Market Snapshot: 50 years of Energy Futures

Release date: 2017-12-13

The recent release of Canada’s Energy Future 2017: Energy Supply and Demand Projections to 2040 (EF2017) marks 50 years since the National Energy Board (NEB) first began releasing comprehensive Canadian energy supply and demand outlooks. The original report, which was released in 1967 and produced an outlook to 1985, covered many issues in Canadian energy that are still relevant today. Similar to EF2017, the relationship between energy, the environment, and technology was prominent in the NEB’s 1967 outlook. Notable topics from the 1967 report included the future of electric vehicles and fuel cells, the role of emerging technologies in power generation (at that time, nuclear), and the future of the oil sands and offshore oil and gas.

The charts and images below provide some of the highlights of the NEB’s energy projection 50 years ago.

Just Like EF2017, the NEB’s 1967 Energy Supply and Demand Forecast
included a lot of discussion about future technologies.

One of the future technologies discussed in the 1967 report was electric vehicles. The ’67 Forecast on Electric Vehicles:

“Much has been said about the development of an electric car that would obviate the obnoxious fumes emitted by the internal combustion engine of the gasoline or diesel fuel operated car or truck, but immediate or practicable solutions do not appear on the nearby horizon.

The potential fraction of the transportation vehicle market which could be filled by electric-powered vehicles will depend to a large degree upon the buying habits of people in the multiple-car household market and upon the practical appeal of various mass transit schemes based on electric vehicles.

The conclusion is drawn that electric vehicles would probably establish themselves in the near future as a complement to the conventional vehicle, but it is assumed that over the next 20-year period there would be no significant displacement of the internal combustion engine in road vehicles.”

In 1967, production of synthetic crude from Athabasca Oil Sands commenced,
and future oil production scenarios were based on exploration activity.

The Great Canadian Oil Sands Ltd. plant became the first to produce synthetic crude oil from the Athabasca Oil Sands. Meanwhile, in-situ recovery techniques were under active research and development. In 1967, Alberta was operating under a policy that prioritized conventional oil sources and regulated oil sands production. The policy limited oil sands production to 5% of conventional production permitting increased production only as markets grew, and linked growth to the life-index of proven conventional oil reserves^Footnote 1.

Assuming this policy would continue, the 1967 outlook projected offshore fields and additional conventional discoveries would drive Canada’s future reserves and production^Footnote 2. However, given this uncertainty, the report provided 3 cases for Canadian oil and natural gas liquids production:

(A) Exploration activity was held steady after 1967^Footnote 3,

(B) Exploration activity steadily increased after 1967 until it reached 50% higher levels by 1985,

(C) Exploration activity steadily increased after 1967 until it reached 100% higher levels by 1985.

Actual production exceeded the 1967 outlook up until the mid 1970’s.

The report projected relatively fast growth for natural gas and refined petroleum products sales,
and was near target for much of the forecast period.

Optimistic outlooks for Canadian population and gross national product (GNP) growth resulted in significant energy demand growth projections^Footnote 4. Natural gas sales were projected to grow 5.75% annually from 1965 to 1985, and annual growth was actually 5.80%. Projected industrial sales for natural gas in 1985 were 2.2 billion cubic feet higher than 1985 recorded sales, which amounts to a 0.24% difference between the projection and actual 1985 sales. For comparison, the EF2017 Reference Case projected Canadian demand for natural gas will grow 0.89% annually from 2016 to 2040.

From 1965 to 1985, refined petroleum products were projected to grow 3.93% annually, while average annual growth was actually 1.12%. However, the disparity between the projection and actual trend emerges in the early 1980s, corresponding with record breaking global oil prices and Canada falling into an economic recession.

The future of Canadian utility generation was believed to be nuclear power,
but the report was a bit too optimistic.

Two key factors drove projections for increased nuclear power. First, the costs of nuclear electricity generation were expected to match or fall below other conventional sources. Second, pressure to decrease fossil fuel emissions provided nuclear generation an opportunity to meet growing Canadian demand. Adoption of nuclear generation was most prominent in Ontario, where the ’67 Forecast projected it would provide 58.5% of utility generation by 1985. In 1985 nuclear actually provided 14% of generation in Canada, up from .28% in 1965.

The ’67 Forecast discussion about pollution and the electricity mix said:

“In general, this study assumes that social pressure to reduce air pollution may have the effect of perhaps slowing somewhat the growth of oil consumption for industrial uses, including power generation, and inhibiting the use of coal. Correspondingly, it is assumed that generation of electric power from nuclear plants and the use of gas will be stimulated.”

The future of Canadian coal production was significantly underestimated.

The 1967 report expected coal imports to continue to exceed exports with the deficit growing from -15 000 tons in 1966, to just under -22 000 tons by 1985. However, in 1981, Canadian coal exports surpassed imports, and by 1985, Canada exported 13 000 st more than it imported.

Date modified:

2023-11-28