Thank you, Mr. Chair.
Thank you for the invitation to appear today.
My name is Dan Woynillowicz. I'm the principal of Polaris Strategy + Insight, an energy and climate advisory firm. I'm joining you from the unceded Coast Salish territory, specifically, that of Lekwungen and WSÁNEĆ-speaking peoples.
My comments today centre on the need to ensure policy-making is grounded in credible analysis and in an understanding that navigating this transition requires that we keep our eyes on the road ahead, not fixed on the rear-view mirror.
Some argue that the transition to clean energy will be slow. They would prefer that policy-makers focus on enabling increased production and use of Canada's oil and gas resources, citing ever-growing global demand. Increasingly, energy analysts are forecasting a future based on current market trends that paints a very different picture, with sweeping implications for Canada.
I'd like to draw your attention to a forecast released last week by DNV, global experts in assurance and risk management. As they put it, “Unlike most energy forecasters, DNV does not develop scenarios...our analysis produces a single 'best estimate' forecast of the energy future”. In this “best-estimate” forecast, they foresee that coal, oil and gas will each begin an inescapable decline before the end of this decade.
Particularly material for Canada are the implications for oil and gas. Oil demand tips from growth to decline in 2027 as electrification of road transport accelerates. Global demand for gas also peaks in 2027, plateaus for a decade, and then declines.
It's their forecast specifically for North American oil and gas production that is particularly noteworthy, and in stark contrast to what you might hear on the news or as members of this committee. North American gas production peaks in the 2020s and declines to 2030 and beyond. Liquefaction capacity to produce LNG in North America is forecast to peak in 2030 and plateau. North American oil is foreseen plateauing at around 17 million barrels per day until 2024, and then it declines to just seven million barrels per day in 2050.
These declines would be even faster and steeper in net-zero scenarios, whether they're the net-zero scenarios that are forecast by DNV, the International Energy Agency, Shell, BP, or many others.
A passage of dialogue from Ernest Hemingway's 1926 novel The Sun Also Rises seems particularly relevant to this situation:
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”
The flip side to this is the extent to which deployment of clean energy is accelerating and will continue to accelerate. The key technologies for achieving net zero—solar, wind, batteries, heat pumps, green hydrogen—are not growing, and will not grow, on a linear basis, but they are following an S-shaped exponential curve driven by self-reinforcing feedback loops that accelerate both their cost reductions and ultimately their scaling.
The risk to Canada, then, is that we continue to pay short shrift to the opportunities at hand—critical minerals, batteries and other technologies, and clean and renewable electricity—in favour of trying to prop up the viability of our oil and gas sector, and that we focus on the sunset rather than the sunrise.
There's a very real opportunity cost when it comes to the efforts of policy-makers and the spending of public dollars, neither of which is limitless. To achieve net zero, we need to target public policy and spending to help shift capital from fossil fuel to clean energy investments and to achieve a ratio of $4 invested in clean energy for every dollar invested in fossil fuels in this decade.
These are key takeaways for the committee to consider. First, we need to prepare for a net-zero future in which the oil and gas sector will not be growing and proactively manage the implications for communities, for workers and for government revenue while also ensuring that the sector responsibly reduces its emissions and manages its growing environmental liabilities.
Second, we need to prepare and to position for a future that includes abundant opportunities to produce, refine, use and, ultimately, recycle our critical minerals and clean energy technologies; to harness our clean and renewable energy resources to power this growth; and to leverage our skilled workforce, innovators and entrepreneurs.
The third is that we don't simply attempt or aspire to mirror the IRA and our American neighbours but that we surgically select those sectors and opportunities in which Canada can compete and win throughout the energy transition.
Thank you, Mr. Chair.