Nine Uncomfortable Canadian Energy Facts

We’re not cutting emissions as much as we should, and we’re dependent on an increasingly expensive source of oil.

By Andrew Nikiforuk  | TheTyee.ca

Andrew Nikiforuk is an award-winning journalist who has been writing about the energy industry for two decades and is a contributing editor to The Tyee. Find his previous stories here.

Canada’s energy twilight: Canada can’t meet emission targets and expand bitumen or shale gas production at the same time, according to energy expert David Hughes. Photo by Jeff Peischl/NOAA.

Canadians are global energy pigs; we’re high emitters of carbon and certainly aren’t leaders in renewable energy.

In addition “aspirational” plans by Canadian politicians won’t deliver promised emission reductions on climate change without major reductions in energy consumption.

These are just some of the hard energy facts contained in Canada’s Energy Outlook, a new and encyclopedic report by David Hughes, one of Canada’s foremost energy experts.

Hughes, whose reliable research is cited by the likes of Bloomberg, Nature, The Economist and The Tyee, has been analyzing energy trends for industry and government for more than 30 years.

Unlike many environmentalists, Hughes does not believe that a transition to renewables or even reductions in greenhouse gases will be seamless, easy or cheap. Here’s why:

1) Canadians live high and large on largely fossil fuel-based energy.

On a per capita basis we consume energy at more than five times the world average. We even consume more energy than oil hungry Americans and twice as much as the average citizen in the Organization for Economic Co-operation and Development. Citizens in Germany, France, the United Kingdom and Japan, nations that don’t export oil, consume energy at less than half the rate of Canadians.

Canada consumed 2.5 per cent of the world’s energy in 2016, and that consumption has increased at .13 per cent per year over the past two years. Fossil fuels, of course, dominated Canada’s energy menu: oil and gas at 57 per cent; coal at five per cent; nuclear at seven per cent; hydroelectricity at 27 per cent and solar and wind at 3.1 per cent. “Canada is among the highest oil consuming countries in the world, at 23.6 barrels per person per year, which is six per cent more than the average American and five times the world average,” Hughes writes. (All quotes in this story are from his report.)

2) Thanks to all that energy guzzling Canadians have one of the world’s highest carbon footprints.

“Canada’s per capita emissions of greenhouse gases are among the highest in the world — 3.2 times the world average, more than double that of China (the world’s highest total emitter) and eight times that of India.”

Per capita carbon dioxide emissions are highest, by order, in six fossil fuel exporting nations: U.A.E., Kuwait, Saudi Arabia, Australia, U.S. and Russia.

3) As an oil exporting nation Canada has never been a leader in renewable energy.

With but 3.1 per cent non-hydro renewable energy, Canada ranks below the world average of 3.8 per cent and way below the United States at 5.3 per cent. In contrast Denmark, an oil-importing nation, got nearly a quarter of its primary energy from renewables in 2016. “Even the most aggressive scenarios in Canada’s mid-century strategy don’t see wind growing to more than 24 per cent of total generation and solar to more than six per cent (which would require an 18-fold increase in wind and a 32-fold increase in solar from current levels).”

4) Canada can’t meet emission targets and expand bitumen or shale gas production at the same time.

Greenhouse gas emissions from oil and gas extraction amounted to 26 per cent of Canada’s total in 2015 and could rise to 76 per cent by 2040.

“Expanding oil and gas production as projected by the National Energy Board means that the rest of Canada’s economy will have to reduce emissions by 49 per cent by 2030, and 85 per cent by 2040, to meet emissions reduction targets. This is almost certainly impossible in the timeframe available.”

5) The oilsands, junk heavy crude, are an important resource that has a limited economic future due to its poor quality.

“Although on paper Canada has the third-largest resource of oil in the world, in practice 97.4 per cent of proven reserves are low-quality oilsands that are energy- and emissions-intensive to extract and costly to refine. Some 80 per cent of the remaining recoverable resources in the oilsands are too deep for mining and thus require even more energy- and emissions-intensive in situ methods to extract. Furthermore, industry invariably extracts the highest-quality, most economic resources first, which means that much of Canada’s remaining oil resource will cost more to extract than current operations and will produce higher levels of emissions.”

6) Canadian energy firms are spending more energy to get less energy from the oilsands.

Energy return on energy investment or EROI measures the ratio of energy gained versus how much energy was required to get that energy. Conventional oil, the driver of the global economy, once had an EROI of 100:1 but those energy returns have shrunk to 17:1 as oil gets more expensive and difficult to find. The EROI for fracked oil in the United States is 11.1. (In other words one barrel of oil must be spent to find 11 more.) Due to its high energy intensity, bitumen production falls way below these averages. Bitumen steamed out of the ground has an EROI of 4:1 but would be closer to 2:1 if the calculation included transport and refining to the point of use. Mined bitumen has an EROI of 8:1. “When EROI approaches a breakeven point it makes no energetic sense to pursue further extraction,” Hughes explains in his report.

7) Canada is a well-dammed country.

Hydro power, a low carbon source of energy, makes up about 59 per cent of all electrical generation in the country, and that power comes from nearly 600 dams. As a result “Canada’s electricity consumption is among the highest in the world — more than five times the world average on a per capita basis.”

According to Hughes, “Canada ranked a distant second in the world to China in terms of total hydropower generation (374 TWh versus 1,163 TWh in 2015).” Six high-cost projects are under construction in Newfoundland, Quebec, Ontario, Manitoba and B.C. Hughes estimates that the controversial Site C project will “cost $8.335 billion, or $7,577 (US$5,683) per kilowatt, which is at the high end of the cost scale, roughly the same as nuclear.”

Yet to meet climate targets the Canadian government forecasts “in its mid-century strategy scenarios that hydropower capacity will have to increase on average by 107 per cent by 2050.”

“Developing this much additional hydropower in just 33 years would require up to 118 new dams the size of Site C at a cost of up to US$739 billion. “

8) Nuclear power is a declining force in Canada.

“Per capita consumption peaked in Canada in 1994 and in the world as a whole in 2002.” The nation’s 19 operating reactors account for 14 per cent of Canada’s electrical generation but four reactors in Ontario and Quebec are being decommissioned.

“Even with the expenditure of $26 billion on refurbishments of the Bruce and Darlington reactors, Canadian nuclear power is set to decline by about 39 per cent over the next two decades unless new reactors are constructed.”

Compared to other forms of electrical generation building nuclear power plants costs “five times more than gas, three times more than onshore wind and two times more than utility-scale solar.”

9) Canada doesn’t have a sustainable energy strategy but based on the evidence, it should largely focus on reducing energy consumption across the board in industry, housing and transportation.

Using incentives to build renewables should be complemented with a program that eliminates fossil fuel subsidies of “US$1,283 per person in Canada in 2015.” Furthermore: “Reducing consumption will maximize the effectiveness of investments in renewable energy, and will minimize overall expenditures on new energy supply and the inevitable economic costs and environmental impacts of developing it.”

Last but not least politicians need to realize that “ramping up oil and gas production is a non-starter if Canada wants to meet its emissions-reduction targets. Increasing production while attempting to meet emissions-reduction targets are conflicting goals, and the reality of having to limit production growth must be faced.”

Hughes concludes that Canada faces some very difficult energy choices ahead.