Summer has finally arrived in Alberta, and Calgary has donned its Stampede regalia in the warm temperatures. With slightly higher oil prices, spirits are lifting; there’s more optimism in the air. As of this writing, Western Canada Select is running at about $70/barrel. Adding to the grounds for optimism, there’s progress on the Trans Mountain pipeline expansion, as Trans Mountain has filed a six-month construction schedule with the National Energy Board for continued construction of the pipeline.

This is good news, as a new CBC poll shows that 60 per cent of Albertans support the federal government’s purchase of the pipeline, but express doubts about the pace of construction. Only one in five Albertans think the pipeline with be finished on or ahead of schedule. About 10 per cent do not believe it will ever be completed.

But yes, Albertans have some concerns about the federal buyout. Calgary-based pollster Janet Brown suggests that while the majority of Albertans support the pipeline, many are uncomfortable with how the sale to Ottawa came about. Progress on the pipeline, however, may make those people somewhat less uncomfortable about the nationalization of the project.

According to a new report from BP, the 2018 statistical review of energy shows that the new pipeline will have a thriving market in which to sell. BP shows that oil demand grew by 1.7 million barrels per day in 2017, significantly above the 10-year average of 1.1 million barrels per day. The outlook, to 2040, suggests that demand for oil grows over much of that period, before plateauing in later years.

Natural gas demand will also grow, enough to overtake coal as the second largest source of energy. These increases in demand will play out even in a world assumed to have strong build outs of renewable power, and an assumption that electric vehicles will increase over the outlook period to 15 per cent of the vehicle market. Even so, oil, gas and coal will each contribute a quarter of the world’s energy. Even PB’s “even faster transition” scenario shows oil and gas producing 40 per cent of global energy in 2040. The 2017 report of the International Energy Administration (IEA) projects global energy needs will expand by 30 per cent by 2040, the equivalent of adding “another China and India to today’s global demand.”

The largest growth of energy demand is projected to be in China, Southeast Asia and India. Interestingly, energy demand in the United States, the monopoly buyer of Canadian oil and gas, is expected to decline by 2040, dropping by some 30 million tonnes of oil equivalents. Like the BP report, the IEA’s outlook to 2040 shows growth in both oil and natural gas. Again, this is in modelling scenarios that are highly optimistic about the expansion of renewable energy, vehicle electrification and a strong global transition to renewable energy.

British Columbia Green Party Leader Andrew Weaver likens oil and gas investment to investing in the horse and buggy. But in the face of global demand for hydrocarbons, those horse and buggy investments might continue generating wealth for a generation and beyond. And speaking of horses and buggies, they’re running today, about a kilometre from my office. Sometimes older technologies live surprisingly long lives.