The Bottom Line

The document argues that Canadian oil producers are highly vulnerable to declining global demand and falling prices. While the heavy reliance on U.S. refineries provides a temporary buffer, this will not shield Canada from global price volatility or the long-term decline in petroleum consumption. The author contends that ESG credentials and production costs will not allow Canada to compete against lower-cost Middle Eastern producers in a shrinking market. Consequently, the brief warns of an existential threat to the sector, including job losses and reduced tax revenues, urging the Canadian government to diversify its economy.

• Canada's oil exports are overwhelmingly dependent on the United States, with over 94% of exports going to the U.S. and 80% consisting of heavy crude from Western Canada's oil sands as of 2021.
• While U.S. refineries provide a temporary buffer, Canada remains vulnerable to falling demand; for instance, the U.S. Inflation Reduction Act is expected to reduce U.S. petroleum product demand by 2.1 million bpd by 2030 and 4.1 million bpd by 2035 compared to 2021 levels.
• Environmental, social, and governance (ESG) credentials will not help Canada maintain market share because refineries prioritize quantity, quality, and price over ESG factors, and retail consumers cannot distinguish the source of refined gasoline.
• Canada is not a low-cost producer compared to Middle Eastern competitors; as of November 2022, Canadian producers had a weighted average breakeven oil price of USD 35.21 per barrel.
• The post-peak oil market is expected to be characterized by low and volatile prices, potentially exacerbated by a 'green paradox' where national oil companies increase production despite falling demand to meet domestic policy goals.
• The oil sands industry has a poor environmental and social record, including being ranked fourth worst globally for GHG intensity in 2015 and facing lawsuits from the Beaver Lake Cree Nation over Treaty 6 rights violations.
• Canada faces a significant liability crisis regarding orphaned oil and gas sites; as of September 2022, 3,309 sites were orphaned, with cleanup costs estimated at nearly CAD 700 million against only CAD 169 million in assets.

APA

Cosbey, A. (2022). The Bottom Line. International Institute for Sustainable Development. https://www.iisd.org/system/files/2022-12/bottom-line-why-canada-unlikely-sell-last-barrel-oil.pdf

Chicago

Cosbey, Aaron. The Bottom Line. International Institute for Sustainable Development, 2022. https://www.iisd.org/system/files/2022-12/bottom-line-why-canada-unlikely-sell-last-barrel-oil.pdf.

Wikipedia

{{cite report |last1=Cosbey |first1=Aaron |title=The Bottom Line |publisher=International Institute for Sustainable Development |date=December 2022 |url=https://www.iisd.org/system/files/2022-12/bottom-line-why-canada-unlikely-sell-last-barrel-oil.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cosbey2022bottom, author = {Cosbey, Aaron}, title = {{The Bottom Line}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = dec, url = {https://www.iisd.org/system/files/2022-12/bottom-line-why-canada-unlikely-sell-last-barrel-oil.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }