For years now, ever since Peak Oil Theory  (the idea that the world would soon run out of economically viable oil reserves) was utterly shattered by the oil and gas boom in the United States, we’ve heard, “it doesn’t matter anyway, and the world is already moving away from oil and gas, so any investment you make there will be stranded.”

Well, if the assets end up stranded, it won’t be for lack of market demand. According to the International Energy Agency, world oil consumption will expand to 100 million barrels per day in the next three months, then moderate a bit to 99.3 million barrels in the first quarter of 2019.

Energy analyst Peter Tertzakian observes that while there are commonalities with prior oil production booms, this time it really is different. He credits “below ground” developments with making the coming boom different:

During the last up-cycle the what-is-different theme was oilfield maturity—the whole “peak oil” thing. The ‘below-ground’ supply-side was hemmed in technologically at then-prevailing prices around US$20 per barrel. Scarcity, induced by lack of oilfield innovation and maturity of the world’s oil reservoirs, was driving up costs from the rocks below.

Tertzakian says the difference this time around is that:

The price of a barrel is going up due to usual above-ground factors [demand, political instability, etc.], while technology is reducing the cost of finding, developing and extracting oil from below ground. This widening innovation dividend between below-ground cost and above-ground price is especially true among leading North American producers.

It’s unclear whether Tertzakian thinks things have changed so radically in oil production advances and global demand that there will not be future boom-and-bust cycles, but that’s one potential takeaway from his analysis.

But I also think there’s something different this time, which is the extreme levels of opposition to oil development and transport, which has strengthened considerably since the last oil boom. The federal government (and Canadian taxpayers) now owns a pipeline project that still faces major challenges to its eventual construction. As well, the industry has seen sharp growth on the level of regulation heaped upon energy projects, particularly here in Canada, where we’ve implemented carbon taxes (poorly), may restructure environmental assessment, and have put a 100 megatonne cap on oilsand greenhouse gas emissions.

Will Canada play a growing part in meeting global thirst for oil? Or will we tread tidewater while we see other countries ride the oil demand wave?