Tuesday, March 21, 2023
No Result
View All Result
  • Media
Support Us
Macdonald-Laurier Institute
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
    • Jobs
    • Women’s History Month Fundraiser
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy Program
      • Energy
      • Environment
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • COVID and after: A mandate for recovery
    • COVID Misery Index
      • Beyond Lockdown
    • Provincial COVID Misery Index
    • Centre for Advancing Canada’s Interests Abroad
      • Dragon at the Door
      • The Eavesdropping Dragon: Huawei
    • An Intellectual Property Strategy for Canada
    • Competition Policy in Canada
    • Speak for Ourselves
    • Canada and the Indo-Pacific Initiative
    • DisInfoWatch.org
    • The Transatlantic Program
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Talkin’ in the Free World with Mariam Memarsadeghi
    • Past Projects
      • Justice Report Card
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Annual Reports
    • Inside Policy Magazine
      • Inside Policy Back Issues
      • Inside Policy Blog
    • Papers
    • Columns
    • Books
    • Commentary
    • Straight Talk
    • Video
    • Multimedia
    • Podcasts
    • Leading Economic Indicator
    • Labour Market Report
    • MLI in the Media
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
    • Jobs
    • Women’s History Month Fundraiser
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy Program
      • Energy
      • Environment
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • COVID and after: A mandate for recovery
    • COVID Misery Index
      • Beyond Lockdown
    • Provincial COVID Misery Index
    • Centre for Advancing Canada’s Interests Abroad
      • Dragon at the Door
      • The Eavesdropping Dragon: Huawei
    • An Intellectual Property Strategy for Canada
    • Competition Policy in Canada
    • Speak for Ourselves
    • Canada and the Indo-Pacific Initiative
    • DisInfoWatch.org
    • The Transatlantic Program
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Talkin’ in the Free World with Mariam Memarsadeghi
    • Past Projects
      • Justice Report Card
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Annual Reports
    • Inside Policy Magazine
      • Inside Policy Back Issues
      • Inside Policy Blog
    • Papers
    • Columns
    • Books
    • Commentary
    • Straight Talk
    • Video
    • Multimedia
    • Podcasts
    • Leading Economic Indicator
    • Labour Market Report
    • MLI in the Media
No Result
View All Result
Macdonald-Laurier Institute

Our oilsands tortoise may outlast the Americans’ shale-oil hare: Heather Exner-Pirot in the Financial Post

Canada has plenty of oil left in the tank, not so U.S. shale.

March 6, 2023
in Columns, Energy, Energy Policy Program, Heather Exner-Pirot, In the Media, Latest News
Reading Time: 3 mins read
A A
Not enough Canadians know how important the oilsands are: Philip Cross in the Financial Post

This article originally appeared in the Financial Post.

By Heather Exner-Pirot, March 6, 2023

Canada’s oilsands have faced strong headwinds over the past decade. Coming online just as their main customer, the United States, saw its own oil production explode thanks to shale, its economics have been pretty tough. And they’ve been compounded by a hostile regulatory and political environment in an Ottawa fixated on emissions. But as shale fields pass their peak production, the oilsands are now poised for prime time.

In both geopolitical and economic terms, the shale revolution — the combination of hydraulic fracturing and horizontal drilling that opened up vast U.S. oil and gas reserves in shale formations — has been one of the most important technological developments of recent years.

In the last decade and a half, U.S. oil production went from five million barrels a day to 12 million, transforming the world’s biggest oil importer into its biggest producer — an unprecedented shift in the global energy landscape. Shale oil has the additional benefit of being easy to ramp up and down, making the U.S. a swing producer able to control world prices, a role previously played by OPEC

But shale’s astonishing rise is expected to be followed by an equally rapid decline. U.S. shale fields will soon plateau. Already wells are becoming gassier and more expensive to drill, and new wells are less productive.

Canada’s oilsands could hardly be more different. They comprise the world’s third-largest reserves: 1.8 trillion barrels of oil, of which just under 10 per cent, or 165 billion barrels, is technically and economically recoverable with today’s technology. Canada currently extracts over one billion barrels a year, which means we have centuries of inventory. Add our conventional production, and we are already the world’s fourth-largest oil producer.

Cheap shale oil

Many oilsands operations are mines, from which oily sand is scooped up and taken to facilities where bitumen is extracted from the sand. Other techniques involve injecting steam underground, heating the bitumen and making it fluid enough to be pumped out. These operations are expensive to build, but once up and running they are cash machines. They require very low levels of capital to maintain and have very low decline rates. Current oilsands operations have decades worth of low-cost production life left. By contrast, many shale wells have just a couple of years.

Thanks in large part to cheap shale, the West Texas Intermediate crude oil benchmark sat below $US60/barrel for most of 2015 to 2020. But now climate and regulatory policies, ESG financing trends, and the effect of cheap shale itself, which over that period dampened investment in oil and gas, could lead to oil prices of $US100+/barrel in the near and medium term — with almost all of Canada’s oilsands inventory still in the ground, ready to reap the benefit of higher prices.

The decline of American shale has huge political implications for Canadian oil. Some policy-makers contemplate a “just transition,” but a more likely scenario — which we should be preparing for — is that global oil demand will grow at least until the 2030s and then level off at something above 100 million barrels/day, with the U.S. share of production declining.

If that does happen, oil prices will rise to a point that threatens the global economy and creates an energy crisis, while OPEC countries and Russia use their market control and energy exports to advance their own illiberal foreign policy goals. Canada must offset the worst of it.

Within the next decade, someone will need to start filling the gap left by the imminent decline of American shale. Our allies, not least the United States, should want to make sure it is us. We have abundant oil that, if we invest now in carbon capture, we can provide in a more environmentally responsible way.

People are always entitled to hope for the best: maybe revolutions in finance, labour, policy and technology will allow us to quickly reduce oil consumption and hit net zero, not only in Europe and North America, but in the developing countries where the other seven billion of us live and where energy demand is growing fastest.

But those responsible for our security must also prepare for the worst. And that means ensuring Canadian oil is available to those who need it, for as long as they need it.

Heather Exner-Pirot is director of energy, natural resources and environment at the Macdonald-Laurier Institute.

Source: Financial Post
Tags: Canada-US relationsenergy policyFinancial PostHeather Exner-Pirotoil sands
Previous Post

Slowly but surely, Indigenous Peoples are gaining control of traditional lands: Ken Coates and JP Gladu in the Globe and Mail

Next Post

Canada needs immigration reform that is fair and constructive: Aaron Wudrick in the Montreal Gazette

Related Posts

Oaths, trust and Canadian democracy: Stephen Van Dine and Karl Salgo for Inside Policy
Inside Policy

Oaths, trust and Canadian democracy: Stephen Van Dine and Karl Salgo for Inside Policy

March 17, 2023
Preparing for the Foreign Threats to Canadian Democracy: Straight Talk with Richard Fadden
Inside Policy

Canada and Japan’s common miscalculation in cyberspace: Koichiro Komiyama for Inside Policy

March 15, 2023
Defending against foreign interference in our elections: Marcus Kolga for Inside Policy
Columns

As Ottawa balks at an election interference inquiry, public trust in our democracy is draining away: Marcus Kolga in the Globe and Mail

March 15, 2023
Next Post
Canada Day is a day for all Canadians – Indigenous and non-Indigenous — to celebrate. It should not be cancelled: Melissa Mbarki in the National Post

Canada needs immigration reform that is fair and constructive: Aaron Wudrick in the Montreal Gazette

Macdonald-Laurier Institute

323 Chapel Street, Suite #300
Ottawa, Ontario
K1N 7Z2 Canada

613.482.8327

info@macdonaldlaurier.ca
MLI directory

Follow us on

Newsletter Signup

Support Us

Support the Macdonald-Laurier Institute to help ensure that Canada is one of the best governed countries in the world. Click below to learn more or become a sponsor.

Support Us

Inside Policy Magazine

  • Current Issue
  • Back Issues
  • Advertising
  • Inside Policy Blog
  • Privacy Policy

© 2021 Macdonald-Laurier Institute. All Rights reserved.

No Result
View All Result
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
    • Jobs
    • Women’s History Month Fundraiser
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy Program
      • Energy
      • Environment
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • COVID and after: A mandate for recovery
    • COVID Misery Index
      • Beyond Lockdown
    • Provincial COVID Misery Index
    • Centre for Advancing Canada’s Interests Abroad
      • Dragon at the Door
      • The Eavesdropping Dragon: Huawei
    • An Intellectual Property Strategy for Canada
    • Competition Policy in Canada
    • Speak for Ourselves
    • Canada and the Indo-Pacific Initiative
    • DisInfoWatch.org
    • The Transatlantic Program
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Talkin’ in the Free World with Mariam Memarsadeghi
    • Past Projects
      • Justice Report Card
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Annual Reports
    • Inside Policy Magazine
      • Inside Policy Back Issues
      • Inside Policy Blog
    • Papers
    • Columns
    • Books
    • Commentary
    • Straight Talk
    • Video
    • Multimedia
    • Podcasts
    • Leading Economic Indicator
    • Labour Market Report
    • MLI in the Media

© 2021 Macdonald-Laurier Institute. All Rights reserved.