What Canada’s oil sands means for global demand

Written by Grant Spring, CNN

While 2019 has ushered in dire straits in several parts of the world, there is one hope for the global economic recovery — the Alberta oil sands.

According to a new global research report, published Tuesday by consultants Statista, a push toward a “global energy transition” could create an additional $61 billion in investment in Alberta’s oil sands. That would come in addition to nearly $1 trillion already slated for the industry.

“Despite the recent Alberta government changes that prioritize fiscal reforms, it is important to keep an eye on the horizon when it comes to environmental and economic impacts of oil sands development,” says Jean-Michel Cadot, Statista’s founder and CEO.

“The global energy market has been undergoing a “basic transformation,” with the higher carbon emitting unconventional oil and gas setting the trend.”

Now, while the report does not directly comment on current policies in Alberta, it does analyze the potential benefits and potential risks of investment if the province is able to protect its environmental standards at the same time it is sustaining a major economic sector.

The oil sands will remain valuable because they contribute to economic diversification and create new employment, while allowing lower-cost oil production.

“Not all oil sands projects are equal. Energy efficiency is critical, and the most robust projects will continue to be profitable because of increased market access, technological and logistical advancements, and ongoing partnerships with governments to optimize the resource’s use,” says Cadot.

Part of that is because, despite concerns surrounding carbon emissions, the production of oil sands is a cost-efficient method of energy that actually cuts emissions.

Technology advancements could further reduce the environmental impact of oil sands.

However, as is the case with the project itself, economic concerns could still impact the recovery of Alberta’s oil sands.

“As the world becomes ever more aware of climate change, is it really worth exposing Canada’s people to the environmental risks and the risks of economic disruption that come with a dramatic shift in the way Canada produces its energy?” asks Cadot.

He adds, “For as long as it is oil sands that drive economic growth, it is important to recognize the environmental risk, as well as the financial opportunity.”

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