Oil & Gas: The Foundation Of The Canadian Economy

At the recent EnergyNL Conference in St. John’s, the room was buzzing with excitement about the oil and gas industry rebounding after Covid19, and the opportunities that are emerging in the new energy sector.

Lisa Baiton, President & CEO of the Canadian Association of Petroleum Producers (CAPP), took the stage at the conference and began her address by highlighting the global energy crisis, illustrating its impact on energy worldwide. Lisa said, “The year 2022 will be remembered for its global energy disruption. The energy crisis in Europe, with shortages of natural gas and oil, is very far from over and continues to pose geopolitical and economic threats. And, it has spread across the globe… it’s not just Europe. Russia’s invasion of Ukraine has brought the global energy security and affordability crisis to the doorsteps of Canadians. The world is undergoing a historical transformation that will impact every country and virtually every society in existence today. This global shift is at the scale of the industrial revolution and is ushering a new era, redefining global trading relationships and geopolitics.”

Lisa’s message resonated deeply, as we have all felt the cumulative effects of this energy disruption, with rising costs affecting our everyday lives; from groceries to home heating to supply chain shortages. The world, Lisa explains, “is undergoing a transformative shift of historical proportions. This shift is comparable to the industrial revolution and redefines global trading relationships and geopolitics.”

At the heart of these fast-paced changes lies the resource that moves the world….energy.

CANADA: Poised to be a stabilizing force for the energy crisis

Lisa conveyed, “The oil and gas industry has been the foundation of the Canadian economy. The upstream oil and gas sector contributed over $197 billion to Canada’s real GDP in 2021 and an average of $12 billion per year in revenue to governments from 2019 to 2021. The sector employs 450,000 Canadians in high-skilled and high-paying jobs. And, these employees come from all regions of Canada. Ours is a truly national industry. The industry is a long-term partner in Newfoundland and Labrador. Over the past 25 years, royalties from offshore production have reached more than $25 billion. Investment into the Province totals over $53 billion over that same period. These contributions to the provincial economy support thousands of jobs and help fund infrastructure, healthcare, schools, roads, and critical social programs.”

Recognizing the demand for oil and the urgency to supply oil to address the energy crisis, Lisa emphasizes that Canada has a unique opportunity to stabilize global energy security while lowering global emissions. The Newfoundland offshore energy industry is an opportunity waiting to happen. With direct access via the province’s oceans, it bypasses the market access challenges faced by other regions in Canada. Furthermore, its geographical proximity to Europe positions it as a secure and trusted supplier of energy to address the ongoing energy security crisis.

Addressing climate concerns, Lisa acknowledges the industry’s commitment to reducing greenhouse gas emissions and investing in clean technology. Newfoundland and Labrador’s offshore industry already produces some of the lowest-emitting barrels of oil in the world. Lisa points out, “Canada’s oil and gas producers view climate change as a serious issue that requires innovation and investment to reduce greenhouse gas emissions. Our industry is a significant investor in clean technology and we are one of the largest spenders on environmental protection – precisely because we understand the scale of this challenge.”

The oil and gas industry in Canada has been focusing on lowering emissions for years and Canadian producers have been an important part of Canada’s global leadership in emissions-reducing innovations and technologies, Lisa points to the solution, “Game-changing technologies and investments will enable Canada’s oil and gas producers to continue reducing emissions. We will require a creative – whole-of-Canada – approach to ensure that our oil and gas sector remains competitive.”

Lisa stresses to Industry that, credible forecasts show oil and gas remaining a significant part of the global energy mix for decades to come, “With investment returning to the offshore industry globally, Newfoundland and Labrador has a golden opportunity within reach. it will require a collective effort from industry and all levels of government to reimagine the province’s potential and seize this moment for the benefit of its people, all Canadians, and global partners seeking a secure and responsible energy supply.”

The province of Newfoundland and Labrador stands on the precipice of greatness, ready to unleash its full energy potential. The combination of oil, gas, and wind will all be elements of the new energy mix that will lead us to a sustainable new energy future. The global investment community is watching closely as Newfoundland and Labrador cements its place as a global energy powerhouse, thereby securing its role as a catalyst for global energy security, economic prosperity, and environmental stewardship.