
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
Canada, a giant oil producer, urges others to end fossil fuel subsidies
Canada is pushing the United States and other major economies to follow through on pledges to phase out "inefficient" fossil fuel subsidies, which have soared despite the growing threat of climate change. Such subsidies hit records last year, according to several watchdog groups, including one that estimated that major world economies—members of the G-20 cooperation forum—surpassed $1 trillion in subsidies for the first time in 2022. That’s a fourfold increase over subsidy levels in 2010, the year after G-20 nations agreed to phase out support for fossil fuels.
What happens to Canada after oil demand peaks?
What will the energy transition mean for Canada's oil and gas sectors, which have long been a powerhouse of the country's economy? Aaron Cosbey, a senior associate and economist at the International Institute for Sustainable Development, lays out what he sees happening to demand for fossil fuels in the next decade, and how the country can navigate the transition to minimize economic disruption.
New Report Finds Carbon Capture And Storage Far Too Expensive
A new report by the International Institute for Sustainable Development found carbon capture and storage (CCS) technologies to be very expensive in Canada. According to the report, which focuses on carbon capture in the context of Canada's oil and gas industry, the climate solution’s persistently high costs are rooted in the "high design complexity and the need for customization."
CCS Can't Compete with Renewables, Won't Deliver by 2030, Report Finds
Carbon capture and storage may have an important role to play in hard-to-decarbonize sectors like iron and steel, but won't pay off for oil and gas companies without continuing government subsidies, the International Institute for Sustainable Development (IISD) concludes in an analysis released this week.