An oil pump jack pumps oil in a field near Calgary in a file photo. (Todd Korol/Reuters)
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If Canada were to make a priority of developing and exporting more oil and natural gas, it could displace half of Russia’s exports, says think tank SecondStreet.org. Russia is the source of about 14 percent of the world’s supply, according to the International Energy Agency (IEA).
“As long as the world requires oil and natural gas—and IEA estimates show this will be the case for decades to come—it’s better for consumers to rely on peaceful nations such as Canada to supply the resources,” said the SecondStreet.org report published last week.
The think tank asked eight industry experts to estimate how much of Russia’s exports Canada could replace and how quickly. The experts were to work under certain assumptions. For example, that the government would not allow protesters to halt the building of pipelines or other infrastructure.
Over the next 7 to 10 years, the report said, Canada could offset almost 60 percent of Russia’s natural gas exports and about 46 percent of its crude oil exports. In the short-term (one year), it couldn’t do much, as infrastructure needs to be built. In the medium-term (the next few years), Canada could replace about 20 percent of Russia’s gas and oil.
Taking over Russia’s exports could cripple its government. About 45 percent of Russia’s federal budget in 2021 came from oil and gas revenues, reports IEA.
SecondStreet.org averaged out the estimates made by the experts, which varied widely. “One reason for the large variation in estimates could be related to investor confidence in Canada. Simply put, the past decade has seen investor confidence plummet as government regulatory decisions have contributed to the demise of many large-scale projects,” the report said.
The project examples it cited include the Teck Frontier Oil Sands Mine and the Keystone XL Pipeline.
Respondents were asked to assume that new energy sector projects would be private sector-led. “Some respondents may have been more optimistic than others” about that, the report said.