The Future of Canada’s Energy Sector: What Happens When No One Wants Oil?

Oil

While plenty of countries are still more than happy to buy Canada’s oil—for now, at least—the report shows the country’s oil production could plummet 76% below 2022 levels by 2050. Photo: millraw/Getty Images

A new report about the future of Canada’s energy sector begs the question: What are we going to sell in a world where nobody wants oil?

Driving the news: For the first time, Canada’s national energy regulator looked into what would happen to Canadian oil and gas revenues if the world met its net-zero goals. While plenty of countries are still more than happy to buy Canada’s oil—for now, at least—the report shows the country’s oil production could plummet 76% below 2022 levels by 2050.

Why it matters: Crude oil accounts for around 15% of Canada’s exports. If the world stops buying it, almost 10% of the country’s GDP and over 165,000 jobs could be affected.

Zoom out: The good news—and yes, there is some—is that Canada stands to benefit from the transition to renewables, with one study showing that the country’s renewable energy sector in 2050 could be worth 63% more than Canada’s oil and gas sector will be in 2025.

Even oil-rich Alberta stands to benefit in the long-term. With top infrastructure and talent from its booming oil and gas sector, the province is well-positioned to smoothly move into clean energy projects.

Yes, but: The potential of long-term gains from the transition away from oil will be of little comfort to the 170,000-or-so people who depend on the world buying Canadian oil now.

This story was originally published by the money experts at The Peak [a ZoomerMedia property]. Get smarter about what matters. Sign up for The Peak, a free 5-minute daily email on Canadian business, tech and finance that you’ll actually enjoy reading.