A man rides a camel through the desert oil field and winter camping area of Sakhir, Bahrain, in this 2015 photo. The country wants to shift away from emissions-intensive industries to meet climate targets. (Hasan Jamali/The Associated Press)
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As the world moves toward reducing greenhouse gas emissions and embracing low-carbon sources of energy, many oil-producing nations like Canada are grappling with the same balancing act. On one hand, they are striving to reach climate goals, while also weighing financial, economic and political considerations.
Considering the extraordinary wildfire season in Canada, coupled with record heat waves and record temperatures around the globe, there is motivation for some countries to move faster to reduce emissions.
However, others are hesitant, as the Russian invasion of Ukraine has caused turmoil for energy systems around the world and put more emphasis on the need for energy security, while keeping utility prices in check.
Around the world, oil-producing countries are taking different approaches to the problem, which highlights how the energy transition will happen at a different speed and scale from one nation to another as they each face contrasting financial challenges and viewpoints about the future.
“Countries have varying starting points and levels of responsibility and capabilities. Consequently, they have adopted various time frames for their net zero emissions pledges,” the International Energy Agency (IEA) said in a new report released Tuesday.
Finland wants to reach net zero by 2035, while China and Saudi Arabia have a target of 2050. Other countries, like Kuwait and Qatar, don’t have a target at all.
All of these competing priorities of oil-producing countries were on display in Calgary last week at the World Petroleum Congress, an oil and gas conference where many industry and government leaders shared their vision for the energy transition.
Delegates from Saudi Arabia chat in front of an image of the Canadian Rockies at the World Petroleum Congress in Calgary on Monday, Sept. 18. (Jeff McIntosh/The Canadian Press)
Policies and giant subsidies
In Canada, the federal government has climate goals in place and has several initiatives aimed at curbing emissions from heating and cooling buildings and the transportation sector, among many others.
Ottawa plans to unveil an emissions cap on the oilpatch later this year, while also funding clean technologies in the industry and subsidizing the development of carbon capture and storage facilities.
Stateside, oil production is on the rise, but a clean energy renaissance could be on the horizon after the passing of the Inflation Reduction Act (IRA), a massive spending bill aimed at cutting emissions and promoting low-carbon sources of energy.
“We’re at a critical point in the energy transition,” said Caroline Narich, a U.S.-based managing director focused on the energy transition with Accenture, a technology and consulting firm.
“In some places we are seeing unprecedented action being taken, with a slew of commitments and phenomenal levels of policy and funding support being made available for the first time.”
While on stage at the World Petroleum Congress, Narich pointed to the IRA and other government programs providing “more than $450 billion available in loans, grants and tax credits to support decarbonization efforts.”
All Points West8:05What can the government do to make transitioning to renewable energy easier?
Keith Hirsche is a former oil and gas worker who worked in Alberta and Europe. He now lives in Duncan and runs a company in Alberta called RenuWell Energy Solutions, which converts abandoned oil wells into solar farms. He spoke with Jason D’Souza about the 24th World Petroleum Congress taking place in Calgary this week.
Cash considerations
The size of the IRA is larger than the total economy of some countries around the world, including Ghana, which has a history of financial struggles even after becoming an oil-producing nation in 2010.
The West African country has just signed a new bailout program with the International Monetary Fund worth $3 billion US that’s aimed at helping ease the country’s severe financial woes.
The country has a target to reduce national emissions by 2030, as well as signing both the Paris Agreement and the Glasgow Climate Pact.
At the same time, it’s looking to ramp up oil production and that’s why some of its officials were in Calgary trying to drum up investment.
Some of its environmental priorities include a zero-flaring policy for the oilpatch and using renewable energy on offshore platforms instead of natural gas for electricity in the future.
“Ghana sees a clear signpost of what we need to do to join the rest of the world in this energy transition scenario that we find ourselves in,” said Egbert Faibille, chief executive of Ghana’s Petroleum Commission, in an interview.
“I will say to investors that want to look to Ghana, if there is any West African country that is ready-prepared to deal with this energy transition issue, it is Ghana.”
Egbert Faibille, chief executive officer of Ghana’s Petroleum Commission, speaks at the World Petroleum Congress in Calgary. (Kyle Bakx/CBC)
Earlier this month, the IEA made headlines around the globe by suggesting peak demand for fossil fuels will happen within this decade and that, while timelines vary, oil, gas and coal are all on their way out.
The leaders of Saudi Arabia and some other nations have rejected the projection, pointing to how the world’s thirst for oil keeps increasing year after year.
While forecasts may vary, the notion of peak oil demand and the concerns about climate change have some oil-producing countries seeking to cash in before sector fortunes begin to fade.
Guyana has one of the fastest growing economies in the world as its oilpatch has flourished with extraordinary levels of foreign investment and several new discoveries of oil reserves.
The small South American country, which borders Venezuela, is ramping up oil production as the world begins shifting to cleaner forms of energy, leaving President Irfaan Ali to remark in the past how “time is not on our side,” in terms of making the most out of Guyana’s newfound oil wealth.
A woman poses for photos in Georgetown, Guyana, on April 12, 2023. Guyana, which has one of the world’s highest emigration rates with more than 55% of the population living abroad, now claims one of the world’s largest shares of oil per capita and is expected to have one of the world’s fastest-growing economies, according to a World Bank report. (Matias Delacroix/The Associated Press)
Climate action
There is no specific roadmap for how oil companies and oil-producing countries should reduce emissions, although environmental advocates often focus on a necessary level of speed and scale to reduce the impacts of climate change.
In its latest research, the IEA shows a decrease in global emissions in the years to come, but warns that it’s nowhere near steep enough to put the world on a path to limiting temperature rises to 1.5 C above pre-industrialized levels, which is considered important to avoiding a climate catastrophe.
“Considerable progress has been made in deploying clean energy technologies and lowering their cost, which is altering the emissions outlook for the energy sector,” the IEA stated in its most recent report. “Although it still falls far short of what is needed to meet the temperature goals of the Paris Agreement.”
The energy transition has to also be sustainable, so companies and governments don’t give up when the going gets tough, said Jon Elkind, a scholar at Columbia University’s Center on Global Energy Policy.
“Durability means the ability of society to sustain its focus on decarbonization progressively over time through economic cycles, through wars, such as we’ve seen with the Russian invasion of Ukraine [and] through pandemics.” he said, on stage in Calgary last week.
“We need that durability,” Elkind said.
The oilpatch is the largest source of emissions in Canada and the federal government’s modelling shows a need for the sector to make significant strides in less than a decade to help the country reach its 2030 goal. (Kyle Bakx/CBC)
Preparing for life without oil
While some countries are being aggressive in pumping out more oil, others are contemplating life without it.
Bahrain, an island in the Middle East, has produced oil and natural gas for almost a century and is one of the most emissions-intensive countries in the world.
The country is about the geographical size of Calgary, but is home to several large industrial facilities — including a massive refinery, a natural gas power plant, an aluminum smelter and an iron production plant — all in a relatively small geographical footprint. Bahrain only hopes to reach net-zero emissions by 2060.
Mark Thomas, group chief executive officer of Bahrain’s Bapco Energies, speaks on stage during a panel discussion at the World Petroleum Congress in Calgary. (Kyle Bakx/CBC)
“Bahrain today faces unique challenges requiring a transformative leap. Our domestic natural resources are depleting, exasperated by rising extraction costs,” said Mark Thomas, a Canadian, who oversees Bapco Energies, Bahrain’s national oil company.
“The economic return [of oil and gas] has been fabulous, but it has come at a cost from a carbon standpoint,” he told a crowd at the World Petroleum Congress.
There isn’t much spare land in Bahrain for large-scale renewable energy projects, said Thomas, so it’s trying to reduce emissions by pushing energy efficiency policies, among other measures, including trying to re-think its overall economy.
“The future of Bahrain is not a high energy intensity country. It will migrate into other investments in lower carbon intensity,” he said, pointing to the technology sector as an example.
Virden, Man., sees a post-oil future down the line
Oil production around the southwest Manitoba community of Virden remains steady, and while diversifying the economy away from fossil fuels will be key for the region in the future, it’s not an immediate concern for some local leaders.
Achieving secure, clean and affordable energy across all sectors within the next decade will be a challenge for the country, he said.
Considering Bahrain’s relatively small size, its total emissions won’t make much of a difference to climate change around the world, Thomas said, however the country made a climate commitment, so it wants to achieve that target, regardless of its size.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
