Thank you very much.
Good afternoon, everyone, and thank you for the opportunity to appear in front of you today.
I have reviewed all the previous presentations and minutes from all the other sessions, believe it or not, and I can see you've had a fairly rich diversity of perspectives on this topic. I'm hoping to add to that rather than to counter or go over any of the previous points you have had.
As you know, I'm a representative of Canada's upstream oil and gas sector. I would like to remind you of the very complex and integrated nature of oil and natural gas in the Canadian economy. Certainly from a value chain perspective, we look at refineries, upgraders, petrochemical plants, LNG, methanol, fertilizer plants, etc., so there's a pretty integrated value chain perspective that the sector has in the economy.
Certainly from a supply chain perspective, there are service sector companies, equipment suppliers, research technology suppliers, and many other connections in that supply chain and across Canada.
Of course, I would like to remind everyone of the transportation perspective—pipelines, trucking, rail, and marine.
Most important from a people perspective, there are indigenous peoples, workforce, governments, public, ENGOs, etc.
All of these perspectives in their own way are investing in clean technology in Canada's resource sectors.
I'll start with a bit of context underlying all of my notes. I want to reflect for a moment on a few very significant dynamics in our operating environment that we're seeing today, certainly starting with the recent U.S. election and the shift in administrative direction we're starting to see. Second is increasing Canadianization, I call it, of our oil sands developers. We've seen that recently in the news. Third is a continued oil and natural gas sector focus on and investments in innovation and technology development and deployment, which I'll talk about in more detail. Fourth is continued influence of global geopolitical events on Canada's economic growth objectives, which are significant.
These context pieces present both challenges and opportunities for Canada's natural resource sectors.
Your oil and natural gas sector remains committed to investing in technologies and innovations that continue to make Canada competitive on both an environmental performance aspect—carbon, air, land, and water—and investment in trade competitiveness, which really is key to our ability to continue to operate successfully around the globe. Of course, I don't want to miss social performance.
The world needs more Canada. Global oil demand is forecast to continue to expand for some time even in a highly global carbon-constrained world. I would refer you to the IEA low-carbon forecast in the range of 75 billion barrels a day in 2035. Canada's opportunity remains strong to insert, at least on the oil side, three, four or five billion barrels a day into that market. It's a significant opportunity and continues to be something Canada should and will strive for.
Clean technology investments in the oil and natural gas sector will mean that Canada can and should competitively supply the world with our products.
I don't have a copy of this, but I will make it available later, properly translated. It's a bit of context from the clean tech investment research and development for our sector. Here are a couple of highlights. The total 2016 overall energy sector R and D spend is $2 billion. That's the overall energy sector, including renewables, electric, energy efficiency, nuclear, and fossil fuels. Fossil fuels in 2016 out of that $2 billion represented $1.45 billion. As a perspective, it's a pretty key role in the overall clean tech investment sector in the energy sector across Canada. Just to put a small point on it, in 2016 our Canada's Oil Sands Innovation Alliance expenditure was $219 million out of that $1.45 billion.
Again, I want to emphasize these are not public funds. These are company investments in these areas.
Before we move on, I want to highlight for you an example of a very specific clean tech innovation. For example, a most significant global differentiator for in situ oil sands operational performance, cost and carbon, on a per barrel basis is with respect to the steam generation required for in situ development. At this year's annual COSIA conference, where a few hundred innovations and technologies were highlighted, one of the examples that came out was called “direct contact steam generation”. I want to describe this for you, because it really amplifies the kind of direction the industry is going in.
For this particular technology, I'd like you to picture a rocket engine buried kilometres under the surface. Natural gas, air, and water are fed in very measured and very exact quantities to this buried rocket engine. Steam that's generated underground melts the bitumen from sand for recovery to the surface. The important thing is that GHGs, greenhouse gases, never leave the reservoir. Basically we're creating instant carbon capture and storage. Certainly the benefits from that include less surface footprint for water recycling and management on the surface, which is a key part as well. Potential or reduced emissions on in situ projects as compared with normal in situ development are in the range of 75% to 90%.
This would be a game-changer opportunity for oil sands development on the in situ side. Equally important, in terms of the potential to reduce costs versus conventional in situ operations, we're projecting anywhere from 25% to 35%. It's a very significant competitive opportunity as well as a carbon opportunity.
We continue to be a most significant investor in clean technology across our economy. That will not stop. We're broadly supportive of elements in this year's budget that focus on innovation investments, including the commitment to revise Canada's intellectual property framework. We see that as a key part moving forward.
Thank you very much.