Picture this: It’s 2035 and Canada is well on its way to reaching its climate goals.
The country’s power system is almost entirely clean – hydro and nuclear, and wind and solar. Natural gas has dwindled. Domestic oil demand is also down a lot, as electric vehicles – a government-subsidized curiosity back in 2022 – are commonplace.
But this picture of 2035 might also surprise: Canada still produces a lot of oil and gas – and remains a top exporter of both fossil fuels.
The policy and legal foundations for this potential future go back to the late 2010s. Of particular note was what happened in 2018: Ottawa imposed an economy-wide and escalating price on carbon; invested many billions in the export-capacity boosting Trans Mountain oil pipeline and expansion; and, with little public attention, started drawing up new climate rules for reviews of proposed industrial projects, dubbed the strategic assessment of climate change.
Some said it was contradictory for Canada to aim to slash greenhouse gas emissions at home, while continuing to sell volumes of gas and oil – the latter a source of national wealth that accounted for one-seventh of the country’s exports.
This spring, 2022, the many details of how to make these two big goals real started to take clearer shape.
Ottawa’s latest plan to reduce emissions landed in late March. It sketched out aggressive cuts in oil and gas emissions – but not production. The hope is to transform Canada’s relatively dirty oil sands into something relatively far better. In early April’s budget, there was $7.1-billion through 2030 to split the cost with industry to build up carbon capture.
On April 6 came another policy puzzle piece, and two examples of how more oil can – and can’t – work.
Seeing a global market that will in years ahead move away from fossil fuels, Ottawa is working on standards for “best-in-class” projects “to transform Canada into the cleanest global oil and gas producer.”
That’s why Ottawa approved the Bay du Nord offshore project in Newfoundland, which could start pumping oil in 2028, with peak production of 200,000 barrels a day. Per-barrel emissions would be low. At the same time, Ottawa told Suncor much more work was required on its plan to mine new ground, and 225,000 barrels of bitumen a day, in the oil sands in 2030, as old mines tap out.
Suncor’s initial submission included hefty climate-heating emissions of three megatonnes of carbon a year – about 12 times that of Bay du Nord. Ottawa told Suncor the plan would likely be rejected; Suncor asked for more time to come up with a smarter, lower-emission plan.
Ottawa’s response to Suncor and Bay du Nord – an openness to new oil projects, if they meet reasonable yet top-tier climate standards – is the right approach.
This is the bargain and the reality: Canada can only affect demand within its borders. That’s the basis of international climate deals from Kyoto onward. We need to hammer down domestic use of fossil fuels, but so long as global demand continues, Canada should have no qualms about capturing an ever greater share of it – while aiming to make this country’s oil the world’s least polluting.
In the International Energy Agency’s reckoning of net zero in 2050, the world will use a quarter of the oil it does today, and half the gas. The industry will shrink. Competition will intensify. For Canada, getting ready, and fast, is essential.
It’s time to get more ambitious. The oil sands in large part exist because of government support. Back in the 1960s, Suncor was the first miner of the vast expanses of bitumen on the banks of the Athabasca River. This was a lead-gold alchemy, turning tarry muck into synthetic oil to be refined into gasoline. Canada showed real tech savvy.
This sort of politics isn’t easy to talk about today. Conservatives shout that Liberals are anti-oil, which isn’t quite true. But the Liberals mostly want to talk about climate – their brand – and not how important the oil industry is to our economy. The way forward, for a country built on natural resources, is in the difficult middle ground.
Picture this: It’s 2035, and Canada uses barely any fossil fuels at home and still exports a bunch of oil and gas. And the oil sands are five years – not 15 – away from net zero.
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TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
