to spend around $24 billion on a CCS network and other technologies to achieve net zero emissions in the oil sands by 2050.  

The industry coalition has already begun design work on what will be the backbone of one the world’s largest CCS projects, a 400-kilometre pipeline connecting an initial 14 oil sands facilities to a storage hub in northern Alberta. The project is expected to remove up to 12 million tonnes of emissions annually by 2030.   

Does CO2 stay underground once injected deep into geologic formations?  

Yes, says Pernot, noting the gas originates in many subsurface structures – approximately 1.845 billion-billion tonnes of carbon are contained in Earth’s mantle and crust, while 43,500 billion tonnes are found at the surface.  

“I think it’s also important to recognize that when we are talking about putting CO2 back in the ground, it’s not under someone’s house,” says Pernot.  

“We are talking about depths between one and three kilometres. We’ve been injecting fluids and other gases for decades without any incident of leakage in terms of storage.” 

Since 2000, Alberta and Saskatchewan have safely stored 47 million tonnes of emissions – the equivalent of removing 10 million cars from the road – says James Millar, CEO of the International CCS Knowledge Centre, noting Canada’s sector is an example to the world. 

Canada accounts for approximately 15 per cent of current global CCS capacity even though it generates less than two per cent of global CO2 emissions, he says.  

“We demand, and we rely on, these [oil and gas] products every day,” says Millar. “We don’t want to be without them. I’ve never heard anyone who is against CCS, say ‘I will go back to living in a cave and reading by lamplight and driving horses and buggies.’ Isn’t it better for industries that manufacture these products to do something about the issue?” 

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From LNG export facilities on the west coast to pipelines across western Canada, Indigenous communities are building on momentum and ramping up efforts for oil and gas infrastructure ownership.  

The Indigenous Resource Network has launched its Ownership is Reconciliation campaign, which calls for a national guaranteed loan program that would enable Indigenous communities to grow their participation in major energy projects. 

“Economic development is one of the greatest catalysts for self-determination,” says John Desjarlais, executive director of the Indigenous Resource Network, noting access to affordable capital is often a barrier to economic growth for Indigenous communities.  

“I’m quite pleased with the sweeping economic impact of Indigenous participation in oil and gas. The biggest thing is not waiting on anyone – becoming entities that can fund our own infrastructure, programming, and culture.” 

If the loan program comes to fruition, a variety of natural resource projects could be developed depending on the location of Indigenous communities – from mining critical minerals on the Canadian Shield to oil and gas in western and Atlantic Canada. Hydrogen production and carbon capture and storage are also of interest to Desjarlais. 

“They sky is the limit,” he says, adding Indigenous communities are already making significant progress in developing and owning energy infrastructure.  

The proposed $3 billion Cedar LNG facility in Kitimat, 50 per cent owned by the Haisla Nation, would be the first Indigenous-owned LNG terminal in the world and could be in operation by 2027. The project holds significant potential for economic and social transformation in the region, say stakeholders.  

Also on the west coast, the Nisga’a Nation near Prince Rupert and its partners have proposed the $10 billion Ksi Lisims LNG terminal on Pearse Island – the project has entered B.C.’s environmental review process. 

Sixteen Indigenous communities along the $14.5 billion Coastal GasLink pipeline, which will feed natural gas from northeast B.C. to LNG Canada and Cedar LNG, have signed a 10 per cent ownership stake once the project is completed in 2023. 

In Alberta, 23 First Nation and Metis communities are now 12 per cent owners of seven operating Enbridge oil sands pipelines, a $1.1 billion investment announced in September 2022 that is the largest Indigenous energy transaction ever in North America.  

The deal was made with the support of a $250 million loan guarantee from the Alberta Indigenous Opportunities Corporation, which has up to $1 billion available in loan guarantees to support Indigenous investment opportunities.   

A national Indigenous loan guarantee program would be a similar concept on a Canada-wide scale.  

As the relationship between Indigenous communities and the resource sector improves, more companies are seeking Indigenous partnerships prior to applying for project permits, says Desjarlais. 

“It’s a win, win, win,” he says. “Industry loves it because I think they realize there are considerable challenges in treating Indigenous people as just stakeholders or part of a process, and considerable benefits when treating communities like partners.”

Through Energy for a Secure Future, Desjarlais and several of his peers, including Haisla Nation Chief Councillor Crystal Smith, travelled to Ottawa in April to meet with diplomatic representatives from Canada’s G7 partners – Germany, France, Japan, and the United States – as well as delegations from Poland and India. Their message was clear, Indigenous people want to drive energy sector development. 

“Every official had a real desire to really understand Indigenous sentiment around resource development,” he says. “There was a sincere desire to learn from our perspective.” 

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