The global demand for oil will hit its peak within the next decade but according to new report from the International Energy Agency, that peak is much lower than what was projected prior to COVID-19.
In, “World Energy Outlook 2020,” released Tuesday, the IEA said that prior to the pandemic energy demand was projected to grow by 12 per cent between 2019 and 2030, but growth over this period is now expected to be around nine per cent. However, if the pandemic is brought under control by 2021, growth projections are expected to fall further to just four percent.
“Even at four per cent growth, we still have an opportunity to play a very major role and create jobs and be a strong part of the economy but it will mean we’ll have to be more competitive,” said Tim McMillan, president and CEO of the Canadian Association of Petroleum Producers. “Today, we’re losing investment to Norway, to offshore Brazil, to the middle east… this competition isn’t going to go away and in a lower-growth scenario I think we need to be more ambitious, more aggressive.”
The Alberta government says despite the adjusted growth projections it’s clear that demand for oil and gas isn’t disappearing anytime soon.
“Whether it plateaus in the 2030s or the 2040s it will continue to be the dominant force of energy for a very long time,” said Alberta Energy Minister Sonya Savage.
Still, Savage says the need to diversify has become apparent.
“We know that there is an energy transformation underway that’s pretty clear.”
“There’s going to be higher usages of renewable and other sources of energy so we’re seeing opportunities there that we’re investing in.”
Last week, the Alberta government released a new natural gas strategy, which includes long-term plans to produce and export hydrogen as well as plans to increase or attract investments into petrochemical manufacturing, plastic production and recycling, and liquified natural gas.
Mark Winfield, an environmental policy professor at York University in Toronto says the Alberta government is right to pursue diversification but warns that across Canada investment in renewable energy sources has been soft.
“We’re not well-positioned for the transition. If anything, we’ve been pulling back on opportunities for the development and deployment of renewables and that runs the risk of us being bypassed in the long term.”
The IEA forecasts projects rapid growth for renewables over the next decade with solar power being the main driver of that growth.