Alberta is about to get blind-sided by China.
No matter the question, the answer for Alberta’s oil and gas industry is always the same: more pipelines. Worried about the Trump administration’s ongoing threats to Canada’s economic and political sovereignty? Just build a pipeline. Nervous about the long-term impacts of the war in Iran on global energy markets? Just build a pipeline. You almost have to admire the message discipline, even if that message was created in — and for — a world that no longer exists.
David Knight Legg, a former principal adviser to Jason Kenney’s government and longstanding industry booster, offered a reminder of that in a recent piece for the National Post. In it, he suggests that “China is in the middle of an urgent search for diversified, dependable supply to reduce its energy vulnerability. Canada is perfectly positioned to meet Chinese demand.” Implicit here is the notion that Chinese oil demand will continue to grow for decades to come, since it would make no sense to build a new pipeline — an asset that needs decades to pay off its investment — to supply a market where demand is declining.
Ramping up oil exports to meet Chinese demand might have made sense a decade ago, when China’s embrace of renewable technology was still in its infancy and the economic and geo-strategic dividends it creates weren’t as obvious as they are today. It makes absolutely no sense today, when China is in the midst of re-wiring the entire global economy with its solar panels, electric vehicles, batteries and other clean energy technologies. That now includes electric heavy-duty trucks, which could have an even bigger negative impact on oil demand than EVs. All of these technologies are being exported in ever-greater numbers, and the war in Iran has only increased the urgency of consumers, businesses and entire countries looking to buy them. In March, for example, China’s solar PV exports hit a record high of 68 GW — the equivalent of Spain’s entire installed solar capacity.
Fossil fuel enthusiasts never fail to point out China’s ongoing construction of coal-fired electricity plants, although they always fail to mention that they’re being used to back up wind and solar — and being used less frequently with each passing year. One additional data point should suffice here, though. In 2025, China’s electricity generation increased by nearly 500 terawatt-hours (TWh), which is roughly the same amount of electricity as Germany generates in an entire year. And most of it came from renewable sources, with solar generation growing by more than 340 TWh — again, in a single year.
The David Knight Leggs of the world are not remotely ready for any of this. In a recent Globe and Mail story, Strathcona Resources executive chair Adam Waterous suggested that Canada “could produce as much as 10 million barrels a day in a decade if all goes according to plan, putting it in league with Saudi Arabia.” This bears a striking similarity to the plan laid out by the Alberta separatists, who predict that oil output would more than double to nearly 10 million barrels a day once freed from the supposed shackles of their relationship with Canada.
It is, in a word, delusional. It reflects a view of the world that existed two decades ago, before the explosive growth of US shale oil put concerns about peak oil supply to bed and renewable energy began raising the prospect, and now inevitability, of peak oil demand. I don’t think it’s a coincidence that the people expressing this view first formed it when they were out of school, in the middle of their careers, and therefore at an age where they’re less willing to take in new information. That’s especially true when that information so clearly threatens their economic and professional interests.
The theory of ever-growing Chinese oil demand also feeds the familiar political narrative that’s propelling every Conservative movement in the West, from the BC Conservatives to the Alberta separatists and their friends in the UCP and the Conservative Party of Canada. Telling their followers the truth about the future of oil and gas has never been a priority. Now, it would probably be an act of political suicide.
I don’t know when China’s demand for oil will peak. But I do know that it’s going to happen way, way sooner than the David Knight-Leggs of the world are prepared for, and that huge volumes of their clean energy technologies will find their way into every other economy on Earth. Far from being an opportunity to sell more Canadian oil to China, the current conflict in Iran — one whose impacts will ripple out long after any political resolution is reached — is actually a harbinger of its eventual decline. As Ember research lead Daan Walter told Grist’s Kate Yoder, “It’s very likely that if this crisis continues to be as bad as it is, and we see this conversion happening, that we’re currently living in the peak year of oil, and that demand will just never come back to the level that it was just before Hormuz closed.”
That’s what Alberta — and Albertans — should be talking about right now, by the way. If they had a government that was truly interested in protecting and promoting its long-term economic prosperity, they would be engaging with these facts and finding ways to position the province accordingly. That could mean pivoting to non-combustive applications of bitumen like advanced materials, and it would absolutely mean putting an end to the province’s de-facto ban on utility-scale renewable energy.
But that would require a level of honesty and good faith, not to mention an understanding of the world beyond Alberta’s borders, that neither Danielle Smith nor the oil and gas industry she has so loyally served are capable of mustering. And so, Albertans will be left to find out what this means for them the hard way — all while the politicians, CEOs, and business community leaders who could have helped them prepare for it have long since retired to somewhere else, whether it’s the Okanagan, the United States, or some other solar-rich jurisdiction. If irony could generate electricity, it would power the entire provincial grid.
