Oil, Gas and Coal

Oil, Gas, Coal and Global Warming

Canada possesses a vibrant fossil fuel sector, defined here as covering coal, crude oil and natural gas. The industry's activities are generally divided into two main sectors: the upstream exploration and production sector and the downstream refining and distribution sector. Alberta is the primary source of crude oil and natural gas in Canada, with British Columbia, Saskatchewan, Newfoundland, Nova Scotia and Canada's far north also contributing.

Canada is the world's third largest gas natural gas producer and second largest exporter. Virtually all the natural gas used by Canadians is produced domestically. About half of all the homes in Canada use natural gas as the primary source of heating. The electricity generation, industrial, and commercial sectors also use significant amounts of natural gas.

The Oil, Gas & Coal Sectors and GHGs

Net GHG emissions associated with Canada's production of crude oil and natural gas solely for the purposes of export are estimated to be as high as 46 MT annually. The GHG emissions associated with the export of oil and natural gas (i.e. its production and transportation) are attributed to Canada, not the importing country, raising total and per capita emissions attributed to Canada. It should be noted that Canada's natural gas exports contribute to increases in high-efficiency co-generation of electricity and heat in many areas of the United States, resulting in global environmental benefits.

In 1999, the dominant proportion of GHG emissions, nearly 82%, was from the use of coal (which has much higher emissions than natural gas), while natural gas and oil accounted for 9.3% and 8.6% respectively. The higher GHG intensity of coal is reflected in the fact that it accounted for only 18% of the total electricity generated in Canada in 1999.

In most cases, Canadian-processed natural resources are exported to other countries for further refining or processing, which is usually less emissions-intensive than the primary production occurring in Canada.

Decreasing Emissions

Canada's reserves of crude oil and gas are extensive. In 1999, the country produced 122 million cubic metres of crude oil and 168 billion cubic metres of natural gas, yielding revenues of $32.8 billion. The Canadian crude oil market is roughly divided into two, with the boundary running north-south through Sarnia, Ontario. Refineries using crude oil imports dominate the eastern market, while refineries using domestically produced crude oil dominate the western market.

At year-end 1999, Canada's reserves of crude oil stood at over 340 billion barrels, exceeding the proven reserves of Saudi Arabia, while Canada's natural gas reserves stood at about 1 640 billion cubic metres. Production of crude oil and natural gas in Canada has been steadily rising, mainly to satisfy additional demand from the United States.

Over 300 billion barrels of Canada's oil reserves are in the form of bitumen/oil sands. Oil sands production processes generate higher GHG emissions than those associated with conventional oil production. In the last decade, the application of new extraction and upgrading technologies and management efforts to improve energy efficiency has succeeded in reducing GHG emissions per unit of output by 22%. This result is one of the best emissions reductions achievements in Canadian industry. By 2010, the oil sands producers expect to have reduced emissions on a per unit of output basis by 45% from 1990 levels.

Greenhouse gas emissions will also be reduced by the displacement of oil- and coal-fired generation by cleaner and more efficient natural gas-fired combustion as older equipment wears out.

We are Working on It

The Government of Canada's Technology Early Action Measures (T.E.A.M.) Fund supports federal government programs that fund technology projects to reduce greenhouse gas emissions nationally and internationally, while sustaining economic and social development. Partners include provincial and territorial governments as well as business and industry, community organizations, and municipalities. The Climate Change Action Fund has announced funding of $31 million to TEAM projects. TEAM projects will lead to significant reductions in greenhouse gases in many sectors, including the energy sector.

TEAM projects include the following:

• The Sustainable Development of Coal Bed Methane: A Life Cycle Approach to the Production of Fossil Energy
• Micro-Turbine/Cogen for Heat & Electricity
• Solid Oxide Fuel Cell Materials
• Biomass Gasifier-based Heat & Power
• Oil sands thermal solvent process
• Thermal Solvent process Phase I Extension
• Paste Technology (Thickened Fine Tailings)
• The Application Of Advanced Clean Coal Technology To New And Existing Coal Fired Power Plants

What Can We Do?

Actions by individuals account for 28 per cent of Canada's greenhouse gas emissions — that's almost six tonnes per person per year! If we're part of the problem, we can be part of the solution, too. By reducing the amount of energy we use at home and on the road, we can save ourselves money and contribute to the global challenge of reducing greenhouse gas emissions. Small actions, like turning off lights in rooms that aren't occupied or not idling our cars, can make a big difference.

Want to know more about climate change?

Visit the Government of Canada climate change Web site at www.climatechange.gc.ca or call 1 800 O-Canada (1 800 622-6232, or TTY 1 800 465 7735) toll-free and ask for information about climate change.

Related documents:

Fact Sheets

• Government of Canada Initiatives
• Atlantic Canada
• Clean Air
• Fisheries
• Competitiveness