Environmentalists say an International Energy
Agency report concluding that investment in new fossil fuel sources must cease if the world is to meet its climate
goals sends a strong message to Canada
, but industry and government say the goal is too lofty.
"We now have an analysis from the world's most authoritative energy body
that shows a direct link between a climate-safe future and a sharp decline in demand for oil
and gas," said Chris Severson-Baker, president of the Pembina Institute, a clean-energy think tank.
"Within a decade, this will have a significant impact on the price of oil and gas in Alberta, and thus on production levels."
The report, which was released on Tuesday, claims that there is a narrow but viable path to a global energy sector with net-zero greenhouse gas emissions
by 2050, calling for a halt to new fossil fuel investment and a fourfold increase in solar and wind power by 2030.
After 2035, no new internal combustion engine passenger cars should be sold, according to the Paris-based agency.
Several countries, including Canada and the United States, have pledged to achieve net-zero emissions by mid-century, which means releasing only as much greenhouse-gas-emitting gases into the atmosphere as can be absorbed.
The energy agency warns of a "widening gap" between rhetoric and reality.
The report outlines 400 actions to transform energy production, transportation, and consumption.
According to Fatih Birol, the executive director of the Energy Agency, the change will create millions of new jobs
and boost global economic growth.
He did, however, warn that greenhouse gas emissions are still increasing.
Last month, the agency predicted that 2021 would 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 actually happening," Birol said.
Unrealistic industry reports
According to the Canadian Association of Petroleum Producers, the report is unrealistic.
"It's critical that we stay grounded in reality, where people
need reliable and affordable energy to live," said director Tim McMillan.
He believes that technology and innovation will meet those needs while also meeting climate goals.
Alberta Energy Minister Sonya Savage stated that her province is already doing much of what the report suggests to reduce its industry's carbon footprint.
"Alberta's government is confident that our energy sector... will continue to grow and thrive in the coming years," according to the Alberta government. "Forecasts for future world energy consumption, including those published by the IEA, predict that oil and gas will continue to dominate the supply mix for the next several decades."
Federal Environment Minister Jonathan Wilkinson mentioned strategies such as producing clean-burning hydrogen from natural gas
and underground carbon dioxide storage.
"We are dedicated to achieving net zero," he said.
Demand for fossil fuels
is expected to rise in the coming years, according to Richard Masson of the University of Calgary.
"There's a night and day difference between what the IEA says we need to do and what we're actually going to do," said Masson of the School of Public Policy.
According to Phil Skolnick, a New York-based energy analyst, no growth may not be detrimental to the Canadian oil patch because pipeline
capacity issues have already forced companies to limit expansion.
Many oil companies intend to offset their emissions through carbon capture and storage, a technology endorsed by the agency in its report.
Energy economist Mark Jaccard of 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, adding that "even in this climate-stabilizing scenario, oilsands output can be sustained at near-current levels for a couple of decades, provided there are ongoing innovations and investments that reduce GHG production emissions."
Despite this, many people believe the agency's report only serves to highlight the fact that major changes are on the way 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 in order to remain carbon-competitive as demand declines," Severson-Baker said, "and this means attracting large-scale decarbonization investments."
According to Adam Scott of Shift, an initiative that works to shift investment into climate-friendly industries, the Canada Energy Regulator and the country's financial sector — one of the most heavily exposed to fossil fuel development in the world — face changes as well.
"Today's financial decisions must assume a future in which we are successful in achieving our climate goals; continuing to make decisions based on the assumption of climate failure locks in that failure," he said.
Greenpeace climate campaigner Keith Stewart called the report a "death
blow" to any belief that Canada can increase output while still meeting its climate goals.