In Canada, energy resource development is presently a strong economic driver. hydrocarbon export revenues contribute to GDP and help fund public services such as healthcare and education. But profound change is coming, and we must be ready for it. We must prepare for a day when we fund these critical public services with alternative revenue sources.
Canadians already sense this to be the case. A recent Decima research poll produced for Natural resources Canada found that a majority of citizens believe the energy sector is one of the most important parts of Canada’s economy, and that the federal government should lead the way in finding alternatives to oil.
“There is not an expectation that Canada should transition overnight, but rather start the process of moving toward more environmentally friendly (but still reasonably cost-effective and reliable) sources in the medium term, and then further up the environmental continuum in a longer term future,” the report’s summary states. “[Canadians] believe that this may not happen without some form of leadership, with objectives and time frames in place for this transitional process, and ideally, investments made in facilitating this transition.”
Indeed, the transition will take time. reinventing our approach to something so core to our lives and economy will likely prove one of the most difficult tasks we have ever tackled as a nation—similar in ambition to building the transcontinental railway. But like that project, this one must be undertaken if we are to remain strong as a nation and competitive in tomorrow’s marketplace of resources and ideas. The longer we wait, the more it will cost us.
Demand-Side Opportunities: Efficiency and Conservation
Canadians are some of the highest per- capita energy users in the world. In a recent oECD survey of 31 economies, using total primary energy supply per capita—which accounts for climate and distance factors— Canada ranks as the third least-efficient country, slightly less efficient than the United States. Cold countries such as Sweden and Finland use a fraction of the energy that Canada does. While discouraging on its surface, the statistic points to the tremendous opportunities to be found on the demand side of the spectrum. Conservation opportunities are largely driven by behavioural and social factors, while efficiency wins are largely an outcome of how we design and manage our appliances, cars, homes, neighbourhoods, and entire cities.
Opportunities in the efficiency sector include technical solutions such as efficient building-envelope materials and software solutions that continually audit buildings for energy anomalies. others exist in professional services such as planning, architecture, and design, and the skilled trades needed to retrofit, redesign and rebuild our homes and communities to make them more complete, compact, and livable. If we drastically reduce our overall need for energy through design improvements, compact, transit-oriented communities, and innovations in building materials, we build-in resilience to future energy price increases.
When it comes to building-envelope design, Canadians have a reputation as pioneers. In 1977, Canadian ingenuity built the Saskatchewan Conservation house—a prototype home that required only a bare minimum amount of energy for heating and cooling. Eventually, the design informed the development, in Austria, of the Passivhaus performance standard. We can lead in this innovation again.
Supply-Side Opportunities: Renewables and Energy Services
One of the more subtle, but critical, characteristics of the new energy era is that it requires a philosophical shift from thinking of energy not as a product, but as an enabler of services.
Consider transportation. Economists often speak about “demand for oil.” But the truth is, there is no demand for oil. Instead, there is an appetite for the energy service of safe, affordable, and reliable mobility, or whatever other service oil consumption currently provides. Despite the headlines, China doesn’t have a growing thirst for petroleum; it has an increasing need for the energy service of transportation, and is presently making unparalleled new energy investments to address it. It is increasingly plausible that China’s solution to meeting the demand for personal mobility will not require imported oil.
There are numerous ways to meet the demands for energy services from renewable sources. The nations that invest today to find new ways to fulfill these demands tomorrow via clean, abundant, and non-polluting sources will dominate the global new-energy economy.
The five drivers of change
The vision offered here presents exciting new opportunities for innovation, global cooperation, and trade. Each year, investors pour some $120 billion into renewable energy representing a total market value of more than $1 trillion. A recent HSBC assessment of stimulus packages notes that global governments invested $430 billion in climate-change related infrastructure projects in recent years.
But while these benefits entice us to join this new race to the future, there are also drivers in the form of larger shifts, trends, and pressures that we can no longer afford to ignore.
We have identified five of these drivers:
- Increasing demand for energy services as world population grows, while petroleum and other non- renewable energy sources become increasingly challenging, risky, and costly to find, extract, and transport;
- The growing global interest in energy independence and security, including the desire to become less reliant on foreign sources of energy;
- The pressure to reduce the risks and impacts of fossil fuel extraction, distribution, and consumption, particularly with respect to greenhouse gases and climate disruption;
- The imperative to maintain Canadian competitiveness in the coming decades as other major economies increasingly shift to non-hydrocarbon energy sources; and
- The increasing demand from the world’s most vulnerable populations to address energy poverty and inequity, while simultaneously minimizing the risk of climate-change impacts on those same peoples.
Whether it suits canada’s present business interests or not, these drivers are inexorably pushing us to an energy future that will be markedly different from the one we have today.