Economic benefits,Indigenous benefits,carbon capture,XPRIZE,pipelines,market access,energy crisis

Top Canadian oil and natural gas stories in 2021

This has been a tumultuous year for Canada’s natural gas and oil industry, with challenges balanced by solutions and a strong look to the future.

1. Prize-winning solution from oil sands funded competition turns carbon into cement

The NRG-COSIA Carbon XPRIZE was a multi-million dollar challenge to innovators from around the world to find a cost-effective means to turn captured carbon emissions into useful products. In 2021, two prizes were awarded, one to a U.S. competitor and one in Canada. The award recipients were CarbonCure from Dartmouth, Nova Scotia and CarbonBuilt from Los Angeles, California. Each claimed US$7.5 million with groundbreaking technologies that could help combat climate change by turning CO2 emissions from factories and power plants into cement.

Read more: Carbon XPRIZE winners have concrete climate change solutions

2. Carbon capture emerges as key to Canada’s emissions reductions

As the world continues to focus on reducing emissions, companies in Canada are leading the way with carbon capture and storage (CCS) projects. CCS captures emissions from industrial sources such as fertilizer plants, refineries, or electricity generating plants and injects the captured carbon in deep underground rock formations for permanent storage.

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A number of CCS and CCUS projects are already operating in Alberta and Saskatchewan. The largest is the Quest CCS facility located near Edmonton that has captured more than five million tonnes of carbon dioxide (CO2) in its five years of operation. The Alberta Carbon Trunk Line started operating in 2020. This system grabs CO2 emissions from two industrial sources near Edmonton and transports it via pipeline to an oil field in central Alberta, where the CO2 is injected.

Read more: Quest carbon capture and storage hits emissions reduction milestone

Read more: ACTL now in operation

3. All about pipelines: Keystone, Line 3 and Trans Mountain

Although the Biden Administration in the U.S. cancelled the Keystone XL pipeline projects, which would have transported Canadian crude oil to refineries in the Midwest and Gulf Coast, two other pipeline projects in Canada made progress. The Enbridge Line 3 project was completed in October and adds about 370,000 barrels per day of new pipeline capacity from Western Canada into the U.S. increasing the pipeline’s overall capacity to 760,000 b/d.

Economic benefits,Indigenous benefits,carbon capture,XPRIZE,pipelines,market access,energy crisis
Tran Mountain Construction

And construction on the Trans Mountain Expansion project continued throughout 2021, although heavy rain and landslides halted work for a period late in the year. The expansion project will increase pipeline capacity from Alberta to B.C. by approximately 300,000 barrels per day to a total of 890,000 barrels per day, to serve markets in B.C., the U.S. and overseas. The pipeline is expected to be in service late in 2022.

Read more: Enbridge says Line 3 in-service date is near

4. Sharing benefits: Indigenous empowerment

Canada’s natural gas and oil industry is having an overall positive impact on Indigenous peoples, who want to be active and engaged in Canada’s economy. This is becoming possible through resource development. Decades of successful interaction between the natural gas and oil industry and Indigenous communities, businesses and entrepreneurs has created thousands of jobs and supported many opportunities for community growth and prosperity. A major report issued by the Canadian Association of Petroleum Producers in 2021 clearly shows that resource development is the foundation for economic reconciliation for many Indigenous communities.

Read more: Indigenous self-determination

5. Toward net zero: Oil Sands Pathways

In 2021, six of Canada’s largest oil sands producers announced a joint alliance to achieve net zero emissions by 2050, helping Canada to meet its climate goals under the Paris Agreement. The participants share the aspiration to find realistic and workable solutions to the challenge of climate change while also supplying the world’s growing energy needs. The alliance also collectively believes an energy transition is underway and alternative energy sources will play an increasingly important role.

Read more: Oil Sands Pathways to Net Zero

6. Energy crises around the world

Worldwide energy policies have led to a number of energy crises impacting energy affordability and security. For example, China experienced electricity shortages and blackouts due to global shortages of liquefied natural gas (LNG), which China was using to generate electricity. As a result, the country has re-started coal production and coal-fired electricity generation, leading to emissions that affect the entire planet. Europe has made a big push toward renewable energy sources but a supply gap in affordable and reliable natural gas have resulted in sky-high prices and supply shortfalls could occur. In the U.S., President Biden is asking OPEC, Russia and other producers to increase production of oil to ease high gasoline prices.

coal plant chimney ss
Coal Plant

With Canada’s focus on emissions reduction, we remain a supplier of choice capable of meeting global energy needs while continually improving its responsible energy production.

7. Economic recovery: higher prices, better outlook for the future

This year saw some recovery from 2020’s collapse in natural gas and oil investment in Canada which led to job losses and lost economic opportunity. With the rollout of COVID vaccines, 2021 included a rise in global demand for oil and natural gas, which led to higher commodity prices. That in turn helped Canada’s oil and natural gas producers to pay down debt and invest in improvements to their operations. Capital investment in 2021 was expected to be about $27.3 billion, a significant increase from $24 billion in 2020.

This gradual improvement in prices and investment is good for all of Canada, not just the energy industry. Few other industries have the capacity to drive economic growth and employment the way Canada’s oil and natural gas sector can. The industry supports more than 500,000 jobs (including thousands in Ontario and Quebec) and additional revenue for producers translates to more government revenue through taxes and royalties – which in turn can help governments pay down deficits that increased dramatically during the pandemic.

Canada’s Deficit-Busting Secret weapon

Economic benefits,Indigenous benefits,carbon capture,XPRIZE,pipelines,market access,energy crisis