The recently released World Oil Outlook builds a case for development of more Canadian pipelines to move landlocked oil to global markets.
The 320-page study for OPEC (Organization of the Petroleum Exporting Countries) predicts energy supply and demand to 2040.
To sustain demands of an additional 1.9 billion people and growing standards of living by 2040, energy demand will increase 39 per cent to 357 million oil equivalent barrels per day.
Only 28.2 per cent of that will be from oil — a market share decline of about 10 per cent from 2018.
That builds a strong case for oil pipelines across Canada to avoid U.S. discounts for our oil and to diversify markets.
Even 20 years from now, oil will comprise more than one-quarter of energy needs.
The study indicates a growing regional shift in oil use patterns. The most developed regions — the Americas, Europe and Oceania — will use less oil as renewables and natural gas use increases. Russian use will be flat while India, China and the rest of the world will continue increasing use of oil to 2040.
Global share of oil use will increase by 12 million barrels from 2018. That’s bad news for any return to $75-$100 US oil prices.
Interestingly, the study shows modest growth in most sources of energy by 2040 except oil and coal. Coal will provide 21.5 per cent of global energy, down five points.
Natural gas climbs 3.7 points to 25.6 per cent.
Renewables — wind and solar energy — move from 1.9 per cent of global energy to 6.5 per cent.
The study clearly shows oil as a source of energy, let alone use for plastics and chemicals, will be around for a long time.
Those advocates of the environment wanting to deny movement of oil from Canada to other markets to resolve climate change issues are short-sighted and unrealistic.
While growing oil production in Canada will present obstacles to our national goals for reduced greenhouse gas emissions, oil exports will help reduce reliance on heavier-emitting coal energy in Asia, thus impacting global emissions.
The anti-oil advocates are short-sighted for not taking the world emissions picture into account. They would penalize oil-producing provinces for assisting global emissions reduction.
Even Saudi Arabia, which is selling shares in ARAMCO, the national oil production/exploration company, admits to declining use of oil over time.
The ARMCO public filings acknowledge reduced oil demand, yet the low-cost Saudi oil will keep ARAMCO profitable when others are not.
According to that IPO filling, Saudi oil can be produced for $25 US a barrel, compared with $75 for Canadian oilsands and $45 for U.S. tight oil.
Canadian oil is already a high cost energy source. Why make it cost more by forcing unsafe rail transportation to market?
Ron Walter can be reached at ronjoy@sasktel.net
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
