The head of the International Energy Agency is pressing Canada to accelerate the development and export of its energy resources, cautioning that current favorable market conditions will not persist indefinitely.
Trust as a key asset
Speaking at a policy conference in Toronto on Thursday, IEA Executive Director Fatih Birol emphasized that in the aftermath of the Iran war, energy security will become a premium factor for buyers. "The most important resource, or card, that Canada has today is trust," he said, noting that countries typically purchase energy based on price, but geopolitical shifts are altering that calculus.
Birol acknowledged Canada's reputation for lengthy project timelines due to multiple levels of government, warning that "Canada doesn't have the luxury to be slow." He described the convergence of factors as a "golden opportunity" for the nation, stressing that "the cost of missing this train will be incredible."
Global oil supply challenges
Birol highlighted that the world is losing 14 million barrels per day of oil due to the conflict in Iran, and post-war production recovery will be gradual. He reiterated the IEA's readiness to take further action after members agreed in March to release 400 million barrels from strategic reserves.
However, he stressed that accelerating major projects must not compromise environmental or human rights standards. "I wish there were a few more Canadas in the world," he said, "so that we can have a much more reliable and sustainable global energy system."
Need for new export destinations
When asked about his advice to the Canadian government on oil and gas, Birol replied: "They have to develop those resources, but more importantly, they have to make sure that they have new export destinations." He expressed confidence that Prime Minister Mark Carney understands the urgency.
Birol's remarks followed comments from Cenovus Energy Inc. CEO Jon McKenzie, who told analysts that higher costs for new oil sands projects require looser environmental rules to be economically viable.
Regulatory challenges
Canada has struggled to keep pace with peers on capital spending. Bank of Canada Governor Tiff Macklem told a Senate committee on Wednesday that international investors are choosing countries with quicker regulatory regimes. "What is holding them back has been very long regulatory approvals," Macklem said, adding that investors dislike locking up capital for extended periods. He advocated for streamlining regulations to make them more predictable and faster, which could boost Canadian access to global capital.
Transport Minister Steven MacKinnon indicated that the government is working on speeding up regulatory processes for major projects, potentially through upcoming legislation.
