Heavy fuel oil consumption in Canada

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Paul McPhie and Anthony Caouette, Manufacturing, Construction and Energy Division

Like other industrialized countries, Canada's thirst for energy continues unabated into the 21st Century. Despite our growing concern about climate change and air quality, petroleum products remain key to satisfying that demand.

Petroleum products include heavy fuel oil, a relatively low-grade fuel of tar-like consistency. Heavy fuel oil is generally higher in sulphur content than most petroleum products and is second only to coal as a carbon-intensive fuel.

In 1990, heavy fuel oil was used to produce 419.5 petajoules of energy; by 2005, this production had declined to 387.3 petajoules (Table 1). One petajoule contains energy equivalent to about 30 million litres of gasoline.

As a result, heavy fuel oil accounted for 4.1% of Canada's total energy needs in 2005, down from 5.5% in 1990.

This article examines trends in the use of heavy fuel oil in Canada at the industrial and provincial levels between 1990 and 2005, mostly using data from the Report on Energy Supply-Demand in Canada (Catalogue no. 57-003).  A more detailed report on Heavy Fuel Oil Consumption is available through /pub/11-621-m/11-621-m2007062-eng.htm.

By far, the largest reduction in heavy fuel oil use has come from the pulp and paper industry. Between 1990 and 2005, this industry cut its consumption of heavy fuel oil by more than one-half. The decline was particularly strong in the Atlantic provinces and British Columbia, and to a lesser extent in Quebec.

The Atlantic provinces were the main consumers of heavy fuel oil in 2005, accounting for 44.4% of national demand (Table 2). In 2005, heavy fuel oil use by electric utility companies in Atlantic Canada dipped slightly compared to the amount used fifteen years earlier.

The sector most dependent on heavy fuel oil was marine transportation, where it accounted for more than 60% of energy consumed in 2005; the rest came from diesel fuel. This sector was also the only major user that increased its consumption during this 15-year period. More than half of consumption occurred in British Columbia.

Energy demand on the rise

Even though Canadians, like people in many other industrialized countries, are concerned about increases in greenhouse gas emissions,¹ their demand for energy keeps rising.

Demands for all major energy sources such as petroleum products, natural gas and electricity have all increased in recent decades.

In 2005, Canada consumed 9,540 petajoules of energy, 25% more than in 1990 (Table 1). Meanwhile, greenhouse gas emissions also increased 25% from 1990 to 2005.²

The increase in demand between 1990 and 2005 was spread more or less equally across all major sources. During the period, there was no significant shift away from the combustion of hydrocarbons toward more benign and renewable energy sources such as hydro-electricity.

Decline in use of heavy fuel oil

While Canadians generally remain dependent upon fossil fuels, they are becoming less dependent on heavy fuel oil.  In fact, the consumption of heavy fuel oil as an energy source declined 7.7% between 1990 and 2005, from 419.5 petajoules to 387.3 petajoules. In 2005, it provided 4.1% of Canada's total energy needs, down from 5.5% in 1990 (Table 1).

A small portion of this drop (less than 15%) was attributable to a general reduction in energy use by consumers of heavy fuel oil. The other 85% of the decline was attributable to the substitution of heavy fuel oil by other energy sources.

While not one of the main energy sources nationally, heavy fuel oil is still an important fuel source for some industries. It is used for thermal-electric power generation and for heating boilers and furnaces in some manufacturing industries, notably the pulp and paper and petroleum refining industries. It is also used to power large marine vessels and to heat some large, usually older, commercial, institutional and multiple-unit residential buildings (Table 3).

The decline in heavy fuel oil use was not distributed evenly among its main users. Some industries reduced their dependence on this energy source, while others still depended heavily on it in 2005.

Pulp and paper industry led the reduction in use

By far, the pulp and paper industry most reduced its use of heavy fuel oil between 1990 and 2005 (Chart 1). The industry cut its consumption by more than half over the period, from 97.6 petajoules to 47.8 petajoules (Table 4).

The decline was strongest in the Atlantic provinces (-58.4%) and in British Columbia (-89.8%). In Quebec, the decline was 28.7%.

Spent pulping liquor, which contains the fiber removed from wood either chemically or mechanically, has been an increasing source of energy for this industry. It accounted for 34.3% of all energy needs in 2005.

Burning wood waste as a source of energy came second to spent pulping liquor, but doubled its share of the pulp and paper industry's energy needs from 12.6% in 1990 to 25.4% in 2005.

These two fuel sources combined provided almost 60% of total energy needs for the pulp and paper industry by 2005, displacing traditional energy sources such as fossil fuels. Electricity accounted for 24.7% of energy use.

Utility companies still dependent on heavy fuel oil

Heavy fuel oil use by electric utility companies in Atlantic Canada dipped slightly compared to the amount used fifteen years earlier.

In 2005, utility companies in Canada used 126.5 petajoules of heavy fuel oil, accounting for one-third of all demand for the fuel (Table 3). This was a reduction of 10.6 petajoules, or 7.7%, from the level in 1990. However, the contribution of this sector to the overall decline in heavy fuel oil from 1990 to 2005 was much less significant than the contribution of the pulp and paper industry.

Utilities in Atlantic Canada dominated when it came to using heavy fuel oil for thermal-electric generation. Almost 15% of the Atlantic region's electricity originated from this fuel source in 2005, down only slightly from 1990 (Table 5).  Outside Atlantic Canada, only utilities in Quebec and Ontario burned heavy fuel oil to generate electricity, but it was responsible for less than 1% of production in each province in 2005.

Demand for heavy fuel oil in marine transportation still strong

The marine transportation industry, which has limited energy alternatives, relies solely on two fuel types: heavy fuel oil, which represented 60.7% of fuel consumption in 2005 and diesel which represented 39.3%.

This was the only sector to increase its consumption of heavy fuel oil between 1990 and 2005. Consumption rose 12.2% from 60.1 petajoules in 1990 to 67.5 petajoules in 2005 (Table 3). In contrast, diesel fuel consumption remained fairly constant over the period.

It is important to note that sales to ships of both Canadian and foreign registry are included in the estimates of heavy fuel oil use by the marine transportation industry.

In 2005, more than one half (55%) of heavy fuel oil sales to the marine transportation sector were made in British Columbia. An additional 23% of sales occurred in Quebec, while 12% were in Atlantic Canada and 10% in Ontario.  

Heavy fuel oil use on decline in other industrial sectors

The petroleum refining industry consumes some of the heavy fuel oil it produces to satisfy its own energy needs. This industry along with the other two main industrial users—the primary metal industry and the mining, oil and gas extraction industry—reduced their use of heavy fuel oil between 1990 and 2005. They accounted for 62.6 petajoules, or 16.2%, of total heavy fuel oil use in 2005 (Table 3). It should be noted that heavy fuel oil meets only a small portion of the total energy needs of these industries, less than 3%.

Footnotes

1. Brewer, Thomas L., 2007, Public Opinion on Climate Change Issues in the G8+5 Countries, www.usclimatechange.com (accessed July 26, 2007).
   
2. Environment Canada, 2007, Canada's 2005 Greenhouse Gas Inventory: A Summary of Trends, www.ec.gc.ca/pdb/ghg/inventory_repiort/2005/2005summary_e.cfm (site accessed on July 25, 2007).