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Energy plays a central role in Canadian life. Canadians are among the world’s biggest consumers of energy, relying heavily on it for transportation, heating, industrial production and economic growth. Canada is also one of the world’s leading producers of energy, exporting huge quantities annually. The environmental impact of energy use has become one of the major issues of our day, forcing many Canadians to rethink how they consume energy.

At the individual level, some hard facts about energy supply and demand hit almost all Canadians in 2006, when gasoline prices soared above $1.00 a litre. Crude oil prices have risen significantly—from $US20 in 2002 to US$77 in the fall of 2006—because of increased demand for oil, political change in Venezuela, the war in Iraq, other conflicts in the Middle East, production cuts by the Organization of Petroleum Exporting Countries (OPEC), and supply disruption after hurricanes in the Gulf of Mexico.

Even though production volume fell slightly in 2005, the value of crude oil exports increased 21%, partly the result of a 30% gain in prices. From 1990 to 2004, the average price for regular unleaded gasoline at Canadian gas stations climbed about 44%, and then jumped another 15% in 2005 alone. Meanwhile, fuel oil for heating households rose 126% from 1990 to 2005.

But rising energy prices aren’t turning Canadians off energy: we continue to consume more than ever. Energy consumption per capita has increased an average 1% a year over the past 20 years. In 2004, we used 363 gigajoules of energy per capita, compared with 302 gigajoules in 1984. One gigajoule is the equivalent of a 30-litre tank of gasoline, and will keep a 60-watt incandescent light bulb lit for six months.

The energy machine

In 2004, driven by an increase in gas and oil production, 16.6 billion gigajoules of primary energy were generated in Canada, more than double the amount in 1978. Gas and oil accounted for 78% of the total production. Electricity (including primary steam) comprised 12% of energy production in the late 1970s, but less than 10% in 2004. Coal production has consistently accounted for about 9%.

Quebec and British Columbia are major generators of hydroelectric power, whereas Alberta and Ontario lead the way in thermal-electric energy production. Ontario produces 89% of Canada’s nuclear power.

Less than one-half of one percent of the country’s generating capacity comes from wind or tidal power—non-polluting, renewable energy sources. Though still a very minor part of the energy industry, wind energy is the fastest-growing form of renewable energy in the world. Canada’s leader in wind energy generation is the town of Pincher Creek, Alberta, which harnesses the chinook winds on the Rocky Mountains’ eastern slopes. Combined, Pincher Creek and Quebec’s Gaspé Peninsula generate almost 87% of all of Canada’s wind power.

Keeping pace with demand

Canada is one of the world’s largest energy producers, and exports virtually all its surplus energy to the United States, primarily via pipelines and power lines. Global demand and high oil prices have pushed Canada’s energy exports upward over the last 25 years. Energy exports have more than quadrupled from 2.1 billion gigajoules in 1980 to 8.8 billion gigajoules in 2004.

Canada’s oil industry is currently booming. In 2005, a 30% surge in prices pushed the value of oil exports up to $30 billion, from $25 billion the previous year. Two-thirds of all oil produced was exported in 2005, with 99% of it going to the United States. Overall, oil accounted for 6.7% of all goods and services exported in 2005, more than twice the proportion 10 years earlier.

Two-thirds of the crude oil produced in Canada in 2005 came from Alberta. About one million barrels a day, or 42% of the province’s total production, was extracted from the massive oil sands alone. Most of Canada’s 180 billion barrels of crude oil reserves—a total second only to Saudi Arabia—is found in the oil sands of northern Alberta. As the most productive fields of natural gas are exhausted, the industry is turning toward developing non-conventional natural gas from coal—otherwise known as coal bed methane—in the Western Canada Sedimentary Basin.

Energy efficiency

As the extent of our impact on the environment becomes more clear, many Canadians have been looking for ways to improve energy efficiency and reduce greenhouse gas (GHG) emissions. Since 1990, energy efficiency in Canada has increased an estimated 14%. In 2004, efforts to conserve energy lowered consumption by more than 900 million gigajoules, reducing GHG emissions by 53.6 megatonnes—roughly equivalent to removing 13 million cars and light trucks from the roads.

The introduction of new appliances, vehicles, machines and production methods have been part of the solution. From 1990 to 2004, energy efficiency in the home increased by 21%, and the transportation industry increased its efficiency by 18%. Industrial users boosted their energy efficiency by 12%.