The year 2020 was certainly challenging, especially the impact of COVID-19 that caused widespread economic impacts, including a collapse in natural gas and oil investment in Canada. In turn, lack of capital investment has led to lost jobs and reduced economic opportunity across the country.
But the energy sector is poised for recovery. In January 2021, the Canadian Association of Petroleum Producers (CAPP) forecasted a small uptick in capital investment within the industry, signalling the beginning of economic recovery for Canada with natural gas and oil as among the primary drivers.
Why does that matter to people in Ontario?
It matters because the industry’s multi-billion-dollar supply chain employs Canadians and supports businesses in every part of the country. Canada’s oil and natural gas industry works with suppliers across Ontario, from technical and engineering service providers to fabricators and manufacturers. Outside of Alberta, Ontario is the largest supplier of goods and services to Canada’s oil sands industry. Data collected in 2020 shows Ontario’s participation in the oil sands supply chain totalled $2.4 billion, purchased from more than 1,300 suppliers across the province and providing employment for nearly 66,000 Ontarians. That means personal and corporate tax revenues stay in Ontario to help municipalities build roads, schools, hospitals and more.
Here are just a couple of examples:
- Located in Sault Ste. Marie, Tenaris Algoma Tubes Inc. makes steel pipe and tubing needed for drilling natural gas and oil wells. Drilling and completions slowed substantially in 2020 because of decreased global and domestic demand for energy resulting from COVID-19. Tenaris took advantage of factory downtime to expand and enhance various parts of its manufacturing plant, creating more than 150 permanent jobs.
- Toronto’s Validere Technologies is a high-tech startup focused on making the energy industry’s supply chain ever more efficient through innovations such as artificial intelligence. By developing ways to track product quality in real time, Validere helps industry clients get the right product to the right customer in the most efficient way possible.
Did you know? Canada’s oil development started in Ontario
Canada’s oil industry got its start in what is now Lambton County in southwestern Ontario, near the settlements of Oil Springs and Petrolia some 60 kilometres from Sarnia. Using vintage 1860s technology, Fairbank Oil Fields continues to produce oil from this region, which is transported to the Imperial Oil refinery in Sarnia for processing.
Speaking of refineries, there are four of them in Ontario, producing not only gasoline and other transportation fuels, but also vital petrochemicals needed to make N-95 masks, plexiglas and other items we’ve come to rely upon during the pandemic. Additionally, propane – derived from natural gas – is an essential fuel for agriculture and to fuel remote communities, fishing and hunting camps, even family cottages.
Strong environmental performance
Beyond being a strong economic driver, the natural gas and oil industry is continuously improving environmental performance, especially reducing greenhouse gas (GHG) emissions. In this area, the industry looks to technology innovators across the country, including those in Ontario. In fact, this sector is Canada’s leading spender on cleantech solutions to address emissions, water use, speed reclamation of disturbed land, and more: according to Statistics Canada, in 2018 Canadian businesses spent a total of $9.7 billion on environmental protection. By far the largest contribution — $3.5 billion – was spent by the oil and natural gas industry.
As vaccinations roll out across the country and focus shifts to reviving the economy, some believe Canada needs a ‘green’ recovery. When it comes to sustainability and environmental responsibility, Canada’s oil and natural gas sector is already there. For decades, the industry has worked to break the link between resource development and emissions, and progress is ongoing. For instance, the Government of Canada’s National Inventory Report shows GHG emissions intensity in the oil sands declined by 32 per cent over the past three decades and reductions will continue as new emissions reduction technologies and innovations are developed.
The industry is collaborative and solutions-oriented when it comes to improving environmental performance. For example, through Canada’s Oil Sands Innovation Alliance (COSIA), the oil sands industry alone has spent $1.4 billion to develop and share more than 1,000 technologies to reduce emissions, improve water management and speed land reclamation.
Canada’s industry and global energy demand
Global demand for oil and natural gas grew continuously for 20 years prior to the pandemic. As economies re-open, global oil and natural gas demand is expected to grow, and long-term demand will be sustained due to global population growth and rising standards of living. Oil and natural gas are essential not only to post-pandemic recovery but also to human progress and quality of life. From fuels for heating, cooking and transportation to making everyday items like contact lenses, running shoes and much more, oil and natural gas underpin virtually every aspect of the economy – and our daily lives.
Canada has the innovation, high standards for safety and environmental performance, and technological expertise to be the world’s energy supplier of choice. Canada can produce reliable, aﬀordable and responsibly produced energy that will get Canadians back to work.
Support for the oil and natural gas sector means jobs and positive economic growth in Ontario.