The Darlington Nuclear Generating Station in Courtice, Ont., in May, 2023. Roughly half of Ontario’s electricity comes from nuclear energy.Carlos Osorio/The Globe and Mail
Christopher Worswick is a professor of economics at Carleton University.
Prime Minister Mark Carney has identified carbon capture and sequestration (CCS) at Cold Lake in Alberta as a necessary condition to the building of an oil and gas pipeline. Premier Danielle Smith has suggested that this could be part of a “grand bargain,” with the federal government allowing for expanded oil and gas development in Alberta without large increases in carbon emissions.
However, CCS is a new technology and has only recently been implemented on a large scale. The potential of CCS should be explored, but any such grand bargain should consider other ways that the sector can be expanded without a substantial increase in emissions.
With the announcement of the first five projects on the federal government’s fast-track list of priorities, a lot of attention has been paid to the absence of an oil and gas pipeline and relatively little attention has been paid to the nuclear energy project. The small modular reactor (SMR) on the list is already approved and will be built at the Darlington nuclear facility in Ontario – one of four planned SMRs to produce electricity there.
Given that roughly half of Ontario’s electricity comes from nuclear energy, and given the industry’s remarkably safe history in Canada, nuclear energy could be key to building a pathway forward for an expansion of Canadian oil and gas production.
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The Alberta government is also considering building SMRs to produce low-carbon energy. Within the context of climate change and the need to reduce carbon emissions while expanding the highly profitable oil and gas sector, nuclear energy in Alberta actually makes a lot of sense. In 2023, Canada’s oil and gas sector contributed approximately 30 per cent of national carbon emissions. Forty-three per cent of emissions result from the generation of heat and electricity in oil sands production and upgrading, and more than 40 per cent of those emissions are from the burning of natural gas.
Instead, SMRs could be used to provide this heat and electricity. Given that life-cycle carbon emissions - the total emissions produced from extraction through to end use - from nuclear energy are around 3 per cent of those produced by burning natural gas, the benefits to SMRs providing energy to the oil and gas sector in terms of emissions reductions are potentially substantial.
While other sources of low-carbon energy are attractive, nuclear is perhaps the sole low-carbon source of energy that can provide 24/7 power to support Alberta’s oil and gas industry which is so vital to Canada’s economic future.
A grand bargain seems feasible where the Alberta government accepts SMRs in the province as a condition of a significant expansion of the oil and gas sector. With a smaller carbon footprint for oil and gas in the near future, the federal government could justify relaxing the carbon emissions cap, at least temporarily while SMRs are being built, and support both pipeline capacity and a relaxation of the tanker ban on the coast of northern British Columbia.
Could solar be an alternative to nuclear? The fact that the Saudi government is investing heavily in solar to reduce their carbon emissions while continuing to produce oil suggests that they see solar as a good option. However, large infrastructure projects such as oil and gas normally operate around the clock, making solar energy less effective in the absence of batteries with the capacity to store energy. That in turn requires large investments in battery facilities which rely on critical minerals for their production that are generally in short supply.
Solar energy is better suited to meet consumer demand for electricity which is normally higher during daylight hours. Hydro power would also be worth pursuing if there remain projects that are economically viable.
Canada has always been at the forefront of the international nuclear industry and Canadians have both the expertise and experience to lead this new wave of SMR production. While nuclear reactors produce waste that must be stored safely, Canada has an excellent track record of doing this.
If the federal government prioritizes new SMRs as part of the upcoming infrastructure projects, there would be the potential for Canada to be a world leader in SMR production, a sector that has tremendous growth potential around the world.
Demand for energy, especially for the burgeoning AI sector, is very likely to grow. However, the need to reduce carbon emissions to limit climate change is not going to go away. This grand bargain between the federal government and the Alberta government could even be a model for developing energy-intensive industries in other provinces.