Energy Markets in Transition - Index :: CERI€¦ · · 2017-11-06Energy Markets in Transition...
Transcript of Energy Markets in Transition - Index :: CERI€¦ · · 2017-11-06Energy Markets in Transition...
Canadian Energy Research Institute
Generation Energy Workshop Energy Markets in Transition
Allan Fogwill President amp CEOJuly 2017
Relevant bull Independent bull Objectivewwwcerica
Relevant bull Independent bull Objectivewwwcerica2
Current Sponsors
Supporters
In-kind supporters
Relevant bull Independent bull Objectivewwwcerica3
Agenda
1 Overview of Market Forces
2 Oil Markets
3 Gas Markets
4 Electricity Markets
5 Transition to a Lower Carbon Energy System
Relevant bull Independent bull Objectivewwwcerica4
1 Increased energy consumption for servicesbull Plug loadbull Industrial use bull Transportation demand
2 Social Acceptance of energy infrastructurebull Global phenomenon
3 Aboriginal titlebull Another layer of government
4 Environmental policies and regulationsbull Increased costbull Increased complexity of new construction and operations
5 Increasing costsbull New options are more expensive than traditional ones ndash unconventional oil and gas ndash
renewable energy technologies and CCS
6 Affordability
Overview of Market Forces
Prices are going up for the end consumer Energy providers
facing a more complex operating environment
Relevant bull Independent bull Objectivewwwcerica5
Canadian Economy Annualized GDP by Industry or Sector(as of August 2016)
Source Statistics Canada
At a Glancehellip
bull Good producing sectors amount to 30 of total GDP service-producing ndash 70
bull Real estate and rental and leasing - largest segment of Canadas economy
bull Manufacturing is the second largest component at 105
bull The oil and gas sector has long been a significant contributor to Canadarsquos economy accounting for 8 of GDP07
07
16
19
22
24
25
30
44
52
53
54
58
65
68
68
72
79
105
131
00 25 50 75 100 125 150
MANAGEMENT OF COMPANIES AND ENTERPRISES
ARTS ENTERTAINMENT AND RECREATION
AGRICULTURE FORESTRY FISHING AND HUNTING
OTHER SERVICES (EXCEPT PUBLIC ADMINISTRATION)
ACCOMMODATION AND FOOD SERVICES
UTILITIES
ADMINISTRATIVE AND SUPPORT WASTE hellip
INFORMATION AND CULTURAL INDUSTRIES
TRANSPORTATION AND WAREHOUSING
EDUCATIONAL SERVICES
PROFESSIONAL SCIENTIFIC AND TECHNICAL SERVICES
RETAIL TRADE
WHOLESALE TRADE
PUBLIC ADMINISTRATION
CONSTRUCTION
HEALTH CARE AND SOCIAL ASSISTANCE
FINANCE AND INSURANCE
MINING QUARRYING AND OIL AND GAS EXTRACTION
MANUFACTURING
REAL ESTATE AND RENTAL AND LEASING
Relevant bull Independent bull Objectivewwwcerica6
What Does Canada Export
Source Statistics Canada
At a Glancehellip
bull Goods exports amount to 30 of GDP (service exports ~5 of GDP)
bull The third largest category of goods exports is Energy Products (oil natural gas and other) at 14 of total exports a decline of 10 from 2014 prior to oil price collapse
bull The United States still accounts for the vast majority of Canadian exports at 75 share
08
20
33
41
52
61
63
64
79
115
142
144
178
00 50 100 150 200
SPECIAL TRANSACTIONS TRADE
OTHER BALANCE OF PAYMENTS ADJUSTMENTS
METAL ORES AND NON-METALLIC MINERALS
AIRCRAFT AND OTHER TRANSPORTATION EQUIPMENT AND PARTS
ELECTRONIC AND ELECTRICAL EQUIPMENT AND PARTS
FARM FISHING AND INTERMEDIATE FOOD PRODUCTS
BASIC AND INDUSTRIAL CHEMICAL PLASTIC AND RUBBER PRODUCTS
INDUSTRIAL MACHINERY EQUIPMENT AND PARTS
FORESTRY PRODUCTS AND BUILDING AND PACKAGING MATERIALS
METAL AND NON-METALLIC MINERAL PRODUCTS
ENERGY PRODUCTS
CONSUMER GOODS
MOTOR VEHICLES AND PARTS
Relevant bull Independent bull Objectivewwwcerica7
Oil Market
Relevant bull Independent bull Objectivewwwcerica8
Oil Proved Reserves by Country(billion barrels and of total at end-2015)
Source BP Statistical Review of World Energy June 2016
3009
2666
17221578
1431
1024 1015 978
177
157
101
9384
60 60 58
00
20
40
60
80
100
120
140
160
180
200
00
500
1000
1500
2000
2500
3000
3500
Venezuela Saudi Arabia Canada Iran Iraq RussianFederation
Kuwait United ArabEmirates
(bln barrels)
96 (1654 billion barrels) of Canadian reserves are in the oil sands
World Oil Proved Reserves - 16976 Billion barrels (at end of 2015)80 are state-owned or controlled
Relevant bull Independent bull Objectivewwwcerica9
Oil Markets
Crude Demand
bull Climate Change Policies
bull Transportation Demand
bull IMO Regulations on Sulphur
Reduction
bull Refining Capacity
bull Geopolitics
bull US Trade Policies
Crude Supply
bull Suppressed Upstream
Investment
bull Crude Inventories
bull Production Costs
bull OPEC Production
bull Market Access
bull Technological Innovation
Relevant bull Independent bull Objectivewwwcerica10
0
200
400
600
800
1000
1200
1400
1600
1800
20
09
20
10
20
11
20
12
20
13
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20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
Mb
d
BC AB SK MB Atlantic
What does this mean for Canada
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
6000
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035
(000 bpd)
Total In Situ Volume
Conventional Crude
Oil Sands Crude
Oil producers and service companies will be active in Canada for the foreseeable
future
Relevant bull Independent bull Objectivewwwcerica11
Oil Sands Challenges Costs and GHGs
High Costs and GHG Emissions
UK
Canada Dilbit
Canada SCO
Brazil Marlim
Nigeria Bonny
LightVenezuela
US Shale
Norway
US Non Shale
Russian ESPO
Iraq Basrah Light
Iran
Saudi Arabia
California Heavy
0
20
40
60
80
100
120
140
0 20 40 60 80
Cru
de
Pro
du
ctio
n E
mis
sio
ns
(kg
CO
2e
bb
l)
Total production costs ($USbbl)
Relevant bull Independent bull Objectivewwwcerica12
Oil Sands Emissions amp 100 MtCO2 Cap
40
60
80
100
120
140
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036GH
G E
mis
sio
ns
(Mt
CO
2e
q
Yr)
Steam-solvent Cogen (SOFC) Scenario Pure Solvent Scenario
Steam DCSG Based Scenario Steam SOFC Based Scenario
Steam-Solvent (FTB wo DCSG) Scenario 100 MtCO2 Cap
Total Direct Emissions with CH4 Policy
100 MtCO2eq Cap
Relevant bull Independent bull Objectivewwwcerica13
Factors Affecting Canadian Oil
1 Global Demand
Economic growth in major consuming regions Europe US China
Future demand growth
2 Global Supply
High levels of inventories (short term)
Delayed investments
Geopolitical Issues Middle East South America Russia
3 Market Access
4 Oil Prices
5 Climate Change Policies and Emissions
Relevant bull Independent bull Objectivewwwcerica14
Natural Gas Market
Relevant bull Independent bull Objectivewwwcerica15
Natural Gas Market
Source BP Statistical Review of World Energy June 2016
742
555
186 176 158
220
161
54 5146
00
50
100
150
200
250
00
100
200
300
400
500
600
700
800
(Bcfpd)
World Gas Production- 342 Billion cubic feet per day (at end of 2015)
Canada is the 5th largest gas producer in the world
Relevant bull Independent bull Objectivewwwcerica16
Natural Gas Market
Source NEB
Ontario 1
Quebec 7
Maritimes 1
Frontiers 223
Conventional 68
Tight Gas 512
CBM 48
Shale Gas 371
WCSB 855
Total Remaining Marketable Gas Resources in Canada = 1230 Tcf (at end of 2015)
Relevant bull Independent bull Objectivewwwcerica17
Canadian Natural Gas Supply and Demand
Source CERI NEB
0
5000
10000
15000
20000
25000
2005 2010 2015 2020 2025 2030 2035
mm
cfd
Pipeline Exports LNG Exports Supply Demand
Relevant bull Independent bull Objectivewwwcerica18
Source EIA
US Shale Gas Supply (Bcfpd)
Relevant bull Independent bull Objectivewwwcerica19
Factors Affecting Canadian Natural Gas
1 Declining production volumes driven by lower demand for exports in the US Emerging supply sources and inter-basin gas-on-gas competition
2 Western Canadian export volumes to Ontario and Quebec have declined competing with US exports out of Marcellus and Utica New TransCanada service
3 Domestic demand is providing upside relief to market driven by industrial demand (oil sands petrochemicals and power generation) Electrification
4 Declining Atlantic Canadian Supply
5 Low natural gas prices
6 LNG facilities
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica2
Current Sponsors
Supporters
In-kind supporters
Relevant bull Independent bull Objectivewwwcerica3
Agenda
1 Overview of Market Forces
2 Oil Markets
3 Gas Markets
4 Electricity Markets
5 Transition to a Lower Carbon Energy System
Relevant bull Independent bull Objectivewwwcerica4
1 Increased energy consumption for servicesbull Plug loadbull Industrial use bull Transportation demand
2 Social Acceptance of energy infrastructurebull Global phenomenon
3 Aboriginal titlebull Another layer of government
4 Environmental policies and regulationsbull Increased costbull Increased complexity of new construction and operations
5 Increasing costsbull New options are more expensive than traditional ones ndash unconventional oil and gas ndash
renewable energy technologies and CCS
6 Affordability
Overview of Market Forces
Prices are going up for the end consumer Energy providers
facing a more complex operating environment
Relevant bull Independent bull Objectivewwwcerica5
Canadian Economy Annualized GDP by Industry or Sector(as of August 2016)
Source Statistics Canada
At a Glancehellip
bull Good producing sectors amount to 30 of total GDP service-producing ndash 70
bull Real estate and rental and leasing - largest segment of Canadas economy
bull Manufacturing is the second largest component at 105
bull The oil and gas sector has long been a significant contributor to Canadarsquos economy accounting for 8 of GDP07
07
16
19
22
24
25
30
44
52
53
54
58
65
68
68
72
79
105
131
00 25 50 75 100 125 150
MANAGEMENT OF COMPANIES AND ENTERPRISES
ARTS ENTERTAINMENT AND RECREATION
AGRICULTURE FORESTRY FISHING AND HUNTING
OTHER SERVICES (EXCEPT PUBLIC ADMINISTRATION)
ACCOMMODATION AND FOOD SERVICES
UTILITIES
ADMINISTRATIVE AND SUPPORT WASTE hellip
INFORMATION AND CULTURAL INDUSTRIES
TRANSPORTATION AND WAREHOUSING
EDUCATIONAL SERVICES
PROFESSIONAL SCIENTIFIC AND TECHNICAL SERVICES
RETAIL TRADE
WHOLESALE TRADE
PUBLIC ADMINISTRATION
CONSTRUCTION
HEALTH CARE AND SOCIAL ASSISTANCE
FINANCE AND INSURANCE
MINING QUARRYING AND OIL AND GAS EXTRACTION
MANUFACTURING
REAL ESTATE AND RENTAL AND LEASING
Relevant bull Independent bull Objectivewwwcerica6
What Does Canada Export
Source Statistics Canada
At a Glancehellip
bull Goods exports amount to 30 of GDP (service exports ~5 of GDP)
bull The third largest category of goods exports is Energy Products (oil natural gas and other) at 14 of total exports a decline of 10 from 2014 prior to oil price collapse
bull The United States still accounts for the vast majority of Canadian exports at 75 share
08
20
33
41
52
61
63
64
79
115
142
144
178
00 50 100 150 200
SPECIAL TRANSACTIONS TRADE
OTHER BALANCE OF PAYMENTS ADJUSTMENTS
METAL ORES AND NON-METALLIC MINERALS
AIRCRAFT AND OTHER TRANSPORTATION EQUIPMENT AND PARTS
ELECTRONIC AND ELECTRICAL EQUIPMENT AND PARTS
FARM FISHING AND INTERMEDIATE FOOD PRODUCTS
BASIC AND INDUSTRIAL CHEMICAL PLASTIC AND RUBBER PRODUCTS
INDUSTRIAL MACHINERY EQUIPMENT AND PARTS
FORESTRY PRODUCTS AND BUILDING AND PACKAGING MATERIALS
METAL AND NON-METALLIC MINERAL PRODUCTS
ENERGY PRODUCTS
CONSUMER GOODS
MOTOR VEHICLES AND PARTS
Relevant bull Independent bull Objectivewwwcerica7
Oil Market
Relevant bull Independent bull Objectivewwwcerica8
Oil Proved Reserves by Country(billion barrels and of total at end-2015)
Source BP Statistical Review of World Energy June 2016
3009
2666
17221578
1431
1024 1015 978
177
157
101
9384
60 60 58
00
20
40
60
80
100
120
140
160
180
200
00
500
1000
1500
2000
2500
3000
3500
Venezuela Saudi Arabia Canada Iran Iraq RussianFederation
Kuwait United ArabEmirates
(bln barrels)
96 (1654 billion barrels) of Canadian reserves are in the oil sands
World Oil Proved Reserves - 16976 Billion barrels (at end of 2015)80 are state-owned or controlled
Relevant bull Independent bull Objectivewwwcerica9
Oil Markets
Crude Demand
bull Climate Change Policies
bull Transportation Demand
bull IMO Regulations on Sulphur
Reduction
bull Refining Capacity
bull Geopolitics
bull US Trade Policies
Crude Supply
bull Suppressed Upstream
Investment
bull Crude Inventories
bull Production Costs
bull OPEC Production
bull Market Access
bull Technological Innovation
Relevant bull Independent bull Objectivewwwcerica10
0
200
400
600
800
1000
1200
1400
1600
1800
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
Mb
d
BC AB SK MB Atlantic
What does this mean for Canada
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
6000
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035
(000 bpd)
Total In Situ Volume
Conventional Crude
Oil Sands Crude
Oil producers and service companies will be active in Canada for the foreseeable
future
Relevant bull Independent bull Objectivewwwcerica11
Oil Sands Challenges Costs and GHGs
High Costs and GHG Emissions
UK
Canada Dilbit
Canada SCO
Brazil Marlim
Nigeria Bonny
LightVenezuela
US Shale
Norway
US Non Shale
Russian ESPO
Iraq Basrah Light
Iran
Saudi Arabia
California Heavy
0
20
40
60
80
100
120
140
0 20 40 60 80
Cru
de
Pro
du
ctio
n E
mis
sio
ns
(kg
CO
2e
bb
l)
Total production costs ($USbbl)
Relevant bull Independent bull Objectivewwwcerica12
Oil Sands Emissions amp 100 MtCO2 Cap
40
60
80
100
120
140
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036GH
G E
mis
sio
ns
(Mt
CO
2e
q
Yr)
Steam-solvent Cogen (SOFC) Scenario Pure Solvent Scenario
Steam DCSG Based Scenario Steam SOFC Based Scenario
Steam-Solvent (FTB wo DCSG) Scenario 100 MtCO2 Cap
Total Direct Emissions with CH4 Policy
100 MtCO2eq Cap
Relevant bull Independent bull Objectivewwwcerica13
Factors Affecting Canadian Oil
1 Global Demand
Economic growth in major consuming regions Europe US China
Future demand growth
2 Global Supply
High levels of inventories (short term)
Delayed investments
Geopolitical Issues Middle East South America Russia
3 Market Access
4 Oil Prices
5 Climate Change Policies and Emissions
Relevant bull Independent bull Objectivewwwcerica14
Natural Gas Market
Relevant bull Independent bull Objectivewwwcerica15
Natural Gas Market
Source BP Statistical Review of World Energy June 2016
742
555
186 176 158
220
161
54 5146
00
50
100
150
200
250
00
100
200
300
400
500
600
700
800
(Bcfpd)
World Gas Production- 342 Billion cubic feet per day (at end of 2015)
Canada is the 5th largest gas producer in the world
Relevant bull Independent bull Objectivewwwcerica16
Natural Gas Market
Source NEB
Ontario 1
Quebec 7
Maritimes 1
Frontiers 223
Conventional 68
Tight Gas 512
CBM 48
Shale Gas 371
WCSB 855
Total Remaining Marketable Gas Resources in Canada = 1230 Tcf (at end of 2015)
Relevant bull Independent bull Objectivewwwcerica17
Canadian Natural Gas Supply and Demand
Source CERI NEB
0
5000
10000
15000
20000
25000
2005 2010 2015 2020 2025 2030 2035
mm
cfd
Pipeline Exports LNG Exports Supply Demand
Relevant bull Independent bull Objectivewwwcerica18
Source EIA
US Shale Gas Supply (Bcfpd)
Relevant bull Independent bull Objectivewwwcerica19
Factors Affecting Canadian Natural Gas
1 Declining production volumes driven by lower demand for exports in the US Emerging supply sources and inter-basin gas-on-gas competition
2 Western Canadian export volumes to Ontario and Quebec have declined competing with US exports out of Marcellus and Utica New TransCanada service
3 Domestic demand is providing upside relief to market driven by industrial demand (oil sands petrochemicals and power generation) Electrification
4 Declining Atlantic Canadian Supply
5 Low natural gas prices
6 LNG facilities
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica3
Agenda
1 Overview of Market Forces
2 Oil Markets
3 Gas Markets
4 Electricity Markets
5 Transition to a Lower Carbon Energy System
Relevant bull Independent bull Objectivewwwcerica4
1 Increased energy consumption for servicesbull Plug loadbull Industrial use bull Transportation demand
2 Social Acceptance of energy infrastructurebull Global phenomenon
3 Aboriginal titlebull Another layer of government
4 Environmental policies and regulationsbull Increased costbull Increased complexity of new construction and operations
5 Increasing costsbull New options are more expensive than traditional ones ndash unconventional oil and gas ndash
renewable energy technologies and CCS
6 Affordability
Overview of Market Forces
Prices are going up for the end consumer Energy providers
facing a more complex operating environment
Relevant bull Independent bull Objectivewwwcerica5
Canadian Economy Annualized GDP by Industry or Sector(as of August 2016)
Source Statistics Canada
At a Glancehellip
bull Good producing sectors amount to 30 of total GDP service-producing ndash 70
bull Real estate and rental and leasing - largest segment of Canadas economy
bull Manufacturing is the second largest component at 105
bull The oil and gas sector has long been a significant contributor to Canadarsquos economy accounting for 8 of GDP07
07
16
19
22
24
25
30
44
52
53
54
58
65
68
68
72
79
105
131
00 25 50 75 100 125 150
MANAGEMENT OF COMPANIES AND ENTERPRISES
ARTS ENTERTAINMENT AND RECREATION
AGRICULTURE FORESTRY FISHING AND HUNTING
OTHER SERVICES (EXCEPT PUBLIC ADMINISTRATION)
ACCOMMODATION AND FOOD SERVICES
UTILITIES
ADMINISTRATIVE AND SUPPORT WASTE hellip
INFORMATION AND CULTURAL INDUSTRIES
TRANSPORTATION AND WAREHOUSING
EDUCATIONAL SERVICES
PROFESSIONAL SCIENTIFIC AND TECHNICAL SERVICES
RETAIL TRADE
WHOLESALE TRADE
PUBLIC ADMINISTRATION
CONSTRUCTION
HEALTH CARE AND SOCIAL ASSISTANCE
FINANCE AND INSURANCE
MINING QUARRYING AND OIL AND GAS EXTRACTION
MANUFACTURING
REAL ESTATE AND RENTAL AND LEASING
Relevant bull Independent bull Objectivewwwcerica6
What Does Canada Export
Source Statistics Canada
At a Glancehellip
bull Goods exports amount to 30 of GDP (service exports ~5 of GDP)
bull The third largest category of goods exports is Energy Products (oil natural gas and other) at 14 of total exports a decline of 10 from 2014 prior to oil price collapse
bull The United States still accounts for the vast majority of Canadian exports at 75 share
08
20
33
41
52
61
63
64
79
115
142
144
178
00 50 100 150 200
SPECIAL TRANSACTIONS TRADE
OTHER BALANCE OF PAYMENTS ADJUSTMENTS
METAL ORES AND NON-METALLIC MINERALS
AIRCRAFT AND OTHER TRANSPORTATION EQUIPMENT AND PARTS
ELECTRONIC AND ELECTRICAL EQUIPMENT AND PARTS
FARM FISHING AND INTERMEDIATE FOOD PRODUCTS
BASIC AND INDUSTRIAL CHEMICAL PLASTIC AND RUBBER PRODUCTS
INDUSTRIAL MACHINERY EQUIPMENT AND PARTS
FORESTRY PRODUCTS AND BUILDING AND PACKAGING MATERIALS
METAL AND NON-METALLIC MINERAL PRODUCTS
ENERGY PRODUCTS
CONSUMER GOODS
MOTOR VEHICLES AND PARTS
Relevant bull Independent bull Objectivewwwcerica7
Oil Market
Relevant bull Independent bull Objectivewwwcerica8
Oil Proved Reserves by Country(billion barrels and of total at end-2015)
Source BP Statistical Review of World Energy June 2016
3009
2666
17221578
1431
1024 1015 978
177
157
101
9384
60 60 58
00
20
40
60
80
100
120
140
160
180
200
00
500
1000
1500
2000
2500
3000
3500
Venezuela Saudi Arabia Canada Iran Iraq RussianFederation
Kuwait United ArabEmirates
(bln barrels)
96 (1654 billion barrels) of Canadian reserves are in the oil sands
World Oil Proved Reserves - 16976 Billion barrels (at end of 2015)80 are state-owned or controlled
Relevant bull Independent bull Objectivewwwcerica9
Oil Markets
Crude Demand
bull Climate Change Policies
bull Transportation Demand
bull IMO Regulations on Sulphur
Reduction
bull Refining Capacity
bull Geopolitics
bull US Trade Policies
Crude Supply
bull Suppressed Upstream
Investment
bull Crude Inventories
bull Production Costs
bull OPEC Production
bull Market Access
bull Technological Innovation
Relevant bull Independent bull Objectivewwwcerica10
0
200
400
600
800
1000
1200
1400
1600
1800
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
Mb
d
BC AB SK MB Atlantic
What does this mean for Canada
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
6000
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035
(000 bpd)
Total In Situ Volume
Conventional Crude
Oil Sands Crude
Oil producers and service companies will be active in Canada for the foreseeable
future
Relevant bull Independent bull Objectivewwwcerica11
Oil Sands Challenges Costs and GHGs
High Costs and GHG Emissions
UK
Canada Dilbit
Canada SCO
Brazil Marlim
Nigeria Bonny
LightVenezuela
US Shale
Norway
US Non Shale
Russian ESPO
Iraq Basrah Light
Iran
Saudi Arabia
California Heavy
0
20
40
60
80
100
120
140
0 20 40 60 80
Cru
de
Pro
du
ctio
n E
mis
sio
ns
(kg
CO
2e
bb
l)
Total production costs ($USbbl)
Relevant bull Independent bull Objectivewwwcerica12
Oil Sands Emissions amp 100 MtCO2 Cap
40
60
80
100
120
140
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036GH
G E
mis
sio
ns
(Mt
CO
2e
q
Yr)
Steam-solvent Cogen (SOFC) Scenario Pure Solvent Scenario
Steam DCSG Based Scenario Steam SOFC Based Scenario
Steam-Solvent (FTB wo DCSG) Scenario 100 MtCO2 Cap
Total Direct Emissions with CH4 Policy
100 MtCO2eq Cap
Relevant bull Independent bull Objectivewwwcerica13
Factors Affecting Canadian Oil
1 Global Demand
Economic growth in major consuming regions Europe US China
Future demand growth
2 Global Supply
High levels of inventories (short term)
Delayed investments
Geopolitical Issues Middle East South America Russia
3 Market Access
4 Oil Prices
5 Climate Change Policies and Emissions
Relevant bull Independent bull Objectivewwwcerica14
Natural Gas Market
Relevant bull Independent bull Objectivewwwcerica15
Natural Gas Market
Source BP Statistical Review of World Energy June 2016
742
555
186 176 158
220
161
54 5146
00
50
100
150
200
250
00
100
200
300
400
500
600
700
800
(Bcfpd)
World Gas Production- 342 Billion cubic feet per day (at end of 2015)
Canada is the 5th largest gas producer in the world
Relevant bull Independent bull Objectivewwwcerica16
Natural Gas Market
Source NEB
Ontario 1
Quebec 7
Maritimes 1
Frontiers 223
Conventional 68
Tight Gas 512
CBM 48
Shale Gas 371
WCSB 855
Total Remaining Marketable Gas Resources in Canada = 1230 Tcf (at end of 2015)
Relevant bull Independent bull Objectivewwwcerica17
Canadian Natural Gas Supply and Demand
Source CERI NEB
0
5000
10000
15000
20000
25000
2005 2010 2015 2020 2025 2030 2035
mm
cfd
Pipeline Exports LNG Exports Supply Demand
Relevant bull Independent bull Objectivewwwcerica18
Source EIA
US Shale Gas Supply (Bcfpd)
Relevant bull Independent bull Objectivewwwcerica19
Factors Affecting Canadian Natural Gas
1 Declining production volumes driven by lower demand for exports in the US Emerging supply sources and inter-basin gas-on-gas competition
2 Western Canadian export volumes to Ontario and Quebec have declined competing with US exports out of Marcellus and Utica New TransCanada service
3 Domestic demand is providing upside relief to market driven by industrial demand (oil sands petrochemicals and power generation) Electrification
4 Declining Atlantic Canadian Supply
5 Low natural gas prices
6 LNG facilities
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica4
1 Increased energy consumption for servicesbull Plug loadbull Industrial use bull Transportation demand
2 Social Acceptance of energy infrastructurebull Global phenomenon
3 Aboriginal titlebull Another layer of government
4 Environmental policies and regulationsbull Increased costbull Increased complexity of new construction and operations
5 Increasing costsbull New options are more expensive than traditional ones ndash unconventional oil and gas ndash
renewable energy technologies and CCS
6 Affordability
Overview of Market Forces
Prices are going up for the end consumer Energy providers
facing a more complex operating environment
Relevant bull Independent bull Objectivewwwcerica5
Canadian Economy Annualized GDP by Industry or Sector(as of August 2016)
Source Statistics Canada
At a Glancehellip
bull Good producing sectors amount to 30 of total GDP service-producing ndash 70
bull Real estate and rental and leasing - largest segment of Canadas economy
bull Manufacturing is the second largest component at 105
bull The oil and gas sector has long been a significant contributor to Canadarsquos economy accounting for 8 of GDP07
07
16
19
22
24
25
30
44
52
53
54
58
65
68
68
72
79
105
131
00 25 50 75 100 125 150
MANAGEMENT OF COMPANIES AND ENTERPRISES
ARTS ENTERTAINMENT AND RECREATION
AGRICULTURE FORESTRY FISHING AND HUNTING
OTHER SERVICES (EXCEPT PUBLIC ADMINISTRATION)
ACCOMMODATION AND FOOD SERVICES
UTILITIES
ADMINISTRATIVE AND SUPPORT WASTE hellip
INFORMATION AND CULTURAL INDUSTRIES
TRANSPORTATION AND WAREHOUSING
EDUCATIONAL SERVICES
PROFESSIONAL SCIENTIFIC AND TECHNICAL SERVICES
RETAIL TRADE
WHOLESALE TRADE
PUBLIC ADMINISTRATION
CONSTRUCTION
HEALTH CARE AND SOCIAL ASSISTANCE
FINANCE AND INSURANCE
MINING QUARRYING AND OIL AND GAS EXTRACTION
MANUFACTURING
REAL ESTATE AND RENTAL AND LEASING
Relevant bull Independent bull Objectivewwwcerica6
What Does Canada Export
Source Statistics Canada
At a Glancehellip
bull Goods exports amount to 30 of GDP (service exports ~5 of GDP)
bull The third largest category of goods exports is Energy Products (oil natural gas and other) at 14 of total exports a decline of 10 from 2014 prior to oil price collapse
bull The United States still accounts for the vast majority of Canadian exports at 75 share
08
20
33
41
52
61
63
64
79
115
142
144
178
00 50 100 150 200
SPECIAL TRANSACTIONS TRADE
OTHER BALANCE OF PAYMENTS ADJUSTMENTS
METAL ORES AND NON-METALLIC MINERALS
AIRCRAFT AND OTHER TRANSPORTATION EQUIPMENT AND PARTS
ELECTRONIC AND ELECTRICAL EQUIPMENT AND PARTS
FARM FISHING AND INTERMEDIATE FOOD PRODUCTS
BASIC AND INDUSTRIAL CHEMICAL PLASTIC AND RUBBER PRODUCTS
INDUSTRIAL MACHINERY EQUIPMENT AND PARTS
FORESTRY PRODUCTS AND BUILDING AND PACKAGING MATERIALS
METAL AND NON-METALLIC MINERAL PRODUCTS
ENERGY PRODUCTS
CONSUMER GOODS
MOTOR VEHICLES AND PARTS
Relevant bull Independent bull Objectivewwwcerica7
Oil Market
Relevant bull Independent bull Objectivewwwcerica8
Oil Proved Reserves by Country(billion barrels and of total at end-2015)
Source BP Statistical Review of World Energy June 2016
3009
2666
17221578
1431
1024 1015 978
177
157
101
9384
60 60 58
00
20
40
60
80
100
120
140
160
180
200
00
500
1000
1500
2000
2500
3000
3500
Venezuela Saudi Arabia Canada Iran Iraq RussianFederation
Kuwait United ArabEmirates
(bln barrels)
96 (1654 billion barrels) of Canadian reserves are in the oil sands
World Oil Proved Reserves - 16976 Billion barrels (at end of 2015)80 are state-owned or controlled
Relevant bull Independent bull Objectivewwwcerica9
Oil Markets
Crude Demand
bull Climate Change Policies
bull Transportation Demand
bull IMO Regulations on Sulphur
Reduction
bull Refining Capacity
bull Geopolitics
bull US Trade Policies
Crude Supply
bull Suppressed Upstream
Investment
bull Crude Inventories
bull Production Costs
bull OPEC Production
bull Market Access
bull Technological Innovation
Relevant bull Independent bull Objectivewwwcerica10
0
200
400
600
800
1000
1200
1400
1600
1800
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
Mb
d
BC AB SK MB Atlantic
What does this mean for Canada
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
6000
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035
(000 bpd)
Total In Situ Volume
Conventional Crude
Oil Sands Crude
Oil producers and service companies will be active in Canada for the foreseeable
future
Relevant bull Independent bull Objectivewwwcerica11
Oil Sands Challenges Costs and GHGs
High Costs and GHG Emissions
UK
Canada Dilbit
Canada SCO
Brazil Marlim
Nigeria Bonny
LightVenezuela
US Shale
Norway
US Non Shale
Russian ESPO
Iraq Basrah Light
Iran
Saudi Arabia
California Heavy
0
20
40
60
80
100
120
140
0 20 40 60 80
Cru
de
Pro
du
ctio
n E
mis
sio
ns
(kg
CO
2e
bb
l)
Total production costs ($USbbl)
Relevant bull Independent bull Objectivewwwcerica12
Oil Sands Emissions amp 100 MtCO2 Cap
40
60
80
100
120
140
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036GH
G E
mis
sio
ns
(Mt
CO
2e
q
Yr)
Steam-solvent Cogen (SOFC) Scenario Pure Solvent Scenario
Steam DCSG Based Scenario Steam SOFC Based Scenario
Steam-Solvent (FTB wo DCSG) Scenario 100 MtCO2 Cap
Total Direct Emissions with CH4 Policy
100 MtCO2eq Cap
Relevant bull Independent bull Objectivewwwcerica13
Factors Affecting Canadian Oil
1 Global Demand
Economic growth in major consuming regions Europe US China
Future demand growth
2 Global Supply
High levels of inventories (short term)
Delayed investments
Geopolitical Issues Middle East South America Russia
3 Market Access
4 Oil Prices
5 Climate Change Policies and Emissions
Relevant bull Independent bull Objectivewwwcerica14
Natural Gas Market
Relevant bull Independent bull Objectivewwwcerica15
Natural Gas Market
Source BP Statistical Review of World Energy June 2016
742
555
186 176 158
220
161
54 5146
00
50
100
150
200
250
00
100
200
300
400
500
600
700
800
(Bcfpd)
World Gas Production- 342 Billion cubic feet per day (at end of 2015)
Canada is the 5th largest gas producer in the world
Relevant bull Independent bull Objectivewwwcerica16
Natural Gas Market
Source NEB
Ontario 1
Quebec 7
Maritimes 1
Frontiers 223
Conventional 68
Tight Gas 512
CBM 48
Shale Gas 371
WCSB 855
Total Remaining Marketable Gas Resources in Canada = 1230 Tcf (at end of 2015)
Relevant bull Independent bull Objectivewwwcerica17
Canadian Natural Gas Supply and Demand
Source CERI NEB
0
5000
10000
15000
20000
25000
2005 2010 2015 2020 2025 2030 2035
mm
cfd
Pipeline Exports LNG Exports Supply Demand
Relevant bull Independent bull Objectivewwwcerica18
Source EIA
US Shale Gas Supply (Bcfpd)
Relevant bull Independent bull Objectivewwwcerica19
Factors Affecting Canadian Natural Gas
1 Declining production volumes driven by lower demand for exports in the US Emerging supply sources and inter-basin gas-on-gas competition
2 Western Canadian export volumes to Ontario and Quebec have declined competing with US exports out of Marcellus and Utica New TransCanada service
3 Domestic demand is providing upside relief to market driven by industrial demand (oil sands petrochemicals and power generation) Electrification
4 Declining Atlantic Canadian Supply
5 Low natural gas prices
6 LNG facilities
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica5
Canadian Economy Annualized GDP by Industry or Sector(as of August 2016)
Source Statistics Canada
At a Glancehellip
bull Good producing sectors amount to 30 of total GDP service-producing ndash 70
bull Real estate and rental and leasing - largest segment of Canadas economy
bull Manufacturing is the second largest component at 105
bull The oil and gas sector has long been a significant contributor to Canadarsquos economy accounting for 8 of GDP07
07
16
19
22
24
25
30
44
52
53
54
58
65
68
68
72
79
105
131
00 25 50 75 100 125 150
MANAGEMENT OF COMPANIES AND ENTERPRISES
ARTS ENTERTAINMENT AND RECREATION
AGRICULTURE FORESTRY FISHING AND HUNTING
OTHER SERVICES (EXCEPT PUBLIC ADMINISTRATION)
ACCOMMODATION AND FOOD SERVICES
UTILITIES
ADMINISTRATIVE AND SUPPORT WASTE hellip
INFORMATION AND CULTURAL INDUSTRIES
TRANSPORTATION AND WAREHOUSING
EDUCATIONAL SERVICES
PROFESSIONAL SCIENTIFIC AND TECHNICAL SERVICES
RETAIL TRADE
WHOLESALE TRADE
PUBLIC ADMINISTRATION
CONSTRUCTION
HEALTH CARE AND SOCIAL ASSISTANCE
FINANCE AND INSURANCE
MINING QUARRYING AND OIL AND GAS EXTRACTION
MANUFACTURING
REAL ESTATE AND RENTAL AND LEASING
Relevant bull Independent bull Objectivewwwcerica6
What Does Canada Export
Source Statistics Canada
At a Glancehellip
bull Goods exports amount to 30 of GDP (service exports ~5 of GDP)
bull The third largest category of goods exports is Energy Products (oil natural gas and other) at 14 of total exports a decline of 10 from 2014 prior to oil price collapse
bull The United States still accounts for the vast majority of Canadian exports at 75 share
08
20
33
41
52
61
63
64
79
115
142
144
178
00 50 100 150 200
SPECIAL TRANSACTIONS TRADE
OTHER BALANCE OF PAYMENTS ADJUSTMENTS
METAL ORES AND NON-METALLIC MINERALS
AIRCRAFT AND OTHER TRANSPORTATION EQUIPMENT AND PARTS
ELECTRONIC AND ELECTRICAL EQUIPMENT AND PARTS
FARM FISHING AND INTERMEDIATE FOOD PRODUCTS
BASIC AND INDUSTRIAL CHEMICAL PLASTIC AND RUBBER PRODUCTS
INDUSTRIAL MACHINERY EQUIPMENT AND PARTS
FORESTRY PRODUCTS AND BUILDING AND PACKAGING MATERIALS
METAL AND NON-METALLIC MINERAL PRODUCTS
ENERGY PRODUCTS
CONSUMER GOODS
MOTOR VEHICLES AND PARTS
Relevant bull Independent bull Objectivewwwcerica7
Oil Market
Relevant bull Independent bull Objectivewwwcerica8
Oil Proved Reserves by Country(billion barrels and of total at end-2015)
Source BP Statistical Review of World Energy June 2016
3009
2666
17221578
1431
1024 1015 978
177
157
101
9384
60 60 58
00
20
40
60
80
100
120
140
160
180
200
00
500
1000
1500
2000
2500
3000
3500
Venezuela Saudi Arabia Canada Iran Iraq RussianFederation
Kuwait United ArabEmirates
(bln barrels)
96 (1654 billion barrels) of Canadian reserves are in the oil sands
World Oil Proved Reserves - 16976 Billion barrels (at end of 2015)80 are state-owned or controlled
Relevant bull Independent bull Objectivewwwcerica9
Oil Markets
Crude Demand
bull Climate Change Policies
bull Transportation Demand
bull IMO Regulations on Sulphur
Reduction
bull Refining Capacity
bull Geopolitics
bull US Trade Policies
Crude Supply
bull Suppressed Upstream
Investment
bull Crude Inventories
bull Production Costs
bull OPEC Production
bull Market Access
bull Technological Innovation
Relevant bull Independent bull Objectivewwwcerica10
0
200
400
600
800
1000
1200
1400
1600
1800
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
Mb
d
BC AB SK MB Atlantic
What does this mean for Canada
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
6000
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035
(000 bpd)
Total In Situ Volume
Conventional Crude
Oil Sands Crude
Oil producers and service companies will be active in Canada for the foreseeable
future
Relevant bull Independent bull Objectivewwwcerica11
Oil Sands Challenges Costs and GHGs
High Costs and GHG Emissions
UK
Canada Dilbit
Canada SCO
Brazil Marlim
Nigeria Bonny
LightVenezuela
US Shale
Norway
US Non Shale
Russian ESPO
Iraq Basrah Light
Iran
Saudi Arabia
California Heavy
0
20
40
60
80
100
120
140
0 20 40 60 80
Cru
de
Pro
du
ctio
n E
mis
sio
ns
(kg
CO
2e
bb
l)
Total production costs ($USbbl)
Relevant bull Independent bull Objectivewwwcerica12
Oil Sands Emissions amp 100 MtCO2 Cap
40
60
80
100
120
140
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036GH
G E
mis
sio
ns
(Mt
CO
2e
q
Yr)
Steam-solvent Cogen (SOFC) Scenario Pure Solvent Scenario
Steam DCSG Based Scenario Steam SOFC Based Scenario
Steam-Solvent (FTB wo DCSG) Scenario 100 MtCO2 Cap
Total Direct Emissions with CH4 Policy
100 MtCO2eq Cap
Relevant bull Independent bull Objectivewwwcerica13
Factors Affecting Canadian Oil
1 Global Demand
Economic growth in major consuming regions Europe US China
Future demand growth
2 Global Supply
High levels of inventories (short term)
Delayed investments
Geopolitical Issues Middle East South America Russia
3 Market Access
4 Oil Prices
5 Climate Change Policies and Emissions
Relevant bull Independent bull Objectivewwwcerica14
Natural Gas Market
Relevant bull Independent bull Objectivewwwcerica15
Natural Gas Market
Source BP Statistical Review of World Energy June 2016
742
555
186 176 158
220
161
54 5146
00
50
100
150
200
250
00
100
200
300
400
500
600
700
800
(Bcfpd)
World Gas Production- 342 Billion cubic feet per day (at end of 2015)
Canada is the 5th largest gas producer in the world
Relevant bull Independent bull Objectivewwwcerica16
Natural Gas Market
Source NEB
Ontario 1
Quebec 7
Maritimes 1
Frontiers 223
Conventional 68
Tight Gas 512
CBM 48
Shale Gas 371
WCSB 855
Total Remaining Marketable Gas Resources in Canada = 1230 Tcf (at end of 2015)
Relevant bull Independent bull Objectivewwwcerica17
Canadian Natural Gas Supply and Demand
Source CERI NEB
0
5000
10000
15000
20000
25000
2005 2010 2015 2020 2025 2030 2035
mm
cfd
Pipeline Exports LNG Exports Supply Demand
Relevant bull Independent bull Objectivewwwcerica18
Source EIA
US Shale Gas Supply (Bcfpd)
Relevant bull Independent bull Objectivewwwcerica19
Factors Affecting Canadian Natural Gas
1 Declining production volumes driven by lower demand for exports in the US Emerging supply sources and inter-basin gas-on-gas competition
2 Western Canadian export volumes to Ontario and Quebec have declined competing with US exports out of Marcellus and Utica New TransCanada service
3 Domestic demand is providing upside relief to market driven by industrial demand (oil sands petrochemicals and power generation) Electrification
4 Declining Atlantic Canadian Supply
5 Low natural gas prices
6 LNG facilities
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica6
What Does Canada Export
Source Statistics Canada
At a Glancehellip
bull Goods exports amount to 30 of GDP (service exports ~5 of GDP)
bull The third largest category of goods exports is Energy Products (oil natural gas and other) at 14 of total exports a decline of 10 from 2014 prior to oil price collapse
bull The United States still accounts for the vast majority of Canadian exports at 75 share
08
20
33
41
52
61
63
64
79
115
142
144
178
00 50 100 150 200
SPECIAL TRANSACTIONS TRADE
OTHER BALANCE OF PAYMENTS ADJUSTMENTS
METAL ORES AND NON-METALLIC MINERALS
AIRCRAFT AND OTHER TRANSPORTATION EQUIPMENT AND PARTS
ELECTRONIC AND ELECTRICAL EQUIPMENT AND PARTS
FARM FISHING AND INTERMEDIATE FOOD PRODUCTS
BASIC AND INDUSTRIAL CHEMICAL PLASTIC AND RUBBER PRODUCTS
INDUSTRIAL MACHINERY EQUIPMENT AND PARTS
FORESTRY PRODUCTS AND BUILDING AND PACKAGING MATERIALS
METAL AND NON-METALLIC MINERAL PRODUCTS
ENERGY PRODUCTS
CONSUMER GOODS
MOTOR VEHICLES AND PARTS
Relevant bull Independent bull Objectivewwwcerica7
Oil Market
Relevant bull Independent bull Objectivewwwcerica8
Oil Proved Reserves by Country(billion barrels and of total at end-2015)
Source BP Statistical Review of World Energy June 2016
3009
2666
17221578
1431
1024 1015 978
177
157
101
9384
60 60 58
00
20
40
60
80
100
120
140
160
180
200
00
500
1000
1500
2000
2500
3000
3500
Venezuela Saudi Arabia Canada Iran Iraq RussianFederation
Kuwait United ArabEmirates
(bln barrels)
96 (1654 billion barrels) of Canadian reserves are in the oil sands
World Oil Proved Reserves - 16976 Billion barrels (at end of 2015)80 are state-owned or controlled
Relevant bull Independent bull Objectivewwwcerica9
Oil Markets
Crude Demand
bull Climate Change Policies
bull Transportation Demand
bull IMO Regulations on Sulphur
Reduction
bull Refining Capacity
bull Geopolitics
bull US Trade Policies
Crude Supply
bull Suppressed Upstream
Investment
bull Crude Inventories
bull Production Costs
bull OPEC Production
bull Market Access
bull Technological Innovation
Relevant bull Independent bull Objectivewwwcerica10
0
200
400
600
800
1000
1200
1400
1600
1800
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
Mb
d
BC AB SK MB Atlantic
What does this mean for Canada
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
6000
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035
(000 bpd)
Total In Situ Volume
Conventional Crude
Oil Sands Crude
Oil producers and service companies will be active in Canada for the foreseeable
future
Relevant bull Independent bull Objectivewwwcerica11
Oil Sands Challenges Costs and GHGs
High Costs and GHG Emissions
UK
Canada Dilbit
Canada SCO
Brazil Marlim
Nigeria Bonny
LightVenezuela
US Shale
Norway
US Non Shale
Russian ESPO
Iraq Basrah Light
Iran
Saudi Arabia
California Heavy
0
20
40
60
80
100
120
140
0 20 40 60 80
Cru
de
Pro
du
ctio
n E
mis
sio
ns
(kg
CO
2e
bb
l)
Total production costs ($USbbl)
Relevant bull Independent bull Objectivewwwcerica12
Oil Sands Emissions amp 100 MtCO2 Cap
40
60
80
100
120
140
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036GH
G E
mis
sio
ns
(Mt
CO
2e
q
Yr)
Steam-solvent Cogen (SOFC) Scenario Pure Solvent Scenario
Steam DCSG Based Scenario Steam SOFC Based Scenario
Steam-Solvent (FTB wo DCSG) Scenario 100 MtCO2 Cap
Total Direct Emissions with CH4 Policy
100 MtCO2eq Cap
Relevant bull Independent bull Objectivewwwcerica13
Factors Affecting Canadian Oil
1 Global Demand
Economic growth in major consuming regions Europe US China
Future demand growth
2 Global Supply
High levels of inventories (short term)
Delayed investments
Geopolitical Issues Middle East South America Russia
3 Market Access
4 Oil Prices
5 Climate Change Policies and Emissions
Relevant bull Independent bull Objectivewwwcerica14
Natural Gas Market
Relevant bull Independent bull Objectivewwwcerica15
Natural Gas Market
Source BP Statistical Review of World Energy June 2016
742
555
186 176 158
220
161
54 5146
00
50
100
150
200
250
00
100
200
300
400
500
600
700
800
(Bcfpd)
World Gas Production- 342 Billion cubic feet per day (at end of 2015)
Canada is the 5th largest gas producer in the world
Relevant bull Independent bull Objectivewwwcerica16
Natural Gas Market
Source NEB
Ontario 1
Quebec 7
Maritimes 1
Frontiers 223
Conventional 68
Tight Gas 512
CBM 48
Shale Gas 371
WCSB 855
Total Remaining Marketable Gas Resources in Canada = 1230 Tcf (at end of 2015)
Relevant bull Independent bull Objectivewwwcerica17
Canadian Natural Gas Supply and Demand
Source CERI NEB
0
5000
10000
15000
20000
25000
2005 2010 2015 2020 2025 2030 2035
mm
cfd
Pipeline Exports LNG Exports Supply Demand
Relevant bull Independent bull Objectivewwwcerica18
Source EIA
US Shale Gas Supply (Bcfpd)
Relevant bull Independent bull Objectivewwwcerica19
Factors Affecting Canadian Natural Gas
1 Declining production volumes driven by lower demand for exports in the US Emerging supply sources and inter-basin gas-on-gas competition
2 Western Canadian export volumes to Ontario and Quebec have declined competing with US exports out of Marcellus and Utica New TransCanada service
3 Domestic demand is providing upside relief to market driven by industrial demand (oil sands petrochemicals and power generation) Electrification
4 Declining Atlantic Canadian Supply
5 Low natural gas prices
6 LNG facilities
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica7
Oil Market
Relevant bull Independent bull Objectivewwwcerica8
Oil Proved Reserves by Country(billion barrels and of total at end-2015)
Source BP Statistical Review of World Energy June 2016
3009
2666
17221578
1431
1024 1015 978
177
157
101
9384
60 60 58
00
20
40
60
80
100
120
140
160
180
200
00
500
1000
1500
2000
2500
3000
3500
Venezuela Saudi Arabia Canada Iran Iraq RussianFederation
Kuwait United ArabEmirates
(bln barrels)
96 (1654 billion barrels) of Canadian reserves are in the oil sands
World Oil Proved Reserves - 16976 Billion barrels (at end of 2015)80 are state-owned or controlled
Relevant bull Independent bull Objectivewwwcerica9
Oil Markets
Crude Demand
bull Climate Change Policies
bull Transportation Demand
bull IMO Regulations on Sulphur
Reduction
bull Refining Capacity
bull Geopolitics
bull US Trade Policies
Crude Supply
bull Suppressed Upstream
Investment
bull Crude Inventories
bull Production Costs
bull OPEC Production
bull Market Access
bull Technological Innovation
Relevant bull Independent bull Objectivewwwcerica10
0
200
400
600
800
1000
1200
1400
1600
1800
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
Mb
d
BC AB SK MB Atlantic
What does this mean for Canada
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
6000
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035
(000 bpd)
Total In Situ Volume
Conventional Crude
Oil Sands Crude
Oil producers and service companies will be active in Canada for the foreseeable
future
Relevant bull Independent bull Objectivewwwcerica11
Oil Sands Challenges Costs and GHGs
High Costs and GHG Emissions
UK
Canada Dilbit
Canada SCO
Brazil Marlim
Nigeria Bonny
LightVenezuela
US Shale
Norway
US Non Shale
Russian ESPO
Iraq Basrah Light
Iran
Saudi Arabia
California Heavy
0
20
40
60
80
100
120
140
0 20 40 60 80
Cru
de
Pro
du
ctio
n E
mis
sio
ns
(kg
CO
2e
bb
l)
Total production costs ($USbbl)
Relevant bull Independent bull Objectivewwwcerica12
Oil Sands Emissions amp 100 MtCO2 Cap
40
60
80
100
120
140
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036GH
G E
mis
sio
ns
(Mt
CO
2e
q
Yr)
Steam-solvent Cogen (SOFC) Scenario Pure Solvent Scenario
Steam DCSG Based Scenario Steam SOFC Based Scenario
Steam-Solvent (FTB wo DCSG) Scenario 100 MtCO2 Cap
Total Direct Emissions with CH4 Policy
100 MtCO2eq Cap
Relevant bull Independent bull Objectivewwwcerica13
Factors Affecting Canadian Oil
1 Global Demand
Economic growth in major consuming regions Europe US China
Future demand growth
2 Global Supply
High levels of inventories (short term)
Delayed investments
Geopolitical Issues Middle East South America Russia
3 Market Access
4 Oil Prices
5 Climate Change Policies and Emissions
Relevant bull Independent bull Objectivewwwcerica14
Natural Gas Market
Relevant bull Independent bull Objectivewwwcerica15
Natural Gas Market
Source BP Statistical Review of World Energy June 2016
742
555
186 176 158
220
161
54 5146
00
50
100
150
200
250
00
100
200
300
400
500
600
700
800
(Bcfpd)
World Gas Production- 342 Billion cubic feet per day (at end of 2015)
Canada is the 5th largest gas producer in the world
Relevant bull Independent bull Objectivewwwcerica16
Natural Gas Market
Source NEB
Ontario 1
Quebec 7
Maritimes 1
Frontiers 223
Conventional 68
Tight Gas 512
CBM 48
Shale Gas 371
WCSB 855
Total Remaining Marketable Gas Resources in Canada = 1230 Tcf (at end of 2015)
Relevant bull Independent bull Objectivewwwcerica17
Canadian Natural Gas Supply and Demand
Source CERI NEB
0
5000
10000
15000
20000
25000
2005 2010 2015 2020 2025 2030 2035
mm
cfd
Pipeline Exports LNG Exports Supply Demand
Relevant bull Independent bull Objectivewwwcerica18
Source EIA
US Shale Gas Supply (Bcfpd)
Relevant bull Independent bull Objectivewwwcerica19
Factors Affecting Canadian Natural Gas
1 Declining production volumes driven by lower demand for exports in the US Emerging supply sources and inter-basin gas-on-gas competition
2 Western Canadian export volumes to Ontario and Quebec have declined competing with US exports out of Marcellus and Utica New TransCanada service
3 Domestic demand is providing upside relief to market driven by industrial demand (oil sands petrochemicals and power generation) Electrification
4 Declining Atlantic Canadian Supply
5 Low natural gas prices
6 LNG facilities
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica8
Oil Proved Reserves by Country(billion barrels and of total at end-2015)
Source BP Statistical Review of World Energy June 2016
3009
2666
17221578
1431
1024 1015 978
177
157
101
9384
60 60 58
00
20
40
60
80
100
120
140
160
180
200
00
500
1000
1500
2000
2500
3000
3500
Venezuela Saudi Arabia Canada Iran Iraq RussianFederation
Kuwait United ArabEmirates
(bln barrels)
96 (1654 billion barrels) of Canadian reserves are in the oil sands
World Oil Proved Reserves - 16976 Billion barrels (at end of 2015)80 are state-owned or controlled
Relevant bull Independent bull Objectivewwwcerica9
Oil Markets
Crude Demand
bull Climate Change Policies
bull Transportation Demand
bull IMO Regulations on Sulphur
Reduction
bull Refining Capacity
bull Geopolitics
bull US Trade Policies
Crude Supply
bull Suppressed Upstream
Investment
bull Crude Inventories
bull Production Costs
bull OPEC Production
bull Market Access
bull Technological Innovation
Relevant bull Independent bull Objectivewwwcerica10
0
200
400
600
800
1000
1200
1400
1600
1800
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
Mb
d
BC AB SK MB Atlantic
What does this mean for Canada
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
6000
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035
(000 bpd)
Total In Situ Volume
Conventional Crude
Oil Sands Crude
Oil producers and service companies will be active in Canada for the foreseeable
future
Relevant bull Independent bull Objectivewwwcerica11
Oil Sands Challenges Costs and GHGs
High Costs and GHG Emissions
UK
Canada Dilbit
Canada SCO
Brazil Marlim
Nigeria Bonny
LightVenezuela
US Shale
Norway
US Non Shale
Russian ESPO
Iraq Basrah Light
Iran
Saudi Arabia
California Heavy
0
20
40
60
80
100
120
140
0 20 40 60 80
Cru
de
Pro
du
ctio
n E
mis
sio
ns
(kg
CO
2e
bb
l)
Total production costs ($USbbl)
Relevant bull Independent bull Objectivewwwcerica12
Oil Sands Emissions amp 100 MtCO2 Cap
40
60
80
100
120
140
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036GH
G E
mis
sio
ns
(Mt
CO
2e
q
Yr)
Steam-solvent Cogen (SOFC) Scenario Pure Solvent Scenario
Steam DCSG Based Scenario Steam SOFC Based Scenario
Steam-Solvent (FTB wo DCSG) Scenario 100 MtCO2 Cap
Total Direct Emissions with CH4 Policy
100 MtCO2eq Cap
Relevant bull Independent bull Objectivewwwcerica13
Factors Affecting Canadian Oil
1 Global Demand
Economic growth in major consuming regions Europe US China
Future demand growth
2 Global Supply
High levels of inventories (short term)
Delayed investments
Geopolitical Issues Middle East South America Russia
3 Market Access
4 Oil Prices
5 Climate Change Policies and Emissions
Relevant bull Independent bull Objectivewwwcerica14
Natural Gas Market
Relevant bull Independent bull Objectivewwwcerica15
Natural Gas Market
Source BP Statistical Review of World Energy June 2016
742
555
186 176 158
220
161
54 5146
00
50
100
150
200
250
00
100
200
300
400
500
600
700
800
(Bcfpd)
World Gas Production- 342 Billion cubic feet per day (at end of 2015)
Canada is the 5th largest gas producer in the world
Relevant bull Independent bull Objectivewwwcerica16
Natural Gas Market
Source NEB
Ontario 1
Quebec 7
Maritimes 1
Frontiers 223
Conventional 68
Tight Gas 512
CBM 48
Shale Gas 371
WCSB 855
Total Remaining Marketable Gas Resources in Canada = 1230 Tcf (at end of 2015)
Relevant bull Independent bull Objectivewwwcerica17
Canadian Natural Gas Supply and Demand
Source CERI NEB
0
5000
10000
15000
20000
25000
2005 2010 2015 2020 2025 2030 2035
mm
cfd
Pipeline Exports LNG Exports Supply Demand
Relevant bull Independent bull Objectivewwwcerica18
Source EIA
US Shale Gas Supply (Bcfpd)
Relevant bull Independent bull Objectivewwwcerica19
Factors Affecting Canadian Natural Gas
1 Declining production volumes driven by lower demand for exports in the US Emerging supply sources and inter-basin gas-on-gas competition
2 Western Canadian export volumes to Ontario and Quebec have declined competing with US exports out of Marcellus and Utica New TransCanada service
3 Domestic demand is providing upside relief to market driven by industrial demand (oil sands petrochemicals and power generation) Electrification
4 Declining Atlantic Canadian Supply
5 Low natural gas prices
6 LNG facilities
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica9
Oil Markets
Crude Demand
bull Climate Change Policies
bull Transportation Demand
bull IMO Regulations on Sulphur
Reduction
bull Refining Capacity
bull Geopolitics
bull US Trade Policies
Crude Supply
bull Suppressed Upstream
Investment
bull Crude Inventories
bull Production Costs
bull OPEC Production
bull Market Access
bull Technological Innovation
Relevant bull Independent bull Objectivewwwcerica10
0
200
400
600
800
1000
1200
1400
1600
1800
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
Mb
d
BC AB SK MB Atlantic
What does this mean for Canada
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
6000
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035
(000 bpd)
Total In Situ Volume
Conventional Crude
Oil Sands Crude
Oil producers and service companies will be active in Canada for the foreseeable
future
Relevant bull Independent bull Objectivewwwcerica11
Oil Sands Challenges Costs and GHGs
High Costs and GHG Emissions
UK
Canada Dilbit
Canada SCO
Brazil Marlim
Nigeria Bonny
LightVenezuela
US Shale
Norway
US Non Shale
Russian ESPO
Iraq Basrah Light
Iran
Saudi Arabia
California Heavy
0
20
40
60
80
100
120
140
0 20 40 60 80
Cru
de
Pro
du
ctio
n E
mis
sio
ns
(kg
CO
2e
bb
l)
Total production costs ($USbbl)
Relevant bull Independent bull Objectivewwwcerica12
Oil Sands Emissions amp 100 MtCO2 Cap
40
60
80
100
120
140
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036GH
G E
mis
sio
ns
(Mt
CO
2e
q
Yr)
Steam-solvent Cogen (SOFC) Scenario Pure Solvent Scenario
Steam DCSG Based Scenario Steam SOFC Based Scenario
Steam-Solvent (FTB wo DCSG) Scenario 100 MtCO2 Cap
Total Direct Emissions with CH4 Policy
100 MtCO2eq Cap
Relevant bull Independent bull Objectivewwwcerica13
Factors Affecting Canadian Oil
1 Global Demand
Economic growth in major consuming regions Europe US China
Future demand growth
2 Global Supply
High levels of inventories (short term)
Delayed investments
Geopolitical Issues Middle East South America Russia
3 Market Access
4 Oil Prices
5 Climate Change Policies and Emissions
Relevant bull Independent bull Objectivewwwcerica14
Natural Gas Market
Relevant bull Independent bull Objectivewwwcerica15
Natural Gas Market
Source BP Statistical Review of World Energy June 2016
742
555
186 176 158
220
161
54 5146
00
50
100
150
200
250
00
100
200
300
400
500
600
700
800
(Bcfpd)
World Gas Production- 342 Billion cubic feet per day (at end of 2015)
Canada is the 5th largest gas producer in the world
Relevant bull Independent bull Objectivewwwcerica16
Natural Gas Market
Source NEB
Ontario 1
Quebec 7
Maritimes 1
Frontiers 223
Conventional 68
Tight Gas 512
CBM 48
Shale Gas 371
WCSB 855
Total Remaining Marketable Gas Resources in Canada = 1230 Tcf (at end of 2015)
Relevant bull Independent bull Objectivewwwcerica17
Canadian Natural Gas Supply and Demand
Source CERI NEB
0
5000
10000
15000
20000
25000
2005 2010 2015 2020 2025 2030 2035
mm
cfd
Pipeline Exports LNG Exports Supply Demand
Relevant bull Independent bull Objectivewwwcerica18
Source EIA
US Shale Gas Supply (Bcfpd)
Relevant bull Independent bull Objectivewwwcerica19
Factors Affecting Canadian Natural Gas
1 Declining production volumes driven by lower demand for exports in the US Emerging supply sources and inter-basin gas-on-gas competition
2 Western Canadian export volumes to Ontario and Quebec have declined competing with US exports out of Marcellus and Utica New TransCanada service
3 Domestic demand is providing upside relief to market driven by industrial demand (oil sands petrochemicals and power generation) Electrification
4 Declining Atlantic Canadian Supply
5 Low natural gas prices
6 LNG facilities
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica10
0
200
400
600
800
1000
1200
1400
1600
1800
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
Mb
d
BC AB SK MB Atlantic
What does this mean for Canada
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
6000
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035
(000 bpd)
Total In Situ Volume
Conventional Crude
Oil Sands Crude
Oil producers and service companies will be active in Canada for the foreseeable
future
Relevant bull Independent bull Objectivewwwcerica11
Oil Sands Challenges Costs and GHGs
High Costs and GHG Emissions
UK
Canada Dilbit
Canada SCO
Brazil Marlim
Nigeria Bonny
LightVenezuela
US Shale
Norway
US Non Shale
Russian ESPO
Iraq Basrah Light
Iran
Saudi Arabia
California Heavy
0
20
40
60
80
100
120
140
0 20 40 60 80
Cru
de
Pro
du
ctio
n E
mis
sio
ns
(kg
CO
2e
bb
l)
Total production costs ($USbbl)
Relevant bull Independent bull Objectivewwwcerica12
Oil Sands Emissions amp 100 MtCO2 Cap
40
60
80
100
120
140
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036GH
G E
mis
sio
ns
(Mt
CO
2e
q
Yr)
Steam-solvent Cogen (SOFC) Scenario Pure Solvent Scenario
Steam DCSG Based Scenario Steam SOFC Based Scenario
Steam-Solvent (FTB wo DCSG) Scenario 100 MtCO2 Cap
Total Direct Emissions with CH4 Policy
100 MtCO2eq Cap
Relevant bull Independent bull Objectivewwwcerica13
Factors Affecting Canadian Oil
1 Global Demand
Economic growth in major consuming regions Europe US China
Future demand growth
2 Global Supply
High levels of inventories (short term)
Delayed investments
Geopolitical Issues Middle East South America Russia
3 Market Access
4 Oil Prices
5 Climate Change Policies and Emissions
Relevant bull Independent bull Objectivewwwcerica14
Natural Gas Market
Relevant bull Independent bull Objectivewwwcerica15
Natural Gas Market
Source BP Statistical Review of World Energy June 2016
742
555
186 176 158
220
161
54 5146
00
50
100
150
200
250
00
100
200
300
400
500
600
700
800
(Bcfpd)
World Gas Production- 342 Billion cubic feet per day (at end of 2015)
Canada is the 5th largest gas producer in the world
Relevant bull Independent bull Objectivewwwcerica16
Natural Gas Market
Source NEB
Ontario 1
Quebec 7
Maritimes 1
Frontiers 223
Conventional 68
Tight Gas 512
CBM 48
Shale Gas 371
WCSB 855
Total Remaining Marketable Gas Resources in Canada = 1230 Tcf (at end of 2015)
Relevant bull Independent bull Objectivewwwcerica17
Canadian Natural Gas Supply and Demand
Source CERI NEB
0
5000
10000
15000
20000
25000
2005 2010 2015 2020 2025 2030 2035
mm
cfd
Pipeline Exports LNG Exports Supply Demand
Relevant bull Independent bull Objectivewwwcerica18
Source EIA
US Shale Gas Supply (Bcfpd)
Relevant bull Independent bull Objectivewwwcerica19
Factors Affecting Canadian Natural Gas
1 Declining production volumes driven by lower demand for exports in the US Emerging supply sources and inter-basin gas-on-gas competition
2 Western Canadian export volumes to Ontario and Quebec have declined competing with US exports out of Marcellus and Utica New TransCanada service
3 Domestic demand is providing upside relief to market driven by industrial demand (oil sands petrochemicals and power generation) Electrification
4 Declining Atlantic Canadian Supply
5 Low natural gas prices
6 LNG facilities
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica11
Oil Sands Challenges Costs and GHGs
High Costs and GHG Emissions
UK
Canada Dilbit
Canada SCO
Brazil Marlim
Nigeria Bonny
LightVenezuela
US Shale
Norway
US Non Shale
Russian ESPO
Iraq Basrah Light
Iran
Saudi Arabia
California Heavy
0
20
40
60
80
100
120
140
0 20 40 60 80
Cru
de
Pro
du
ctio
n E
mis
sio
ns
(kg
CO
2e
bb
l)
Total production costs ($USbbl)
Relevant bull Independent bull Objectivewwwcerica12
Oil Sands Emissions amp 100 MtCO2 Cap
40
60
80
100
120
140
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036GH
G E
mis
sio
ns
(Mt
CO
2e
q
Yr)
Steam-solvent Cogen (SOFC) Scenario Pure Solvent Scenario
Steam DCSG Based Scenario Steam SOFC Based Scenario
Steam-Solvent (FTB wo DCSG) Scenario 100 MtCO2 Cap
Total Direct Emissions with CH4 Policy
100 MtCO2eq Cap
Relevant bull Independent bull Objectivewwwcerica13
Factors Affecting Canadian Oil
1 Global Demand
Economic growth in major consuming regions Europe US China
Future demand growth
2 Global Supply
High levels of inventories (short term)
Delayed investments
Geopolitical Issues Middle East South America Russia
3 Market Access
4 Oil Prices
5 Climate Change Policies and Emissions
Relevant bull Independent bull Objectivewwwcerica14
Natural Gas Market
Relevant bull Independent bull Objectivewwwcerica15
Natural Gas Market
Source BP Statistical Review of World Energy June 2016
742
555
186 176 158
220
161
54 5146
00
50
100
150
200
250
00
100
200
300
400
500
600
700
800
(Bcfpd)
World Gas Production- 342 Billion cubic feet per day (at end of 2015)
Canada is the 5th largest gas producer in the world
Relevant bull Independent bull Objectivewwwcerica16
Natural Gas Market
Source NEB
Ontario 1
Quebec 7
Maritimes 1
Frontiers 223
Conventional 68
Tight Gas 512
CBM 48
Shale Gas 371
WCSB 855
Total Remaining Marketable Gas Resources in Canada = 1230 Tcf (at end of 2015)
Relevant bull Independent bull Objectivewwwcerica17
Canadian Natural Gas Supply and Demand
Source CERI NEB
0
5000
10000
15000
20000
25000
2005 2010 2015 2020 2025 2030 2035
mm
cfd
Pipeline Exports LNG Exports Supply Demand
Relevant bull Independent bull Objectivewwwcerica18
Source EIA
US Shale Gas Supply (Bcfpd)
Relevant bull Independent bull Objectivewwwcerica19
Factors Affecting Canadian Natural Gas
1 Declining production volumes driven by lower demand for exports in the US Emerging supply sources and inter-basin gas-on-gas competition
2 Western Canadian export volumes to Ontario and Quebec have declined competing with US exports out of Marcellus and Utica New TransCanada service
3 Domestic demand is providing upside relief to market driven by industrial demand (oil sands petrochemicals and power generation) Electrification
4 Declining Atlantic Canadian Supply
5 Low natural gas prices
6 LNG facilities
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica12
Oil Sands Emissions amp 100 MtCO2 Cap
40
60
80
100
120
140
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036GH
G E
mis
sio
ns
(Mt
CO
2e
q
Yr)
Steam-solvent Cogen (SOFC) Scenario Pure Solvent Scenario
Steam DCSG Based Scenario Steam SOFC Based Scenario
Steam-Solvent (FTB wo DCSG) Scenario 100 MtCO2 Cap
Total Direct Emissions with CH4 Policy
100 MtCO2eq Cap
Relevant bull Independent bull Objectivewwwcerica13
Factors Affecting Canadian Oil
1 Global Demand
Economic growth in major consuming regions Europe US China
Future demand growth
2 Global Supply
High levels of inventories (short term)
Delayed investments
Geopolitical Issues Middle East South America Russia
3 Market Access
4 Oil Prices
5 Climate Change Policies and Emissions
Relevant bull Independent bull Objectivewwwcerica14
Natural Gas Market
Relevant bull Independent bull Objectivewwwcerica15
Natural Gas Market
Source BP Statistical Review of World Energy June 2016
742
555
186 176 158
220
161
54 5146
00
50
100
150
200
250
00
100
200
300
400
500
600
700
800
(Bcfpd)
World Gas Production- 342 Billion cubic feet per day (at end of 2015)
Canada is the 5th largest gas producer in the world
Relevant bull Independent bull Objectivewwwcerica16
Natural Gas Market
Source NEB
Ontario 1
Quebec 7
Maritimes 1
Frontiers 223
Conventional 68
Tight Gas 512
CBM 48
Shale Gas 371
WCSB 855
Total Remaining Marketable Gas Resources in Canada = 1230 Tcf (at end of 2015)
Relevant bull Independent bull Objectivewwwcerica17
Canadian Natural Gas Supply and Demand
Source CERI NEB
0
5000
10000
15000
20000
25000
2005 2010 2015 2020 2025 2030 2035
mm
cfd
Pipeline Exports LNG Exports Supply Demand
Relevant bull Independent bull Objectivewwwcerica18
Source EIA
US Shale Gas Supply (Bcfpd)
Relevant bull Independent bull Objectivewwwcerica19
Factors Affecting Canadian Natural Gas
1 Declining production volumes driven by lower demand for exports in the US Emerging supply sources and inter-basin gas-on-gas competition
2 Western Canadian export volumes to Ontario and Quebec have declined competing with US exports out of Marcellus and Utica New TransCanada service
3 Domestic demand is providing upside relief to market driven by industrial demand (oil sands petrochemicals and power generation) Electrification
4 Declining Atlantic Canadian Supply
5 Low natural gas prices
6 LNG facilities
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica13
Factors Affecting Canadian Oil
1 Global Demand
Economic growth in major consuming regions Europe US China
Future demand growth
2 Global Supply
High levels of inventories (short term)
Delayed investments
Geopolitical Issues Middle East South America Russia
3 Market Access
4 Oil Prices
5 Climate Change Policies and Emissions
Relevant bull Independent bull Objectivewwwcerica14
Natural Gas Market
Relevant bull Independent bull Objectivewwwcerica15
Natural Gas Market
Source BP Statistical Review of World Energy June 2016
742
555
186 176 158
220
161
54 5146
00
50
100
150
200
250
00
100
200
300
400
500
600
700
800
(Bcfpd)
World Gas Production- 342 Billion cubic feet per day (at end of 2015)
Canada is the 5th largest gas producer in the world
Relevant bull Independent bull Objectivewwwcerica16
Natural Gas Market
Source NEB
Ontario 1
Quebec 7
Maritimes 1
Frontiers 223
Conventional 68
Tight Gas 512
CBM 48
Shale Gas 371
WCSB 855
Total Remaining Marketable Gas Resources in Canada = 1230 Tcf (at end of 2015)
Relevant bull Independent bull Objectivewwwcerica17
Canadian Natural Gas Supply and Demand
Source CERI NEB
0
5000
10000
15000
20000
25000
2005 2010 2015 2020 2025 2030 2035
mm
cfd
Pipeline Exports LNG Exports Supply Demand
Relevant bull Independent bull Objectivewwwcerica18
Source EIA
US Shale Gas Supply (Bcfpd)
Relevant bull Independent bull Objectivewwwcerica19
Factors Affecting Canadian Natural Gas
1 Declining production volumes driven by lower demand for exports in the US Emerging supply sources and inter-basin gas-on-gas competition
2 Western Canadian export volumes to Ontario and Quebec have declined competing with US exports out of Marcellus and Utica New TransCanada service
3 Domestic demand is providing upside relief to market driven by industrial demand (oil sands petrochemicals and power generation) Electrification
4 Declining Atlantic Canadian Supply
5 Low natural gas prices
6 LNG facilities
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica14
Natural Gas Market
Relevant bull Independent bull Objectivewwwcerica15
Natural Gas Market
Source BP Statistical Review of World Energy June 2016
742
555
186 176 158
220
161
54 5146
00
50
100
150
200
250
00
100
200
300
400
500
600
700
800
(Bcfpd)
World Gas Production- 342 Billion cubic feet per day (at end of 2015)
Canada is the 5th largest gas producer in the world
Relevant bull Independent bull Objectivewwwcerica16
Natural Gas Market
Source NEB
Ontario 1
Quebec 7
Maritimes 1
Frontiers 223
Conventional 68
Tight Gas 512
CBM 48
Shale Gas 371
WCSB 855
Total Remaining Marketable Gas Resources in Canada = 1230 Tcf (at end of 2015)
Relevant bull Independent bull Objectivewwwcerica17
Canadian Natural Gas Supply and Demand
Source CERI NEB
0
5000
10000
15000
20000
25000
2005 2010 2015 2020 2025 2030 2035
mm
cfd
Pipeline Exports LNG Exports Supply Demand
Relevant bull Independent bull Objectivewwwcerica18
Source EIA
US Shale Gas Supply (Bcfpd)
Relevant bull Independent bull Objectivewwwcerica19
Factors Affecting Canadian Natural Gas
1 Declining production volumes driven by lower demand for exports in the US Emerging supply sources and inter-basin gas-on-gas competition
2 Western Canadian export volumes to Ontario and Quebec have declined competing with US exports out of Marcellus and Utica New TransCanada service
3 Domestic demand is providing upside relief to market driven by industrial demand (oil sands petrochemicals and power generation) Electrification
4 Declining Atlantic Canadian Supply
5 Low natural gas prices
6 LNG facilities
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica15
Natural Gas Market
Source BP Statistical Review of World Energy June 2016
742
555
186 176 158
220
161
54 5146
00
50
100
150
200
250
00
100
200
300
400
500
600
700
800
(Bcfpd)
World Gas Production- 342 Billion cubic feet per day (at end of 2015)
Canada is the 5th largest gas producer in the world
Relevant bull Independent bull Objectivewwwcerica16
Natural Gas Market
Source NEB
Ontario 1
Quebec 7
Maritimes 1
Frontiers 223
Conventional 68
Tight Gas 512
CBM 48
Shale Gas 371
WCSB 855
Total Remaining Marketable Gas Resources in Canada = 1230 Tcf (at end of 2015)
Relevant bull Independent bull Objectivewwwcerica17
Canadian Natural Gas Supply and Demand
Source CERI NEB
0
5000
10000
15000
20000
25000
2005 2010 2015 2020 2025 2030 2035
mm
cfd
Pipeline Exports LNG Exports Supply Demand
Relevant bull Independent bull Objectivewwwcerica18
Source EIA
US Shale Gas Supply (Bcfpd)
Relevant bull Independent bull Objectivewwwcerica19
Factors Affecting Canadian Natural Gas
1 Declining production volumes driven by lower demand for exports in the US Emerging supply sources and inter-basin gas-on-gas competition
2 Western Canadian export volumes to Ontario and Quebec have declined competing with US exports out of Marcellus and Utica New TransCanada service
3 Domestic demand is providing upside relief to market driven by industrial demand (oil sands petrochemicals and power generation) Electrification
4 Declining Atlantic Canadian Supply
5 Low natural gas prices
6 LNG facilities
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica16
Natural Gas Market
Source NEB
Ontario 1
Quebec 7
Maritimes 1
Frontiers 223
Conventional 68
Tight Gas 512
CBM 48
Shale Gas 371
WCSB 855
Total Remaining Marketable Gas Resources in Canada = 1230 Tcf (at end of 2015)
Relevant bull Independent bull Objectivewwwcerica17
Canadian Natural Gas Supply and Demand
Source CERI NEB
0
5000
10000
15000
20000
25000
2005 2010 2015 2020 2025 2030 2035
mm
cfd
Pipeline Exports LNG Exports Supply Demand
Relevant bull Independent bull Objectivewwwcerica18
Source EIA
US Shale Gas Supply (Bcfpd)
Relevant bull Independent bull Objectivewwwcerica19
Factors Affecting Canadian Natural Gas
1 Declining production volumes driven by lower demand for exports in the US Emerging supply sources and inter-basin gas-on-gas competition
2 Western Canadian export volumes to Ontario and Quebec have declined competing with US exports out of Marcellus and Utica New TransCanada service
3 Domestic demand is providing upside relief to market driven by industrial demand (oil sands petrochemicals and power generation) Electrification
4 Declining Atlantic Canadian Supply
5 Low natural gas prices
6 LNG facilities
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica17
Canadian Natural Gas Supply and Demand
Source CERI NEB
0
5000
10000
15000
20000
25000
2005 2010 2015 2020 2025 2030 2035
mm
cfd
Pipeline Exports LNG Exports Supply Demand
Relevant bull Independent bull Objectivewwwcerica18
Source EIA
US Shale Gas Supply (Bcfpd)
Relevant bull Independent bull Objectivewwwcerica19
Factors Affecting Canadian Natural Gas
1 Declining production volumes driven by lower demand for exports in the US Emerging supply sources and inter-basin gas-on-gas competition
2 Western Canadian export volumes to Ontario and Quebec have declined competing with US exports out of Marcellus and Utica New TransCanada service
3 Domestic demand is providing upside relief to market driven by industrial demand (oil sands petrochemicals and power generation) Electrification
4 Declining Atlantic Canadian Supply
5 Low natural gas prices
6 LNG facilities
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica18
Source EIA
US Shale Gas Supply (Bcfpd)
Relevant bull Independent bull Objectivewwwcerica19
Factors Affecting Canadian Natural Gas
1 Declining production volumes driven by lower demand for exports in the US Emerging supply sources and inter-basin gas-on-gas competition
2 Western Canadian export volumes to Ontario and Quebec have declined competing with US exports out of Marcellus and Utica New TransCanada service
3 Domestic demand is providing upside relief to market driven by industrial demand (oil sands petrochemicals and power generation) Electrification
4 Declining Atlantic Canadian Supply
5 Low natural gas prices
6 LNG facilities
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica19
Factors Affecting Canadian Natural Gas
1 Declining production volumes driven by lower demand for exports in the US Emerging supply sources and inter-basin gas-on-gas competition
2 Western Canadian export volumes to Ontario and Quebec have declined competing with US exports out of Marcellus and Utica New TransCanada service
3 Domestic demand is providing upside relief to market driven by industrial demand (oil sands petrochemicals and power generation) Electrification
4 Declining Atlantic Canadian Supply
5 Low natural gas prices
6 LNG facilities
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica20
Asia-Pacific LNG Demand and SupplyLNG Export Potential to the Pacific Basin
Source CERI IEA
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica21
What does this mean for Canada
Source CERI IEA
bull Western Canadian-sourced gas evolving into a regional market
bull Western LNG not cost competitive with current Asia Pacific market
bull Eastern Canadian markets likely to be sourced almost completely by US shale gas
bull Atlantic Canadian LNG highly uncertain due to risk valuation of supply availability in Europe
bull Natural gas prices will remain modest over the medium term
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica22
Electricity Market
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica23
bull In 2014 global electricity supply was 24000 TWh
bull 66 of the electricity was produced by combusting fossil fuels (mainly coal)
bull Industrial sector remains as the largest consumer of electricity
World electricity generation by fuel type
World electricity final consumption by sectorSource IEA Electricity Information 2016
World Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica24
bull In 2014 net Canadian electricity supply was 637 TWh
bull In 2014 58 of the electricity was supplied by hydroelectric generators
bull Industrial sector remains as the largest consumer of electricity
bull Since 1990s electricity intensity of the economy (electricityGDP) has decreased by about 30
bull Electricity consumption per capita has remained relatively unchanged
Canadian electricity generation by fuel type Canadian electricity final consumption by sector
Source IEA Electricity Information 2016
Canadian Electricity Supply and Demand
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica25
Electricity Share of the Residential Sector Energy Mix in Canadian Provinces 2014
9 913
20
2834
42
54
6165
0
10
20
30
40
50
60
70
AB PE SK ON NS BC MB NB NL QC
Ele
ctri
city
sh
are
GHG Emissions Intensity of Electricity Generation
Mix of Canadian Provinces 2014
21 34 8 147 30 41
300
700
780 790
0
100
200
300
400
500
600
700
800
900
QC MB PE BC NL ON NB NS SK AB
Ele
ctri
city
gen
erat
ion
em
issi
on
s in
ten
sity
(kg
CO
2eq
MW
h)
Electricity Market in Canada
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica26
Factors Affecting Canadian Electricity
1 Increased demand for cleaner electricity grids - electrification
2 Evolving technologies ndash renewables storage CCS
3 Distributed Generation
4 Evolving business model for distribution companies bull Rate structuresbull Operating challengesbull Islanding or by-pass
5 Regional grid interoperability
6 Interprovincial and international Trade
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica27
Electricity Demand Electrified Sectors
x 15 times
x 25 times
x 18 times
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica28
Growth in Electricity Demand
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica29
GHG Emissions relative to 2005 Benchmark
In 2030 In 2050
Atlantic Canada 7 13
Quebec 9 35
Ontario 14 31
Manitoba 11 24
Saskatchewan 8 16
Alberta 6 16
British Columbia 9 16
Target - 2030 ndash 30 below benchmark- 2050 ndash 80 below benchmark
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica30
Challenges associated with electrification
1 Retail price increase beyond inflation from 25 to 75
2 Insufficient effort to meet GHG goals
3 Large land use footprint
4 Unknown effects on principle economic drivers ndash industry and freight transport
5 Stranded assets and reduced tax revenues (gasoline taxes NG Dx)
6 Non-economic decision makingbull Coal + CCS = $ 180tonnebull Wind + CCGT = $200tonne
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica31
Transition to a cleaner energy system
1 Challenges are economic not technicalbull Technologies exist to clean and green our systems Are we willing to pay
for thembull How do we transition the work force
2 Cost to move toward low carbon or zero carbon electricity costs in the range of $200tonne to $500tonne bull How do we reconcile the costs in the electricity system with the $30 to
$50 per tonne charges in the oil and gas systems
3 Electrification will mean at least a tripling of the land use for electricity grids bull How do we get social licence for that build outbull Can Canadians accept cleaner oil and gas for the medium term
4 Energy system governance is brokenbull How do we overcome the politics of advocacy Trust National Interest
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605
Relevant bull Independent bull Objectivewwwcerica32
Canadian Energy Research Institute
Thank you for your time
wwwcerica
Canadian Energy Research Institute
ceri_canada
Upcoming studiesldquoEconomic Potential of Onshore Oil and Gas in New Brunswick and Nova Scotiardquo RELEASEDldquoEconomic and Environmental Assessment of Canadian Oil and Gas exports to the USrdquoldquoAn Economic Assessment of Electricity Generation Optionsrdquo
Allan Fogwillafogwillcerica
allan_Fogwill5872257605