The N.L. government wants to double oil production by 2030. But could demand soon dry up?

Demand for Canadian oil exports could evaporate within 15 years, according to a recent study published in scientific journal Nature Energy — a prediction that flies in the face of the Newfoundland and Labrador government's target to double oil production by 2030.

More than 100 national and regional governments, including Newfoundland and Labrador's, have pledged to reach net-zero greenhouse gas emissions by 2050. By charting the impact of those commitments and the rapid adoption of electric vehicles by major emitters like China — while also forecasting scenarios where countries outside Europe and East Asia don't keep their climate promises — the study's authors believe global demand for oil will peak within 10 years.

The researchers also argue that once demand peaks, the Organization of Petroleum Exporting Countries — a network of Middle Eastern countries whose oil production costs are significantly lower than those of places like Canada and the United States — could flood the market with cheap oil and quickly price out the competition.

"OPEC countries are much more competitive in that they are able to produce at much lower production costs and price than other countries. And there's sufficient amounts of oil reserves and resources in OPEC countries to effectively cover oil demand up until 2050 in many scenarios, if not, most," said University of Exeter associate professor Jean-François Mercure, lead author of the study, in an interview Wednesday with Radio-Canada.

"In midwest Canada, producing oil comes to a cost of approximately $60 US or $70 US, while it could be done for $10 in the Middle East. That difference is the reason why Canadian production is likely to be some of the first to be pushed out of the markets."

Mercure said the future of Newfoundland and Labrador's oil sector seems more uncertain than Alberta's.

According to the province's Oil and Gas Corporation, producing a barrel of offshore oil in Newfoundland costs an average $15 US. A recent study suggests, however, that when total development costs are included, oil production off Newfoundland costs on average about $22 per barrel and can reach as high as $35 per barrel for the Terra Nova and White Rose fields.

"Sites such as [those] in Newfoundland could find themselves at risk in terms of being very marginal or close to the [break even] oil price," Mercure said. "But if the transition happens less quickly than that, then they could well find that they produce till the end of their lifetime and their reserves and actually manage to extract the value they were planning to."

The Nature Energy article, named "Reframing Incentives for Climate Policy Action" and published Nov. 4, is based on a database with information from more than 40,000 oil and gas extraction sites across the globe.

"That gives us an enormous amount of information on production and production costs, existing reserves, remaining ones, and where production is happening currently. We can easily determine, using that database, which sites will become superfluous in a scenario where oil drops to certain levels," Mercure said.

"That's how we can easily tell that Canadian oil production will not survive long."

Newfoundland and Labrador's government has long stated that during the global transition away from oil, markets will favour the province's offshore petroleum because its production emits relatively less emissions.

"No oil is perfectly clean, but we have some of the cleanest product in the entire world. It's a product that the world needs right now in terms of transition and it needs to be a just transition," Premier Andrew Furey said on the heels of his trip to Glasgow for the COP26 climate summit.

Mercure questions that vision and said he'd advising the government against approving new oil projects in the province, given companies may never see a return on their investment.