Canada Energy Regulator: Oil Output Would Drop by 2050 Due to Net-Zero Setting

According to a recent analysis published on June 20 by the Canada Energy Regulator (CER), it is expected that Canadian oil production will experience a significant decline by 2050 if the Paris net-zero goal is achieved within that timeframe.

The recent report shows the first time the regulator has provided a forward-looking perspective on Canadian energy with net zero as the baseline.

The Canada Energy Regulator predicts a significant 65% drop in worldwide fossil fuel consumption between 2021 and 2050 under circumstances where both domestic and global climate policies effectively lead to a net-zero emissions scenario.

If this happens, oil prices worldwide could fall to US$35 per barrel by 2030 and US$24 per barrel by 2050, according to the report.

The analysis estimates that by 2050, Canadian crude oil production will drop to 1.2 million barrels per day, 76% lower than in 2022, due to these low oil prices.

“In a net-zero world, not only for Canada but for the rest of the planet, the supply and demand dynamic that we see today will be very different in the future,” said Jean-Denis Charlebois, the Canada Energy Regulator chief economist, on June 20.

“Because there will be less demand for hydrocarbons, producers of hydrocarbons will need to be increasingly efficient at managing their costs in order to remain competitive.”