April 25, 2018

Affordable Energy News Service for April 25, 2018

‘We are in a bad place right now’: Canada struggles to reconcile economy with environment — Jesse Snyder

A tense political atmosphere has persisted in Ottawa ever since Kinder Morgan Canada Ltd. threatened to halt its highly contentious pipeline project earlier this month, as policymakers wrestle with thorny questions over how to build major infrastructure projects while also addressing environmental concerns. There is a risk that fierce opposition to fossil fuel development will pose insurmountable challenges for oil and gas producers in Canada. Divides over fossil fuel development came into sharp focus in Ottawa after Kinder Morgan threatened to halt all non-essential work on the $7.4-billion Trans Mountain expansion project in early April. Ottawa continues to push the message that the economy and the environment go hand in hand and argues that with measures like a carbon tax in place, a pipeline can and should be built. But energy firms have been warning that continued delays in major projects has caused foreign investors to rethink Canada as an investment destination. - Financial Post


The other end of the Trans Mountain pipeline: As B.C. protests, an Alberta hamlet hopes — Ameya Charnalia

Protesters have clustered for weeks at the end point of Kinder Morgan’s Trans Mountain pipeline in Burnaby, B.C. to voice their opposition to its expansion. But 1,150 kilometres away, at the other end of the line, feelings flow in the opposite direction. The current pipeline begins in Sherwood Park, a suburb of east Edmonton that constitutes the urban core of Strathcona County. The town is ground zero to a proposal to twin the existing pipeline that has sparked off a row between the provincial governments. Residents are fed up with the squabbling between the two provinces. “I don’t believe that B.C. should hold Alberta hostage,” said Jim Travnik, a millwright who has lived in the community for 25 years. Citing numbers released by Kinder Morgan, the Edmonton Chamber of Commerce says the pipeline expansion would create 700 construction jobs over two years. Many of the announced jobs would be in Sherwood Park, where several residents rely on the oilpatch for their livelihood. - Edmonton Star


Retiring MEG Energy co-founder calls for action to solve oilsands access woes — Dan Healing

Access to international markets is the “fundamental question” confronting the oilsands industry and all parties must work together to find a solution, says the co-founder of oilsands producer MEG Energy Corp, Bill McCaffrey. A lack of pipeline space to move growing production of oilsands bitumen from northern Alberta to markets overseas or in the United States is being blamed for higher-than-normal discounts for Canadian heavy oil compared with New York benchmark prices. The access problem has affected MEG Energy, which reported producing a record 90,000 barrels of bitumen per day from its steam-drive facilities in the fourth quarter of 2017. - Financial Post


Edmonton gas prices see biggest one-day increase in five years — Hamdi Issawi

The cost of gas in Edmonton spiked Tuesday morning, with stations around the city reporting prices as high as $1.31 per litre. According to Gasbuddy.com, the average cost of gas in the city Tuesday afternoon was sitting at $1.28 per litre, which is up 6.5 cents from Monday’s average. Several variables contribute to the cost of gas, such as the strength of the Canadian dollar, the price of oil, and Chicago spot markets, which trades energy prices. There are other factors, however, that are harder to account for, such as the state of refineries here in Edmonton, which aren’t always made public. - Edmonton Star


Beyond pipeline politics: Canada’s love-hate relationship with foreign direct investment — Glen Hodgson

Invest in Canada, the new federal agency to attract foreign direct investment (FDI), is a positive step forward, because it creates a centre of expertise that can align with initiatives by major cities, provinces and other parts of the federal government. To accompany a new agency, Canada should undertake a timely rethink of the Investment Canada Act, with primacy given to protecting national-security interests. There are many dimensions to Canadian FDI policy that are complex and misaligned. In many prominent cases, specific regional or industrial concerns collide with broader national economic interests, and emotion threatens to crowd out evidence and thorough analysis. Kinder Morgan’s prospective investment in the expansion of the Trans Mountain pipeline is the latest test case of the overall coherence of Canadian policy related to foreign investment. Under the Investment Canada Act, there is no definition of “national security.” In our view, it is time to examine giving explicit priority to a well-defined national-security test. This review mechanism would assess whether foreign governments, or their state-owned enterprises, should secure access to Canadian technology, intellectual property, markets and talent, based on an assessment of Canada’s long-term interests. - Globe and Mail


Cumberland County figures in Nova Scotia’s commitment to renewable energy staff writer

Cumberland County is playing a valuable part in Nova Scotia Power’s commitment to renewable energy. The power corporation announced Tuesday that it is continuing to produce real results on the road to a low-carbon, clean energy future, with 29 per cent of electricity in Nova Scotia last year coming from renewable energy resources. This achievement surpassed the previous record set in 2016 of 28% of electricity generated in the province coming from renewables. Nova Scotia Power President and CEO Karen Hutt pointed to wind farms in Springhill and on the Tantramar Marsh near Amherst, as well as the community-based wind project between the Pumping Station Road and the John Black Road, as playing a key role in producing renewable energy. Together, they generate enough electricity to power about 11,000 homes. Hutt said the Tantramar Marsh wind farm is an impressive sight on the landscape near the New Brunswick border, as highway travelers are much closer to these turbines than those situated in more rural areas of Nova Scotia. - Cumberland News Now


United States

Oil inches higher ahead of U.S. stocks data Christopher Alessi

Oil prices rose Wednesday on signs of declining U.S. petroleum inventories. Brent Crude, the global benchmark, was up 0.2% at 73.97 a barrel on London’s Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.2% at $67.84 a barrel. The data is expected to show U.S. crude stockpiles fell by 1.7 million barrels last week, according to analysts surveyed by the Wall Street Journal. Crude prices had been bolstered by a growing consensus in the market that President Donald Trump will move the U.S. out of a 2015 international accord to curb Iran’s nuclear program. But prices fell after Mr. Trump, following a meeting with French President Emmanuel Macron at the White House on Tuesday, signaled an interest in an unspecified potential new deal to rein in Iran’s nuclear program. - Wall Street Journal


Trump faces pressure to choose sides in fight between corn growers and oil refiners — Timothy Puko & Bradley Olson

President Donald Trump is caught between two powerful business constituents of the Republican Party as he faces growing pressure to resolve a dispute between the oil industry and the Farm Belt. Oil refineries want out of a costly requirement to blend ethanol into the gasoline they produce. Corn growers say the requirement diversifies the U.S. fuel supply, and insist Mr. Trump fulfill promises to at least hold the ethanol mandate. Both sides have close ties to the GOP and the White House. Tensions between the two industries have been building since well before Mr. Trump became president, the result of a 2005 law that requires refineries to blend about 10% plant-based ethanol into the fuel they produce or buy credits from rivals to cover their blending obligations. Congress created the mandate in hopes of reducing carbon emissions and weaning the U.S. from foreign crude at a time when oil prices had begun soaring. By the time Mr. Trump took office, though, oil and gas supplies had gone from shortage to saturation thanks to the shale-drilling boom. Now, oil refiners – and some Trump advisers – consider a rollback of the 2005 regulation years overdue. - Wall Street Journal



Demolition of South Australia’s last coal-fired power station nears completion Luke Griffiths

Little remains of South Australia’s last coal-fired power station after a 47-metre high coal bunker was destroyed this morning in a controlled explosion. The felling of the 3000-tonne bunker at the Northern power station in Port Augusta, 280km north of Adelaide, follows the demolition of an 80-metre high chimney stack at the nearby Playford B power station in January. Before announcing the closure of the 540-megawatt Northern in mid-2015, Alinta unsuccessfully sought $25-million in subsidies over three years from the former South Australian Labour government to keep it operating until this year, to ensure an effective transition occurred, after a rapid rise in renewable energy made it enviable. Port Augusta mayor Sam Johnson has questioned why the Turnbull government and Alinta did not make the same ­effort to extend the life of Northern as they have with AGL’s Liddell plant in New South Wales. In the months leading up to Northern’s closure, Mr. Johnson said he was repeatedly told by the federal government that its future was a “state issue.” - The Australian