The oil sands are a vital energy source for Canada and the world. The world relies on an energy mix that includes oil, coal, natural gas, hydro, nuclear and renewables.
Canada is uniquely positioned to supply an abundance of safe, secure energy as fossil fuels will satisfy the vast majority of growing global demand – which will grow as economies grow and standards of living improve.
The International Energy Agency's (IEA) World Energy Outlook 2015 predicts continued growth in global energy demand by 2040 and continued reliance on fossil fuels. Hydrocarbons are forecast to remain the world’s dominant source of energy, meeting 75 per cent of the world’s energy needs by 2040. The IEA says Canada is expected to be third in oil production growth over the forecast period, after Iraq and Brazil. As the IEA reports, Canada has the energy the world needs – our challenge is to move it to new customers in new markets in the years ahead.
Highlights from the November 2015 report include:
- China is forecast to become the world’s largest oil importer before 2020 (India second by 2035) and the largest oil-consuming country by the 2030s, overtaking the U.S. Chinese oil demand is forecast to increase from 10.5 million barrels per day in 2014 to 15.3 million barrels per day in 2040.
- U.S. oil production is forecast to increase from 11.8 million barrels per day in 2014 to 13.2 million barrels per day in 2020, then decrease to 10.6 million barrels per day by 2040.
- Canada is forecast to be third in oil production growth between 2014 and 2040, after Iraq and Brazil.
- Canada accounts for the third largest growth in global oil supply, after Iraq and Brazil, over the forecast period.
With consumption rising worldwide and conventional oil supplies declining, the need for a secure supply of oil from unconventional resources like Canada’s oil sands will continue to increase. In 2014, Canadian crude oil production was almost double its consumption. With the majority of reserves located in the oil sands, the resource has potential to become a key global supplier.
Canada and the U.S.
Oil sands reserves have helped diversify global supply, reduced reliance on more distant sources of oil and improved North American energy security – while supporting economic growth in Canada and the U.S. U.S. crude oil exports to Canada were 10 times higher in 2015 than five years ago. Meanwhile, Canadian oil exports to the U.S. have increased by about 40 per cent over the same timeframe. Even with increased domestic oil supply, the U.S. will need to import oil. It’s not about how much oil the U.S. uses – it’s about the source of the oil.
Canada’s oil and gas industry provide economic benefits across North America. More than 1,900 American companies directly supplied the oil sands and pipelines companies in the past two years. These included construction, electrical, engineering and equipment services (Source: CAPP). Canadian oil will find new paths to U.S. markets and continue to create jobs and wealth for Canadians and Americans.