transforming canada’s energy system: a challenge & opportunity for alberta
DESCRIPTION
Transforming Canada’s Energy System: A Challenge & Opportunity for Alberta. David Layzell, PhD, FRSC . Professor and Executive Director Institute for Sustainable Energy, Environment & Economy, University of Calgary, Calgary, Alberta. Transform Alberta Summit, - PowerPoint PPT PresentationTRANSCRIPT
Transforming Canada’s Energy System:
A Challenge & Opportunity for Alberta
Transform Alberta Summit, Banff, Alberta. November 8, 2012
David Layzell, PhD, FRSC.Professor and Executive Director
Institute for Sustainable Energy, Environment & Economy, University of Calgary, Calgary, Alberta
What is an Energy System?
SourcesServices
• Transportation• Communication• Illumination• Healthy food• Health care• Heating/cooling• Clean water• Information…
• Coal• Oil• Natural gas• Sunlight• Wind• Uranium• Biomass• Geothermal…
WHAT NATURE
PROVIDES:
WHAT PEOPLEWANT:
Harvesting TechnologiesCurrenciesService
Technologies
• Automobile• Telephone• Light bulb• Refrigerator• X-ray machine• Computer• Furnace…
• Gasoline• Diesel • Electricity• Methane• Ethanol• Hydrogen…
• Oil Refinery• SAGD facility• Hydraulic fracturing • Anaerobic digester• Pipeline• Nuclear power plant• Coal power plant• Gas turbine• Fuel Cell• Solar panel• Wind turbine…
WHAT ENERGY SYSTEM DEVELOPERS CREATE:
Adapted from “Smelling Land” by David Sanborn Scott
Forces for Energy System Transformation
Energy Systems
Rapidly rising global energy
demand (esp. Asia)
Jobs & tax income
Declining conventional oil and gas High oil
price
More reliance on unconventional oil
& gas
Low natural gas price (esp.
in NA)
ECONOMY
Climate Change Air pollution &
health impactsWater and land useENVIRONMENT
Societal Impacts
Energy Security Concerns
(esp. in USA & E. Canada)
Risk/benefit assessment and relative ranking of each ‘Force’ differs widely among individuals and groups.
My definition of a Canadian Energy Strategy:Inter-provincial or multi-provincial cooperation around key components of Canada’s Energy Systems to achieve:
How to Transform our Energy System should be the Focus of a
“Canadian Energy Strategy”?
As Canada’s energy province, Alberta needs to take a leadership role in the next energy system transformation.
EnergySecurity
Healthy Environment
EconomicGrowth
Canada’s Energy System (2006)
Oil
Gas
Coal
Hydro
Electricity Exports
Residential & Commercial
Oil & Gas Industry
OtherIndustry
Transportation
Domestic Energy use
Waste
Waste
Energy Service Energy Source
* Estimate of useful vs. wasted energy in energy services from NRCan Sankey (2006).
Note: Large exports; ~85% of primary
energy from fossil fuels;
Large waste from conversion & transport
Outline for Talk
Oil
Gas
Coal
Hydro
Electricity Exports
Residential & Commercial
Oil & Gas Industry
OtherIndustry
Transportation
Domestic Energy use
Waste
Waste
Energy Service Energy Source
* Estimate of useful vs. wasted energy in energy services from NRCan Sankey (2006).
3. Electricity
2. Natural Gas
1. Oil
4. Energy Efficiency
1. SUMMARIZE KEY FEATURES / peculiarities of the Canadian energy system;
2. IDENTIFY QUESTIONS to explore opportunities for Transforming the Cdn / Alberta Energy System;
3. CONCLUSIONS
1. Oil
Trends in Cdn Oil Production & Import
19851986
19871988
19891990
19911992
19931994
19951996
19971998
19992000
20012002
20032004
20052006
20072008
20092010
2011
-1000
-500
0
500
1000
1500
2000
2500
3000
3500
Exports to the USA
Domestic use [CDN production]
Imports
Totaldomestic usein refineries
Source: Statcan Cansim 126-0001
Crude Oil Production
Alberta Dominates the Production of Crude Oil in Canada (2011)
Oil Production
Most (76% or 2.2 mil. boe/d) of the Oil Canada Produces is Exported to USA.
Oil Production
Oil Transport
Only 57% (0.9 mil. boe/d) of Cdn Crude Oil Production is Refined in Canada…
…but Canada also refines 0.7 mil. boe/d of Imported Oil (42% of Total Oil Refined)
Oil Production
Oil Transport
Refine Petroleum Products (RPP)
In balance, Canada is a Net Exporter of Refined Petroleum Products (RPP).
Canada is on Track to Greatly Increase Oil Production in the Next 20 years
Sources: Statcan Cansim 126-0001 (historical data) and adaptation from CAPP forecast (Crude Oil: Forecast, Markets and Pipelines, June 2012)
Oil Sands
…and Shale Oil Production in the USA is Threatening Existing Markets for Cdn Oil
Source: U.S. Energy Information AdministrationNote: Production data includes crude oil and lease condensate
This new production will compete with CDN oil for US markets.
USA Annual crude oil production (1985-2011)
19851987
19891991
19931995
19971999
20012003
20052007
20092011
0
1000
2000
3000
4000
5000
6000
7000
Texas
AlaskaOklahoma
California
North Dakota
Kboe
/d
Source: Rising US Energy Independence, what does it mean for Canada?, Special Report, TD Economics, May 2012
Production in excess of Cdn needs
Estimated US import
CD
N o
il (K
boe/
d)
Available for new markets
1. Can we move AB oil to E. Canada at competitive prices with Brent crude?
2. Should we refine more AB oil in Canada?
3. Can we get access to the Pacific to open up markets in Asia?
4. How can we address the environmental cost?
Questions…
2. Natural Gas
-2,000,000
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
Exports Domestic use Imports
After Years of Rising NG Production & Export, Both are Declining as US Imports Rise
Source: CANSIM tables 128-0009 and 128-0002
Nat
ural
Gas
in C
anad
a (E
J/yr
)
Exports
Domestic use [of CDN production] TotalDomestic use
Canadian production
Imports
Over 50% of Cdn Gas Production was Exported to USA in 2009
Natural Gas Transport
Natural Gas Production
Natural Gas Import
While E. Canada imported gas equiv. to ~11% of Cdn production.
US production of gas has been increasing sharply…
US Shale Gas is taking market share from Cdn Natural Gas production.
Source: EIA Annual Energy Outlook 2012 (early release)
US Natural Gas Production in EJ/yr
What are the NG reserves in Canada?
NG Price is low compared to oil:
$ / GJ• Nat Gas: $3-
4• Oil (@$80/barrel) $13
Canada has Vast Natural Gas Resources…
Sources: IEA, Golden Rules for a Golden Age of Gas: World Energy Outlook Special Report on Unconventional Gas, 2012Energy content conversion factors used: 38,430 k}J/m3 (IEA values for Canadian natural gas)* Council of Canadian Academies, Energy from Gas Hydrates: Assessing the Opportunities and Challenges for Canada, 2008
Conventional gas (173 EJ)
Coal bed methane (192 EJ)
Tight gas (77 EJ)
Shale gas (423 EJ)
Gas hy-drates*(Min. Est: 1676 EJ)
865 EJ equivalent to
290 years of current natural gas use in Canada**
* Total amount of gas hydrates in Canada could be 18 times higher** Current Natural Gas demand in Canada is ~ 3 EJ/yr.
Source: Adapted from Rising US Energy Independence, what does it mean for Canada?, Special Report, TD Economics, May 2012
Exports
Predicted NG Supply & Demand for Canada & USA
EJ/
yr
Available for new markets
1. Does it make sense to transform the energy system towards natural gas?A. LNG exports to Asia?B. Replace coal power with
cleaner gas?C. CNG/LNG vehicles?D. Expand fertilizer & plastics
industries?
2. How can we address the environmental costs? Recovery & Processing? Use?
Questions…
3. Canada’s Electrical System
Provinces Vary in Sources for Power Production
Hydro
Coal
Nuclear
Note: Average values between 2005 and 2009
Power Generation
Most is used within each province, but ~78% of Canada’s electricity trade
is N-S, not E-W
Notes:- Trades lower than 0.5 TWh removed- Average flows values do not consider years without trade- Share calculation based on all flows values
Labrador trade with Quebec is
the primary exception
Power Generation
Power Transport
Provincial greenhouse gas (GHG) emissions affected by source of power.
Note: Average values between 2005 and 2009
Power Generation
GHG Emissions
Canada’s GHG Emissions from Power Generation
GHG emissions** associated with power production in Canada
119 Mt CO2/yr
Oil8
Gas18
Coal93
Equivalent to: ~3X the GHGs from oil sands
recovery and processing (well to pipe)*
*** In 2009, oil sands recovery accounted for 6.5% of GHG Canadian total emissions (source: NRCan)
1. Should provinces switch from Coal to Natural Gas?
Reduce GHGs by 40 Mt CO2/yr
1 2 30
20
40
60
80
100
Kg
CO
2 / T
J po
wer
Coa
l
Oi
l
Nat
ural
gas
*
* Assuming combined cycle units
2. Should provinces switch from fossil fuels to large hydro / renewables for power generation Reduce GHG emissions by
~119 Mt CO2/yr Create an W. Cdn Power Grid?
Larg
e H
ydro
An opportunity for inter-provincial cooperation…
Questions…
Canada has the hydro potential to displace fossil fuel power generation
Developed hydro
Undeveloped hydro
potential
Notes:- Trades lower than 0.5 TWh removed- Average flows values do not consider years without trade- Trade newer than 2007 not considered
…and hydro is a great base load / storage for wind and solar
Dollars of Revenue per t CO2e Emissions ($/CO2e) for Canada’s Primary Industries
Coal Fired Power Gen.
Agriculture
Cement
Marketable Nat Gas
Crude Oil
Bitumen
Primary Metal Mfg
$0 $1,000 $2,000 $3,000 $4,000
Dollars of Revenue Per Tonne of CO2e Emissions ($/CO2e) [2008]
Per tCO2, coal power generates less economic activity than other primary industries. Plus we have other alternatives. Should not this be the first place to look for GHG reductions?
4. Energy Efficiency
Canada Alberta Ontario Quebec BC UK Sweden Germany Finland Denmark0
100
200
300
400
500
600
2008
Ener
gy u
se (G
J/ca
pita
)
30
Industry
Why is Alberta be so much
worse than other
provinces?
Canada: CanSim Table 128-0002, Table 128-009, Table 128-0016. Supply and demand of primary and secondary energy in terajoules, annual (terajoules); Canada. Table 051-0005 - Estimates of population, Canada, provinces and territories, annual (persons); European Countries: Eurostat. Supply, transformation, consumption - all products - annual data [nrg_100a]; Eurostat. Population on 1 January by age and sex [demo_pjan]
TransportResidential
Commercial & Institutional
Agricultural & Fishing
Per Capita Energy use in Alberta, Canada and Northern Europe
49% higher than the Cdn Avg!
Why?
Oil8
Gas18
Coal93
ISEEE is working on this…
We have some of the answers, but there is still a lot we don’t know.
Clearly, there is much that can be done to improve.
QuestionShould not Alberta strive to be the Canadian Leader in:
Energy efficiency? Renewable energy? Low carbon communities?
“My government will put energy efficiency at the top of the agenda. It is the fastest and most cost effective measure to improve on sustainability; it is the "low-hanging fruit.”
Alison Redford, Leadership Campaign Materials (2011)
Conclusion1. Energy Efficiency is the ‘low hanging fruit’. Alberta has the potential
to move from last place to first place in the transformation to a low carbon community:
Population growth (new communities); Financial resources; Impressive technology and innovation workforce; Willing public.
Success is critical to ‘rebranding’ Alberta, and creating an industrial base that can carry the province through its boom/bust cycles.
2. Build Partnerships with other Provinces to realize the energy system transformations that will better achieve energy, environment and economy objectives:
• OIL (pipelines east?, new refineries? Pacific access? Better recovery technologies?)
• GAS (LNG terminals? Replace coal? Replace diesel? Fertilizer/plastic? Better recovery technologies?)
• ELECTRICITY (W. Canadian grid? Renewable integration? Electrification of oil sands?)