Canada's fossil fuel use to peak in 2019, National Energy Board now projects

The National Energy Board now projects fossil fuel use in Canada will peak in 2019, a major downward revision of similar estimates it has made annually for the past decade.

Improving energy efficiency, slower growth and carbon pricing cited for major shift in projection

The National Energy Board has revised its earlier estimates and now projects a peak in fossil fuel demand in 2019. (David Duprey/The Associated Press)

The National Energy Board now projects fossil fuel use in Canada will peak in 2019, a major downward revision of similar estimates it has made annually for the past decade.

It's the first time in the 11-year history of the NEB's annual reports on the topic that a peak in fossil fuel demand has been included in the baseline projection.

Previous reports projected demand would increase for the next two or three decades, at least.

The NEB's projections from previous years are indicated by the lines in different colours. The line in black indicates the latest projection, which has Canadian fossil fuel use peaking in 2019 and then declining slowly after that. (National Energy Board)

The NEB now says things have changed on several fronts, and a peak in domestic demand is likely much sooner than previously expected.

"Improving energy efficiency, somewhat slower economic and population growth projections than in previous outlooks, and climate change policies introduced by various federal and provincial governments underlie this change in trajectory," the NEB said in a report released Thursday.

The estimate is based on what the NEB calls the "reference case" — a projection based on current economic outlooks, "a moderate view of energy prices" and a national carbon price of $50 per tonne from 2022 to 2040.

The report also includes two other scenarios that involve an even sharper decline in fossil fuel demand after 2019.

The "high carbon price" scenario, which assumes a carbon price that increases steadily starting in 2022, projects fossil fuel demand will be 7.5 per cent lower in 2040 than it is 2017.

The NEB's latest projections show projected fossil fuel demand peaking in 2019 in three different scenarios: the reference (or baseline) case, the high-carbon price case and the technology case. (National Energy Board)

And the "technology" scenario, which assumes an increasing carbon price and a more rapid change in alternative energy and efficiency technologies, projects 12.3 per cent lower demand in 2040, compared to the current year.

The NEB has been publishing these types of projections each year since 2007 as part of its Canada's Energy Future reports.

​The analysis is "not a prediction of what will take place, nor does it aim to achieve certain goals like Canada's climate targets," the report cautions.

​"Rather, Energy Futures employs economic and energy models to make projections based on a certain set of assumptions given past and recent trends related to technology, energy and climate policies, human behaviour, and the structure of the economy."

NEB chief economist Shelley Milutinovic noted the trajectories for fossil-fuel demand have been reduced in every annual report except one for the past decade, largely due to ongoing improvements in energy efficiency.

"We're just getting more fuel-efficient throughout the economy," she said.

"We have continually, over many years, been using fossil fuels more efficiently. But we've been using all forms of energy more efficiently. And this just shows that trend."


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