The International Energy Agency / IEA did NOT say oil & gas demand would continue to rise - Sierra Club Canada

As Oil Change International puts it: “A peak in fossil fuels is still expected under the baseline trajectory of STEPS, which sees a near-tripling of renewable capacity by 2035, even after accounting for U.S. policy backsliding. The IEA [still] expects coal to decline before 2030, oil to peak around 2030, and gas to peak around 2035….

Crucially, the IEA clarifies that the Current Policies Scenario (CPS), an obsolete, fossil-fuel heavy scenario reintroduced under U.S. pressure, does not reflect ‘business-as-usual’. Instead, it implausibly assumes that existing policies and technology trends freeze or roll back, portraying a U.S. administration fantasy rather than the reality of today’s rapidly evolving energy market.”

The idea renewable energy technology development would suddenly stop is ridiculous and countries around the world are in fact accelerating their adoption of renewables – not for the sake of stopping climate change – but because renewables represent cheaper energy than oil and gas and because no country wants to be tied a product that is so volatile.

See their full release or read a full explainer on why expanding Canada’s oil and gas/LNG is economically futile.

Artificial intelligence is not expected to change the case for LNG demand, as one energy analyst put it: “we don’t anticipate Germany needing gas for AI specifically,” especially since heavier reliance on gas “would just ramp up electricity prices and push these data centres away even more.”

As a result of the coming decline in demand, global oil and gas corporate exploration budgets are already shrinking and oil and gas investment is shifting to short term gains. This means LNG projects like the one proposed in Fermeuse, Newfoundland and Labrador have no market.

Demand for LNG in emerging markets is contingent on price, and LNG is expensive to produce in Canada. LNG is a risky bet as renewables are rapidly becoming the default for energy development especially across the ‘Global South.’ Low-cost renewable energy is soaring in China and Vietnam: Vietnam’s wind and solar generation exceeds gas-fired power generation. Demand is estimated to have already peaked in Europe and South Korea. China has already surpassed its 2030 renewable energy ambitions. In fact, China installed more wind and solar power in a single year than the total amount of renewable energy currently operating in the United States. Canada actually risks losing out on the renewable future of energy and ending up reliant on China if we don’t build our own independent renewable supply chains.

The International Energy Agency (IEA), an authoritative voice on energy, says in its World Energy Outlook for 2024 anticipates a surplus of LNG supply in the coming years, and that “we estimate that the sponsors of around 70% of LNG export projects currently under construction would struggle to recover their invested capital.”

Exporting LNG will likely raise the cost of gas in Canada and BC households are going to experience much higher gas bills when BC starts exporting LNG this summer because they’ll be paying global gas prices. This despite the fact that 77% of British Columbians favour renewable and clean-energy projects instead of LNG. In Australia, wholesale gas prices tripled, and U.S. households were paying 50 per cent more for their gas as LNG exports began.

By contrast 81% of renewables offer cheaper energy than fossil fuels. Renewables also create far more jobs than oil and gas projects (oil and gas corporations have cut jobs in Canada even when oil production has expanded., it’s easier to localize renewable jobs in communities in places like Alberta and NL, and renewables are more reliable than oil and gas.

But all of this hasn’t stopped the Federal and Provincial Governments from wasting taxpayer money on dead-end LNG projects. LNG Canada received a precedent-setting incentive package, a policy framework from the BC government that includes corporate tax breaks, reduced rates for electricity consumption and interest-free deferral of provincial sales tax on construction, each valued at tens of millions of dollars every year. It also received $275 million in direct federal subsidies, and a federal exemption on steel tariffs, which cost taxpayers as much as $1 billion. Canada is spending three times more backing oil and gas than renewables, even though renewables are a better investment, especially as a November 2025 report shows a stark picture of the revenue losses provincial governments will face in the next decade as “oil and gas demand dries up:

By 85% in Alberta, from $153 billion to $23 billion;
By 72% in British Columbia, from $47 billion to $13 billion;
By 78% in Saskatchewan, from $16 billion to $3.5 billion;
By nearly 100% in Newfoundland and Labrador, from $4.4 billion to $300 million.”

Our governments are also discussing further massive taxpayer subsidies for foreign-owned oil and gas projects like Bay du Nord that have little chance of creating any significant employment but hold back other efforts.

The Nova Scotia Provincial Government has also attempted to implement a series of U.S.-Style authoritarian measures in favour of fracking and lifted a ban on fracking without consulting the Assembly of Nova Scotia Mi’kmaw Chiefs. It was a protection adopted after consultation and engagement with Nova Scotians and backed by health and economic research.

The idea that we need new gas plants to enable renewable energy is also FALSE. We already have energy storage options for renewable energy that are cheaper than building out new gas plants. Solar and wind with battery storage are set to produce cheaper electricity than natural gas in Alberta and Ontario.

Many First Nations have spoken out against fracking and LNG development because infrastructure for these massive industrial projects, such as pipelines, crosses their territories. For example, the Wet’suwet’en never gave consent for the Coastal Gas Link pipeline that was built to supply an LNG export terminal in Kitimat and several First Nations have not given consent to the Prince Rupert Gas Transmission that would supply the Ksi Lisims LNG project, also in Northern BC.

LNG interests, as with all fossil fuel interests, now rely heavily on maintaining the false appearance that there will be continued oil and gas expansion – an appearance propped up by Canadian taxpayer support. Because if people see the evidence beyond the spin investors will quickly realize reserves of oil and gas are overvalued. As a key energy journalist wrote recently:

“Every fossil company everywhere wants investors, governments, and citizens to think, even against the thinnest of evidence, it will be the last one standing as its business steadily crashes. But times are already tough, and the tell comes from two of the industry’s biggest voices…. The problem is that citizens, rather than fossil companies and their shareholders, might be stuck picking up the tab.”

As covered by DeSmog: “new LNG ventures in British Columbia saddle Indigenous communities with debt, opaque ownership structures, and financial risk that could leave them owing billions.”

In short, if Canada does not go renewable soon we risk being left behind to carry the weight of a lot of very unpopular and uneconomical oil and gas projects. Because renewables create more jobs, and localize jobs, while helping protect the climate, it’s also best to power any data centres with renewables not gas. We already have renewable solutions for when the sun does not shine or the wind does not blow like interconnected grids, energy efficiency, and energy storage, but LNG prices are inherently volatile due to international factors beyond our control.