Canada’s clean energy efforts have been deemed exemplary among oil and gas producing countries. A newly released report from the International Energy Agency (IEA) generally commends the federal government’s targets and policies for reducing greenhouse gas emissions and identifies Canada as a potential key player in the transition to low-carbon energy sources — both as a stable supplier of the fossil fuels that will be needed in the interim and as a leader in curbing emissions from oil and gas production.
As an oil and gas exporter, Canada is in the minority of the IEA’s 30 member nations. However, IEA executive director Fatih Birol suggests that gives it strategic influence in the Organisation of Economic Cooperation and Development (OECD), with which the IEA is affiliated, and the wider global context. One of the world’s most stringent emission taxes — currently at $50 per tonne, but set to increase in annual $15-increments until it reaches $170 in 2030 — a recent pledge to cut oil and gas methane emissions to 75 per cent below 2012 levels by 2030, and committed investment in energy-related research and development (R&D) are all cited as indicators of serious intent.
“We still need oil and gas for years to come and, therefore, somebody has to produce it. I prefer that fuels are produced by countries that: a) produce them in a clean way; and b) are reliable partners for the consumers.” Birol observed during an online media briefing in conjunction with the release of the IEA’s report. “We follow many oil and gas producing countries around the world, looking at their plans, programs and the concrete steps they are making. I can very easily and comfortably say, in terms of transformation and taking it seriously, Canada is definitely in the top league of all those oil producing countries when it comes to addressing our climate challenge.”
“The IEA is one of the world’s most trusted voices on energy and it’s both rewarding and reassuring to have the agency acknowledge our impressive leadership, as they put it, on climate action, while commending our conscious efforts and historic investments to get Canada to net-zero emissions by 2050,” responded Canada’s Minister of Natural Resources, Jonathan Wilkinson, who also participated in the online briefing.
That said, the report identifies many opportunities for improvement and makes recommendations for priority actions as part of a comprehensive review of energy policy, programs, infrastructure, demand pressures, components of supply and resulting environmental implications. The IEA conducts such in-depth assessments of all its member nations on an ongoing basis, and last scrutinized Canada’s energy landscape in 2015.
For 2022, IEA analysts highlight three fundamentals of the low-carbon transition —energy efficiency, renewable energy, and R&D and innovation — which are further emphasized in two of the report’s four overarching key recommendations. They call for increased federal funding for emerging clean energy technologies and the development of a national energy efficiency strategy that establishes targets for the buildings, transportation and industrial sectors.
Muted energy efficiency role model
Energy efficiency plays a central role in reducing GHG emissions and is frequently tapped as a logical economic driver of the low-carbon transition through investment in retrofitting homes, commercial and institutional buildings and industrial facilities. In contrast to Birol’s flattering characterization, it’s also a category in which Canada stumbles as an international role model.
“Canada, in 2019, still had the highest energy intensity of GDP among IEA member countries and the second highest energy intensity per capita,” Divya Reddy, IEA analyst and lead author of the Canada review, confirmed during the online briefing.
That equates to 119 tonnes of oil equivalent (toe) per USD $1 million compared to the IEA average of 65 toe/USD $1 million, and 5.47 toe per capita versus the IEA average of 2.9 toe per capita. However, in the decade between 2009 and 2019, Canada’s GDP grew by 24 per cent, while, reflective of more efficient performance, energy intensity of GDP decreased by 10 per cent. Energy intensity per capita remained fairly steady, albeit rising by 0.05 per cent, over the same period, as the population grew by 12 per cent.
“Canada’s energy system today is still heavily dominated by fossil fuels and in 2020 the largest source of energy supply was natural gas, which accounted for 39 per cent of supply, followed by oil at 33 per cent,” Reddy noted. “Total consumption of energy increased by 12 per cent between 2009 and 2019, driven by economic growth, and in line with that, energy-related carbon dioxide emissions have also been steadily increasing in recent years.”
Buildings account for slightly less than one third of total final energy consumption, although, at 67 million tonnes of oil equivalent (Mtoe), it’s a roughly comparable portion to the other two predominant end uses, industry (71 Mtoe) and transport (68 Mtoe). Residential dwellings represented about 53 per cent of the sector’s energy demand in 2019 with the remainder in commercial and institutional buildings. Sector-wide, 58 per cent of energy demand was attributable to space heating, equating to more than 35 Mtoe and far outdistancing other uses such as water heating, lighting and cooling.
Looking at where more impetus is needed, the report points to the familiar Canadian complication of shared federal-provincial jurisdiction and urges the federal government to use its leverage to prompt more action and/or better results. IEA analysts recommend: faster rollout of national building and energy codes with requirements to meet retrofit and net-zero-energy-ready standards; tying federal funding for energy efficiency in buildings to “outcome-based” targets and ensuring that energy poverty is addressed; and introducing incentives and/or regulations to drive the adoption of energy management systems and implementation of energy audit recommendations in industry.
Those are in line with policy directions that Efficiency Canada, a national research and advocacy organization promoting the dual environmental and economic benefits of resource conservation and climate action, has actively endorsed. Brendan Haley, Efficiency Canada’s policy director, maintains that some federal measures are languishing, while others need refinement to draw more uptake and achieve better results.
“The emphasis on energy management systems is something that has received little federal policy attention, despite a federal policy goal to see 75 per cent of industrial energy demand benefiting from energy management systems by 2030,” he notes. “The recommendation to ‘set outcome-based targets for each financial programme targeting energy efficiency in buildings’ highlights that federal programs, such as Greener Homes and the Canada Infrastructure Bank, are providing incentives without net-zero emissions compatible standards to guide them. Existing programs are supporting incremental energy and GHG savings more than the scale required for net-zero.”
Exploring technologies for clean and conventional fuels
In other prioritized elements of the low-carbon transition, Canada ranks third among the 30 IEA member nations for the percentage of its GDP — 0.6 per cent — it invests in R&D and supporting commercialization of innovative energy technologies. That includes a focus on hydrogen, nuclear small modular reactors and, closely tied its conventional fossil fuel resources, carbon capture utilization and storage (CCUS).
“Canada is already a global leader in CCUS with four of the world’s 26 commercial projects in operation as well as extensive expertise in research and development, and these technologies can notably play an important role in decarbonizing upstream crude oil production,” Reddy advised.
Accordingly, Birol ranks carbon capture and storage in the top three of approximately 800 technologies contemplated in the IEA’s roadmap for the low-carbon transition. “In the absence of CCUS, reaching our climate goals will be much more difficult, if at all possible,” he said.
It also aligns with the role he sees for Canada as “an important supplier of oil and gas to the global market”. Meanwhile, Wilkinson sketched out the prospects for a continued strong presence heading into and on the other side of the energy transition.
“Canada faces challenges and opportunities that are unique — our climate, our geography, our demographics and, certainly, our economy. Our climate action has to reflect that,” he maintained. “Canada is blessed with an abundance of natural resources that position us to be a global leader in clean energy. We have ample land for solar and wind farms, vast water systems for hydroelectric power, geological formations to sequester captured carbon, critical minerals for clean technologies, uranium needed for nuclear energy and, of course, significant traditional sources of energy.”
Barbara Carss is editor-in-chief of Canadian Property Management.
