April 16, 2018

Affordable Energy News Service for April 16, 2018

Affordable Energy News Service for April 16, 2018

What if Trans Mountain is never built — Jeff Lewis, Kelly Cryderman & Shawn McCarthy

The $7.5-billion Kinder Morgan expansion project, approved by the federal government in 2016, was put on life support this week as the company warned it would scrap the project without assurances by May 31 that it can actually start construction this summer. Oil-industry executives and the heads of major Canadian banks have issued dire warnings, saying Canada already seems like a less attractive place to invest. Faced with the prospect of cancellation, Alberta Premier Rachel Notley has made the extraordinary threat to choke off fuel deliveries to B.C.’s Lower Mainland and has vowed to buy the expansion project outright. For his part, B.C. Premier John Horgan has not blinked, arguing his province has a right to defend its coasts, economy and interests. - Globe and Mail  


‘We are going to get the pipeline built’: Trudeau begins federal talks with Kinder Morgan to guarantee Trans Mountain — Jesse Snyder

Prime Minister Justin Trudeau said on Sunday after an emergency meeting with the British Columbia and Alberta premiers that his government would introduce financial and legislative backing to ensure the Trans Mountain Pipeline expansion project goes ahead. Finance Minister Bill Morneau will begin private talks with Kinder Morgan Canada Ltd to determine what financial supports could be provided. Sunday also marked Ottawa’s starkest opposition yet to B.C. Premier John Horgan, whose government has vehemently opposed the pipeline at every turn. It is not clear whether Ottawa’s financial and legislative backstops would ensure the pipeline gets built. Analysts have suggested a federal equity position in the company would do little to placate investor concerns and Kinder Morgan was neutral on the notion of financial backing. On Monday, Alberta is expected to move ahead with emergency legislation aimed at exacting economic pain on B.C., potentially including restrictions of crude shipments into British Columbia. - National Post


Trudeau promises financial backing for ‘vital’ Trans Mountain pipeline — Shawn McCarthy & Justine Hunter

Prime Minister Justin Trudeau is pledging financial backing and legislation to ensure that the Trans Mountain pipeline expansion is completed, after B.C. Premier John Horgan gave no ground at a hastily called meeting in Ottawa on Sunday. Alberta Premier Rachel Notley has also promised financial support from her government. But on Sunday, Mr. Horgan continued to insist that he has an obligation to protect B.C. coasts from oil spills and said his government will pursue a reference in federal court to clarify his government’s authority to regulate transportation of oil-sands bitumen through the province. Mr. Trudeau provided no details of what the financial support from his government might entail, though officials have said it could be a form of political risk insurance, loan guarantees or even direct investments. The promise of financial backing may ease the financial risk, but the two governments offered no clear answer for Kinder Morgan’s insistence that B.C. ends its indirect threats to block the project. - Globe and Mail  


Trudeau placed a big strategic bet on the Trans Mountain pipeline expansion a long time ago — Campbell Clark

Prime Minister Trudeau said Sunday that the federal government had “come together” with those of B.C. and Alberta – there was no coming together. There was only an assertion of control. But B.C. Premier John Horgan left a meeting with the PM and Alberta Premier Rachel Notley in Ottawa saying he’s still against the project. It’s this pipeline that Mr. Trudeau has adopted as a linchpin to his economic and environmental agenda. His reasoning is clear: get this one done, and Liberal carbon taxes and climate measures can fly politically, too. The Trans Mountain Pipeline Expansion has always been a priority in Trudeau’s eyes, despite his seeming lack of commitment. The broad mass of Canadians won’t settle behind a climate policy that appears to stifle resource development or an energy policy that ignores emissions. Mr. Trudeau can have a viable start on both. The catch is that political middle ground might not be easy to hold, either.  - Globe and Mail  


As Trudeau starts to act, B.C. wins a powerful new ally — Don Braid

Part prime minister, part faith healer, Justin Trudeau tried to pull the country back together Sunday under the flag of Kinder Morgan. It came amid signs that any national consensus is further fracturing. The Quebec government – Liberals, no less – are now siding with B.C.’s adamant opposition to the Trans Mountain pipeline to the west coast. Ottawa’s assertion of dominance on Kinder Morgan “is not a good sign for federalism,” said Premier Philippe Couillard. Many Albertans will find Quebec’s attitude infuriating. Quebec opposition was a major factor in the death of the Energy East pipeline. The resistance began under the leadership of a former federal Liberal minister, Denis Coderre, when he was mayor of Montreal and nobody even knew details of the project. Now the Quebec government wants to block Alberta’s last chance at tidewater access – at a port 3,600 kilometers from Montreal. - Calgary Herald  


Emergency pipeline meeting in Ottawa ends with a whimper not a bang — Graham Thompson

Well, that went about as badly as expected. Sunday’s meeting in Ottawa between Prime Minister Justin Trudeau, Alberta Premier Rachel Notley and British Columbia Premier John Horgan wrapped up with no end to the pipeline impasse. On the positive side, I suppose, nobody stomped out, threats weren’t issued, transfer payments weren’t cut. But neither were solutions found. Horgan is still fiercely opposed to Kinder Morgan’s $7.4-billion Trans Mountain pipeline expansion, which would pump bitumen from Alberta to the West Coast for shipment to Asia. Horgan reportedly didn’t blink in the 90-minute eyeball-to-eyeball-to-eyeball meeting where he was out-eyeballed four to two. Both Notley and Trudeau desperately want the pipeline to go ahead, for economic and political reasons, but they failed to wring any compromise from Horgan. - Edmonton Journal  


Justin Trudeau faces his Margaret Thatcher moment on pipelines ... and cowers — William Watson

Unlike the pipeline crisis of 1956, the federal Liberals are far from gung-ho for the pipeline. The Conservatives are fully behind the pipeline and want approvals streamlined so it could be built yesterday. Alberta oil and gas could be sold at a legitimate profit to actual foreigners, not just captive-market Quebecers and Ontarians. But without pipelines the resources are landlocked and sold at a discount, which is a major economic loss for Alberta and the country as a whole. It’s always pleasing to point out hypocrisy and arrogance, and the federal government has shown no shortage of either in the current debate. But I suspect its apparent passivity in pushing Trans Mountain is mainly for fear of what might happen if the project goes forward. - National Post  


Pipeline crisis is a moment of truth for all three federal leaders — Rex Murphy

The turmoil of one party is the moment of opportunity for another. Mr. Trudeau and the federal Liberals are in a deep trough of their own excavation with the current pipeline war. Suddenly there was a call for substantive national leadership. Justin Trudeau was facing a challenge that set clearly in focus the abiding question of his leadership: was it just image? This is the moment for either Andrew Scheer or Jagmeet Singh to do something, anything, to mark them as Mr. Trudeau’s necessary replacement. But they have done hardly anything at all. Mr. Singh has been distressingly flat as a political performer. On the Kinder Morgan issue he has displayed no ability to use his NDP ties to mollify, or bring together, his provincial cousins, Rachel Notley and John Horgan. His one notion of tossing the affair to the Supreme Court is not impressive. Mr. Scheer has also played no standout role in this showdown. He has not at all made himself present in the debate on the ground in either British Columbia or Alberta. If there is a time for articulating the national interest, this is it. - National Post  


Little confidence in feds and province at pipeline rally — Tim Ross

After the Prime Minister met with Premiers Rachel Notley and John Horgan in Ottawa Sunday, a rally in support of pipelines and in opposition to the carbon tax was held in downtown Calgary. People carried signs labelling Notley and Justin Trudeau as liars, calling an end to the carbon tax, and indicating that Alberta is close to becoming a socialist country like Venezuela. There was not a lot of confidence in the developments in Ottawa, where Trudeau and Notley agreed to get the Trans Mountain Pipeline Expansion built, possibly by directly investing in the project. - 660 News


A carbon tax on meat? —  Peter Shawn Taylor

If lately it feels like everything that makes life a pleasure is at risk of having a new carbon tax slapped on it...well, you’d be right. Demands for a global tax on meat – and in particular beef – to fight climate change is a topic of great interest these days. “It is highly probable that over the medium to long term some form of taxation on meat products will be implemented,” says a report released last December by the British-based investment advisory group FAIRR. It is widely noted by proponents of meat taxes that nearly a third of all greenhouse gas emissions worldwide are a result of agricultural production, with the greatest share coming from cattle. But is this a problem that requires a tax? Every carbon dioxide tax proposal involves substantial trade-offs and losses. Putting a big tax on what we eat will inevitable make people poorer or hungrier. A global carbon food tax threatens to undo much of the world’s remarkable climb out of poverty and hunger in recent decades. - Telegraph Journal  


Wynne’s Liberals, not Doug Ford, ran Hydro One into the ground — Lorrie Goldstein

Ontario Premier Kathleen Wynne and Energy Minister Glenn Thibeault say Progressive Conservative leader Doug Ford would cause chaos at Hydro One by replacing its board of directors and firing its $6.2-million-a-year CEO and president. In reality, it’s too late. The Liberals already caused it. If Wynne and Thibeault want to talk about chaos at Hydro One, let’s talk about the Liberal record of managing the utility before they sold majority control of it (53%) to the private sector last year in a $9.2-billion fire sale. This so Wynne could claim to balance the Ontario budget in the 2017-18 fiscal year. The sale was sharply criticized by Ontario’s independent, non-partisan, Financial Accountability Office which said while the sale would temporarily boost government revenues, over the long-term it would cost taxpayers more, mainly because of the reduced revenue stream the government will now get from Hydro One. - Toronto Sun  


United States

API opposes bailout of FirstEnergy Solutions, asks Trump administration to 'let the markets work' — Javier David

It's not often environmentalists and the oil industry find themselves on the same side of an argument, but FirstEnergy Solutions' plea for emergency government assistance has united some unlikely bedfellows. The American Petroleum Institute, the oil and gas industry association, released a letter calling for the Trump Administration to "let markets work" by denying the struggling utility firm's request for a government rescue. A bailout of FirstEnergy Solutions, which earlier this month filed for bankruptcy protection, is also opposed by a majority of power plant owners and environmental groups. Last month, the company – a unit of FirstEnergy Corp – announced plans to shutter 3 nuclear plants, which according to FirstEnergy Solutions generates over 4-billlion watts of energy and affects 65 million customers. FirstEnergy said it would shut several nuclear plants in Ohio and Pennsylvania in the next three years without some kind of state or federal relief. - CNBC  


U.S. energy security begins at home — Jude Clemente

The cornerstone of U.S. energy security, the pillar of it all, is producing more of the resources that we have at our disposal. This isn't about being anti-trade, but about being pro-self-reliance. Increased self-sufficiency, not "energy independence," is our perpetual goal. A glance around the world makes it very clear that we must continually support the critical triad of 1) new energy production, 2) new energy infrastructure, and 3) new energy exports. OPEC and Russia control nearly 80% of the world's proven oil reserves and 70% of the gas. In contrast, while our production is soaring, we still only control 7% of the world's oil and gas reserves – and developing more of our immense oil and gas resource would change that. The ability to enhance energy security is the core of U.S. coal: we have nearly a 380-year supply and hold nearly a quarter of all proven reserves. - Forbes  



Push on with NEG and don't sweat details, says industry — Ben Potter

Big power, industry and the renewable energy lobby all urged energy ministers to ask the Energy Security Board to press on with the detailed design of the National Energy Guarantee at their meeting on Friday. The cross-sector support increases the chances of the National Energy Guarantee moving past the state and territory energy ministers' meeting and into the full policy design stage, despite reservations among Labour states and territories. Mark Collette, head of energy at EnergyAustralia, one of the big-three generator retailers, urged the ministers not to get bogged down in the NEG's details, describing it as the best chance in a decade to end the impasse in climate and energy policy. - Australian Financial Review


Other International

Curtain drawn back for first time on the energy giant that makes more profit than all of Big Oil combined — Bloomberg News

For four decades the financial performance of Saudi Aramco has been one of the biggest secrets in global business. Now, with the company’s initial public offering looming, investors can get their first detailed insight into this cornerstone of the global economy. The company said the figures were inaccurate, when asked to comment on them. According to data reviewed by Bloomberg News, the Saudi state-owned giant reported net income of $33.8-billion in the first half of 2017. Big Oil earned just under $26-billion in the same period. The phenomenal profitability shows the value of Aramco’s ultra-low cost of production, which comprises one-in-ten barrels pumped worldwide. The Saudi government owns 100% of Aramco, so it receives the company’s dividend. - National Post