Thank you very much. Good afternoon, Chair, and members of the committee.
CAPP appreciates the opportunity to be part of the committee's study on a possible emissions cap for the oil and gas sector in Canada.
CAPP members produce about 80% of Canada's natural gas and oil from the offshore in Newfoundland right across Canada to northeast British Columbia. Oil and gas in Canada is one of the largest investors in the economy, about $33 billion this year. We make up about 20% of Canada's exports. We're proud to be one of Canada's largest employers and to have a supply chain from coast to coast to coast.
The importance of energy policy cannot be overstated, and an understanding of the global energy system is essential to good policy. As the previous speaker noted, the International Energy Agency is putting out some very relevant content that I think we should be aware of. In their base case, looking out to 2040, they see all forms of energy, including wind, solar, nuclear, hydro, bio, oil and gas, and coal growing by about 20%. That's going to mean better diets, less poverty, more homes that get heating and more freedom of movement for the poorest people around the world.
Specific to oil and gas, in the IEA's base case they expect oil to grow from its current 100 million barrels a day by about 6% out to 2040. They also expect natural gas to grow substantially from about 390 billion cubic feet of gas today by another 30% by 2040. At the end of the forecast on a global basis, they expect just crude oil and natural gas to make up over 50% of primary energy demand worldwide.
Meeting these substantial growing needs will not be easy, and doing it in an environmentally responsible way will take ongoing technology development, smart policy from government and hard work in every nation on earth.
Unfortunately, even today because of poor policy choices, there are some ongoing and new energy supply shortages that are having perverse social, economic and environmental outcomes as a result. I have a few examples. The United States is appealing to OPEC to get more oil flowing. Europe is relying on Russia to secure more natural gas. We are seeing blackouts across Asia, and several European countries are reigniting coal-fired power plants and Asian countries are building new coal-fired power plants to mitigate the damage of energy scarcity.
Now we look to Canada and Canada's policy framework that an emissions cap could or would fit into. Over the past decade, Canada has rapidly been implementing policies and legislation with the goal of reducing greenhouse gas emissions. These have included net-zero legislation, carbon pricing with the cost increasing to $170 a tonne by 2030, multiple methane regulations, clean fuel regulations, output-based pricing systems, offset systems and strategic assessments of climate change inside the regulatory process.
This leaves us as a world leader, certainly, and makes us in some ways an outlier relative to our trading partners and our competitors. Carbon leakage is a reality today and is something this committee must contemplate as they deliberate on these issues. Ultimately, this could lead to greater global emissions as we see more coal being utilized than natural gas and sources of supply for natural gas and oil coming from jurisdictions that don't have our high standards.
Where does our industry stand? To be clear, our industry and almost every company in it is committed to world-leading environmental performance. We are committed to improving on our production. We have a solid track record of showing reductions of emissions and of putting more technology into the field into the future.
We would want the committee to ask themselves these questions. Would an emissions cap in the context of all of the policies that are currently in place have the effect of limiting coal use globally or sustaining it? Would it have the effect of increasing investments into jurisdictions like Canada with high environmental and social standards, or lessening them? Ultimately would it meet the objectives that we're all working towards?
Thank you for your consideration of CAPP's point of view.