The recent Canadian Association of Petroleum Producers (CAPP) Symposium featured keynote speakers, such as Saskatchewan Premier Scott Moe and Alberta’s Energy Minster Sonya Savage, who gave compelling speeches on the state of the Canadian oil and gas sector.
Canada’s oil and gas sector and economy have been tremendously impacted by COVID-19, and as the country trudges forward, the sector will play a huge role in the country’s economic recovery. Saskatchewan’s rich resource base will also be a factor in this recovery.
“The energy industry in Alberta has been generously supplied by Saskatchewan. Saskatchewan continues to be a major energy producer in the world, produce for example as much oil in Saskatchewan as they do in Argentina or Ecuador,” Moe said in his virtual presentation.
It’s been a challenging year for all Canadians in every walk of life. Moe said Saskatchewan took a dual approach looking at how they were going to be able to protect lives and livelihoods, both of which are important to the success of how they address COVID-19.
“I would just say there’s a strong recovery on the horizon we inch closer to it each and every day. Our exports in this province continue to surge. Our unemployment rate is lower than the national average. And the average private-sector forecast for growth this year in Saskatchewan is 4.6%, and that is a number that we have every intention of creating an environment where we can blow rates through.”
The energy industry is going to be part of that recovery. Energy prices are starting to firm up, and they’re going to play a major role. “Prior to the pandemic, Saskatchewan had oil production of about half a million barrels per day and we think that production could go higher in fact we set a target of increasing it to 600,000 barrels a day by the year 2030.”
Moe said the Saskatchewan government understands the importance of the energy industry, to the people and communities for Saskatchewan people and for our charitable organizations that are the receivers. “We’re a world that is going to require more energy and so we remain strongly committed to the long-term sustainable development of Saskatchewan’s oil and gas resources and we’re steadfast in that commitment. We do realize that it’s a competitive environment out there and that energy investment can land anywhere in the world.”
There’s no doubt Saskatchewan is one of the best places in the world for scale-up of new technologies in the oil and gas industry. They continue to be a leader in the advancement of oil recovery technologies.
According to Moe, enhanced oil recovery fund projects have sequestered now over 40 million tons of carbon dioxide and they’ve resulted in the interim, incremental recovery of more than 200 million barrels of oil, having an increasingly increasing focus on sustainability.
Saskatchewan continues to support CCS projects in the energy sector through their royalty regime and through investment incentive programs that they have and are continuing on this discussion as to how CCS can be further utilized in thoroughly revised enhanced oil recovery, while continuing to support value-added processing and climbing that value chain in all industries in Saskatchewan and most notably the energy industry.
Moe also spoke about how companies like doing business in the province, citing the Fraser Institute’s most recent sector competitiveness survey says it showed that Saskatchewan was the best place in Canada to invest rate overall in their survey, ahead of both Alberta and Manitoba.
Moe then talked about Saskatchewan’s implemented the Methane Action Plan, released in January 2019. According to the website, will reduce methane emissions by 4.5 million tonnes of carbon dioxide equivalent (CO2e) annually by 2025. Total MAP emissions reductions between 2020-2030 will be at least 38.2 million tonnes CO2e. “This is a step forward in sustainability in the energy industry and a significant step forward in reducing our methane emissions in the industry and we want to further work with producers on ways that we can continue to make our energy production more sustainable into the future.”
Moe mentioned Canada has the most advanced, responsible, and environmentally sustainable energy industry in the world, which the country should be proud of. “Quite frankly, the world needs more Canadian energy. We can meet that demand for many years to come. We can meet it with the most sustainable energy produced in the world, and it’s available right here in Canada.”
Savage started off her conversation by saying as Alberta and the country makes its way out of the pandemic, “I’m really optimistic for where the energy sector is going. For several reasons I think we can see signs of optimism, starting with price, price recovery for WTI has been trending around $63 bucks a barrel in. We’ve seen production oil production in Alberta has recovered to pre-pandemic levels. We’ve seen investment forecasts increase. We’ve seen land sales, we’ve reinstituted real reopen land sales in Alberta, and we’ve seen drilling forecasts up which of course streams through more jobs and more production.”
Another reason for optimism, Savage mentioned, is that credible forecasts show that oil and gas will continue to dominate the energy mix for decades to come. “While we’re going to see more and more alternatives and renewable energy enter into that energy mix, there’s still a dominant role for oil and gas.”
The next type of energy that will be entering into the mix is hydrogen, which is a remarkable opportunity for natural gas. The new opportunities in Alberta are based on the resourcefulness, innovation, and entrepreneurship of the energy sector. Savage does see hope for recovery and a competitive environment moving forward.
Alberta’s economic recovery strategy for the energy sector is built on those fundamentals. She mentioned three prongs for energy sector recovery.
“First, supporting our traditional oil and gas sector, making sure it’s competitive, making sure that we are in a jurisdiction that will be competitive with every other jurisdiction in the world. The second prong is value-added, ensuring value-added for the oil and gas sector that’s primarily in our natural gas, strategy, including petrochemicals, including hydrogen, and an emphasis on getting LNG to market. The third prong of our economic recovery strategy is pursuing new and emerging technologies where there’s a strong opportunity for the province.
Getting Alberta’s LNG to market is key and crucial for that strategy. There is a remarkable future for hydrogen blue hydrogen created from natural gas, and Alberta has an abundant supply of natural gas here in Alberta.
Savage said if Alberta wants to continue attracting investment, Alberta needs to continue performing on ESG goals. “We need to put huge importance on ESG. If we’re going to continue to attract investment, I think it goes without saying that we have a need to get that message out because our industry here in Alberta, there is no place in the world that can compete with our industry in terms of taking steps to invest in and lowering emissions in new technology in governments, environmental and social issues. Our industry has put more than $20 billion in a decade into environmental technology and research, innovation.”
As the world is looking to lower emissions and reach climate targets, energy is still going to a part, but the supplier choice for that energy is going to be the jurisdictions that has the lowest carbon footprint and the highest ESG standards.