Energy, Environment and Economy Increasingly Interconnected Says NEB Report
The convergence of energy efficiency and conservation with renewable energy policies continued to be a strong trend in 2008 says the National Energy Board (NEB) in its Canadian Energy Overview 2008 report.
While the economy garnered significant headlines in the latter half of 2008, the environment and the increasing momentum on climate change initiatives were key influences on the Canadian energy sector throughout the entire year.
Several provincial and federal policies aimed at energy demand were proposed early in 2008 including the expansion of clean energy and renewable energy strategies and new standards for consumer goods. A proposed design of a comprehensive regional cap-and-trade program to reduce greenhouse gases was introduced by the Western Climate Initiative. By the end of 2008, all provinces had some legislation for climate change initiatives. Many of these new government programs and policies should impact consumer energy demand trends in the next few years as Canadians factor environmental costs into purchasing decisions.
“2008 was an extreme year and uncertainty around the global economic picture continues today,” said Gaetan Caron, NEB Chair. “However, what remains certain is Canada has numerous opportunities with respect to technology, sustainability and environmental protection.”
“Going green” was also a common theme in electricity generation. Investment in wind power has increased the energy produced from this source by 265 per cent from 2004. In 2008, Canada produced enough electricity through wind to power 680,000 homes or about one per cent of Canada’s total electricity demand. Canada’s capacity rose by 34 per cent from 2007 levels making Canada 16th in the world for wind generating capacity. Ontario led all other provinces with 782 Megawatt (MW) of installed capacity followed by Quebec (532 MW) and Alberta (524 MW). Many wind projects that are currently under construction will soon be fully commissioned meaning 2009 could exceed 2008 installation levels.
The price of oil and natural gas reached new highs only to fall dramatically in the latter half of 2008. Due to the low price and volatile financial markets, several of the oil sands projects that earlier in the year had been promising, were either postponed or cancelled. Until the price of crude oil rebounds to levels that offer economic incentives, increases in production volumes and refining capacity may remain in doubt.
Natural gas prices fell in the second half of 2008 due to the emergence of unconventional resource plays in the United States. This created a supply glut which added to the economic slowdown and reduced demand. While natural gas production and exports declined, net export revenues were up substantially due to higher prices.
Approximately 16,300 oil and gas wells were drilled in 2008 which is about 10 per cent below 2007 numbers. Alberta took the brunt of the decline with only 11,569 wells drilled compared to the 14,001 in 2007. Despite the drop in well numbers, activity in some areas of the country increased. Saskatchewan saw an increase of 22 per cent from 3,202 to 3,898 wells. Records for provincial revenue generated by the sale of petroleum rights were set in British Columbia with the province earning $2.7 billion and Saskatchewan with $1.1 billion.
Celebrating 50 years of regulatory leadership, the NEB is an independent federal agency that regulates several parts of Canada’s energy industry. Its purpose is to promote safety and security, environmental protection, and efficient energy infrastructure and markets in the Canadian public interest, within the mandate set by Parliament in the regulation of pipelines, energy development and trade. As part of its mandate, the NEB monitors the supply of all energy commodities in Canada and reports its findings. The NEB Internet site is regularly updated with new energy information for the Canadian public.