Thank you for the opportunity to join you in this important discussion your committee has undertaken.
My name is Tim McMillan. I represent the oil and gas producers in Canada. I'll tell you a little bit about our association. We represent both large and small companies that explore, develop and produce natural gas and oil throughout Canada. Our member companies produce about 80% of both of those commodities. With them and our associate members, who are involved in the service side of our business, we generate about $116 billion worth of revenues a year, and we make up the largest component of Canada's exports.
I know that today we'll be speaking specifically about technology and clean exports. I will get into that in a moment, but we believe that responsible oil and gas development, driven by technology and innovation, is essential to a healthy Canadian economy.
Our industry recognizes the importance of delivering reliable, affordable, and responsibly produced energy that addresses important social and environmental issues, including climate change. We believe that Canada's oil and gas has a critical role to play in an integrated energy system, and is part of the global solution needed to tackle climate change. CAPP believes Canada is well-positioned to become a global supplier of choice. World energy demand is growing, and we have some of the highest quality reserves in the world.
Canada is obviously an environmental leader in general, and we take our ESG responsibilities very seriously. I think that when we look at oil and gas producers globally, Canada truly stands out, and when you look at the world's top 10 producers of both of those commodities, we are unique. The other nine include Saudi Arabia, Iran, Iraq, Nigeria, Venezuela—countries that just don't share our capacity to innovate, drive technologies, or implement them on the ground. That gives us a unique role to play, and I'll speak to that more in the moments ahead.
On innovation and technology, almost 40% of all clean-tech and green-tech investments made in Canada are made by the oil and gas industry. We have seen studies recently that say that as much as 70% of green and clean innovation spending comes out of the oil and gas sector, but we use a number of a little less than 40%, and it's having a great effect.
Over the last decade, the oil sands, for example, have seen an over 20% reduction in greenhouse gases per barrel. According to IHS CERA, a research group, it is predicted that over the next decade, innovation and technology will continue to drive a further 20% to 25% emissions reduction.
As I noted earlier, other countries that are producing large amounts of energy globally don't have this capacity. I think that Canada has a responsibility to develop these technologies and innovations and, ultimately, see them adopted globally. We most certainly are seeing that happen.
Other contexts that I think would be important are the following. If we look at energy demand globally, it is growing. It is growing across the board—every energy source, including oil and gas. We are expecting, according to the International Energy Agency's best-case scenario, to get back to record demand for oil and gas as early as 2023. We will continue to see both of those commodities growing aggressively to 2040, the end of that forecast. Gas will grow aggressively, but oil will continue to grow at a slower pace.
By 2040, the International Energy Agency expects that oil and gas will grow to a level of over half of all energy consumption globally, meaning that gas will overtake coal for the first time, which brings me to the largest single opportunity Canada has to lower global greenhouse gas emissions.
Today, there are almost 300 coal-fired power plants under development and under construction. Canada will have the lowest emission LNG, once our first major LNG facility is completed. We have done some work to look at this. If Canadian natural gas were to be used to offset the new build-out of coal in Asia and around the world, we would actually only need four facilities, the size of the one that's currently under construction, to entirely meet Canada's Paris commitment.
We've looked at the numbers another way, that if the almost 300 coal-fired power plants under development and construction were offset with Canadian natural gas, the savings of greenhouse gases globally would be more than Canada's entire greenhouse gas emissions today. We would be at net zero if we just took on the responsibility of offsetting the current build-out of coal.
There are a couple of challenges for Canada to meet that objective, which I would like to highlight for the committee.
One is the ability to recognize those reductions, which were set aside in article 6 of the Paris Agreement to recognize international offsets. That is the one article of that agreement that has not been finalized. Until it is finalized, the strong efforts by Canada to continue to drive down our emissions per barrel, per gigajoule of gas cannot be recognized and there is no incentive for Canada, or increased incentive, to offset those coal-fired power plants and no incentive for China or India or the other countries to get Canadian gas to do their part to offset it as well.
A couple of other areas of challenge that I'd highlight for the committee are things as simple as the infrastructure to get our products to market. The regulatory system in Canada is viewed by global investors to be challenging. Major pipelines have been cancelled, and as we build the LNG facility that's currently under construction, getting the pipeline from the gas developments to the coast is one of the big pieces of infrastructure that's needed and has been a challenge to this point. I'm very confident that it's well positioned and will get built.
I would like to highlight the other technologies that are currently coming through the process. In the recent budget, there is the carbon capture tax credit. We have 90 days of consultation to ensure that it will be a workable model that can continue to allow Canada to drive down its emissions.
I would highlight some serious concern that enhanced oil recovery was specifically excluded from that tax credit. I think that should be reversed if we want to ultimately reach the objective we're all looking for.
Some of the funding around IISD to enable infrastructure to be built is going to be very positive.
I would be happy to take questions at the conclusion, but ultimately, maybe the last message I would leave with the committee before I conclude is that Canada needs to be competitive. We need to be attracting investment in our energy resource development if we want to develop the technologies that are used here and ultimately exported around the world.
Over the last five or six years, we have seen a decrease in capital investment in the energy sector in Canada, from over $80 billion to about $27 billion this year. That's a substantial decrease. I think there is a lot of room for growth, a lot of opportunity, and I look forward to your questions about how we can contribute into the future.
Thank you, Madam Chair.