Oil And Gas Fundamental To Energy Transition, Say Provincial Energy Ministers

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Saskatchewan Energy Minister Jim Reiter. File photo.

A rapid transition away from oil and gas will damage the economies of Canada’s major oil producing provinces, making it difficult to take advantage of new energy opportunities, three provincial energy ministers told an audience at the World Petroleum Congress Monday. 

“Our offshore industry is what keeps us going,” said Andrew Parsons, Newfoundland and Labrador minister of industry, energy and technology.

Newfoundland’s oil industry is responsible for 20 per cent of its GDP and provides thousands of high paying jobs that would be lost in a rapid transition, Parsons explained. “We lost 30,000 people in Newfoundland when the fisheries collapsed. We don’t want to see that again.”

The province is working with industry partners to advance both wind and hydrogen. But it also wants to grow clean oil development and is exploring its natural gas potential as well, said Parsons.

“We have a resource that needs to be developed,” he said, adding it can be done while lowering emissions. “It’s not mutually exclusive.”

The province is looking at electrifying its offshore developments as one option.

Parsons, along with Alberta Energy and Minerals Minister Brian Jean and Saskatchewan Energy Minister Jim Reiter, were in part responding to comments made by federal Energy and Natural Resources Minister Jonathan Wilkinson in his opening address to the WPC on Sunday.

“This transition away from the combustion of fossil fuels is indeed underway and will take place over the next three decades,” Wilkinson said. “At the end of the day, the cause of climate change is carbon emissions associated with the production and the combustion of fossil fuels. We clearly need to move to largely eliminate the unabated combustion of fossil fuels over the period between now and 2050.”

“It was a speech to drive investment away from oil and gas,” said Reiter. “It was also very dismissive of technology.”

Technology like CO2 EOR could help reduce emissions by storing some emissions subsurface while generating more revenues for his province, said Reiter. However, the federal government has excluded EOR from its new CCUS tax credit program.

Around 15 per cent of Saskatchewan’s GDP comes from oil and gas, and the sector employs 30,000 workers.

Jean said there is huge potential with carbon capture and storage, if the province could get the federal government on board.

“Alberta could be the first net zero oilfield in the world,” he said.

There is also huge potential for LNG exports, lithium and other critical mineral production, and hydrogen production in the future, said Jean. But oil and gas will remain the backbone of the economy, given the massive resource base in place. Alberta generates 25 per cent of its GDP from oil and gas.

“Oil and gas dominates the conversation,” said Jean.

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