The CER is the Federal Government’s energy agency. It publishes an annual report, most recently Canada’s Energy Future 2021, released on December 9, 2021. The CER’s projections show the expected level of oil and gas production in Canada to 2030, 2040, and to 2050. The CER is the primary source of data about the future path of oil production in Canada and is relied on by the government in developing policy, including climate policy.
Until a few years ago, the CER was known as the “National Energy Board” (NEB). Its reports have routinely provided long-term projections showing the expected trend of Canada’s oil and gas production, looking ahead 20 and 30 years.
For the past seven years, these projections have been essentially unchanged, save for relatively small variations in the long-term picture. These annual reports have all been based on the expectation, affirmed by the CER year after year, that the global appetite for oil will continue to grow for many decades to come.
The basic outline of the current expansion of Canada’s oil sands production was set out in a report published by the NEB on January 27, 2016, Canada’s Energy Future 2016: Energy Supply and Demand Projections to 2040. The NEB concluded then that global oil consumption, especially in Asia, would likely continue to grow for at least another twenty-five years. Based on that projection of increasing oil demand worldwide for several more decades, the NEB forecast that Canada’s oil sands production would increase from 2.4 million barrels per day (bpd) in 2014 to 4.8 million bpd by 2040 – a projected doubling of production by 2040.
In October 2016, the NEB published an update (titled Canada’s Energy Future 2016 Update) that lowered the NEB’s projections due to uncertainty about future oil prices. World oil prices had declined sharply starting in late 2014. The October 2016 Update report estimated that oil sands production would rise more slowly, reaching 3.967 million bpd by 2030 and growing to 4.3 million bpd by 2040 (a little less than the previous 4.8 million number) but nevertheless still a 72% increase above the 2015 level of 2.5 million bpd. Together with an additional 1.4 million bpd of conventional oil production, the Update projected that Canada’s total crude oil output would reach 5.7 million bpd by 2040, up from 4.0 million bpd in 2015.
At that time, during the lead-up to the Federal Government’s approval of the Trans Mountain pipeline expansion (TMX), the government prepared what was described as an “upstream emissions assessment” for the proposed pipeline which was publicly released on November 25, 2016 (formally known as the Review of Related Greenhouse Gas Emissions Estimates for the Trans Mountain Expansion Project). The upstream emissions assessment adopted the NEB’s October 2016 Update forecast that oil sands production will increase from the 2014 level of 2.3 million bpd to 3.967 million bpd by 2030, and to 4.3 million bpd by 2040: see Report, November 25, 2016, s. B.2.1 at p. 21, “Canadian Oil Supply Growth.” That projected long-term growth of Canada’s oil production was used by the government to justify its decision on November 29, 2016, to approve the construction of the TMX pipeline expansion.
Based on the same information about rising global oil demand, the government also approved a second pipeline, Line 23, which is routed south to the U.S. market. Those decisions were guided by the NEB’s numbers.
None of those assessments developed by the NEB in 2016 of Canada’s future oil production considered the problem of climate change or acknowledged that future policies to limit global warming would necessarily have to curb global oil consumption and would therefore lower oil demand over the long run.
Nothing much has changed. The CER’s most recent Canada’s Energy Future Report 2021 shows that by 2030 oil sands production under its Current Policies Scenario will reach 4.046 million bpd by 2030. And it projects a level of 4.323 million bpd by 2040. Those numbers have now been adopted by the government and incorporated into its new climate policy plan, the ERP. They are virtually identical to the projections developed by the NEB in October 2016, which assumed that global oil demand will continue to grow for another 20 or 30 years. For the past seven years, the CER has consistently refused to address the rapidly unfolding threat of climate change and declined, even in its most recent 2020 and 2021 reports, to prepare scenarios showing the future lower levels of Canada’s oil production that would be safely aligned with staying within the 1.5°C or 2°C warming limits. It is inexplicable that Canada’s Minister of Natural Resources, Wilkinson, waited until December 16, 2021, to instruct the CER to address that fundamental question.