Despite all the hype surrounding electricity exports, they earn less in a month than oil and gas generate every day, writes Philip Cross in the Financial Post. Below is an excerpt from the article, which can be read in full here.
By Philip Cross, October 12, 2021
Statistics Canada this week reported that energy exports reached $12.0 billion in August, more than recouping all their losses during the pandemic. Exports topped their March 2019 high of $11.4 billion and are closing in fast on their all-time peak of $12.8 billion set in 2014. The increase was driven by sharply higher exports of both crude oil and natural gas. Despite all the hype surrounding electricity exports, they earn less in a month than oil and gas generate every day.
The surge of energy exports is a dramatic reversal of fortune from their low of $3.0 billion a month during the depths of the pandemic, when oil prices briefly went negative for technical reasons related to a lack of storage capacity (negative prices imply that sellers paid buyers to physically take possession of their oil).
Opponents of Canada’s oil industry gleefully leapt on this one-day anomaly of negative oil prices to chortle that the industry had no future. Their pronouncements at the time make for interesting reading today. Green Party parliamentary leader Elizabeth May told reporters that “Oil is dead and for people in the sector, it’s very important there be just transition funds.” Bloc Québécois leader Yves-François Blanchet predicted oil is “never coming back” and that “it is clear that there is no long-term future for that kind of industry, so let’s help them go somewhere else, something which is more green.” Wiser heads were more cautious, recalling that sharp declines in oil prices have rarely lasted more than six months. The strong recovery of prices over the past year proves that their nosedive in spring 2020 was just another cyclical decline, albeit an extreme one, given the sharp economic slowdown, and did not signal the end of fossil fuels.