In Search of Prosperity: The role of oil in the future of Alberta and Canada
-
What does the future look like for #Alberta’s oil sector? Is a thriving oil sector even possible, given market realities? #abpoli
-
Alberta’s oil sector has been an economic workhorse for decades; as of 2019, it was contributing CAD 68 billion to the province's economy. But its long-term outlook is bleak. #abpoli
-
By 2030, market forces & geopolitics will drive a long-term decline in the AB oil sector—potentially causing 20,000 job losses annually. Public support to the sector is a poor investment. #abpoli
The long-term market outlook for Alberta's oil sector is bleak. By the end of this decade, a combination of market forces, international climate policies and geopolitics will push the sector beyond a tipping point and drive its long-term decline.
This is new. The oil sector has never experienced an outlook like this, in which demand and prices fall without prospect of recovery—and its decline, beginning by the end of this decade, will put Alberta’s economy to the test.
Modelling for low oil prices shows material drops in provincial GDP, royalties, and employment from the oil sector. However, price volatility poses a much greater threat than low prices to the Alberta economy. When we apply the kind of price volatility that we’ve seen over the last 37 years to the next 30 years, the damage to Alberta’s economy can be more than five times worse in our modelling.
This is a dynamic that standard economic projections ignore.
A prosperous Alberta will need to depend less and less on the oil sector, at least in so far as production of oil for combustion. Governments should target support and investments at diversification, new growth opportunities, and a just transition for workers and communities.
Read the report, then join our event: Oil and The Future of Alberta's Economy.
Participating experts
You might also be interested in
Why Carbon Capture and Storage Is Not a Net-Zero Solution for Canada’s Oil and Gas Sector
Canada's oil and gas sector regards carbon capture as the primary solution for lowering its emissions—but a careful analysis of the evidence reveals major risks in relying on and funding this technology.
Researchers urge Canadian government to fend off oil and gas industry pressure for billions more carbon capture dollars
A new IISD brief analyzes whether carbon capture and storage is a viable solution to reduce oil and gas emissions in line with Canada’s 2030 climate targets.
Canada vows to stop funding overseas oil and gas projects, but billions in support still on the books
In November 2021, Prime Minister Justin Trudeau issued a warning about the dangers of climate change at the United Nations’ 26th climate change conference in Glasgow, Scotland.
Canada is sitting on 12 'carbon bombs.' Here's where they are
Just under the surface of B.C. and Alberta, in a rock formation known as the Montney Play, lies enough potential greenhouse gases to blow past Canada's 2030 emissions targets 30 times over. It's one of 12 fossil fuel reserves researchers in the journal Energy Policy have identified in Canada — called "carbon bombs" — that would each release a billion tonnes or more of carbon into the atmosphere if their resources were extracted and burned. This would be catastrophic for the world's efforts to slow rising global temperatures, the authors argue.