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Canada's energy consumption declined 2.1% in 2008 from 2007, the result of lower consumption in the nation's industrial and transportation sectors.

Declines in those sectors offset slight increases in the residential, public administration, and commercial and other institutional sectors.

In 2008, Canada consumed 7 793 petajoules of energy, down from 7 958 petajoules in 2007. One petajoule equals roughly the amount of energy required to operate the Montreal subway system for one year.

Energy use derived from the three main fossil fuels – natural gas, refined petroleum products and coal – dropped 3.6%. This was due to lower demand from the iron and steel industry and transportation sectors.

In the transportation sector, the largest user of energy, consumption fell 3.5%. The sector accounted for about 31% of final demand.

The industrial sector, the second largest user of energy, consumed 5.9% less. This decrease was due primarily to three industries: pulp and paper, iron and steel, and cement.

Total demand for all refined petroleum products, including fuel oil and motor gasoline, dropped 3.0% in 2008. Sales of motor gasoline amounted to 41 billion litres, down 3.4%.

Crude oil production decreases

Canadian companies produced 159 million cubic metres of crude oil in 2008, down 1.2% over 2007. (A cubic metre contains 1 000 litres).

Alberta's oil sands accounted for 70% of total crude oil production in 2008, up from 43% in 2007 and well above the 28% in 2000. The oil sands produced 192 000 cubic metres of oil a day in 2008.

Exports of crude oil, primarily to the United States, increased 1.6% from 2007. According to the United States Energy Information Administration, Canada remained the leading export country to the United States, ahead of both Mexico and Saudi Arabia.

Canadian crude oil now represents 20% of total US demand for imported crude oil. These exports account for more than 65% of all Canadian production. The US Midwest is the most significant market for Western Canadian crude oil.

Modest decrease in natural gas production

Natural gas production fell 4.9% in 2008. At the same time, natural gas drilling declined by 16%.

Natural gas exports to the United States fell to 3 941 petajoules in 2008, down 4.0% from 4 106 petajoules in 2007. This decrease reflected increases in natural gas production in the United States.

Well over one-half (59%) of total Canadian natural gas marketable production goes for export. In the United States, Canadian natural gas accounts for 16% of total American consumption of natural gas.

Marginal increase in electricity production

Electricity production from primary sources (hydro, nuclear, wind and tidal) increased 2.7% in 2008 while demand increased 2.9%.

Hydro generation accounted for 60% of electric power in 2008, the largest source. Nuclear energy provided about 15%. (In Ontario, nuclear power accounted for more than 53% of total electricity generation.).

Although electricity generation from wind, solar and tidal sources is rising, total generation from these sources represented less than 0.5% of total generation.

Wind generation capacity in 2008 rose 26.3% to 2 369 megawatts. In 2000, this capacity was 137 megawatts. According to the Canadian Wind Energy Association, Canada ranked 10th in the world in terms of new wind energy capacity at the end of 2008.

Coal production decreases and exports increase

Coal production was down 2.3% in 2008, primarily the result of lower demand by electric utilities as well as the manufacturing sector.

Final demand for coal by the manufacturing sector decreased 10.7% from 2007. Exports of Canadian coal increased 1.2% in 2008 from a year earlier, compared with a 9.3% advance in 2007.

Demand remained highest in Quebec, Ontario and Alberta

Energy demand in Quebec, Ontario and Alberta together accounted for 72.6% of Canada's total energy demand. Demand decreased slightly in each of these provinces from 2007.

In all three provinces, decreases in the manufacturing and transportation sectors accounted for the overall decline in demand.

Energy consumption increased slightly in Newfoundland and Labrador, Manitoba and Saskatchewan from 2007. Combined, these three provinces accounted for just over 10% of Canada's total energy demand.

NOTE: The above analysis refers to the preliminary 2008 data.