The price of Canadian oil and natural gas reached new highs only to fall dramatically in the latter half of 2008 due to the emergence of unconventional resource plays in the United States. This created a supply glut, which added to the economic slowdown and reduced demand, according to Canadian Energy Overview 2008 by the country's National Energy Board (NEB).
Due to the low price and volatile financial markets, several oilsands projects that earlier in the year had been promising were either postponed or canceled. Approximately 16,300 oil and gas wells were drilled in 2008, which is about 10% below 2007 numbers. Alberta took the brunt of the decline with only 11,569 wells drilled compared to the 14,001 in 2007. Despite the drop in well numbers, activity in some areas of the country increased. Saskatchewan saw an increase of 22% from 3,202 to 3,898 wells. Records for provincial revenue generated by the sale of petroleum rights were set in British Columbia with the province earning C$2.7 billion and Saskatchewan with C$1.1 billion.
The environment and increasing momentum on climate change initiatives were key influences on the Canadian energy sector throughout the year, NEB said. Several provincial and federal policies aimed at energy demand were proposed early in 2008, including the expansion of clean energy and renewable energy strategies and new standards for consumer goods.
A proposed design of a comprehensive regional cap-and-trade program to reduce greenhouse gases was introduced by the Western Climate Initiative. By the end of 2008 all provinces had some legislation for climate change initiatives. Many of these new government programs and policies should impact consumer energy demand trends in the next few years as Canadians factor environmental costs into purchasing decisions.
"2008 was an extreme year and uncertainty around the global economic picture continues today," said NEB Chair Gaetan Caron. "However, what remains certain is Canada has numerous opportunities with respect to technology, sustainability and environmental protection."
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