Can We Have It All?: Building a Sustainable Energy Future for Canada

By Jennifer Marron
Published April 25, 2022 | 3 min read

Canada and the world have experienced a dramatic series of events in recent years. Unprecedented heatwaves. Once-in-a-generation floods and forest fires. And in 2022, geopolitical upheaval in Europe that’s driving energy prices to record heights. It’s a confluence of crises: At the same time as the world is grappling with how to bring down global emissions, we’re struggling with a shortage of affordable energy—and fighting over the path to a Net Zero future.

The world is struggling with a shortage of affordable energy, and our systems still rely heavily on fossil fuels. With Canada’s population expected to rise by around 30% to 50 million in the next decade, demand for energy will only increase. To satisfy it and hit our climate targets, we’ll need to double our supply of “green electricity”—power drawn from hydro, nuclear, wind and solar sources. But transitioning to a low carbon economy is an enormous challenge, and the path to get there is still far from clear.

“As we make investments to decarbonize the [oil patch], are we doing those in a way that has a view towards maintaining the competitiveness of the sector in 2050, when so much is still uncertain about where prices will be, where production will be and where demand will be in 2050?,” asks RBC Economist Colin Guldimann.

The steps we take now on sustainability, costs, and geopolitical tensions will all impact our country’s energy future. So how can we keep our focus trained on that future, even as we grapple with the immediate challenges of the war in Ukraine, high oil prices, record inflation rates and extreme weather events? How can we achieve energy security while also pursuing our Net Zero emissions targets?

These are just some of the questions we’re tackling in a special three-part series of the Disruptors podcast, called, “The Climate Conversations”.

Speaker 1 [00:00:01] Hi, it’s John here. I’m not in the studio today. I’m actually on the shores of Burrard Inlet staring at some of the most beautiful scenery in Canada, knowing this is the epicenter of Canada’s climate challenge. Just north of me is the North Shore Mountains, which last summer were clouded in smoke from devastating fires to the east of here devastating floods over those mountains. Was that horrific scene of listen B.C. burning to a crisp? Everyone here knows the reality in the here and now of climate change, and we’re all coming to grips with the reality of energy security. Knowing that what we pay and what we need to move around to stay warm and to stay cool is not getting any easier or cheaper by the year. I just stepped out of a conference room where Justin Trudeau was rolling out Canada’s new emissions reduction plan, which tries to balance energy security and climate security along with economic security. Can it be done when Europe is staring at the reality of a horrific war? Can it be done when consumers all around the world are struggling with inflation? Can be done when the technologies that we know we’re going to need to get to net zero aren’t really in our hands yet. These are some of the questions that we’ve been wrestling with at disruptors, and we’re going to try to find answers to over the next three episodes. Join me as we meet innovators and disruptors from all over Canada who are trying to navigate this new challenge. They know this beautiful corner of Canada and all of our communities hang in the balance.

This is Disruptors, an RBC podcast. I’m John Stackhouse. On today’s episode, we’re talking with some of Canada’s biggest thinkers on climate and energy security. Each year in Vancouver for the annual Globe Conference, the conference kicked off with a splashy announcement that Canada would now aim to cut emissions by 42 percent in the oil and gas sector by 2030. But how do we get there? How do we reconcile our climate and energy goals? That may seem like a challenge of today, but it’s also a challenge we’ve seen in decades past and students of history are looking back in time to the last big shock to global energy markets. Among those looking back to the future is Peter Tertzakian of the Arc Energy Research Institute in Calgary and noted author on energy trends. I caught up with Peter on the floor of the conference.

Peter, hey,

how you doing, John?

Peter. Let’s start with the long view history. Fifty years ago, the IEA launches. We’re now facing another energy crisis. Same or different?

Speaker 2 [00:03:04] Well, there’s a lot of eerie similarities. And in the 1973 energy crisis was a consequence of military conflicts in the Middle East, the Yom Kippur War. We were in the midst of a Cold War or adversary was the Soviet Union, which was Russia. Today, we have prices spiking oil prices in the face of excess demand. And so there’s a lot of areas similarities. The only difference was, you know, rather than us sanctioning other countries, we were effectively sanctioned with the Arab oil embargo. And so, yeah, the circumstances were different. But in the end, there was a price spike and actual shortages of vital fuels for the economy dominantly of oil. That led to the formation of the International Energy Agency, whose core mission was to restore energy security.

Speaker 1 [00:03:54] There was a climate movement back then, smaller than it is now, but the Brundtland Commission had just done its piece, and the world was aware of some of the challenges, not to the degree we are now. Clearly, the tension between energy and climate, if there was one, then energy one out. Today, we also have a tension between energy and climate, right?

Speaker 2 [00:04:15] Will this play out? Well, actually, so I think some lessons from the past don’t. Environment as a broader umbrella has always been a force of change. In the words of energy, you can go back centuries in terms of, you know, all the way from denuded forests to all sorts of issues. There were big environmental drivers in the 1970s, including smog, leaded gasoline, ozone layer, you name it. Eventually, I think the later 70s acid rain and so on and so forth. So energy and environment have always been closely linked. And that environment is a force of change to transition. However, it is an insufficient force of change, in my opinion, to take you to where you want to go as fast as possible. That’s where the energy crises come in. And unfortunately, very unfortunately, it takes a crisis to bring about the force of change, which is very powerful and that is energy security and affordability or lack thereof.

Speaker 1 [00:05:12] So are these crises competing or supportive?

Speaker 2 [00:05:16] Well, that’s a great question in the near term that are competing the way the script plays out in the near-term. When you have a crisis like this, do you have to scramble to satisfy societal needs for these vital energy commodities for heat mobility ET? And so the first response is typically a regression. Oil and natural gas is oil too expensive to burn? What am I going to burn out here is coal. It’s cheaper on this. Are burning coal emissions go up for environment? And so the first phase is always regressive. That’s the phase we’re in right now as we record this podcast. But eventually as the fog of war and the fog of the crisis sort of settles down of it, then you start to see the policies coming out, OK, we’ve got a change and now you double down. Obviously, in Europe, they’re already doubling down because they’re at the heart of the crisis. We have yet to see it here, in my opinion, really in North America and other parts of the world because, you know, we’re fairly shielded. Yeah, for the price of gasoline, up 50 percent. It’s a nuisance for a lot of people, but we’re an affluent country. But of course, up three or four times, that’s a big deal.

Speaker 1 [00:06:16] What lessons should we reflect on from the 1970s to do things differently so that we find more of a balance between environmental concerns and energy security concerns?

Speaker 2 [00:06:27] Yeah, that’s a great question. I’ll tell you why, because as I reflect on this, this is almost half a century. Forty eight years since the formation of the IEA and that first price shocks, and here we are, back to square one. We’ve doubled oil consumption and production emissions are keep going up, and we’ve had several mini crises in between. But it’s not like 1991, the Gulf War 2003 invasion of Iraq. We have the lead up to the financial crisis and the price spike. Don’t we ever learn? I have not. Heard anything in any of these policies about how to put in like a ratchet so you don’t go backwards once inevitably. You know, as I said, the fog of the crisis sort of clears our supply chains improve over the next few years. But if that means that the price of oil, gas, coal etc goes down, then there’s sort of the sense, false sense of energy security again. If you go back to the 70s in Europe, what they did was they actually put in fairly aggressive fuel taxes and they did not allow the price of the fuels to go down. And they that was also an impetus to build out a lot of mass transit, high speed rail, etc., etc. Now we don’t have the luxury as much in Canada because of our vast geography and low population density. But there’s also an educational component to this that the demand side, in other words, a consumer has to participate in the transition. And overwhelmingly, the dialog over the last 50 years has been How do we deal with transitioning the supply side? I think now again, we have to see how do we get people’s mindsets to think differently because I don’t think that part of it’s been addressed.

Speaker 1 [00:08:09] One of the ideas that struck me from my conversation with Peter is from decades past that energy usually trumps climate or environmental issues when it comes to a political decision. Voters think about the here and now. They think about cost of living, and that’s playing out in the world today in many different places. But a big difference today is there are many more choices for energy, and the cost of some of those choices continues to go down. So while we see a significant spike in prices for fossil fuels, particularly, there’s more options for all of us. And it’s the consumer that’s all of us who has a major part to play in Canada’s energy transition. But there’s little doubt that the suppliers, the Big Oil and gas producers are also the ones who have to think differently. As Peter put it, one of them who’s thinking differently is Susanna Pierce, the president and country chair of Shell Canada. She understands the challenges ahead better than most. We caught up with her next. Susanna, great to see you.

Speaker 3 [00:09:11] Good to see you, John.

Speaker 1 [00:09:12] So much has changed since The Last Globe Forum. It’s dizzying to think about pandemic war, economic disruption and so much more. How has all of that changed your net zero thinking?

Speaker 3 [00:09:27] One of the interesting things about net zero for us is when we talk about it and when we commit to it, it’s scope one, two and three. So it’s the emissions which we create. When we produce energy, it’s emissions we cause to be created because of electricity consumption or state or steam or heat. But it’s also the emissions of our customers and that’s what we call Scope three. And 90 percent, the emissions we need to tackle are our customers. It’s. And that’s really difficult because we can control scope one and two to a larger extent and three. But with that in mind and that target in mind, you know, with the pandemic happening and now certainly with the challenges of war in Ukraine, it certainly does increase the complexity. I would say, and I think it increases, you know, the challenges we have to work with all the parties we need to to get to that commitment of net zero by 2050. Having said that, though, it doesn’t change the commitment. The commitment is there. We have a commitment to achieve net zero by 2050 with what we see happening in terms of the war and the disruption in the energy markets and of course, what’s happened in the rebound since the pandemic. All it really suggests is that the challenges are real. This isn’t a simple solution, and I think those who have suggested the easiest way to get to net zero is just to cut. Fossil fuels are clearly it’s not the answer because we see what happens when you cut the ability of consumers to get natural gas or oil, and they suffer from that. And we are suffering to an extent where you see prices, where they are. So in short, there’s no easy solution, but that just means it just means we all have to work together and that no lever should be off the table.

Speaker 1 [00:11:00] What do you say to those people who would take issue with that position and perhaps argue that high prices, shortages, rationing even is going to drive us to change faster and adopt and scale the replacement technologies?

Speaker 3 [00:11:14] Well, I would say I probably don’t disagree that high prices will incentivize some to say, Well, let’s move more quickly to energy security that doesn’t depend on fossil fuel imports. And I think that’s a very important thing to keep in mind, and we should look to see what we can do to lean in and and maybe continue to press towards lower carbon solutions, renewable energy solutions that don’t require imports from unstable areas. But there’s a cost, and we’re experiencing that right now, so it can’t. It has to be in a way that recognizes, well, we want to make that transition. We do need to think about the now and the now really needs to be providing the energy that customers need because of the energy the customers need is too expensive. Then they’re having to make some choices and for. Customers, some of whom it’s a choice between putting food on their table or paying their energy bills, for some industry, it’s a choice of keeping a factory open or shutting it down. So we need to be very thoughtful about how quickly we move. But I would say to those that say it just means we need to double down while I don’t disagree, but we have to be mindful of the impact that has and address all along the way.

Speaker 1 [00:12:15] I have to think about both. Yeah, we do. Scope three is really all of us. It’s what we consume. It’s how we get through our lives in a comfortable and meaningful way. And many people are struggling with energy security, not just at a national level, but at a household level and trying to balance that with what I might call climate security released climate stability. How are we going to ensure that people have energy security and climate security?

Speaker 3 [00:12:45] Well, you know, I fundamentally believe in when you say Scope three, I mean, scope three is our customers emissions. But if I’m the customer go three, I’m still one. Those are my emissions that I’m. I’m producing what I drive my car when I consume energy. And so I think fundamentally each one of us has to ask, You know, how much energy do I need? Are there ways that I can reduce my energy consumption? Because energy efficiency and energy reduction to an extent is one way of reducing emissions and increasing to an extent energy security because you don’t need as much of it. So we have to start with what can I do to be more efficient with the energy that I use? But there will come a point, of course, where it becomes a very difficult choice between again, food on the table shutting a factory down. And so in the short term, I think what we have to do is find ways of accelerating the energy supply where it’s needed. And as much as we can, can we find ways of accelerating the decarbonization as well? So we know in the short term we will continue to need a short to medium term. We’ll still need fossil fuels because so much of our energy system runs on fossil fuels. But what can we do to decarbonize the fuel system? So what can we do, for example, to decarbonize fuel use and carbon capture sequestration? So can we capture emissions in carbon capture sequestration, which again creates an emissions reduction while we look to produce the fuels that the energy system needs? What can we do to increase the amount of renewable biodiesel renewable fuels that again can reduce the amount of carbon that is in the fuel system using the fuel infrastructure that we have today? So I think there’s a combination here of recognizing the energy system runs on fossil fuels. Today, we can decarbonize the fossil fuels that we have by using carbon capture, sequestration, renewable fuels, hydrogen while we look to transition the types of renewable infrastructure that we will need, such as EVs such as hydrogen vehicles and all the rest of it. So there’s a pathway,

Speaker 1 [00:14:35] and Shell is a critical player on that on that pathway. The Canadian government has unveiled its emissions reduction plan, including in anticipation of a 40 percent reduction in net emissions for your sector by 2030. How are you going to do it?

Speaker 3 [00:14:53] What I see in the emissions reduction plan is that government has recognized that there are challenges for the private sector and making investments that are not economic. So what do we need? What I see and that at first glance, is that they’re looking at how do I drive carbon tax price certainty? That’s important because I’m making an investment on a certain carbon tax. I want to know that it will be there because if we reduce the carbon tax, then all of a sudden those investments may not be economic. They’re looking at addressing some of the regulatory uncertainty. So we have the clean fuel standard. But how do we make sure again that we will be able to generate the credits? So I think the plan at this point recognizes the challenges. It doesn’t mean, again, it’s going to be simple, but it does mean that if we can work with customers so we can work with producers and across the entire value chain, we’ve got a better shot than I think we ever have had.

Speaker 1 [00:15:38] I think it’s safe to say very few expected energy markets to be where they are today and to see where Canada’s places in the energy world. As Susanna noted, We can’t think of Canada in isolation. We are part of a global economy and part of a global society. And that’s the challenge the Canadians need to come to grips with. Coming up after the break, we’ll have more disruptors climate conversations from Vancouver. So stay right there.

Speaker 4 [00:16:07] You’re listening to Disruptors and RBC podcast. I’m Theresa Do. Russia’s attack on Ukraine is a defining moment for global energy markets as governments and consumers grapple with energy shortages and high gas and power bills. Climate change targets are clashing with energy security measures. Coming soon, a new RBC Economics and thought leadership report on how Canada can play a role in calming nervous oil markets in the short run and develop a framework for a competitive and decarbonized oil and gas sector for the long haul. The world is going to need it to learn more. Check out the link in the show notes of this episode and visit our slashed thought leadership.

Speaker 1 [00:16:50] Welcome back. We’re talking with some of the big thinkers and innovators in the energy sector here in Vancouver to figure out how we can accelerate Canada’s transition to a lower emissions economy. One of the big questions that seems to be coming up repeatedly is whether Canadian oil and gas through technology and innovation can be both low emissions and globally competitive. To get more perspective on that. I talked with my colleague Colin Guldimann, an economist with RBC Economics and thought leadership and principal author of our research on the climate transition. Colin, you’ve let our research on climate through a number of reports. How do you thread the needle in your mind in terms of the the contradiction? Some would see it between higher emissions as a result of greater oil and gas production, balancing that with not only the need, but now the declared intention of the country to reduce emissions by 40 percent with respect to the oil and gas sector.

Speaker 5 [00:17:47] So I’ll start just by noting that the government’s plan to reduce emissions in the oil and gas sector does account for some growth of production through to 2030. Or at least that’s what their forecasts suggest. And I think the story here is really that there are a lot of technological solutions that already exist in the oil and gas space to cut, for example, methane emissions, which are highly polluting and warming the atmosphere more quickly than carbon dioxide. But I think the fundamental question here is Canada’s role as an oil and gas producer going forward, not just to 2030, but also to 2050. As we make these investments to decarbonize the sector, are we doing those in a way that has a view towards maintaining the competitiveness of the sector in 2050, when so much is still left uncertain about where prices will be, where production will be and where demand will be in 2050? If you look at the landscape now, you think, OK, planes really hard to decarbonize, so we’ll need oil for jet fuel, we’ll need oil for petrochemicals and plastics and all these other non-combustion uses. The IEA has a great report out that suggests demand in a net zero world could still be 25 million barrels a day. Canada’s production around five million barrels a day. Why shouldn’t Canada be an oil and gas producer with 20 percent market share? So that’s the question. Can we fight for that last barrel? And if we decarbonize the sector smartly with an eye to cost and competitiveness, I don’t see a reason why that shouldn’t be the case.

Speaker 1 [00:19:13] As Colin explained, We can have both climate security and energy security, but it’s going to cost us how much is still to be determined and the cost may be more than economic. We’re going to need to think through abatement technologies that allow us to continue to produce oil and gas, at least for the foreseeable future, but also new energy technologies both for production and consumption that allow us to literally rewire much of our economy. Just how feasible is that? Who better to answer that than Linda Cody? Linda is the executive director of the Pembina Institute, a think tank advocating for a clean energy transition. She also has a lot of experience in the energy sector, having worked as chief sustainability officer for Enbridge and as vice president of sustainability for the 2010 Vancouver Olympics. Linda can take some credit for this magnificently green convention center. The greatest part of the city’s waterfront. Here’s part of our conversation, and thanks so question is. Energy security vs. climate security. So let me, Linda, start out with a broad question. Many people are thinking about this choice anew because of global events and markets, energy security versus climate security. Is it a versus or is it possible to have both?

Speaker 6 [00:20:31] Well, it needs to be an and I’m sure others have said this to you. It needs to be an end and not an order. Although I think it’s probably correct that historically, you know, and when there’s been a competition between those two values and priorities, security has obviously always trumped because people need access to energy and the energy needs to be affordable. But this time around, there’s just a lot more at stake here. And so we got to somehow translate the order into an end, and that’s going to be a big challenge for Canadians, especially.

Speaker 1 [00:21:08] I think you’re a great student of society. What do you see out there that gives you confidence that we will be able to approach this and we’re ready as a society to approach this differently.

Speaker 6 [00:21:19] I see good leadership. I see good leadership on the part of government today with the release of the emissions reduction plan, the new Canadian Plan, which is much more detailed than anything we’ve ever done before. But I also see good leadership in communities among cities, in business, in industry and indigenous communities and in the nonprofit NGO sector. So that’s where I would be hopeful that there will be good leadership and that that. Leadership will be able to navigate the complexities of the tradeoffs involved here.

Speaker 1 [00:21:54] How can we help society show leadership at home in terms of all of our own activities, because many people see the price of gas or the price of heating their home and they’re saying, I just can’t afford this, I need somehow to get more of conventional energy sources so I pay less and maybe someone else can address the mega challenge of of climate.

Speaker 6 [00:22:18] I guess it’s how it’s framed to them, right? And that’s where leadership can make a difference. You know, definitely Canadians care about these issues. And yes, energy has to be affordable. But at this point in Canada, we aren’t experiencing what they’re experiencing in Europe, although it could come here, and that’s the uncertainty that we’re facing right now.

Speaker 1 [00:22:39] Yeah, I guess I’m premising the question on the kind of survey that shows people are willing to pay, you know, a couple of hundred dollars a year for climate action, but they don’t want to pay a lot more than that. And some of these things are expensive for new electric vehicle costs more than a conventional one.

Speaker 6 [00:22:57] Yeah, not really funny. And not definitely. Not everybody is in the category where they can afford an electric vehicle. But I think we’re all in the category that we can see the costs of not acting on some of the climate challenges that are out here. And we’re in British Columbia today, and this is a province that in the last 10 months has been battered. It’s really coming home here to people in ways that it hasn’t before is so individual choices count. But really, the choices made by governments and business and cities count a lot more riots. So that’s the level at which I think people have to get together around this new Canadian climate plan. And because it certainly isn’t, it won’t work if it’s all up to the federal government to do it. So it is a call to action. And I think there’s some reason to hope that Canadians will act on this.

Speaker 1 [00:23:50] Well, to make it happen to make the climate plan a reality, we’re going to need a lot more electricity and it needs to be clean or green electricity from renewable sources. We know how to do that, but we’re going to have to do it at a scale and speed that we’ve never done, certainly in our lifetime to be able to run a country that has 50 percent new vehicles by the end of this decade as electric vehicles. I’m curious what you think we need to come to grips with as a country in terms of really getting going at a meaningful speed and scale to get to those 2030 goals?

Speaker 6 [00:24:32] Well, demand for the electricity will obviously be part of it, right? But greater cross territorial and provincial collaboration around electricity is obviously going to be key. And that’s where I think that indigenous communities also come into the equation as well on electricity. It’s going to be a much bigger lift for us than it is in the US to get to a 20 35 net zero grid. So it’s going to take new investment mechanisms, new shared infrastructure, new relationships, hopefully in the North American context. Hopefully we’re not just talking about an East-West grid here. Hopefully, it can be a North-South grid and we can take advantage of some of that speed and scale and scope and speed

Speaker 1 [00:25:19] scale, scope three critical words for this conversation. You hear it across the energy sector. Everyone agrees the future will include more renewables. The real challenge is how big, how bold and how fast are we moving today? If you ask Marion Smith, she’d say not fast enough. Marin is executive director of Clean Energy Canada, a Vancouver based organization aiming to accelerate Canada’s clean energy transition through original research dialog and public engagement. And as you’re about to hear, Marin is encouraged by what she sees in the renewable space and the promise for innovative clean tech solutions to get us to net zero. Marin Many people are thinking a little bit differently about the climate challenge than they might have say six months ago. Given global events and what’s happening in markets due to energy prices, how do you think about things differently, if at all? Given how the world has changed,

Speaker 7 [00:26:16] I’d say what’s going on in Ukraine right now has really brought to our attention the fact that there isn’t energy security when we are dependent on fossil fuels. And so we see Europe saying, well, we’re in a crisis crunch right now for getting more gas and oil. In fact, we’re going to double down and move faster on shifting to renewable energy because that provides a nation’s security. You can produce your own renewable energy, and the cost of renewable energy have dropped significantly 90 percent for things like. Solar wind also significant drops and the kind of the lynchpin is the batteries, because we know that wind and solar are intermittent. The battery costs have dropped as well. So when I look at recent events that have happened in Europe and really the crisis around energy, we are now seeing that the transition to clean renewable energy that can be created locally in many places is part of the solution. And I think we’re going to see that accelerate, including things like hydrogen as one of the energy sources. Billions and billions of dollars have already been spent in Canada dealing with climate crisis. So we need to accelerate. We know that climate change is accelerating faster than we expected. I think what we’re seeing already in the electric vehicle space shows us actually when the companies get behind it and see that this is where the world is going. We have seen dozens of new makes and models come out, including some of Canadians. Favorite cars like the Ford F-150 is coming out with an electric version. We’re seeing other trucks SUVs coming out with as electric models in the next few years. So I think that once business sees the opportunity and we’re experiencing that, that’s why the price of solar wind batteries have all dropped just because industry is seeing that this is where the world is going and they are developing the products there. So when we talk about energy security, actually this energy transition is going to take us to a more secure future. But it’s not just energy security, it’s economic security.

Speaker 1 [00:28:29] Depending on your projection, we’re going to need to double, maybe even triple our electricity supply over the next couple of decades. Where’s that going to come from? Is it all wind and solar? Will we need more hydro nuclear? What are the sources we’re going to need to invest in?

Speaker 7 [00:28:46] Yeah. So electricity is something that Canada is good at. We already have over 80 percent zero emission grid. You know, we have huge, enormous potential resources. Alberta and Saskatchewan are the leaders in solar resources and is on par with places like Florida, even Vancouver. Rainy Vancouver has the same amount of solar energy as Germany. But this is where innovation comes in. This is where I’m going to be excited to see what comes. Solar and wind are clearly cheap sources of renewable energy at this point. Are we going to see solar roofing tiles? Are we going to see solar windows in buildings, geothermal? Where is that going to fit into the mix of things? I’m not sure that we’re going to see either nuclear or large scale hydro because of the cost, because there are other energies now in renewable energies that are so much cheaper. But there are there will be places where those energies are important and do you need to be part of the mix? I think what is exciting to me is what is going to happen in this space going forward because with the potential to double or triple our electricity in Canada, I think we’re going to see some creative new ideas.

Speaker 1 [00:30:05] I’m back outside overlooking Burrard Inlet. The clouds have rolled in, the rain is sprinkling, we’ve heard over this episode the enormous challenges and opportunities Canada faces in the climate transition. We’ve never done anything like this as a country, certainly not at the speed and scale that we’re going to need to take on the transition in the coming years. Electric vehicles, hydrogen, food production, housing, everything has going to have to evolve, but faster. We’re all going to have to change the way we make things, the way we consume things, the way we sell things to the world. Great opportunity for those who get it right. Our research from RBC Economics suggests we’re going to need to mobilize $80 billion a year to make that happen. That’s about four times what we spend and invest now in transition-related activities. But the capital is there. The public desire is there. Increasingly, the public policy is there, and the ambition in many businesses is there. How are we going to do it? How are we going to balance energy security and climate security? Well, it’s possible, but it’s going to take a lot of innovation. That’s what we’re going to chase in our next episode. We’re going to meet some of Canada’s great cleantech innovators and hear about what they’re doing, how they’re building differently and how they see the future as an exciting one for all of us. I’m John Stackhouse and This is Disruptors, an RBC podcast. Talk to you soon.

Speaker 4 [00:31:45] Disruptors, and RBC podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by Jar Audio. For more disruptors content, like or subscribe wherever you get your podcasts and visit our rbc dot com slash disruptors.

Here’s some of what we heard from the experts in episode one.

Energy security is top of mind in today’s complex and politically unstable world

Canada and the world have experienced a dramatic series of events in recent years, including unprecedented heatwaves, once-in-a-generation floods and forest fires. More recently, geopolitical upheaval stemming from Russia’s invasion of Ukraine has driven energy prices to record heights. It’s a confluence of crises.

On the face of it, Canada would appear to be in a secure position in terms of energy supply. Rich in our diversity of sources, both renewable and non-renewable, Canada is the sixth largest producer of primary energy with 3% of global production, and is among the top five exporters of crude oil, natural gas, uranium and electricity.

But a new tension has emerged between energy security and our climate priorities.

“Historically, when there’s been a competition between those two values and priorities, security has always trumped because people need access to energy and the energy needs to be affordable,” said Linda Coady, Executive Director of the Pembina Institute. “But this time around, there’s just a lot more at stake.”

The war in Ukraine has revealed the difficulty in achieving energy security when the world is still dependent on fossil fuels.

“We see Europe saying, well, we’re in a crisis crunch right now for getting more gas and oil—in fact, we’re going to double down and move faster on shifting to renewable energy because that provides a nation’s security,” said Clean Energy Canada’s Merran Smith.

In Canada, where fossil fuels play an outsized role in the economy, the challenges of shifting from to renewable energy are particularly significant.

Renewable and clean energy solutions are key to reaching Net Zero. But we need to adopt the associated technologies faster.

In 2019, over 60% of Canada’s energy came from fossil fuels (oil, gas and coal), representing over 81% of Canada’s GHG emissions, according to a 2020 study.

“Billions and billions of dollars have already been spent in Canada dealing with the climate crisis,” said Smith. “So we need to accelerate since we know that climate change is accelerating faster than we expected.”

The recently announced 2030 Emissions Reduction Plan entails cutting emissions by 42% by 2030, in order to achieve Net Zero emissions by 2050. The plan also includes $9.1 billion in new investments to cut pollution. As we look to increase electricity production, the source of all this new energy will be critical. Even in the existing grid, the costs of decarbonizing could run about $5.4 billion annually. We need to accelerate now, otherwise we’ll never meet our climate goals.

“What is exciting to me is what is going to happen in this space going forward, because with the potential to double or triple our electricity in Canada, I think we’re going to see some creative new ideas,” said Smith.

Stay tuned for episode two in the “Climate Conversations” series, featuring host John Stackhouse’s trip down British Columbia’s “hydrogen highway” to meet face-to-face with three of Canada’s top Cleantech firms.

Coming soon: a new RBC Economics and Thought Leadership report on how Canada can play a role in calming nervous oil markets while developing a framework for a competitive—and decarbonized—oil-and-gas sector.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

Jennifer Marron

Jennifer Marron
Producer, Disruptors

CanadaCarbonESGEconomicsEconomyEnergyEnergy Transition MomentumGeopoliticalGlobal EconomyNet Zero