Canada is making long-term, multi-billion dollar, decisions about its energy future at a moment of global change. Geopolitical shocks, unstable supply, shifting demand, and changing investment patterns are reshaping the global energy system. This series looks at those forces, and what they mean for Canada’s economy and the choices now in front of it. 

The world has now experienced two major fossil fuel supply shocks in less than five years. Russia’s 2022 invasion of Ukraine exposed European dependence on imported Russian gas. The share of Europe’s gas demand being met by Russian supply dropped just shy of 75 per cent between 2019 and 2023. Today, strikes in Iran resulted in the closure of the Strait of Hormuz, through which 25 to 30 per cent of global oil and 20 per cent of LNG usually passes. 

These two shocks, taken together, are reshaping how nations are defining energy security. It’s no longer about an abundance of imported oil and gas, but rather a lack of dependence on fossil fuels altogether. As Canada contemplates a barrage of fossil fuel export projects, it is courting risk. Instead, it should consider how it can play a role in the global supply chain that feeds domestic renewable power generation all over the world. 

The security case against fossil fuels

While diversified imports can shield markets from outright disruption of supply, oil and gas prices are set on international markets. Supply disruptions on one side of the world raise prices on the other. Even for a net exporter like Canada, disruptions to the fossil fuel trade in the Middle East can cause spikes in local gas prices.

Meanwhile, renewable power generation has no fuel costs. While global events........

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