Last time, Michael Holden highlighted some of the information and key findings of the Canada West Foundation’s recently-released publication, State of the West: Energy – 2012 Western Canadian Energy Trends, focusing on the intermediate use of raw energy as an input prior to consumption by final end-users. This week and next, he turns his attention to energy consumption in western Canada, looking first at the types and quantities of energy used in the region. Next week he will examine energy consumption by sector.
As in the rest of the country, nearly all the energy consumed in western Canada is in one of three forms: electricity, natural gas and refined petroleum products (gasoline, diesel, etc.). These three account for 97% of all energy consumption in the region and a similar share nation-wide. As discussed last week, other major forms of energy like coal and natural gas liquids are used primarily as inputs (the vast majority of coal is used to produce electricity) or to make non-energy products.
Western Canadians are not only major producers of energy, they are also some of the largest consumers in the country. In 2009, the four western provinces, which were home to some 30.8% of the Canadian population, accounted for 42.7% of all primary and secondary energy consumption in the country.
However, these figures mask significant differences in consumption intensity within the region. Western Canada’s high overall consumption levels are entirely the result of disproportionately heavy energy use in Alberta and Saskatchewan. On a per-capita basis, those two are by far the largest energy-consuming provinces in Canada, using almost twice as much energy per person as residents of other provinces. Meanwhile, energy consumption levels in BC and Manitoba are comparable to those outside the West.
High consumption levels in Alberta and Saskatchewan extends across energy types. Alberta is the single largest natural gas consumer in the country, accounting for 35.8% of Canadian final demand in 2009. Per capita consumption in the province is more than three times the national average and is growing rapidly. Saskatchewan is the next largest user on a per-capita basis and is the only province other than Alberta where natural gas is a significant and growing source of energy. Similarly, Saskatchewan is by far the largest per-capita consumer of refined petroleum products in Canada, while Alberta is ranked third (behind Newfoundland and Labrador). The two provinces also consume higher-than-average amounts of electricity per person, although in that category at least, they are closer to the national average.
Not only do Albertans and Saskatchewanians consume more energy than do residents of other provinces, but they are also bucking the national trend in terms of overall demand growth. Per capita energy consumption has fallen in most provinces since the late 1990s, but it has soared in the West’s two middle provinces. Newfoundland and Labrador—Canada’s third largest oil-producing province—is the only other province where per capita energy use has risen since 1999.
At the other end of the spectrum, BC has seen one of the largest decreases in consumption intensity since 1999. Per capita energy use in that province was 8.5% lower in 2009 than it was a decade earlier. The only province in which energy consumption has fallen more is Ontario, where a decline in industrial production in the late 2000s contributed to a large decrease in energy use in that sector.
In addition to the fact that energy consumption levels vary across the region, there are also considerable differences across Canada in the relative importance of each type of energy—differences which largely reflect regional resource endowments and transportation linkages. The four western provinces, along with Ontario are relatively large consumers of natural gas. Quebec is by far the largest consumer of electricity and the Atlantic Provinces are large users of refined petroleum products.
Within western Canada, energy consumption in BC and Manitoba is relatively evenly divided across the three main energy types. Refined petroleum products—used heavily in the transportation sector—made up about 43% of total energy consumption in BC in 2009 and 40% in Manitoba. Natural gas accounted for a little less than 30% of total consumption in both provinces, with electricity making up the remainder.
By contrast, energy consumption in Alberta and Saskatchewan is more heavily skewed towards natural gas, which made up 54% and 44% of final demand in 2009 in the two provinces, respectively. Electricity accounted for about 14% of energy use in each, and petroleum products, the remainder (30% of total energy use in Alberta and 40% in Saskatchewan).
It is tempting to attribute the high level of consumption in Alberta and Saskatchewan to the energy-intensive nature of fossil fuel extraction, which is heavily concentrated in those provinces; indeed, oil and gas extraction (as well as mining) does account for about one quarter of overall energy consumption in Alberta and Saskatchewan. However, this is only a partial explanation. When industrial energy use is removed from the equation, Albertans and Saskatchewanians still consume far more energy on a per capita basis than other Canadians. Each Albertan uses 50% more energy for non-industrial purposes compared to the national average and each resident of Saskatchewan consumes almost twice the national average. How western Canadians consume energy in their day-to-day lives and how transportation, home heating and other activities affect energy demand across western Canada will be discussed next week.
– By Michael Holden