April 17, 2018

Affordable Energy News Service for April 17, 2018

Affordable Energy News Service for April 17, 2018

New law would allow Alberta to restrict flow of oil and gas — Dean Bennett

The Alberta government has introduced legislation that would give the energy minister power to restrict the flow of oil, gasoline and natural gas leaving the province. Once passed, Marg McCuaig-Boyd would be able to direct truckers, pipeline companies and rail operators on how much product could be shipped and when. Violators would face fines of up to $1-million a day for individuals and $10-million a day for corporations. “The bill sends a clear message: we will use every tool at our disposal to defend Albertans (and) to defend our resources,” Notley said Monday before introducing the proposed law in the legislature. Existing pipelines are near capacity and the bill aims to give Alberta the power to adjust what is shipped and where it goes to ensure maximum profitability, she said. Alberta is locked in a dispute with British Columbia over the Trans Mountain pipeline. An expansion to the West Coast has been approved by the federal government, but B.C. is fighting it in the courts. - Global News  


UCP leader's carbon tax referendum bill defeated in legislature — staff writer

A bill introduced by United Conservative Leader Jason Kenney that would have required the Alberta government to put future carbon dioxide tax increases to a referendum was defeated in the legislature Monday. Bill 202 would have made it impossible for current or future provincial governments to hike Alberta's carbon tax above $30 a tonne without the approval of a majority of Albertans. Alberta's carbon tax came into effect Jan. 1, 2017, with carbon priced at $20 per tonne of emissions. This January, it increased to $30 per tonne. The carbon tax on a litre of gasoline is now 6.73 cents per litre, and 8.03 cents per litre on diesel fuel. The federal government is requiring all provinces to raise the price of carbon to $40 a tonne by 2021 and $50 a tonne by 2022. Premier Rachel Notley is making the start of the Trans Mountain pipeline expansion a condition for Alberta to follow suit. Kenney has vowed that a repeal of Alberta's carbon tax would be his first action as premier if the UCP wins the 2019 election. - CBC News


Energy shippers nervous about Alberta plan to control oil and gas exports — CP

Oil shippers are reacting with trepidation to legislation the Alberta New Democrats introduced Monday that would give the government power to restrict energy exports from the province. Canadian Energy Pipeline Association president Chris Bloomer said he understands the Alberta government needs to act on the impasse with British Columbia over Kinder Morgan’s Trans Mountain pipeline project, but is worried about the potential consequences of the bill. “We are concerned that the measures being considered in Bill 12 could have longer-term, unintended consequences for industry and the public at-large. We hope that the measures will not need to be implemented,” Bloomer said in a statement. - Calgary Herald


Notley's Bill 12 'shows bold leadership,' say Alberta oil and gas producers — Lucie Edwardson

Alberta's oil and gas producers are calling Bill 12 a regrettable but necessary step in the ongoing battle over the Trans Mountain pipeline expansion. Bill 12, titled Preserving Canada's Economic Prosperity Act, gives the Alberta government the ability to retaliate against B.C. over any delays to the expansion by driving up gas prices or restricting shipments of other energy products. And while industry officials support the move, they hope the legislation revealed by Premier Rachel Notley and Energy Minister Marg McCuaig-Boyd on Monday doesn't need to be put to work. - CBC News


Alberta’s plan to cut oil shipments would be felt from L.A. to Fort Nelson — Robert Tuttle

Alberta’s plan to cut crude and fuel shipments to British Columbia could ripple across the entire west coast of North America, causing pump prices to surge and shifting the flow of international crude. Legislation introduced Monday would allow oil-rich Alberta to curb the flow of crude and fuel if neighbouring British Columbia doesn’t drop its opposition to Kinder Morgan Inc.’s Trans Mountain pipeline expansion. The existing pipeline supplies the Vancouver area with as much as 60 per cent of its refined products. If Alberta makes good on its threat, Vancouver drivers can expect to pay more at the pump. So too might people in Washington state and Oregon if the region’s refineries were to face a curtailment of Canadian oil shipments down the Puget Sound pipeline. Even Alberta’s own producers and refiners would take a hit, cutting off a key export link at a time when a pipeline bottlenecks have caused a glut and reduced the value of heavy oilsands crude. - National Post  


B.C. threatens to sue Alberta as all sides in Trans Mountain dispute dig in — CP

British Columbia's attorney general is threatening to sue if a new law introduced in Alberta causes gasoline prices in B.C. to skyrocket. David Eby says it's unconstitutional for one province to use energy policy to punish another province and B.C. is prepared to take legal action against Alberta. "If there is anything in this legislation that even suggests the possibility of discrimination against British Columbians we will take every step necessary to protect the interests of British Columbians," Eby said. - CBC News


Canada’s resource industries need to reboot their message — Tony Coulson

In response to a recent shareholder question, Athabasca Oil Corp. chief executive Rob Broen is reported to have stated, “Near as I can tell, we have a tax – we have a carbon tax – but we don’t have a pipeline and the opponents of those pipelines are more entrenched than they’ve ever been.” Mr. Broen was expressing frustration about the apparent fraying of what many understood as the grand bargain of oil sands development. The bargain was that governments would impose carbon taxes and regulations to reduce greenhouse gas emissions and control environmental impacts, while producers would get infrastructure (pipelines) that would let them carry the product to international markets and fetch better prices. Today, the carbon tax and other environmental measures are a reality, but environmentalists continue to fight the pipeline, and Kinder Morgan, the pipeline’s proponent, has pointedly announced that it’s pausing investment in the project. - Globe and Mail  


Trudeau’s political future hinges on the Trans Mountain pipeline expansion — John Ibbitson

Justin Trudeau’s handling of the Trans Mountain pipeline issue will decide the fate of his government. Nothing else is this important − not deficits-for-infrastructure, not legalizing cannabis, not the refugee situation, not even trade and NAFTA. If the Trans Mountain pipeline expansion is under construction 18 months from now, Mr. Trudeau is likely to win the October 2019 election. If the project is frustrated by legal and illegal resistance, he is likely to lose. Federal governments are expected to manage the national economy in the public interest. Those that fail are punished. Because the government is committed to fighting climate change, it has imposed a national carbon tax, which takes effect next year. Most provinces already have one in place. Each province may implement the tax as it sees fits, with revenues remaining in the province. But the Liberals are also committed to protecting the Alberta economy and so, in exchange for the carbon tax, Ottawa is backing the Trans Mountain expansion. - Globe and Mail  


When it comes to Trans Mountain, Trudeau is on the right trail — Andrew Coyne

It was not inevitable that we should arrive at such a pass over the Trans Mountain pipeline expansion: province divided against province, First Nation against First Nation, with the economic union and the rule of law as potential collateral damage. A debacle this big does not come about without years of hard work on all sides. We should be clear on one thing: this is not a debate about a pipeline, or not any longer. It is about who decides. Reasonable people will differ on the merits of Trans Mountain. But whatever anyone’s opinion, there is a lawful process for deciding these things, and lawful authority to decide them. In the present case, those lawful authorities are the National Energy Board, the federal cabinet, and the courts. Whatever anyone’s concerns — economic, environmental, Aboriginal or other — that is the process by which those concerns are adjudicated. And that is the process that approved the pipeline: the NEB, the cabinet and the courts, all ruling in its favour (though not every legal appeal has been exhausted – a case is still before the Federal Court of Appeal on behalf of seven First Nations arguing they were not adequately consulted). - National Post  


Trudeau’s cynical politics caught him in his own Trans Mountain trap — Gwyn Morgan

Canada is endowed with the third-largest oil reserves in the world, but a lack of access to world markets means our oil is sold far below world prices. Each day, this “captive-market discount” hands a $40-million gift to Americans. Adding insult to injury, the discount also drives tens of billions of dollars in Canadian investments to American oilfields. Now, after seven years and billions of dollars spent by proponents of three oil-export pipelines, hopes for revival of Canada’s oil industry has come down to one extremely troubled project: the Trans Mountain pipeline expansion. How could this possibly have happened? The answer lies in politically motivated decisions that progressively narrowed those three proposals to what was always the most fraught project. Here is a precis of what I’ll call “the saga of the three pipelines.” - National Post  


Trudeau’s decisiveness doesn’t make Trans Mountain hurdles any easier — Chantal Hebert

Prime Minister Justin Trudeau’s decision to take a financial stake in the Trans Mountain Pipeline Expansion project following a meeting with Premiers John Horgan and Rachel Notley on Sunday still leaves the project with the same hurdles it faced before. If Trudeau is willing to pump an unspecific amount of taxpayer money in the project in such short order, his government (along with that of Alberta) must have concluded that the risks that the Houston-based company will otherwise walk away are real. But keeping the pipeline expansion alive with an injection of federal funds will neither detract its opponents from fighting it every step of the way nor eliminate the threat of more litigation. If anything, this weekend’s meeting with the feuding premiers mostly demonstrated the limits of the power of a prime minister to force a province into line. - Toronto Star  


B.C. government ‘can’t have their cake and eat it too’: Green Party leader Andrew Weaver — Ainslie Cruickshank

Green Party Leader Andrew Weaver supports B.C.’s NDP government in its battle against Kinder Morgan’s Trans Mountain pipeline expansion, but when it comes to LNG, he says they “can’t have their cake and eat it too.” “There’s an incompatibility in having a plan to reduce greenhouse gas emissions and building capacity to increase greenhouse gas emissions. You can’t have it both ways,” he told StarMetro Vancouver. Last month, Premier John Horgan announced tax breaks as an incentive for liquified natural gas projects, including LNG Canada’s proposed export terminal in Kitimat, B.C. Weaver argued it is not possible for the province to reduce emissions with LNG even with federal regulations aimed at reducing methane by 20 megatonnes a year. Industry, however, is confident it can achieve the reductions the federal government is aiming for, said Terry Abel, the Canadian Association of Petroleum Producers’ executive vice-president. - Toronto Star  


Trudeau kicks pipeline can down the road — editorial

Last week saw the beginning of a national crisis as Kinder Morgan put their Trans Mountain pipeline project on hold citing an uncertain investment environment in the face of government squabbling. It is plainly obvious this project is in the national interest. Justin Trudeau has said as much. And B.C. Premier John Horgan, full well knowing this, is intent on derailing a project of national economic interest. How is Trudeau responding to this? He cut short his Peru trip to host a meeting between Horgan and Alberta Premier Rachel Notley. Little came out of it though. We’re now left with vague assurances of legal action. Plus, we’re going to be left with some sort of a bill. Canadians didn’t ask to pay for or backstop this project. They asked for it to be built because it will spur growth and job creation. - Toronto Sun  


Scrapping Ontario’s cap and trade would be foolish: California governor — Paola Loriggio

California governor Jerry Brown said Monday that rolling back carbon pricing delays progress and increases costs down the line, arguing that scrapping Ontario’s cap-and-trade system would make no sense. Ontario recently linked with California and Quebec to hold joint cap-and-trade auctions after running its own system for a year. So far, Ontario’s cap-and-trade program has raised $2.4-billion in proceeds. The Ontario Tories initially promised to replace cap and trade with a carbon tax, since federal rules require provinces to adopt one of the two systems. But the party’s new leader Doug Ford, has vowed to eliminate carbon pricing altogether and suggested he would fight Ottawa in court if necessary. - Global News  


United States

First LNG export from U.S. East Coast hits the seas — Ryan Collins

The first export of natural gas from the U.S. East Coast has set sail. Dominion Energy Inc.’s Cove Point terminal in Maryland shipped its first commercial cargo of liquefied natural gas Monday, officially bringing the total number of U.S. exporters of the super-chilled fuel to two. The company last week said the facility was finally poised to send gas under long-term contracts after more than three years of construction, joining Cheniere Energy Inc.’s Sabine Pass terminal. Cove Point’s startup is accelerating America’s emergence as an LNG powerhouse that’s expected to challenge Australia and Qatar for worldwide dominance in the next five years. Three more export terminals may open on the Gulf Coast by 2019. - Globe and Mail  


Nebraska clean energy activists seek path around legislature — Karen Uhlenhuth

Clean energy proponents in Nebraska, stymied by state government, are going directly to the state’s largest utilities in an attempt to make change. A coalition of organizations has begun lobbying the state’s major utilities – which are all publicly owned – to adopt a clean energy plan that it unveiled earlier this year. Meanwhile, several candidates who support clean energy are running for four seats on the board of directors of the Omaha Public Power District. The new, more direct approach follows years of frustration at the state capitol in Lincoln, where lawmakers in recent years rejected a renewable portfolio standard and multiple bills related to net metering and community solar. Clean energy supporters like Ken Winston, who lobbies for Nebraska Interfaith Power & Light, said he decided their time and energy would be better spent talking directly with utilities “rather than lobby the Legislature on legislation that is not likely to go anywhere.” - Energy News  


U.S. backs Westinghouse, says it's ready to finish nuclear power projects in India — Reuters

Westinghouse Electric, which filed for bankruptcy last year, is now "lean and mean and ready to get to work" on its projects to build nuclear reactors in India, U.S. energy secretary Rick Perry said on Tuesday. The show of support by Perry came after Pittsburgh-based Westinghouse's bankruptcy filing had raised doubts about the proposed construction of six nuclear reactors in India's Andhra Pradesh state. The agreement to build reactors, announced in 2016, was the result of a decade of diplomatic efforts as part of a U.S.-India civil nuclear agreement signed in 2008. - Economic Times  



Northern Territory go-ahead for fracking as Michael Gunner lifts moratorium — Angela MacDonald- Smith

Gas industry players in the Northern Territory are pointing to billions of dollars of potential investment in exploration, development and pipelines after Chief Minister Michael Gunner lifted the 18-month blanket moratorium on fracking, opening up some of the country's most resource-rich regions. The move clears the way for the controversial process to be used under strict conditions over 51% of the Territory, including the key Beetaloo Basin described as Australia's answer to prolific shale regions in the U.S. and which could be a lifeline for the gas-short east coast. But major hurdles still stand in the way, given the ability for any person or group to object to exploration or production applications, which is included among the conditions. - Australian Financial Review