Just how much do the oil sands contribute to Canada’s prosperity? A new report by the Canadian Energy Centre sheds light on the massive revenues the oil sands sector – accounting for roughly two-thirds of the country’s oil output – generates for governments.
Based on data from Rystad’s Energy UCube, the analysis predicts that under a conservative Brent crude oil benchmark price of US $60 per barrel, Canadian governments will benefit to the tune of approximately USD $420.7 billion in royalty and tax revenues between 2023 and 2050. On a yearly basis, the revenues will grow from USD $12.1 billion in 2023 to USD $19.4 billion by 2050.
Furthermore, the CEC predicts that capital investments into oil sands projects could total nearly $328 billion over the same time period. Annual capital expenditures are expected to grow from USD $10.6 billion in 2023 to USD $12.6 billion by 2050, for a total of $327.8 billion.
More capital spending equates to continued employment benefits over the long term for Canadians and Indigenous communities. It also likely means the development of new cleantech and innovation that could drive emissions reductions while reducing environmental impacts associated with the extraction and production of bitumen altogether. Also see:
- Carbon Capture a Major Opportunity for Canadians: REPORT
- Canadian Oil Sands the Best Choice for Future Supply: REPORT
- Why Should You Support Democratic Oil Producers like Canada?
Oil Sands On the Way to Net Zero
Canada’s oil sands sector recognizes the need to reduce greenhouse gas emissions while continuing to be a stable, reliable and responsible supplier of energy the world needs. That’s why an overwhelming majority of oil sands producers have committed to net zero by 2050, forming the Pathways Alliance to accomplish this challenging, but attainable goal.
"We are really working hard on our net zero plan. So we intend to eliminate all greenhouse gas emissions from oil sands production by 2050 and get a good chunk of the way there by 2030,” said Pathways Alliance President Kendall Dilling via reporting BNN Bloomberg during the 24th World Petroleum Congress in Calgary this past September.
“The key project associated with that is a large carbon capture and storage network in northeastern Alberta to take the CO2 from the oil sands operations and permanently and safely store it underground. We're making great headway. We're advancing all the regulatory, all the studies required, all the engineering, the subsurface evaluation for the permitting. We'll submit regulatory applications this fall and look for an approval kind of towards the end of 2024.”
As long as the world needs oil - and it will for decades to come - it should come from environmentally responsible producers like Canada that are focused on reducing emissions. #Oilsands pic.twitter.com/HrSqzuzkjT— Oil Sands Action (@OilsandsAction) September 27, 2023
“We're also just launching Indigenous consultation. I'm working really closely with the key Indigenous communities in Northeastern Alberta to help them understand the project, make sure we're addressing their concerns, and also ensuring that they're seeing the benefit of the development and participating in the upside.”
According to Dilling, the Pathways Alliance is a unique global organization where competing companies are working together to make an impact on net global emissions.
“We always say Pathways is globally unique, and it truly is. I'm really not aware of any other entire sectors that have come together and said we're going to do this together and we're going to share IP (intellectual property) and rising tides float all boats. And it's really, pretty a truly uniquely Canadian construct. And we're really proud of it.”
“You know, nationalized oil companies might be similar in that it's just one entity controlling the whole industry. But to see... competitors, and we remain very competitive in other aspects of the business, but when it comes to environment, we're not competitors anymore.”
How Will the Oil Sands Do It?
How exactly will Canada’s oil sands sector reach net zero emissions by 2050? According to the Pathways Alliance, through a multitude of methods including carbon capture utilization and storage (CCUS) and new innovative cleantech solutions such as the deployment.
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