Nuclear fusion breakthrough should be a wakeup call for Alberta

It’s the scientific breakthrough that’s been decades in the making. On Tuesday, researchers studying nuclear fusion managed to create more energy than they used — a crucial milestone that could one day pave the way to an almost limitless supply of cheap, clean energy. As U.S. Energy Secretary Jennifer Granholm said, “This demonstrates that it can be done.”

The big question now is how long we’ll have to wait before “it” can be done at scale. For Canada’s oil and gas industry, though, it raises a very different question: how long until business is permanently disrupted? Nuclear fusion, like the growing supply of wind and solar power around the world, is part of a future in which oil and gas are far more marginal players in the global energy mix. And that future is coming faster than they might like to admit.

As the International Energy Agency’s most recent World Energy Outlook noted, “A profound reorientation of international energy trade is underway… Many of the contours of this new world are not yet fully defined, but there is no going back to the way things were.” Oil and gas markets, which fossil fuel proponents like to pretend are stable and predictable, have instead been turned into geopolitical weapons over the last year by everyone from Russia’s Vladimir Putin to the OPEC cartel led by Saudi Arabia. “In contrast,” said Sepi Golzari-Munro, the Global Wind Energy Council’s energy transition director, “renewables provide the opportunity for nations worldwide to benefit from homegrown, secure, and sustainable energy on their own terms.”

Germany, which is bearing the brunt of Russia’s weaponization of oil and gas exports (as well as its own foolish decision to rely on them), is learning that lesson quicker than most. Yes, it spent the summer importing as much liquefied natural gas as it could in preparation for the winter heating season, and it will do the same over the next few years. But it has already announced an acceleration of its transition away from fossil fuels, one it now intends to complete in just over a decade by aggressively embracing wind, solar and demand-side measures.

That could happen faster than anyone expects — including most people in Germany. A May 2022 paper by a quartet of energy economists laid out a path to “Freedom Energy” by 2030, one that could help Germany rapidly displace not just Russia’s fossil fuel imports but all of them. As co-author Nafeez Ahmed wrote in an op-ed: “Not only will Germany not have to build any new fossil fuel, nuclear, hydrogen, hydropower or geothermal power, but after 2035 it will never need to import fossil fuels again.”

It may not be alone. For the first time ever, the IEA’s World Energy Outlook predicted a peak or plateau for fossil fuel demand in all of its scenarios — including the least ambitious one. “As governments inevitably do more to accelerate the energy transition,” Canadian Climate Institute research lead Caroline Lee tweeted, “the outlook for fossil fuels will not become any rosier.” In the net-zero emissions scenario, for example, oil demand plummets to 75 million barrels per day by 2030 on its way to less than half that by 2050, while in the “announced pledges” scenario, it peaks in the mid-2020s.

Here in Canada, though, that message has yet to really sink in. In an October op-ed for the Globe and Mail, former Scotiabank CEO Brian Porter suggested now is the time for us to ramp up our fossil fuel exports. “We recognize the importance of working, over time, to reduce carbon emissions, and our domestic ambitions on the climate front are well-intentioned,” he wrote. “But we cannot act as if nothing has changed in the world over the past year. Positioning ourselves to be the preferred supplier of responsibly produced energy to the world is good for our allies and good for all Canadians.”

A month later, at COP27, the head of Canada’s largest oil and gas lobby made it clear she wasn’t buying the IEA’s forecast, either. “As global demand for natural gas and oil will remain strong for decades, Canada has a role to play in providing safe and lower emission resources to the world’s energy mix,” said Lisa Baiton, president and CEO of the Canadian Association of Petroleum Producers.

In other words, Canada’s oil and gas industry and its proxies in the banking sector are betting the world will not live up to its existing promises on climate change and net-zero emissions, much less make new and more ambitious ones. This, along with their desire to extract as much in subsidies and support out of the federal government as possible, explains why they’ve been moving so slowly on their much-touted commitment to building new carbon capture and storage projects.

But ragging the puck like this only works if the score is in your favour — and the game is within your control. If the world gets serious about decarbonization, or at least lives up to its current promises, that game is already over. As University of Calgary professor and Pembina Institute board member Sara Hastings-Simon tweeted, “The biggest impact policy can have in the next few years on Alberta’s oil production/value of that production is not the policies in Alberta or Canada but the policies everywhere else.”

In other words, we are not masters of our destiny here in Alberta, no matter how many sovereignty acts our government signs into law. Nuclear fusion may still be decades away, but the global energy transition away from fossil fuels is only going to pick up speed in the months and years to come. The longer we wait to respond, the further behind we’re going to end up.