Opinion: Most oil jobs will disappear by 2050; that’s why the clean energy stimulus in the federal budget is vital

Merran Smith is the Chief Innovation Officer and Founder and Trevor Melanson is the Communications Director of Clean Energy Canada, a think tank at Simon Fraser University’s Morris J. Wosk Center for Dialogue.

With its half a trillion dollars in clean energy incentives, the US Inflation Reduction Act threatens to divert similar investments from other countries, including Canada. Faced with this reality, the significant industry incentives in Tuesday’s budget are not only welcome but vital news.

That’s because the resource-based economy of this country is changing. Canada’s oil and gas lobby is right about one thing: there is indeed a bright future for Canadian energy. It’s just not in fossil fuels.

You may have heard the announcements brought to you by the Pathways Alliance, a consortium of Canada’s largest oil companies. The alliance should envision a robust oil and gas sector thriving in a net-zero 2050 (the goal by which most of the world has agreed to stop climate change), when that future is not possible.

Today, 92% of global GDP is covered by some form of net zero commitment. In the inevitable net zero of 2050, Canadian oil sands jobs and oil production decline by 98% compared to 2025, according to our research.

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Even in a scenario where Canada is considered a fossil fuel island in a net zero world, oil results remain relatively unchanged. Regardless of what our next government does or doesn’t do, jobs in oil production will decline by at least 93 percent. Simply put, domestic policies cannot save a global industry.

This is not based on an obscure hypothesis, but on the best available. Our model uses the International Energy Agency’s 2050 net-zero oil price below US$30 a barrel by mid-century, a price that Canada’s Energy Regulator is poised to adopt for to future net zero scenarios.

So why does the Pathways Alliance say their industry can thrive in a 2050 world with zero?

That’s because the organization’s net zero aspiration includes an important asterisk: scope 1 and 2 emissions. To the layman, this means that only operational emissions count. In fact, the use of things (ie Scope 3) accounts for more than 90 percent of the sector’s carbon footprint.

While emissions from oil and gas production are significant and, yes, could be reduced or even eliminated through electrification and carbon capture and storage, it is the use of fossil fuels, from gas vehicles to industrial facilities as raw material, which contributes the most to climate change.

This is precisely why the world is moving towards net zero by 2050, rapidly switching to renewable energy, electric vehicles and clean fuels like hydrogen.

The reality is that no matter what steps Canada takes at home, no matter what certain politicians may promise voters, a decarbonized world will want much more clean energy and much less fossil fuel.

While there is a non-fuel future (think lubricants and asphalt) for oil in a net-zero world, 70 percent of oil would be used this way in a net-zero world by 2050, according to the International Energy Agency: global oil consumption. by 2050 it will be about a quarter of what it is today.

For natural gas, the industry fares better than oil, but Canadian jobs in natural gas production decline by 31% in our model between 2025 and 2050.

But while global emissions will fall, non-fossil fuel energy jobs certainly won’t.

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This transition is already underway. Aside from the US Inflation Reduction Act, the European Union has its own multibillion-dollar industrial Green Deal plan, and China still controls 60% of the world’s manufacturing of clean energy technologies. The number of people working in clean energy jobs globally has recently surpassed that of fossil fuels for the first time.

Canadians have the advantage of a choice: to invest in the future, by reskilling our workforce while there is still time to make this transition a smooth one. In our net zero scenario, jobs in Alberta’s clean energy sector grow by 10% per year to 2050, the fastest of any province or territory, with far more jobs created in clean energy than in fossil fuels.

The alternative, betting against the world’s largest economies and betting on climate failure, is not really an alternative.