The last few years have not been good for pipeline projects in Canada. The Keystone XL pipeline continues to be plagued by delays, TransCanada made big news by axing the Energy East pipeline and Kinder Morgan has cut spending on the critical Trans Mountain expansion project to protect its shareholders.
After each pipeline setback, oil and gas opponents react with glee and deliver yet another self-righteous speech about the end of the fossil fuel economy.
The problem is these activists are delivering a eulogy to the oil economy that’s as premature as the obituary delivered for Swedish chemist Alfred Nobel, the originator of the famous Nobel prizes (a French newspaper erroneously published an obituary for Alfred when his brother Ludvig died).
The need for oil and especially natural gas will continue for many decades. Energy consumption and projected needs will continue well into the future.
The origin of this energy demand, however, is not where many expect.
A recent report by the Canadian Association of Petroleum Producers (CAPP) called Canada’s Role in the World’s Future Energy Mix points out that global energy demand is expected to increase by 30 per cent from today to 2040. Unless a miraculous new energy source or technology completely replaces fossil fuels, oil and gas will continue to play a dominant role in that mix.
The International Energy Agency (IEA) says this growth in energy demand is equivalent to adding another China or India to current consumption.
In fact, the CAPP study points out that the IEA estimates that oil will continue to hold the largest share of any fuel source. “This continued high demand for oil will be driven largely by the transportation sector, including aviation and shipping, plus industrial and petrochemical uses.”
The IEA also says that this energy demand will increase despite the growth in the use of electric vehicles.
Where is all this new energy demand coming from?
Not from the industrialized West, which is becoming more energy efficient through various technologies.
The report mentions that the world’s population is expected to grow by nearly two billion, reaching about 9.2 billion people by 2040. The global middle class will double in the same period. This means gross domestic product will also grow exponentially.
This growth will continue over the next few decades in developing and emerging economies. Their populations are urbanizing and industrializing, and many of their citizens are joining the middle class. Growing incomes and improved access to electricity are also creating higher demands for energy.
Of course, these improving incomes and economies should be major causes for celebration. Why should we be against more people in the developing world having access to the household appliances and computers that make our lives easier? This also means more people from these countries can access air travel. They will have their lives opened up to the wider world, just like we have.
The report also says that energy use in African countries will increase, signalling growing economies in that most impoverished part of the world.
So why do environmentalists and critics of pipelines cheer when more Canadian petroleum products are landlocked in this country?
Why wouldn’t we want Canada to play a major role in helping these emerging economies industrialize and enjoy our standard of living?
What do environmentalists and pipeline critics have against the world’s most poor that they want to keep them poor?
These activists may think they’re scoring a real moral victory when they stop pipelines from being built. But they’re only preventing oil and gas products from getting to economies that need them the most. In the absence of Canadian oil and gas – which is produced with some of the best environmental and human rights records in the world – other less-than-stellar producing countries will fill the void.
Eulogizing oil and gas is premature and delusional. The oil and gas industry has a big role to play in improving the lives of many people living in the most desperate economies.
It’s time to tell pipeline opponents who they’re really hurting: the world’s poorest economies.
Joseph Quesnel is a research associate with the Frontier Centre for Public Policy.