Environmentalists say a report from the International Energy Agency that concludes investment in new fossil fuel sources must end if the world is to meet its climate goals has a strong message for Canada.
"We now have an analysis from the most authoritative energy body in the world that shows a direct link between a climate-safe future and a sharp decline in demand for oil and gas," said Chris Severson-Baker of the Pembina Institute, a clean-energy think tank.
"The @IEA shows a direct link between a climate-safe future and a sharp decline in demand for oil and gas. @YourAlberta needs to develop climate action plans that include job creation."
— Pembina Institute (@Pembina) May 18, 2021
—@Pembina’s Chris Severson-Baker
Read more here: https://t.co/vxk8hAjz3I #NetZero2050Roadmap pic.twitter.com/nuseAtloog
"Within the decade, this will have a significant impact on the price and therefore production levels of oil and gas in Alberta."
The report, released Tuesday, says there is a narrow but viable pathway for a global energy sector with net-zero greenhouse gas emissions by 2050. It calls for an end to investment in new fossil fuel supplies and a fourfold increase in solar and wind power by 2030.
The Paris-based agency adds no new internal combustion engine passenger cars should be sold after 2035.
Several countries, including Canada and the United States, have pledged to achieve net-zero emissions by mid-century. That means only as much planet-warming gases would be released into the atmosphere as could be absorbed.
The report sets out 400 steps needed to transform how energy is produced, transported and used. Fatih Birol, the energy agency's executive director, said the change would create millions of new jobs and boost economic growth worldwide.
But he warned that while countries and companies have begun to set bold targets for cutting greenhouse gases, actual emissions continue to rise. The agency said last month that 2021 will see the second-largest annual increase in emissions since 2010.
“There is a growing gap between the rhetoric we hear from governments and industry leaders, and what is happening in real life,” Birol said.
Richard Masson of the University of Calgary said demand for fossil fuels in the next few years is expected to increase.
"The difference between what the IEA says we need to do and what we're actually going to do are night and day, because there's not a chance in the world we're hitting this path," said Masson with the School of Public Policy.
He said the agency anticipates North America will still be the world's second-largest producing area in 2050, which suggests there will still be demand for oilsands oil.
The Canadian Association of Petroleum Producers said in its June 2019 oil production forecast that Canadian crude oil production would increase to 5.86 million barrels daily by 2035.
New-York-based energy analyst Phil Skolnick said no growth might not hurt the Canadian oilpatch since pipeline capacity issues have already forced companies to restrain expansion. He noted the report seems to ignore carbon capture and storage.
Mark Jaccard, an energy economist at Simon Fraser University in British Columbia, said the agency's report confirms what other researchers have been saying for a decade.
"This is not a disaster for Alberta," he said. "Even in this climate-stabilizing scenario, oilsands output can be sustained at close to current levels for a couple of decades, provided that there are ongoing innovations and investments that reduce GHG production emissions."
Still, many said the agency's report only serves to emphasize big changes are in store for Canada's energy sector and those who regulate and invest in it.
"Alberta must take action to reduce emissions in the oil and gas sector to remain carbon-competitive as demand declines," Severson-Baker said. "This means attracting large-scale investments in decarbonization by demonstrating that the Alberta government is committed to achieving net-zero emissions."
The Canadian Energy Regulator and the country's financial sector — one of the most heavily exposed to fossil fuel development in the world — also face changes, said Adam Scott of Shift, an initiative that works to move investment into climate-friendly industries.
"The (agency's) definitive new outlook forces meaning into empty net-zero pledges made by governments, finance institutions and companies in recent years," he said.
"Financial decisions made today must assume a future where we are successful in achieving our climate goals. Continuing to make decisions based on the assumption of climate failure locks in that failure."
Greenpeace climate campaigner Keith Stewart called the report a "death blow" to any belief that Canada can increase production and reach its climate targets.
“It won’t be easy, but the report shows that a zero-carbon world is better for our health, creates more jobs, has lower energy costs and is more equitable, while avoiding climate catastrophe."
