As Canadians grapple with skyrocketed energy bills and prolonged high oil prices, the latest energy statistics released today by Statistics Canada for July 2023 provide a nuanced insight into the state of the nation’s energy sector. While the data points to some encouraging trends, it also raises concerns about the resilience of the Canadian electricity industry in the face of increasingly extreme weather events.
Primary energy production in Canada saw a 1.0% increase in July, primarily driven by a significant gain in natural gas production, which rose by 2.7%. However, this uptick was somewhat offset by a 10.9% drop in primary electricity production. Secondary energy production, on the other hand, surged by 4.1% compared to the previous year.
A notable feature of July’s statistics was the impact of the record high temperatures experienced in some parts of Canada. These soaring temperatures led to a surge in electricity consumption and imports, setting new monthly records. Electricity exports and hydroelectric generation in July hit their lowest levels since 2016, with British Columbia, a region heavily reliant on hydroelectricity, experiencing its lowest precipitation levels since the same year.
Total electricity generation in Canada decreased by 5.5% year-over-year, amounting to 49.0 million megawatt-hours, with hydroelectricity generation falling by a significant 13.6%. The provinces of Quebec and British Columbia were the primary contributors to this decline in hydroelectric generation, with Quebec citing weather conditions and low prices as reasons for reduced exports and generation.
Electricity consumption, however, increased by 3.6% year-over-year, reaching 46.9 million megawatt-hours in July. Imports, particularly from British Columbia, surged by a staggering 136.6%, accounting for 89.3% of total imports. In contrast, exports of electricity to the United States plummeted by 42.2%.
The Canadian energy sector’s reliance on hydroelectric power and its vulnerability to weather fluctuations were evident in these figures. The shift in hydroelectric generation, along with an increase in electricity consumption and imports, underlines the need for improved infrastructure and energy diversification strategies to ensure Canada’s energy security.
Another striking aspect of the July energy statistics was the production of crude oil and equivalent products. Production rose by 1.0% from the previous year, primarily driven by the production of synthetic crude oil, which increased by a remarkable 13.3% to 6.6 million cubic meters. With turnarounds completed in the second quarter of 2023, some upgraders achieved record production levels in July.
Closing inventories of crude oil declined by 5.6% year-over-year to 18.0 million cubic meters. This marks the 19th consecutive monthly year-over-year decrease and is the lowest level since December 2019, before the COVID-19 pandemic. This trend can be attributed to increased exports to the United States by pipeline, which have been rising for over two years. However, it’s worth noting that synthetic crude used as an input to Canadian refineries saw its first year-over-year decline in the same 19-month period.
As Canadians continue to feel the pinch of high energy prices, the production of gasoline and renewable fuels offers a glimmer of hope. Production of finished petroleum products rose by 3.9% year-over-year in July, with motor gasoline increasing by 10.2%. This growth follows consecutive increases since March 2021. The production of renewable fuels also saw a significant boost, climbing by 12.6% in July, marking the second-highest production level since the series began in January 2020. This uptick coincides with the implementation of Canada’s Clean Fuel Regulations in July 2023, highlighting the country’s commitment to cleaner energy sources.
Additionally, the production and exports of natural gas witnessed an upswing in July. Production of marketable natural gas rose by 2.7% year-over-year to 659.9 million gigajoules. This rebound came after notable drops in May and June, primarily due to forest fires. Exports of natural gas to the United States increased by 3.0% year-over-year in July, signaling a positive trend after six consecutive months of year-over-year declines.
In conclusion, the July 2023 energy statistics reveal a complex landscape for Canada’s energy sector. While there are signs of growth and adaptation in various areas, the challenges posed by climate change, extreme weather events, and energy security demand proactive measures and strategic investments to ensure a more sustainable and resilient energy future for Canadians.