Canada as a supplier of energy

Canada is one of the most important countries in the world in terms of resources and Canada stands in a position of prime importance as a supplier of energy. Its vast hydropower resources add even greater importance to its role as an energy supplier. Canada’s forest resources, particularly in combination with its hydropower resources, make the country a major source of clean, renewable energy for the future. Canada is also a significant producer of metals, including nickel and copper, which are essential in the manufacturing of goods worldwide.

The Country

Canada is located in the northernmost part of the North American continent. The country is primarily bordered by water, with the north Atlantic Ocean to the east, the north Pacific Ocean to the west, and the Arctic Ocean to the north. It shares its southern border with the United States and a portion of its western border with the state of Alaska. Canada primarily comprises plains but does have mountain ranges in the west and lowlands in the south. Canada’s key resources are oil, natural gas, potash, uranium, zinc, hydropower, and forests. Canada has a competitive global economy and is one of the richest in the world based on gross domestic product (GDP) per capita.

Oil

Oil is a form of composed of hydrogen and carbon compounds. It is a liquid form of fossilized biomass contained in underground reservoirs in basins both on land areas and in seabeds. Crude oil is refined and used for fuel, lubricants, and various petrochemical feedstocks.

Oil is an abundant resource in Canada. Approximately 47 percent of Canada’s land is covered by sedimentary basins. Only a small number of these land basins are exploited. The major basin is the Western Canadian Sedimentary Basin, which has an area of 181.6 million hectares. The major oil fields of the basin—including the LeDuc oil field, Norman Wells, and Redwater—are all located in the province of Alberta. However, Canada’s greatest resources for oil production in the future are located in basins in the Beaufort Sea and in the waters off the east coast. The Hibernia oil field in the Atlantic Ocean is a major producer of oil. The Canadian government, in cooperation with private companies, is developing many of these basins, including those under the Beaufort Sea. All leases to explore and extract oil and the manner in which it is extracted are regulated by the Canadian government.

The oil sands located in the Athabasca basin in Alberta constitute another rich source of oil for Canada. However, oil sands require unconventional means of extraction and processing that threaten the environment with increased greenhouse-gas emissions. The oil in oil sands is bitumen, a heavy, viscous crude oil. It is encased in sand and water and requires considerable processing to be converted into gasoline and jet fuel.

Oil is important to the Canadian economy both domestically and globally. As of 2023, Canada produced 5.692 million barrels of oil per day. Ninety-seven percent of its oil was sold to the United States during that year. The completion of the Trans Mountain Expansion (TMX) in 2024 was expected to triple its capacity, allowing Canada to export more oil.

Natural Gas

Natural gas, a highly combustible odorless and colorless liquid, is found with crude oil and in separate deposits. Natural gas is composed of methane, butane, ethane, and propane and, like oil, is a form of petroleum. Natural gas is extracted from wells dug deep into the Earth and also from coal-bed methane and from tight sandstone and shale. The methane extracted from the last two sources is referred to as tight gas.

Natural gas is found in various areas in Canada. The extraction of natural gas by drilling wells is the conventional means of retrieval but is expected to decline as unconventional methods of extraction (from coal-bed methane and from shale and tight sandstone) increase. The Western Sedimentary basin located in southwestern Canada contains the majority of the estimated Canadian natural gas reserves. There are also known reserves off the east coast near Nova Scotia and in Ontario. The Arctic Ocean is believed to contain a large amount of gas hydrates, methane enclosed in frozen water on the ocean floor and under areas of permafrost. These potential reserves are not included in the estimated Canadian reserves because the technology necessary to extract them has not been developed.

Natural gas plays an important role in the economy in both the domestic and global markets. In Canada, natural gas is an important resource because it is used by all sectors: residential, commercial, industrial, and power-generation. In 2022, Canada produced 187.686 billion cubic meters of natural gas and exported 84.928 billion cubic meters, according to the World Factbook. The United States, Canada’s major trading partner, plays a significant role in the Canadian natural gas industry. The two nations participate in an integrated marketplace that unifies the two countries’ regulation of the industry at all stages. In 2022, Canada exported half the natural gas that it produced to the United States and earned $236.9 billion in revenues.

Potash

Potash, the seventh most abundant in the Earth’s crust, includes potassium compounds and any material containing potassium. The major use of potash is in the making of fertilizer. Potash was first discovered in Canada in 1943 in the province of Saskatchewan by workers drilling oil wells. In 1951, exploration for potash deposits began. The major potash deposits are in the Middle Devonian Prairie Evaporite, which is located in central and south-central Saskatchewan and extends south into Manitoba and into the United States. Canada possesses approximately 68 billion metric tons of potash reserves. The first company to produce potash in Canada was the Potash Company of America; the firm was founded in 1958 with underground mines at Patience Lake. From 1960 to 1985, extensive development of potash mining took place in Saskatchewan and New Brunswick. In 1964, Kalium Chemical Ltd. established a potash solution mine near Regina, Saskatchewan. This was the world’s first mine of this type. The Canadian potash industry is composed of nine underground mines located in Saskatchewan and two solution mines. By 2022, Canada had become the largest exporter of potash in the world and had 46 percent of the world trade in potash. Canada exports potash to forty different countries. The United States, China, and Brazil are its greatest markets for potash.

Uranium

Canada is one of the world’s leading producers of uranium, a radioactive metal. The exploited deposits of uranium are all in Saskatchewan Province; the largest deposits of high-grade uranium are located in the Athabasca basin. The major operating uranium mines, most located in Saskatchewan, are at Rabbit Lake, McClean Lake, and McArthur Lake. The major use of uranium is in commercial nuclear power plants in the production of electricity. Canada exports 80 percent of its uranium for this purpose. The majority of the exported uranium is sent to the United States, Japan, and Western Europe. The remaining 20 percent is used domestically in Canada’s CANDU reactors to produce approximately 15 percent of Canada’s electricity.

Hydropower

Hydropower, a renewable resource, first became an important source of energy in Canada in the late 1800s. Hydroelectric plants were constructed at Niagara Falls in Ontario and at Shawinigan Falls in Quebec. Afterward, hydropower continued to play an important role in Canada’s economic development. The number of hydroelectric plants in Canada has grown to 521, and hydropower furnishes approximately two-thirds of Canada’s electricity. Although the number of facilities using hydropower throughout Canada has increased dramatically, the country has not begun to utilize fully its resources of potential hydropower. Globally, Canada is a leader both in the production of hydropower-generated electricity and in the development of hydroelectric power-plant technology. The United States, Canada’s major trading partner, imports about $1.2 billion of electricity from Canada in 2023. The majority of this electricity was generated with hydropower. As global concerns about greenhouse-gas emissions and air pollution become ever greater, Canada’s role as a developer of clean, renewable energy resources and technology continues to grow in importance.

In 2022, Canada’s electricity production composition continued to show the strong positioning of hydroelectric sources. More than 60 percent of Canada’s electricity was produced through this means. This was followed by fossil fuels (about 17.2 percent), and nuclear sources (12.9 percent). Canada had committed to eliminating coal as a source of power generation by 2030.

Aluminum

Aluminum is not a metal native to Canada; nevertheless, as the major refiner of aluminum, Canada plays an important role in supplying aluminum to the world. The metal is shipped from all over the world to Canada’s refineries in Quebec, where a vast amount of is available for processing. The refined aluminum is exported globally.

Forests

Ten percent of the world’s forests are in Canada, covering 901 million hectares. Canada’s forest area also accounts for 30 percent of the boreal forest of the world. Forests play a key role in Canada’s economy. Globally, Canada is the largest exporter of forest products. The United States, the European Union, and China are the major markets for Canadian forest products. In 2008, the housing crisis in the United States caused a decline in both the quantity and the dollar value of soft-wood lumber exports. The popularity of electronic media throughout the world has brought about a decline in the amount of newsprint exported. However, the demand for pulp has become greater, with a significant increase in pulp export to Asia. Canada exports a wide variety of forest products, both wood and nontimber products. Christmas trees and maple products account for the majority of nontimber products. Logs, paper products, and pulp constitute the largest dollar value of timber product exports; however, Canada also exports a substantial amount of wood-fabricated products such as fiberboard, both soft- and hard-wood lumber, and plywood. Although Canada imports some forest products, the country is primarily an exporter of forest products, with exports far exceeding imports.

The forest-products industry accounted for approximately 1.2 percent of Canada’s GDP in 2022. Forest-based food products, such as wild mushrooms and berries, and secondary manufacturing of wood products from residues of timber harvesting make a significant contribution to Canada’s economy. Both are also important in that they contribute to the economy without increasing the number of trees harvested. Canada was not only the world leader in forest products but also one of the nations most concerned with forest and renewal. The annual forest harvest was less than 1 percent of the total Canadian forest. Canada has a number of programs to protect its forestlands and assure their regeneration. Approximately 40 percent of the forest is covered by various programs of land-use planning or is designated as certified forest. Legislation provides protection to approximately 7 percent of the forest. By 2024, Canada remained committed to protecting and managing its forests. Scientists and technologists from Natural Resources Canada

Fisheries

Fisheries as a resource have experienced considerable difficulties throughout the world because of changes. Coupled with the decline in numbers in various species of fish because of climate changes, specifically warming ocean temperatures, the over-exploitation of this resource has resulted in the collapse of some segments of the industry. Canada’s fishing industry has not escaped this problem. While fisheries have played a less important role in the Canadian economy than forests, they have been a major part of the economies of the coastal provinces, especially those of the Atlantic coast. The first major decline in Canada’s fisheries occurred in 1992 with the collapse of the Atlantic cod fisheries. This decline came about because of colder water temperatures in the Labrador Sea and overfishing of the species. Atlantic cod had played a significant role in Canada’s fish exports.Sockeye salmon, which has a higher dollar value, is a Pacific fish and is threatened by warming in the Pacific Ocean. This is causing the salmon to move toward the Bering Sea, resulting in a reduction in the number of sockeye found in Canadian waters. By 2024, Canada was taking measures to protect Pacific salmon. It was trying to stop illegal, unreported, and unregulated (ICC) fishing, which has caused its populations to decline.

Canada’s fishing industry was shifting from reliance on a to dependency on farm-raised and ocean-cultured fish. Aquaculture, much of which is mariculture (aquaculture done in the ocean), has played an ever-greater role in the industry. Both finfish and shellfish are cultured. From 1991 to 2022, aquaculture production grew from 50,000 tons to 166,000 tons, values of $234 million to $1.3 billion.

Zinc

Zinc is a bluish white metal found in the Earth’s crust. It has a large variety of uses ranging from the of steel against corrosion to the creation of alloys such as brass to use in roofing and in paint. Zinc deposits are located in the Appalachian region of Canada and are mined in both open and underground mines. There are a large number of zinc mines operating in Canada, including mines in British Columbia, Manitoba, Saskatchewan, Ontario, Quebec, and the Northwest Territories. Canada is the world’s largest producer of zinc and exports about 90 percent of its zinc production. Zinc is exported both as refined metal and as concentrate. The refined metal that is exported has been subjected to an electrolytic process and is therefore an almost pure product. Canada exports zinc worldwide. The major markets for zinc as refined metal are the United States and Taiwan. For zinc concentrate, the majority of markets are in Europe, especially in Belgium, Germany, Spain, and Italy. South Korea is also an important market for zinc concentrate.

Nickel

Nickel is a grayish white metal and ranks twenty-fourth in abundance among metals found in the Earth’s crust. It is used primarily as an alloying agent and is found in about three thousand different alloys, including stainless steel. Nickel was first discovered in Canada near Sudbury, Ontario, where a number of companies run integrated operations in mining, milling, smelting, and refining the nickel. In 1993, another large deposit of nickel was discovered at Voisey Bay. Canada’s domestic market uses only 2 percent of the nickel produced in the country; the remainder is exported to major markets such as the United States, Western Europe, and Japan.

Other Resources

Canada’s other resources include salt, copper, gold, and molybdenum as well as numerous others. Salt is found in both eastern Canada, where it is abundant in the Atlantic basin, and western Canada, from Manitoba to Alberta. Canada is a world leader in teh production of salt. All but 1 percent of Canada’s trade in salt is done with its major trading partner, the United States. However, Canada imports more salt than it exports.

In Canada, copper, a reddish metal, is usually found in combination with sulfite minerals. The copper sulfides often contain gold and molybdenum as well. Canada is the fifth largest mine producer of copper globally. Its two major copper-producing provinces are Ontario and British Columbia. The copper mined in Ontario is processed there, but the copper mined in British Columbia is exported to Asia for processing.

Impacts of 2022 Russian Invasion of Ukraine

The Russian invasion of Ukraine in February 2022 caused shifts in global markets for energy. Much of this resulted from international sanctions that targeted Russia's ability to garner revenues to fund the war. Canadian energy products increased in both demand and price. In March 2022, Canada announced it would increase petroleum production by 300,000 barrels per day to offset reduced availability of Russian petroleum.

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