Canada must increase public money in SR&ED in the energy sector
According to the International Energy Agency (IEA) , Canada needs to put more public money towards research and development in the energy sector.
Canada’s oil era may be facing an imminent end due to dramatically low prices, increasing environmental concerns, a lack of public support for pipelines and evolving climate policies. The IEA conducted an in-depth review of Canada’s energy portfolio and policies, and have urged Canada to adopt strong climate goals as it considers future energy production.
A funding injection is needed to make Canada’s oil-and-gas industry more cost-competitive and reduce its environmental footprint in line with commitments made at the COP21 climate talks, where Canada committed to reducing emissions 30 per cent relative to 2005 levels by 2030.
The IEA report noted that despite being heavily reliant on the energy industry, the country has an opportunity to diversify its energy mix by investing in clean energy. “This will contribute to reducing the environmental impact of energy use and production, as well as the cost of natural resource development, notably for oil sands operations,” said the report.
Canada’s energy policies have not been thoroughly reviewed since 2009 by the IEA, and they found that public research funding for the industry is in decline at a time when it’s especially needed.
The report says while Canada’s research funding is large compared with other IEA members, core public funding has dropped from $1.34 billion in 2013-14 to $941.9 million in 2014-15.
“The financial resources available for basic, publicly funded energy R&D in Canada are under pressure.”
That decline has been partially offset by short-term, targeted federal programs and funding from provincially owned companies, including spending on carbon capture and storage pilot projects.
But the IEA says the industry needs stable, long-term funding to address the high costs of the industry and because the oil-and-gas industry has become one of the biggest barriers to Canada honoring its climate change commitments.
Emissions from the oil-and-gas industry have grown 14 per cent since 2005, and 67 per cent since 1990. They now make up about a quarter of Canada’s total emissions, the report said.
Besides outright funding, the IEA also calls for a federal energy research-and-development strategy, especially on clean energy technology, carbon capture and storage, and more environmentally friendly ways of extracting fracking-based tight oil and gas. “By ensuring responsible energy production and use, Canada can continue to develop its resources while balancing economic and sustainability goals.”
