Canada is home to vast sources of energy that span coast to coast. With our mix of conventional sources such as oil, gas, coal and hydro, unconventional sources such as oil sands, and alternative and emerging sources such as wind and biofuels, Canadians have a wide variety of energy options to meet our rapid population and economic growth. At the same time Canada is committed to reducing the greenhouse gas emissions that contribute to global climate change and the emission of criteria air contaminants that affect human health – both of which are, in part, a by-product of the production and use of hydro-carbon fuels.
Looking at the range and magnitude of Canada's resources and our growing contribution to the global energy picture, Prime Minister Harper has declared Canada to be an 'emerging energy superpower'. Claiming that role – especially a 'green' energy superpower – brings long term obligations along with significant opportunity.
If Canada, its governments, industries and citizens are to make the energy superpower vision a reality, an assessment of our energy options must be undertaken – undertaken in a way that looks at the energy system as an integrated whole and considers the implications of different choices on our energy future. We need to look at the 'green energy superpower' vision not as a 'given', but an opportunity that can be either seized or squandered.
Current growth in the energy sectors is an exciting contributor to Canada's economy. The energy sector underpins much of the Canadian economy – through investment, jobs and taxes, through reliable and affordable energy inputs to our homes and businesses, and through the generation of foreign exchange with which Canadians can acquire goods and services produced abroad. Investment and policy decisions that will have profound long term implications should be made with broad input, with an appropriate long term time horizon and with a fact based analysis of the possibilities, limitations and implications of those decisions.
Each source of energy that we rely on comes with recognized set of challenges relating to unequal regional distribution of different resource types, to the cost of converting resource into consumer energy and to the emission of CO2 and other by-products associated with both energy production and consumption. We are entering an era where traditional energy sectors can no longer live in silos, but are becoming significantly integrated as increasing volumes of non-traditional energy enter the mix and as we look for innovative solutions.
Shifts in the energy economy can only be observed over relatively long time periods due to the long lead times for major projects, the slow rate of capital stock turnover, and the time for new technologies to penetrate the marketplace. Thus, decision makers need long-term insights to balance the short-term demands of both investors and electorate in making decisions whose outcome will span decades.
CanESS is unique in its detailed representation of the technologies that transform energy sources into the energy currencies, hydro-carbon fuels, electricity and hydrogen, and that transform energy currencies into services such as transportation, space conditioning and the mechanical energy and process heat required for the production of goods. CanESS keeps track of the physical stocks and flows of energy feedstocks and fuels, the stocks of capacity for producing energy and energy currencies, and the stocks of artifacts such as vehicles, hot water heaters, HVAC systems, appliances, and electronic devices that use energy in the production of services. This physical economy approach is appropriate for examining coherent scenarios that explore the economic, social and environmental consequences as Canada transitions from an energy economy based primarily on conventional oil and gas to one based on a variety of renewable and non-conventional energy sources and on electricity and hydrogen as energy currencies. CanESS simulations reveal trade-offs among options and tensions, challenges or gaps that may be resolved by new technology, policy alternatives, or changes in the behavior of energy producers and consumers.
This approach complements the more conventional econometric energy models that focus on the behavioural responses of energy producers and consumers to international energy prices and economic incentives, and that are appropriate for short term policy analysis.
The nature of Canada's diverse geography, geology and market forces suggest there will be regional variations for these energy options. As such, the assessment needs to be built on a good understanding of these regional differences and the opportunities (and infrastructure required) for cross-region and cross-sectoral integration. Because CanESS is being built upon regional building blocks, disaggregation of simulator outputs can be provided for regional analysis.