Canada’s Energy Sector
Canada is blessed with an abundance of energy resources and is the world’s third largest producer of natural gas and the eighth largest producer of crude oil. Energy is an important sector of the Canadian economy and is a key contributor to our country’s merchandise trade. It accounted for 7.2% of the country’s GDP in 2006 with an overall merchandise trade surplus of $53.6 billion. Being a capital intensive sector, it also provides support to other industries, such as construction and manufacturing. Increases in the cost of energy directly affects other segments of the Canadian economy.
The majority of Canada’s energy resources are found in the province of Alberta. The Alberta oil sands are among the largest deposits of crude bitumen in the world with an initial in-place volume of approximately 1.6 trillion barrels. Oil sands are a thick, viscous mixture of bitumen hydrocarbons combined with water, sand, heavy metals and clay. Bitumen is separated from the oil sands through heating processes and is then upgraded into higher valued products for end-use markets. The Athabasca oil sands are the largest deposit in Alberta with an estimated bitumen of 1.3 trillion barrels.
The graph below shows that the annual investment in Canada’s Mining and Oil and Gas Extraction sector grew at a CAGR of 9.9% from 1998 ($20.5 billion) to 2007 ($52.6 billion).
This series of articles briefly describes the oil, natural gas, coal and electricity industries that make up a large portion of the Canadian energy sector.