Canada can still be a major global oil producer, but only if the tar sands/oil sands can cut costs and emissions, International Energy Agency Executive Director Fatih Birol said during a visit with Natural Resources Minister Jim Carr in Ottawa last week.
The country’s vast fossil resources could make it “a cornerstone of the global energy market for many years to come,” Birol told the Globe and Mail.
“My plea to the oil sands industry is to increase the productivity and reduce the carbon footprint by having access to cleaner technologies for production processes,” he said. “The world needs oil. If they don’t get the oil from Canada, they will get it somewhere else.”
But there are “major risks and challenges to maintaining a world-class oil and gas industry, particularly as low-cost producers flood global markets with crude and liquefied natural gas,” the Globe notes. And Birol said long-term growth in tar sands/oil sands production can only be consistent with Canada’s carbon reduction targets—even the paltry 30% reduction by 2030 the new federal government inherited from the Stephen Harper regime—by dramatically reducing its emissions per barrel.
“It is extremely crucial that they make more use of advanced technologies,” Birol said. “This may well increase the cost of production a bit, but it is a key asset protection strategy for them.”
The IEA expects oil prices to recover to US$80 per barrel by 2020, and foresees Canada’s tar sands/oil sands production growing by 800,000 barrels per day through the end of this decade.