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Last week in the first part of this three-part series on Canada’s energy security, some of the broader issues concerning Canada’s energy security were discussed. As discussed, a large aspect of Canada’s energy security revolves around the ability to refine, distribute, and market its energy reserves. This week, the pros and cons of some of Canada’s largest and most controversial energy sectors will be discussed in order to shed light on how these issues are considered. Specifically, this article will analyse the pros and cons of Canada’s oil sands, nuclear energy, and renewable energy for Canadian energy security.
Oil Sands
Easily one of the more controversial aspects of Canada’s energy development, the refinement, distribution, and marketing of Canadian oil products represents Canada’s largest energy sector. Canada’s energy security thus relies heavily on the ability to produce and distribute large quantities of oil. Therefore, a fluctuation in the price and availability of oil worldwide greatly affects Canada’s energy security. The large quantity of oil resources that Canada possesses offers security in terms of its availability, but offers other risks in return. For example, earlier this month the International Energy Association (IEA) stated that approximately 25% of Canadian oil products would become vulnerable if oil prices drop below US$80.
A large quantity of Canada’s oil lies in Alberta’s oil sands, where bitumen is recovered using two specific methods. The Canadian Association of Petroleum Producers reports that 20% of the bitumen from Alberta’s oil sands is extracted through the use of open-pit mining, where raw bitumen is extracted from the soil and transported by pipelines to be thinned out by water to remove other components. The tailing ponds whereCanadian Oil Sands, Alberta. this process takes place are controversial due to the long term environmental concerns that they raise. Recent events such as the Mount Polley tailing pond breach only exacerbate tension surrounding the detrimental environmental impact caused by oil extraction.
The remaining 80% of the bitumen recovered from Alberta’s oil sands is extracted through the use of in situ (in place) drilling, where wells are drilled to recover reserves that are too deep for open-pit mining. This process does not require the use of tailing ponds, yet risks include the contamination of groundwater that is difficult to detect in the short term.
Despite these environmental concerns, however, the IEA has stated that it supports the continued extraction of bitumen from Alberta’s oil sands, arguing that supplying Asian markets with much-needed oil is a more pressing concern than the potential environmental impacts. As discussed in the first article of this series, a concern for Canada’s energy security revolves around shifting US demand for oil as support for oil and gas imports wanes. This is where Asian markets become a positive beacon for Canada’s energy sectors, as declining exports to the US may be supplemented by increasing exports to Asian countries such as China and India.
Nuclear Energy
Canada is currently the second largest producer of uranium in the world, with 15% of global production originating from Canadian soil. Currently, 17 out of 22 reactors are providing energy to 15% of the country, and account for over 50% of Ontario’s energy consumption. With approximately $6.6 billion in revenues per annum, nuclear energy is a significant contributor to the Canadian economy.
Especially for central Canada, nuclear energy represents a secure source of energy given its availability and production levels. The Canadian Government emphasizes the importance of nuclear energy in the long term, stating that “it has taken necessary measures to ensure the long term development of nuclear energy as a sustainable energy source in meeting our existing and future energy requirements,” and that “when properly managed, nuclear energy can contribute effectively and significantly to sustainable development objectives.” Indeed, nuclear energy produces lower greenhouse gas emissions than other non-renewable sources of energy. It is efficient, reliable, uranium is in good supply, and nuclear plants take up less space and have less of an impact on the environment. However, while in the short term, the effect on the environment may be less than the other non-renewable alternatives, nuclear waste represents a long-term issue.
With 17 out of 22 reactors operational in Canada, the worry over high initial costs is less than it would be in states without already operational nuclear plants. For states just beginning their nuclear programs, the initial cost is high. For Canada however, growth in the nuclear sector has been slowing down in the past decade, and many of Canada’s current reactors are or will be in need of refurbishment. Further, there are no new plans to develop additional nuclear plants in Canada. With the high initial cost of developing plants and the extended timeline for construction and production, new proposals are unlikely. Given advancements in other, more renewable energy sectors, many nuclear options are playing ‘catch-up’ rather than advancing.
Renewable Energy
Worldwide, renewable energy is developing at a rapid rate, and in some cases, faster than non-renewable sources. Clean energy in Canada, however, is not following that trend. A recent report released by Clean Energy Canada gained traction last month when it reported that Canada was lagging behind other states in clean energy investment. While non-renewable sources of energy benefit Canada’s energy security, clean energy does the same without the added risks of depleting sources and environmental damage.
Even as little as five years ago, the cost of many forms of renewable energy production technology was much higher. Solar module prices, for example, have dropped more than 83% since 2008. In 1990, the price of solar power was at $5/watt due to the high production and material costs. Today, that price is as low as $0.69/watt. Currently, Canada is a leading hydroelectricity producer, falling second to China. Clean Energy Canada reports that policy leadership from Quebec and Ontario on this front has raised Canada in international standings.
However, other countries are leading the overall charge, with China, the United States, Japan, the United Kingdom, and Germany representing the top five investors in renewable energy sources.
The risks to Canada’s energy security are threefold given these developments. First, much of Canada’s energy security relies on the demand for its energy exports. As other countries (read: the US and China) begin to rely more heavily on internal energy production rather than imports, the Canadian reliance on energy exports becomes vulnerable. Secondly, Canada’s environmental track record is already lagging behind other states in the international system, and continuing on its present course will only exacerbate this issue. Thirdly, and perhaps most important, is the simple fact that one day Canada’s natural resources will not be as abundant as they are at present. Costs will rise as extraction becomes increasingly difficult and risky, and public concerns will only continue to grow.
[quote align=”center” color=”#999999″]The NCC is holding an Energy Security Roundtable with keynote speaker Ron Oberth, President of Organization of Canadian Nuclear Industries (OCI), Rob Swartman, CEO of Solcan, Hugh Moran, Executive Director of Ontario Petroleum Institutes (OPI) and Professor Dimitrov, Associate Professor from University of Western Ontario. Come join the discussion on November 6th, 2014 at the University of Western Ontario. [/quote] Register Here.
