NEB Report Predicts 2019 Oil Demand Peak, But Falls Far Short of Low-Carbon Future
Fossil fuel demand in Canada could peak in 2019 and fall 7.5 to 12.3% between 2017 and 2040, but even the maximum reduction will still fall short of meeting the country’s carbon reduction goals—much less the more ambitious targets that would meet and exceed international climate objectives, according to the projections in the National Energy Board’s latest annual report.
The NEB’s number-crunching shows Canadian crude oil production continuing to increase under all the scenarios, “even if governments impose sharply higher carbon prices and the world adopts new technology designed to cut greenhouse gas emissions,” the Globe and Mail reports. “The country’s fossil fuel consumption will peak before 2020, but new policies and ‘disruptive’ technologies will be needed to reduce that demand sufficiently to achieve Ottawa’s emissions reduction targets.”
Like this story? Subscribe to The Energy Mix and never miss an edition of our free e-digest.
“From the fossil fuel projections, you can see those goals are not met,” NEB Chief Economist Shelley Milutinovic told the Globe. “So more needs to be done to get to where people are targeting.”
The Thursday release marked “the first time in the 11-year history of the NEB’s annual reports on the topic that a peak in fossil fuel demand has been included in the baseline projection,” CBC reports. “Previous reports projected demand would increase for the next two or three decades, at least.”
“Improving energy efficiency, somewhat slower economic and population growth projections than in previous outlooks, and climate change policies introduced by various federal and provincial governments underlie this change in trajectory,” the NEB explained. The 2019 peak was contained in the Board’s reference case, which presumes a steady, $50-per-tonne carbon price from 2022 through 2040 and a “moderate” view of energy prices.
The high carbon price scenario in the report presumes rates of $90 per tonne in 2030 and $140 per tonne in 2040. The “technology scenario” also factors in estimates for electric vehicle adoption and carbon capture and storage.
The NEB concludes that “higher carbon prices and the adoption of new technology would not come at the expense of economic growth,” the Globe notes. “A steady increase in carbon prices would shave only 0.2% off economic activity in 2040 compared with where it would be if no new policies were adopted.”