The Energy Landscape in Canada & ASEAN
Let’s start with Canada, where there is an abundance of space and natural resources. Here, it is not uncommon for the word ‘energy’ to be synonymous with ‘oil & gas’, the two commodities which supply the nation with over 65% of its primary energy supply. This number increases to 73% if you include coal, another resource which is in abundance. However, it differs from oil and gas, in that the majority of it is exported to Asian markets.
Canada Primary Energy Supply & Consumption
Canada ranks 3rd amongst OECD countries in oil consumption per capita (behind Luxembourg and South Korea) (NEB, 2018), largely due to the energy required to keep the widespread population warm in the winter and to transport people and goods across the country. Although many energy efficiencies are being realized in the transportation sector, it is still projected to be a major consumer globally and one only needs to visit an airport to realize the magnitude. Take LAX for example, the airport distributes ~4 million gallons of jet fuel per day, which requires almost 1 million bbls of crude oil to produce; this is a very significant amount considering Canada produces 3.4 million bbls/d (good enough for the fifth largest producer globally).
Energy consumption in Canada is expected to plateau by 2040. However, the supply source is expected to change, with more pressure (demand) on renewables and natural gas forecasted to displace coal for electricity generation. In the ASEAN region, a different energy story is emerging – a growing middle class and increased urbanization is estimated to contribute to 140% energy demand growth over the same period. Similar to Canada, primary energy is supplied by the oil and gas sector, however there is more reliance on coal and ~40% of the population primarily rely on traditional use of biomass and shockingly, ~10% does not have access to electricity at all (IEA, 2017).
ASEAN Primary Energy Supply & Consumption
How does this ASEAN energy growth compare to other global consumers? While China takes the top spot for overall consumption, India and ASEAN are forecasted to grow at a faster rate, driven largely by the aforementioned factors which are characteristic of emerging economies.
These figures are integral to frame where Canada and ASEAN sit within the global energy landscape. The bottom line: Canada will need to increase export capacity in order to access emerging economies, such as ASEAN, who will have to rely upon imports to address their expected energy growth. Canada would benefit from an ‘energy relationship’ with ASEAN, however the ASEAN nations will likely compete for ‘energy attention’ with their close neighbors, China and India. This relationship provides Canada with another export option, should it increase capacity, and ASEAN with a trading partner that could help address its energy needs as the region collectively grows.
IEA. (2017). Southeast Asia Energy Outlook 2017.
IEA. (n.d.). International Energy Associate. Retrieved from Access to modern energy services in SE Asia.
International Energy Agency. (2017). World Energy Statistics. International Energy Agency.
NEB. (2018, January 24). Market Snapshot: Why do Canadians use so much oil? Retrieved from https://www.neb-one.gc.ca/nrg/ntgrtd/mrkt/snpsht/2018/01-04whdcndnssl-eng.html?=undefined&wbdisable=true
U.S. Energy Information Administration. (2017). International Energy Outlook 2017. EIA.
Matt Klukas is the CABC’s Energy Advisor and works for the Criterium Group, a management consulting and merchant capital firm focused on delivering creative, custom strategies and capital solutions across multiple industries. Matt is a registered Professional Geophysicist in the province of Alberta and received his MBA from the University of Calgary.