Canadian oil and gas exports rose significantly in 2022, with no signs of slowing down. However, recent efforts to expedite federal climate targets and decimate the industry are concerning.
According to a Statistics Canada report, total exports rose 22.5% last year, bolstering government revenues by $142 billion. Of that increase, $76.9 billion came from oil and gas exports.
Energy exports represented 27.2% of total exports last year, up 6% from the previous year. Strong energy prices increased the value of those exports by 57.1%.
The Fraser Institute attributed these market conditions to the Russia-Ukraine conflict that helped drive the price increases.
"Oil and gas had their best year ever," said senior Fraser Institute analyst Philip Cross. "Every Canadian should [know] that our largest industry continues to thrive."
With the TransMountain pipeline expansion and Kitimat LNG export facility poised for completion in 2024 and 2025, further industry growth is expected in the coming years.
However, incredible uncertainty exists for the industry long term amid the threat of burdensome government regulations and 'Just Transition' rhetoric.
Canada's controversial Bill C-69, the Impact Assessment Act, gave Canadian and international investors a hard time getting shovels in the ground on their projects, even after securing regulatory approval.
On Thursday, federal Environment Minister Steven Guilbeault pledged to cap and cut greenhouse gas emissions from the sector by mid-2024.
"As per our Glasgow commitment, we eliminated last year's international fossil fuel subsidies. Now we're doing domestic," he said, referring to the Glasgow Climate Pact agreed at the COP26 summit 2021.
"Getting new energy projects underway can take time — it would take years, even if governments fast-tracked approvals," said Colin Craig, president of policy think tank SecondStreet.org.
Between 2015 and 2020, Canada lost $150 billion in energy investment opportunities, which would have generated billions in revenue and tens of thousands of jobs for the domestic economy.
"It doesn't make sense to deny Canadian companies an opportunity to sell their products," said Craig.
"Ottawa's position especially doesn't make sense when we consider foreign oil is allowed into the country without [meeting] some of the same requirements Ottawa places on Canadian oil."
Canada has imported over half a trillion dollars worth of foreign oil over the past three decades, despite hosting the third-largest reserves in the world. When asked about regulations on foreign oil, Guilbeault said, "It's very difficult to impose our laws and regulations on other nations."
According to the Canadian Energy Centre (CEC), Canada imported nearly nine billion barrels of crude oil from other countries, an average of over 745,000 barrels per day between 1988 and 2020.
They spent $488 billion ($604 billion in 2020 dollars) on foreign oil imports during that period. Among the benefactors are Saudi Arabia ($44.4 billion), Russia ($9.2 billion), and Nigeria ($21.5 billion), among others.
In 2021, the total cost of imported crude oil in Canada was $14.7 billion, an increase of 30% over the previous year. Of that $14.7 billion, Canada brought in 15% from Saudi Arabia for over $2 billion and 13% from Nigeria for $1.9 billion.
"From additional regulatory reviews and tanker bans to rejection of pipelines, Ottawa has made it very difficult for Canadian oil and gas projects to be developed and export resources beyond North America," Craig told Rebel News.
"The federal government continues to roll out the red carpet for foreign oil while putting up roadblocks in front of domestic supply."
In 2013, TC Energy proposed a $16 billion "Energy East" pipeline that transported oil from Alberta and Saskatchewan to New Brunswick, bolstering reliance on Canadian oil to meet domestic demand and exports abroad.
A 2014 Canadian Energy Research Institute report said the project would have contributed $7.6 billion in tax revenues, including $3.5 billion in federal revenues — money to build critical infrastructure, fund government services or pay down debt.
However, the National Energy Board announced an "upstream and downstream" emissions review in 2017 for Energy East.
TC abandoned the project two months later because the regulatory process became too exhaustive and expensive.
Of all Canadian provinces, Québec has been the largest importer of foreign oil — at a value of $228 billion between 1988 and 2020, or $1,576 per Québec household.
Earlier this month, federal Environment Minister Steven Guilbeault called for a "phase-out of unabated fossil fuels" for projects that don't use technology to reduce carbon emissions "no later than 2050."
He cited a recent report by the Canada Energy Regulator outlining a 'net-zero' scenario where Canadian crude oil production falls to 1.2 million barrels per day by 2050 — 76% lower than in 2022. Natural gas production would drop by 68% over the same period.
A significant curtailment of Canada's oil and gas sector would "obviously take away our leading source of growth," said Cross, adding that Canada's oil production has doubled since 2010 because of increased oil sands investment.
"[Because] the Americans know we can't export anywhere other than to them — they demand a low price. When European natural gas prices hit record levels in 2022, Canada could not capitalize on the opportunity," he said.
"Americans stepped in and filled that gap — importing our relatively low-priced natural gas from Canada, and then they turned around and sold their gas for record high prices in Europe."
"The rest of the world is laughing at us," added Craig.