A long-time gas price analyst and former Member of Parliament is warning that, if you think the price of gas is high now, it's possible you haven't seen anything yet.
President of Canadians for Affordable Energy Dan McTeague says carbon taxes, high demand, and oil production slowdowns will add up to higher prices for the foreseeable future. McTeague points to the Clean Fuel Standard, which the federal government says will require producers of liquid fuel (gasoline, diesel, home heating oil) to "gradually reduce the carbon intensity of the fuels they produce and sell for use in Canada over time, leading to a decrease of approximately 13% (below 2016 levels) in the carbon intensity of our liquid fuels used in Canada by 2030." McTeague claimed the clean fuel standard will add up to 16 cents per litre to the cost of gasoline in 2023.
President of Advanced Biofuels Canada Ian Thomson disagrees with the information McTeague is citing. Thomson said the Clean Fuels Standard will add a maximum of four cents a litre and the cost numbers McTeague cites are significantly exaggerated, and based on a deeply flawed study riddled with fundamental errors.
"We’ve reviewed dozens of studies over the years; this was amongst the most ineptly prepared," said Thomson.
With prices in most southwestern Ontario communities at over $1.30 per litre, McTeague said we haven't seen gas prices this high in Ontario since June of 2014. Gas prices at the beginning of the pandemic were hovering around 80 cents a litre.
McTeague said demand for oil and gas is growing as travel restrictions are lifted across North America, but supply is not keeping up and that is driving up gas and oil prices. He said currently there's an oil shortage of about one million barrels a day in the U.S.
"The United States this week broke all records in terms of consumption. They're well past their pre-pandemic levels of use of fuel. So, markets are responding by driving up prices," said McTeague. "We need more oil now than we have ever needed at any time in our lives and it's going to continue over the next 20-30 years, despite what the narrative is out there."
McTeague said another factor for the skyrocketing gas prices is that oil producers are afraid to get back into the game or can't get enough money to finance operations because of months of economic uncertainty and disinvestment in fossil fuels.
"Whether it's Wall Street or Bay Street, there's been a so-called green movement to move away from fossil fuels. The problem is that the world economy has not made that transition," McTeague noted.
Prime Minister Justin Trudeau tweeted out on Monday that climate change is real, and it’s affecting every region on Earth. Canada is warming at nearly twice the global rate, with some regions out West and up North warming even faster.
"We cannot deny this or delay action," Trudeau said. "Today’s report from the Intergovernmental Panel on Climate Change makes that clearer than ever."
The report from the United Nations-appointed panel on climate change says wild weather events are expected to worsen and become more frequent in the coming decades.
