The oil and gas industry is in decline and will inevitably fade away, possibly starting as early as this year, Natural Resources Minister Jonathan Wilkinson said Tuesday. That’s why Canadians should avoid investing in major infrastructure projects to increase production in a market with nowhere to go but down.Speaking to reporters prior to Question Period, Wilkinson was criticizing opposition leader Pierre Poilievre’s plans to allow more oil production while rolling back the carbon tax..“They have no view about how to build an economy of the future. Oil and gas will peak this decade. In fact, oil is probably peaking this year and and the economic plan of the Conservative Party of Canada is simply to produce more in oil and gas into a market that inevitably, if we are going to fight climate change, will begin to decline,” he said.“That is a ridiculous economic plan for the future of this country. It will leave Canada uncompetitive and poorer on a go forward basis.”Ottawa is basing its climate change policies on a widely debunked analysis by the International Energy Agency (IEA) that sees oil and gas production declining worldwide 70% after 2029..That view is hardly unanimous.On Monday, the Organization of Petroleum Exporting Countries (OPEC) raised its medium and long-term demand forecasts to 2050.“There is no peak oil demand on the horizon," OPEC Secretary General Haitham Al Ghais wrote in the foreword to its annual World Oil Outlook report.Al Ghais has previously claimed that efforts by governments — including Canada’s — to stifle oil production growth are reckless and even “dangerous” to the world economy.The cartel now expects world oil demand to reach 118.9 million barrels a day (bpd) by 2045, 2.9 million bpd higher than last year's report, and hit 120.1 million bpd by 2050. That’s more bullish than ExxonMobil, which sees oil demand staying above 100 million bpd but still at the upper end of the range.By comparison the world produced about 96.4 million bpd in 2023 — Canada was its fifth largest producer at around 5 million bpd..And other groups like Goldman Sachs don’t see that changing soon. In a report, the finance house cites slowing EV sales and rising living standards around the globe keeping oil demand robust. Although it expects overall demand to peak above 110 million bpd after 2034 before gradually tapering off. Instead of gasoline, it expects demand will be driven by petrochemicals and specialty products like jet fuel.“We think peak demand is another decade away, and more importantly, after the decade it takes to peak, it plateaus, rather than sharply declines, for another few years,” wrote Nikhil Bhandari, co-head of Goldman’s Asia-Pacific Natural Resources and Clean Energy Research department.Even in an ‘accelerated’ energy transition, New York-based management consultancy McKinsey predicts oil companies will have to add 38 million bpd of new production to maintain output and meet new demand.
