Canadian Manufacturing

Canada needs to sink more public money into energy sector R&D, IEA says

Agency says funding injection needed to make oil and gas industry more cost-competitive

February 26, 2016  by Ian Bickis, The Canadian Press

Steam generators at Cenovus' forest Creek facility. PHOTO: Cenovus Energy Inc

The Canadian oil and gas industry needs stable, long-term funding, according to the IEA. PHOTO: Cenovus Energy Inc

CALGARY—The International Energy Agency says Canada needs to put more public money towards research and development in the energy sector.

The Paris-based organization says the funding injection is needed to make Canada’s oil-and-gas industry more cost-competitive and reduce its environmental footprint.

“This will contribute to reducing the environmental impact of energy use and production, as well as the cost of natural resource development, notably for oilsands operations,” said the report.

In its first in-depth look at Canada’s energy policies since 2009, the IEA says public research funding for the industry is in decline at a time when it’s especially needed.


The report says while Canada’s research funding is large compared with other IEA members, core public funding has dropped from $1.34 billion in 2013-14 to $941.9 million in 2014-15.

“The financial resources available for basic, publicly funded energy R&D in Canada are under pressure.”

That decline has been partially offset by short-term, targeted federal programs and funding from provincially owned companies, including spending on carbon capture and storage pilot projects.

But the IEA says the industry needs stable, long-term funding to address the high costs of the industry and because the oil-and-gas industry has become one of the biggest barriers to Canada honouring its climate change commitments.

“The emissions intensity of oilsands production is one of the most important factors in determining the country’s future energy consumption and emission performance,” said the IEA.

Emissions from the oil-and-gas industry have grown 14 per cent since 2005, and 67 per cent since 1990. They now make up about a quarter of Canada’s total emissions, the report said.

“Canada faces a number of challenges if the country wants to continue developing its natural resources in a sustainable and cost-effective manner, and to enhance its position as a responsible energy supplier and user,” it said.

Besides outright funding, the IEA also calls for a federal energy research-and-development strategy, especially on clean energy technology, carbon capture and storage, and more environmentally friendly ways of extracting fracking-based tight oil and gas.