Regan Brown
Canada is one of the world's largest oil reserve holders, with 11% of the world's reserves as of 2020. Fossil fuels are the second most important source of electricity in Canada, with coal, natural gas, and petroleum accounting for 19.3% of the electricity supply. In 2020, natural gas and refined petroleum products accounted for 75% of Canada's end-use energy demand. The industrial sector accounts for the largest share of this demand, followed by transportation, residential, and commercial sectors. Canada's fossil fuel consumption is expected to decline, but it could still account for two-thirds of the country's energy use by 2050.
| Characteristics | Values |
|---|---|
| Fossil fuel use by 2050 | Could make up two-thirds of Canada's energy use |
| Fossil fuel use in 2020 | 40% of total energy demand |
| Fossil fuel use by fuel type in 2020 | Natural gas (38%), refined petroleum products (37%), electricity (18%), biofuels (6%), coal, coke, and coke oven gas (1%) |
| Electricity generation in 2021 | 625.7 TWh |
| Electricity generation by fuel type in 2021 | Coal (9.5%), natural gas (8.5%), petroleum (1.3%) |
| Total GHG emissions in 2022 | 708 MT of CO2e |
| Oil refineries in 2024 | 17 |
| Oil production in 2023 | 5.1 MMb/d |
| Natural gas production in 2023 | 17.9 Bcf/d |
| Electricity generation in 2014 | 639 terawatt hours |
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What You'll Learn
Fossil fuels could make up two-thirds of Canada's energy use by 2050
Fossil fuels have been the dominant energy source for most countries since the Industrial Revolution. In 2020, Canada held some of the largest oil reserves in the world—11% of the world’s reserves. Crude oil production grew from 3.6 million barrels per day (MMb/d) in 2013 to 5.1 MMb/d in 2023. Natural gas production increased from 14.1 billion cubic feet per day (Bcf/d) in 2013 to 17.9 Bcf/d in 2023. In 2020, natural gas accounted for 38% of Canada's energy demand, followed by refined petroleum products at 37%.
However, Canada, like other countries, is trying to shift away from fossil fuels towards low-carbon sources of energy, such as nuclear or renewable energy, including hydropower, solar and wind. The federal government has announced its plan to reduce Canada’s net carbon emissions to zero by 2050 to meet its climate change targets.
Despite this, a report by the Canada Energy Regulator suggests that fossil fuels could still account for 64% of all energy used by 2050. The report projects that electricity will generate more than a quarter of Canadian energy by 2050, with fossil fuels providing about 10% of that. The Regulator CEO, Gitane De Silva, noted that the goal of the report is not to comment on existing policy but to paint a picture of where things could go. Darren Christie, the chief economist at the Canada Energy Regulator, added that COVID-19 made this year's projections more uncertain, as fuel consumption and production fell during the pandemic restrictions.
To achieve net-zero emissions by 2050, Canada will need to accelerate its transition away from fossil fuels. This will require a more aggressive transition away from oil and gas, as well as a shift towards electric vehicles.
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Canada's fossil fuel use and production fell during the pandemic
Darren Christie, the chief economist at the Canada Energy Regulator, noted that the COVID-19 pandemic caused fuel consumption and production to fall substantially. Overall energy use in Canada decreased by 6%, and oil production dropped by about 7%.
Despite this recent decline, fossil fuels are still the dominant energy source in Canada, as they are in most countries since the Industrial Revolution. In 2020, natural gas accounted for 38% of energy demand, and refined petroleum products accounted for 37%. Canada also holds some of the largest oil reserves in the world, with 11% of the world's reserves. Crude oil production has grown from 3.6 million barrels per day in 2013 to 5.1 million in 2023.
Canada's electricity generation comes from a mix of sources, with fossil fuels being the second most important source. About 9.5% of electricity supply comes from coal, 8.5% from natural gas, and 1.3% from petroleum. Fossil fuel generation is particularly important in Alberta, Saskatchewan, the Atlantic Provinces, Northwest Territories, and Nunavut.
Canada has set a target of reducing its net carbon emissions to zero by 2050. However, even with a decline in oil and gas, fossil fuels could still make up two-thirds of Canada's energy use by 2050. This highlights the need for a more aggressive transition away from fossil fuels and towards low-carbon energy sources such as nuclear and renewable technologies.
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Canada's oil refineries and capacity
Canada is home to 16 refineries and 10 clean fuel facilities, which represent about 70% of the country's refining and biofuel production capacity. The petroleum products market in Canada is highly competitive, with prices varying based on market conditions. The viability of a refinery depends on the choice of crude oil used, the complexity of the refining equipment, and the desired type and quality of the final product.
Canada has the third-largest oil reserves in the world and is the fourth-largest producer and exporter of oil. In 2023, crude oil production averaged 4.6 million barrels per day, nearly three times the country's 1.7 million barrels per day refinery capacity. Many refineries in the US are designed to handle heavy oils like those produced in Canada's oil sands, yielding refined products such as gasoline, diesel, chemicals, and plastics. The proximity of the two countries allows Canada's pipelines to transport crude oil from the western provinces, mainly Alberta, to refineries in the US. The Trans Mountain Expansion Project (TMX), which became operational in May 2024, nearly tripled the pipeline capacity to Canada's Pacific Coast to 890,000 barrels per day.
Refineries in Atlantic Canada and Quebec are dependent on imported crudes and tend to process a more diverse slate of crude oils than those in Western Canada and Ontario. These refineries have the flexibility to purchase crude oil from almost anywhere in the world. In contrast, refineries in Western Canada and Ontario have historically relied on abundant, domestically produced light, sweet crude oils. However, with increasing oil sands production and declining conventional light sweet crude production, these refineries have started investing in the capacity to process heavier crude oils.
Some notable refineries in Canada include the Irving refinery in New Brunswick, with a capacity of 320,000 barrels per day; the Imperial Oil Strathcona Refinery near Edmonton, with a capacity of 187,200 barrels per day; the Shell Canada Scotford Refinery near Edmonton, with a capacity of 100,000 barrels per day; and the Suncor Energy (Petro Canada) refinery near Edmonton, with a capacity of 142,000 barrels per day.
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Fossil fuel generation is important in Alberta, Saskatchewan, and Atlantic Provinces
Canada holds some of the largest oil reserves in the world, with 11% of the world's reserves, second only to Venezuela and Saudi Arabia. Alberta, Saskatchewan, and the Atlantic provinces are key players in the country's fossil fuel sector.
Alberta has the largest share of refining capacity in Canada at 30%electricity sector has the highest greenhouse gas emissions in the country, primarily due to its reliance on fossil fuel-based generation. In 2020, Alberta's total energy demand was the largest in Canada, mainly due to the oil and gas industry. Natural gas was the primary fuel type consumed, accounting for 58% of consumption. Alberta's crude oil production has been steadily increasing, with almost all growth coming from oil sands.
Saskatchewan's electricity sector is the second-highest emitter of GHG emissions in Canada, also due to its reliance on fossil fuels. The province has two refineries with a combined capacity of 152 Mb/d, which consume western Canadian crude oil. Saskatchewan's remaining crude oil resource is estimated to be 7.6 billion barrels as of December 2021.
The Atlantic provinces, particularly Newfoundland and Labrador, and Nova Scotia, are poised to become major players in Canada's energy expansion. With vast offshore oil reserves and new liquefied natural gas (LNG) projects, the region is set to capitalize on international markets, especially in Europe and Asia. The province of Newfoundland and Labrador believes its high-quality, low-emission crude will remain in demand globally, and it is also exploring hydrogen production.
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Canada's fossil fuel electricity generation
Canada's electricity generation mix is changing as the country shifts from fossil fuels to low-carbon sources of energy. In 2021, Canada's total fossil fuel demand was 10,774 PJ, and this is projected to decline to 5,867 PJ by 2050.
Canada's electricity generation is diverse, with varying sources across different provinces and territories. Alberta, Saskatchewan, Nova Scotia, and Nunavut primarily generate electricity from fossil fuels like natural gas, coal, or petroleum. In 2020, natural gas was the main energy consumed in Canada, accounting for 38% of total energy consumption. However, the demand for natural gas is projected to decline over the long term, with a shift towards lower-carbon sources of energy.
On the other hand, provinces like British Columbia, Manitoba, Quebec, and Newfoundland and Labrador typically generate over 85% of their electricity from hydroelectric sources. Canada is a world leader in hydroelectricity, with 62% of its electricity coming from hydropower. Additionally, nuclear power plants generate about 13% of the country's electricity.
Wind and solar photovoltaic energy are the fastest-growing sources of electricity in Canada. In 2021, wind power capacity was 13.9 GW, with most wind facilities located in Ontario, Quebec, and Alberta. Ontario has committed to increasing its renewable energy capacity, including wind and solar, to 20 GW by 2025.
Canada has a target of achieving 90% carbon-free electricity by 2030 and 100% by 2035. The country is making progress towards these goals, with 70% of its electricity coming from renewable sources and 82% from non-greenhouse gas-emitting sources in 2022.
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Frequently asked questions
Fossil fuels could make up two-thirds of Canada's energy use by 2050, despite the current decline in oil and gas.
Fossil fuels are coal, oil, and gas, and they are responsible for three-quarters of global greenhouse gas emissions.
Canada holds 11% of the world's oil reserves, second only to Venezuela and Saudi Arabia. Fossil fuel generation is particularly important in Alberta, Saskatchewan, the Atlantic Provinces, Northwest Territories, and Nunavut.
Canada has announced plans to reduce its net carbon emissions to zero by 2050. However, there are concerns that the plan lacks accountability. Canada will also need to increase the number of electric vehicles to meet its targets.
