Thank you for you the invitation to give testimony on the critical need for Canada to increase its energy exports, an absolute imperative for both our energy sector and for Canada at large. I apologize in advance if some of my remarks seem overly blunt, for I am no politician, but it is time for someone on this topic to finally speak the unvarnished truth.
I come before you with an urgent call to action. We live in a world where the demand for oil continues to set record highs, and late last year The International Energy Association stated under their base scenario that the demand for oil will grow until at least 2050.
Despite decades of future demand growth, the world is hurtling towards a supply crisis. In 2012, oil production from US shales began its ascent, and since then US shale has accounted for 117% of total non-OPEC production, making it by far the single largest source of incremental barrels of the past decade plus. Importantly, it is now estimated that due to geologic maturity and investor demands, that US shale production has now peaked. What does this mean? The rise of US shale was extremely destructive to the oil market, resulting in several price crashes, an exodus of investor interest, and ultimately a meaningful drop in spending on exploration and long-lead development projects. As a result, not only is United States’ oil production forecast to peak this year, but so too is total non-OPEC production, with 75 of the 79 non-OPEC countries now in permanent decline. Why does this matter? Non-OPEC production accounts for 68% of global oil supply.
Normally, this would not have been the profound challenge that it is, as OPEC has historically had meaningful excess spare capacity, offering a form of insurance against declines elsewhere. This is no longer the case. Since April of last year, OPEC has unwound most of their curtailed production shut-in during the demand shock of COVID, and similarly to non-OPEC countries, has not been investing in meaningful incremental capacity. We estimate that OPEC has only 1.5MM Bbl/d of excess spare capacity, which amounts to a meagre 18 months of demand growth.
The world has never before faced the energy challenge it faces now. Given an incremental 19MM Bbl/d of demand growth by 2050, accelerating decline rates from existing fields, peaking US shale, peaking non-OPEC production, and imminent exhaustion of OPEC spare capacity, I pose this simple question: where will the necessary future production growth come from? This is where Canada comes in.
Canada is gifted with the 4th largest oil reserves in the world and produces roughly 5.5MM Bbl/d to the highest environment standards of anywhere on the planet. We have nothing, I repeat nothing, to apologize for. This production benefits all Canadians, from coast to coast, through royalties and taxes. Canadian Natural Resources, Suncor, and Cenovus, Canada’s 3 largest oil companies, collectively paid $16.9BN in royalties and taxes in 2025, which compares to $16.2 BN in corporate taxes paid in 2025 by Canada’s 6 largest banks.
Despite this windfall, we have for the past 10+ years purposely and intentionally practiced economic self-flagellation, inhibiting our oil and gas sector with penalizing legislation and excess costs, all rooted in energy ignorance and a misguided notion that Canada can play a pivotal role in lowering global emissions. No other country in the world would do this to themselves, and all we have accomplished is willingly cede market share to other countries, many of whom have far, far lower environmental standards, at a profound economic cost to ourselves. This insanity must end. So what should we do?
Canada today has modest excess capacity and through several expansion projects will increase pipeline capacity by up to 770,000 Bbl/d by 2030. This is not enough. It is crucial to maintain excess pipeline capacity as the price of all 5.5MM Bbl/d of production is set off the ONE marginal barrel: 1 barrel of production more than pipeline capacity and the price of all 5.5MM Bbl/d falls. We are now up against the clock as it is estimated that it will take at least 8 years to build a new major pipeline, taking us beyond the 2030 timeframe and risking a repeat of widening price differentials that would significantly impact revenue, royalties, and taxes. We estimate that a single 1MM Bbl/d pipeline would generate an additional $5 billion dollars in new royalties every year. This would be enough to hire 13,000 new doctors, enough to provide healthcare to almost 17MM Canadians. 8-hour wait times with your child in an emergency room is a choice. Failing, inadequate infrastructure is a choice. Neighborhoods such as mine in Toronto that are getting burglarized on a weekly basis due to insufficient police budgets is a choice. We do NOT have to live like this.
We have an enormous opportunity in front of us, and to seize it all we need to do is recognize one inalienable truth: the world needs more Canadian energy! With a looming supply crisis in the years ahead we are one of only 4 countries that can rise to meet the call, in a world where despite what we are told, not a single purchaser of oil cares about a barrel’s carbon footprint, but rather its affordability, availability, and reliability. More Canadian oil production means a higher quality of living for all of us, and to not recognize this generational opportunity and continue to impair our industry by not making new pipelines an urgent, national priority, backed with action versus more talk, would be the equivalent of economic treason.
Video of Eric Nuttall’s testimony at the House of Commons can be viewed here.