The Approaching Global Energy Crunch And How Canada Should Meet It
In this issue. Where do Canada’s energy resources fit into the global outlook for energy? The escalation in the prices of oil and gas — beyond expeca-tions — will force a vigorous response in the markets for fossil fuels and alternative energy sources. The Study in Brief The purpose of this Commenta...
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| Language: | English |
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| Online Access: | http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.491.4422 http://www.cdhowe.org/pdf/commentary_203.pdf |
| Summary: | In this issue. Where do Canada’s energy resources fit into the global outlook for energy? The escalation in the prices of oil and gas — beyond expeca-tions — will force a vigorous response in the markets for fossil fuels and alternative energy sources. The Study in Brief The purpose of this Commentary is to consider where Canada’s energy resources fit into the global outlook for energy and what this means for the nation and its public policies. If global prices for oil and gas continue to increase more than has generally been assumed — a central theme in this analysis — how does the market respond? How do investors in primary energy resources plan ahead to meet the growing risks? What impact will the market have on alternative sources of energy? Although Canada is generally thought to be well endowed with primary energy resources, the long-term outlook is not so comfortable. Conventional oil and gas reserves are declining; their replacement requires heavy investment in higher-risk resources in the Alberta tar sands, the Mackenzie Delta, the Arctic and offshore. Global oil production is unlikely to meet rising global demand, with powerful growth in China being a major new factor. More attention will be given to imported liquid natural gas. Every option for developing new sources of energy will be expensive and time-consuming. There are only a few large undeveloped hydroelectric power sites in Canada, and these are far from the major markets. Plans to eliminate thermal coal stations in Ontario, and political resistance to electricity generation from nuclear energy, represent serious challenges to the quest for viable alternatives. Governments will be pressed to demonstrate to consumers that they recognize and support the efforts of suppliers to raise the huge sums of capital required to ensure continued flows of electricity. Policymakers will have to avoid sheltering consumers from the reality of higher energy prices. Alternative energy sources — wind, sun and hydrogen — will eventually make a contribution to the ... |
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