A new global survey shows that Canadian oil and gas is more admired outside the country than it is within.
Jeff Gaulin, vice president of communications for the Canadian Association of Petroleum Producers (CAPP), says low trust for the industry is consistent with most other developed countries, but the survey shows industry has to communicate its message better in provinces where it hopes to build energy infrastructure, such as British Columbia, Ontario and Quebec.
Ipsos polled more than 22,000 respondents online in 32 countries. The top five countries interested in importing Canadian oil—including controversial oil sands bitumen—and natural gas were Israel, the U.S., Algeria, India and South Africa.
China and India, key new markets for Canadian producers because they are forecast to increase their energy demand by almost 50% by 2040, both rated Canada’s energy industry high for its leading-edge technologies to minimize environmental impacts, according to the CAPP release.
“This research shows that citizens all around the world are more supportive of oil and gas development when they know the country has got a climate change policy. End of story,” Gaulin told Hart Energy. “Canada is well-positioned to be the preferred exporter for many, including those with the highest forecasted demand.”
Alberta is well-positioned to meet growing global energy demand partly because the oil sands are the third-largest oil reserves in the world behind Venezuela and Saudi Arabia; Canadian oil production is forecast to grow 28% by 2030 to 4.9 million barrels per day (MMbbl/d), up from 3.8 MMbbl/d, all driven by oil sands growth. And Canada is also the world’s fifth-largest gas producer with an output of 15.2 Bcf/d in 2016.
But Alberta is landlocked and building oil pipelines to tidewater—the first, Kinder Morgan’s 525 Mbbl/d Trans Mountain Expansion, is finally scheduled to start construction this fall—has proven challenging, as has growing a West Coast LNG industry, which has only one modest expansion and one small facility under construction after years of wooing international companies.
Industry is facing fierce opposition from Vancouver-based environmental groups and British Columbia First Nations on the West Coast. A similar coalition that includes urban residents is forming in Ontario and Quebec as the National Energy Board review of TransCanada’s Energy East project gets underway again. Gaulin says Canadians would be more supportive of infrastructure projects if they understood industry’s support for climate mitigation policies.
“I think Canadians would allow for continued growth in oil and natural gas production in Canada if they knew that the industry was aligned to their own views that climate change is real, that we take it seriously and that we’re doing our part through innovation and technology to reduce our impact on the environment with every new barrel of oil,” said Gaulin.
His observation is backed up by a December CAPP/Ipsos survey that found a majority of Canadians approved of the national government’s stated strategy to balance pipeline approvals with stricter greenhouse gas emission reductions, e.g., a national carbon tax, and other climate mitigation policies. Another survey from last year, this one by Abacus Data, found that 76% of respondents would accept more pipelines if Canada was supporting the transition to cleaner forms of energy.
But the most recent CAPP/Ipsos survey put its finger squarely on a big political problem for the oil and gas industry: Canadians don’t trust it.
“It is important to note that just one in five (21%) Canadians provide a favorability score, significantly lower than results from other major producing countries,” Ipsos wrote in the 2017 Global Energy Pulse report.
Perhaps of even more concern is that Canadian oil and gas companies had the worst scores on trust, tied with France, Spain and Australia at 18%. Gaulin shrugs off the low numbers by pointing out that developed countries that typically don’t expect economic growth to be tied to oil and gas expansion all have similar scores, while developing nations looking to create energy jobs and businesses were two or three times more positive.
“Most Canadians are not familiar with the oil and gas industry because the resources are concentrated in a very few of the less populous provinces,” said the veteran industry communicator. “We’ve seen it improving in the last couple of years, but there’s no doubt that Canadians overall don’t have the same trust in the oil and gas industry as they would with many other industries that they know or are familiar with.”
CAPP hopes the trust issue will resolve itself in coming years as industry delivers on its promise to “take carbon out of the barrel.” Gaulin points out that innovative new technologies are being implemented in both in situ and mining oil sands operations that will drive down carbon intensity to par, or perhaps even lower than the average American crude oil. Imperial Oil’s Kearl mining facility already produces crude only 2% higher than the U.S. average using a process called “parafinnic froth treatment.”
“Imagine a barrel of oil sands crude produced with zero emissions. Not only are you taking out 30% of the emissions in the barrel, but you might find other ways to go beyond,” said Gaulin.
“That is pretty substantive in the next 10 years or so. That’ll be a breakthrough. Then, instead of being seen as a carbon burden, Canadian oil sands can be seen as a carbon benefit to displace other forms of carbon-intense oil around the world.”