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Oil and natural gas are going to be valuable commodities for decades to come
Pumpjacks draw out oil and gas from well heads as wildfire smoke hangs in the air near Calgary, Alberta, May 12, 2024. Photo by Jeff McIntosh /The Canadian Press
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So, as it turns out, oil and natural gas aren’t dead fossil fuels and the previous Liberal government of Justin Trudeau, which kept insisting they were, was dead wrong.
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That blunder is costing the Canadian economy up to $25.6 billion a year and who knows how much more if Canadian politicians don’t get their act together.
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Canada should be sitting pretty in the global energy market today because we have vast reserves of reliable energy, presided over by democratically-elected federal and provincial governments, as opposed to dictatorships.
We are the world’s fourth-largest producer and exporter of crude oil, with the world’s fourth-largest proven reserves.
We are also the world’s fifth-largest natural gas producer and fourth-largest exporter, with the world’s ninth-largest proven reserves.
The problem is our lack of pipelines and infrastructure to get these resources to global markets.
As a result, we have to sell more than 90% of our oil exports and almost 100% of our natural gas exports to the U.S. at huge discounts, because they’re our only major customer, costing the Canadian economy an estimated $25.6 billion per year in lost revenue.
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Trudeau’s political gaffe
Trudeau’s dismissive attitude towards Canada’s oil and natural gas sector was revealed in January 2017 when he committed a classic political gaffe, which occurs when a politician accidentally tells the truth.
Speaking at a town hall meeting in Peterborough, Ont., he caused outrage across Alberta when he said his government’s plan was to “phase out” the oil sands.
In the face of that uproar, Trudeau apologized a few days later and, in a bid to quell the controversy, added in March 2017 that, “No country would find 173 billion barrels of oil and just leave it in the ground. The resource will be developed. Our job is to ensure this is done responsibly, safely and sustainably.”
Today, a relative trickle of our vast oil and natural gas resources is making its way to global markets because of the completion of the Trudeau government-purchased TMX pipeline, which began operations in May 2024, and the opening of the LNG (liquified natural gas) Canada plant in Kitimat, B.C., in June 2025, under a process developed by the Stephen Harper Conservative government.
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But overall, our inability to get these natural resources to tidewater and from there onto tankers to reach global markets is the continuing legacy of a decade of restrictive federal laws and regulations passed under Trudeau.
Today, even the prospect of one new bitumen pipeline from Alberta’s oil sands to the northern coast of B.C. and from there by oil tanker to Asian markets – as proposed by the memorandum of understanding between Prime Minister Mark Carney and Alberta Premier Danielle Smith – has our chattering classes, including some leftover Liberals from the Trudeau era, in a tizzy.
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That this attitude endures in an era when the U.S. under “drill, baby drill” President Donald Trump intends to dramatically increase its oil and natural gas production is economic recklessness.
In its latest report issued in November, the authoritative International Energy Agency says under current policies, global demand for oil and natural gas could continue to grow to at least 2050, contrary to previous claims demand would rapidly decline due to the global adaptation of green technologies.
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The new IEA study, under pressure from the Trump administration to report on what countries have actually achieved as opposed to unmet promises of future action, acknowledges these technologies are not being adopted as quickly as projected.
That reverses previous IEA claims “peak oil” – the theoretical year when global demand reaches its highest level and begins to decline – would occur as early as 2030.
Now the IEA projects that under current policies global oil consumption will increase to 113 million barrels per day by 2050, up 13% from 2024.
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Rising energy demands from tech companies and AI
The global liquified natural gas market, under current policies, is expected to increase from 560 billion cubic metres in 2024 to 1,020 billion cubic metres in 2050, because of rising energy demands from tech companies and to power Artificial Intelligence, which needs vast amounts of energy.
One reason for the strength of the global LNG market is that it is considered a transitional fuel to replace coal-fired electricity globally.
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Because it burns at half the carbon dioxide intensity of coal this could dramatically lower industrial greenhouse gas emissions.
Replacing China’s coal-powered electricity with natural gas and a non-emitting energy source such as nuclear power – both well-developed technologies in Canada – would be a practical way of dramatically lowering global emissions.
This as opposed to promising to lower them and then failing to do so, which is Canada’s actual record under both Conservative and Liberal governments going back almost four decades.
The IEA report says the use of renewable energy will continue to increase and that if countries start meeting their commitments to lower emissions to net zero by 2050, the need for fossil fuels will decline, although not disappear.
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The reality, then, is that oil and natural gas are going to be valuable commodities for decades to come and it would be economically reckless to continue policies aimed at keeping them in the ground.
According to the Canadian Association of Petroleum Producers, Canada’s oil and gas sector is responsible for an estimated 450,000 direct and indirect jobs.
When the number of induced jobs are added – jobs created by the spending of those directly or indirectly employed in the industry – the number rises to 900,000.
Annual revenue last year is estimated at $172.4 billion, contributing over 3% of Canada’s Gross Domestic Product in 2024 and the oil and gas extraction sub-industry is the largest goods-producing industry in Canada.
Prices for oil and natural gas are always going to fluctuate, with boom and bust years.
But the idea Canada should keep sitting on the sidelines instead of profiting from two of our most valuable natural resources is economic nonsense.
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