Canada is one of the most oil and gas-rich countries in the world, with the third-largest oil reserves and significant natural gas resources. The oil and gas industry is a major driver of the Canadian economy, generating billions of dollars in revenue, taxes, and royalties, as well as providing employment for hundreds of thousands of Canadians.
According to Statistics Canada, the oil and gas industry contributed $195 billion to Canada’s GDP in 2020, accounting for 8.5% of the total economic output. The industry also paid $12 billion in taxes, royalty payments, and leases between 2019 and 2021, supporting public services and infrastructure across the country.
The oil and gas industry is mainly concentrated in Western Canada, especially in Alberta, which produces over 80% of Canada’s oil and 68% of its natural gas. Alberta also has the largest refining capacity in the country, with nine oil refineries that process crude oil into various products such as gasoline, diesel, jet fuel, and petrochemicals. British Columbia and Saskatchewan are also important oil and gas producers, while Newfoundland and Labrador has offshore oil fields that supply domestic and international markets.
Canada is a net exporter of both oil and gas, with 75% of its crude oil and 55% of its natural gas exported to the United States. Canada is the largest foreign supplier of oil and gas to the US, providing about 40% of its crude oil imports and 20% of its natural gas consumption. Canada also exports oil and gas to other countries such as China, Japan, India, and Mexico, diversifying its markets and enhancing its energy security.
Despite the challenges posed by the COVID-19 pandemic, which caused a sharp decline in global oil demand and prices in 2020, the Canadian oil and gas industry has shown resilience and recovery in 2021. The industry’s gross revenue increased by 85.7% from $93.7 billion in 2020 to $174 billion in 2021, while its total assets rose by 9.4% from $413.8 billion to $452.9 billion. The industry also increased its production by 16.4% from 4.7 million barrels per day (bpd) in 2020 to 5.5 million bpd in 2021, matching its pre-pandemic level.
The outlook for the Canadian oil and gas industry is positive, as global demand for energy is expected to grow in the coming years. According to S&P Global Commodity Insights, Canada could lead the world in oil production growth in 2024, adding about 500,000 bpd to its output and reaching an all-time high of 5.3 million bpd. The oilsands are expected to be the main source of this growth, as large companies improve their efficiency and reduce their emissions intensity. The completion of the Trans Mountain expansion project, which will increase the pipeline’s capacity from 300,000 bpd to 890,000 bpd by early 2024, will also enable more oil exports from Alberta to British Columbia and overseas markets.
The Canadian natural gas industry is also projected to grow in the future, as new liquefied natural gas (LNG) projects come online and increase Canada’s export capacity. LNG is natural gas that is cooled to -160°C and converted into a liquid form that can be transported by tankers across long distances. Canada has abundant natural gas resources that can be used to produce LNG for domestic and international markets, especially in Asia where demand is high. Currently, Canada has one LNG export facility in operation (the Tilbury LNG plant in Delta, BC), but several more are under construction or planned (such as LNG Canada in Kitimat, BC; Woodfibre LNG in Squamish, BC; Goldboro LNG in Nova Scotia; and Énergie Saguenay in Quebec).
The Canadian oil and gas industry is not only a key contributor to the economy but also a leader in innovation and environmental stewardship. The industry invests heavily in research and development (R&D) to improve its performance and reduce its environmental impact. In 2019, the industry spent $1.6 billion on R&D activities, representing about 10% of all business R&D expenditures in Canada. The industry also supports various initiatives to address climate change and lower its greenhouse gas (GHG) emissions, such as carbon capture and storage (CCS), methane emission reduction technologies, renewable energy integration, energy efficiency measures, and clean fuel standards.
The Canadian oil and gas industry is a vital part of Canada’s economy and society, providing energy security, economic benefits, employment opportunities, innovation potential, and environmental solutions. As the world transitions to a low-carbon future, the industry will continue to play a significant role in meeting the energy needs of Canadians and the world, while also reducing its environmental footprint and supporting the global fight against climate change.
References:
: https://madeinca.ca/oil-and-gas-industry-statistics-canada/
: https://www150.statcan.gc.ca/n1/daily-quotidien/210928/dq210928a-eng.htm
: https://www.cbc.ca/news/canada/calgary/bakx-oil-production-s-p-record-1.6993102
: https://www.nrcan.gc.ca/science-data/science-research/energy-science-research/oil-gas-research/innovation-oil-gas-sector/20467