Fu­ture oil de­mand hazy

Truro Daily News - - OPINION -

C ould it be that we’re start­ing to turn a cor­ner in the never-end­ing jour­ney of ful­fill­ing en­ergy needs – here in Canada and else­where?

The go-to, of course, has long been hy­dro­car­bons, with this coun­try en­joy­ing fairly abun­dant re­sources of gas and oil. Some might ar­gue that Canada has re­lied too much on oil ex­plo­ration, to the point that the fall in oil prices eight years ago saw a re­sul­tant crash in the coun­try’s econ­omy.

That event has led to much spec­u­la­tion about the value of sub­se­quent ex­plo­ration and in­fra­struc­ture to trans­port fos­sil fu­els, as na­tions in­di­cate their re­solve to em­brace greener op­tions and dras­ti­cally re­duce emis­sions.

A new re­port adds fod­der to that dis­cus­sion. And it has im­pli­ca­tions for any push to trans­port oil to the Mar­itimes for pro­duc­tion or to ship off­shore.

The Cen­tre for In­ter­na­tional Gov­er­nance In­no­va­tion casts some doubt on the need for new pipe­lines in Canada to carry prod­uct to tide­wa­ter for ex­port. Cur­rently both the east and west coasts have pro­pos­als at var­i­ous stages of dis­cus­sion – draw­ing a share of protest from some cir­cles.

Jeff Ru­bin, a se­nior fel­low at the cen­tre and a for­mer chief econ­o­mist at CIBC, says there is no mar­ket­ing his­tory to sup­port the hope that such projects will ul­ti­mately reap the ben­e­fits of higher prices. Over­seas mar­kets pay lower prices for bi­tu­men than in North Amer­ica, he said. Add to that the grow­ing com­mit­ment world­wide from coun­tries to move away from a car­bon-based econ­omy.

Con­sid­er­ing the length of time it would take to build th­ese pipe­lines, that ar­gu­ment will only grow stronger in sev­eral years’ time.

The lat­est in re­gard to the pro­posed, much-de­bated En­ergy East pipeline, which would take prod­uct from the oil­sands in Al­berta to Saint John, N.B., sees the pro­posal at a hia­tus. Tran­sCanada has asked the Na­tional En­ergy Board to put its ap­pli­ca­tion on hold af­ter the reg­u­la­tor said it would con­sider in­di­rect green­house gas emis­sions in eval­u­at­ing the project.

Oil in­dus­try cham­pi­ons are giv­ing up hold­ing their breath wait­ing for prices to re­turn to what they were a decade or more ago. Con­sider the ramped-up pro­duc­tion of shale gas in the United States as that coun­try tries to be more self-suf­fi­cient in en­ergy needs.

Pro­duc­tion lev­els aside, de­mand for car­bon fu­els isn’t likely to sky­rocket any­way. A num­ber of Euro­pean coun­tries have set dead­lines that will see the ban­ning of ve­hi­cles pow­ered by gas and diesel in a cou­ple of decades. Im­prove­ments in elec­tric ve­hi­cles in com­ing years, their range and the means to recharge, will see a lot more in­ter­est from con­sumers.

For a long time oil has been the king­pin in de­lib­er­a­tions by gov­ern­ment about eco­nomic de­vel­op­ment poli­cies – and in their tar­geted rev­enues. Gov­ern­ments in Canada – fed­eral and pro­vin­cial – might eas­ily be ac­cused of hav­ing put all their eggs in one bas­ket on this, to the point of be­ing caught in the in­evitable crash.

It’s sound­ing more and more like it’s time to shift those eggs around and pro­vide more sup­port for bet­ter en­ergy ef­fi­cien­cies and greener tech­nolo­gies.

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