Alberta Premier Jason Kenney isn’t concerned after OPEC cut oil demand forecasts and BP said it expects oil demand to peak in the 2020s. In fact, he says BP is echoing what his government has also said.
“There will be a huge demand for oil and gas well into the future,” he said during a news conference on Wednesday.
On Monday, OPEC cut its forecasts citing developing countries’ difficulty in containing the spread of the novel coronavirus in keeping a lid on global oil demand.
OPEC cut its estimates for world demand by 400,000 barrels a day for both this year and next. It now sees a drop in demand of 9.5 million barrels a day in 2020 and a rise of 6.6 million barrels in 2021.
BP, meanwhile, said it expects crude oil demand to spike early this decade and predicted oil demand will fall dramatically over the next 30 years, leaving renewable energy to drive consumer change.
Kenney told reporters Tuesday there will be a supply crunch once global demand recovers after the COVID-19 pandemic and Alberta “will be there.”
“There are some people who live in a fantasy land where they think that we can flick a switch and somehow airplanes are going to be operating on unicorn farts or something, but in the real world, we’re going to be consuming hydrocarbon-based energy for a long time to come.”
Kenney pointed to the difference between Canadian oil extraction and the U.S. shale process as to why Alberta’s oil is the better choice.
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“Unlike U.S. shale, it’s not churn and burn,” he said. We don’t need to drill a new well every year to replace shale wells that are exhausted. We have projects that might be capital intensive upfront, but they generate energy for 25, 30, 35 years. I believe, for that reason, we have the most capital efficient oil and gas sector in the world. That will become evident post-COVID recovery.”
Kenney also defended new Conservative leader Erin O’Toole’s comments to the Quebec premier about the Energy East pipeline being off the table.
Kenney said the proposed cross-Canada pipeline isn’t on the table because the federal Liberal government killed it in 2017 and that one of his first calls as premier was to contact his Quebec counterpart and ask him to reconsider his opposition to such a project.
Kenney said his government has “not given up on the dream” of a west-east pipeline system to carry Alberta oil to New Brunswick.
He said he expects there will be a jump in global demand once the COVID-19 economic recovery is complete, since there’s been little or no investment in upstream exploration and another private company might resurrect the idea.
“For those people who want to, quote, ‘leave it in the ground, including, let’s face it, a bunch of people in Ottawa right now, they are operating in a fantasy world,” Kenney said. “Here in Alberta, at least, we’re operating in the real world and we know that you cannot function a modern industrial economy anytime now or in the foreseeable future without massive consumption of oil and gas.
“The challenge is how do we produce that oil and gas in a more environmentally responsible way?”
O’Toole met with Quebec Premier Francois Legault on Monday in Montreal — his first visit with a premier since winning the leadership race in August.
— With files from The Associated Press and Bill Graveland, The Canadian Press