March 19, 2018

Affordable Energy News Service for March 19, 2018

Trudeau is Captain Canada to our threatened steel workers. Our oil workers? Silence  Rex Murphy

President Donald Trump hints or bluffs of tariffs on steel (and then defers it) and Prime Minister Justin Trudeau delays a vacation to do a reassurance tour of Canada’s steel cities. There is to be no “feminist gender analysis” for steel. No talk of upstream and downstream emissions. No national steel tax. Oil, on the other hand, hasn’t been under the hint of a threat. It’s been on the rack of dozens of real ones. Alberta oil has had so many blows against it. Pounded then from every quarter as it has been, have we had a prime ministerial tour, an “I have your back” message for oil? The answer is so obvious the question itself is lunatic. Trump hasn’t imposed a tariff on oil, but Trudeau has, with his carbon tax and re-working of the National Energy Board. Does Trudeau have the Trans Mountain pipeline and the future of the oil industry’s back? No. - National Post

 

Rachel Notley made mistake in believing in the federal Liberals’ ‘social licence’ staff writer

Since Rachel Notley has become premier she has, at least, acknowledged a more realistic view of fossil fuels and their importance to a modern economy, and the need to get her province’s oil to tidewater for export. But she also imposed a carbon tax and put caps on the oil sands. Alas, all those efforts have bought little support from B.C., where Notley’s fellow NDP premier, propped up by a handful of Green MLAs isn’t about to let Alberta make any progress on the Trans Mountain pipeline expansion. Notley now says Alberta won’t increase its carbon tax to $50 per tonne, in line with federal commitments to a national target, as originally intended, until Ottawa treats Alberta with the same respect. Having given up on finding any common cause with B.C., Notley is ramping up the pressure on Prime Minister Justin Trudeau, another self-styled progressive. But no one should hold their breath waiting for Trudeau to actually do much. - National Post  

 

Metro Vancouver gas prices set to surpass record Cheryl Chan

Metro Vancouver drivers should gear up for more pain at the pump this week with gas prices set to shatter an all-time high. Gas prices across the region have been climbing steadily in recent weeks. On Sunday, most gas station prices were in the $1.49 to $1.53 per litre range, with some hitting $1.54.9 per litre – inching closer to the record of $1.55.9 set in June 2014. “The record is likely to be broken this week,” said GasBuddy analyst Dan McTeague. “The Lower Mainland has a chronic lack of supply and it’s not going to go away,” McTeague said. “If anything, temporary shortages or demand spikes or anything happening south of the border means we are more susceptible here.” A 2018 outlook report by GasBuddy predicted prices hitting $1.60 per litre sometime in the summer. Factors for the price spike include: a hike in B.C.’s carbon tax on April 1 and the temporary closure of some refineries in Washington. - Vancouver Sun  

 

Environment Minister Catherine McKenna says pipeline fight puts national climate plan in peril Justine Hunter

Federal Environment Minister Catherine McKenna, faced with the threat of a growing number of Canadian provinces balking at her government’s climate action plan, is pleading for a truce in the pipeline dispute between the B.C. and Alberta governments. Continued support for Kinder Morgan Canada Inc.’s pipeline-expansion project was the trade-off Ottawa made to bring the Alberta NDP government on board for a national price on carbon. Now with B.C.’s NDP government seeking to block the pipeline, Ms. McKenna sees the potential for Alberta’s crucial support unravelling. With Doug Ford in Ontario, and Jason Kenney in Alberta, Ms. McKenna has two serious threats to her plan. George Heyman, B.C.’s Minister of Environment, said he rejects the accusation that his government’s actions on Kinder Morgan are undermining climate action. - Globe and Mail  

 

Firm action needed on pipelines Prasad Panda

If there’s one thing I hope all Albertans can agree on, it’s the desperate need for more pipelines to get our abundant oil and gas resources to market. According to recent reports, Alberta is losing $7-billion per year because of lack of pipeline capacity, with industry losing $6.7-billion more annually. While the NDP argues that the Harper government never dealt with a pipeline going to tidewater, the Harper government did approve Northern Gateway. It was however, subsequently cancelled by the Trudeau Liberals. The Alberta NDP government promised that imposing a carbon tax on Albertans would buy so-called social license in B.C. for a pipeline to the Pacific. We are baffled that the Alberta government bought this specious argument since it’s their fellow travellers – both the B.C. NDP and radical environmental activists such as Tzeporah Berman – who are leading the fight against the approved Trans Mountain expansion. - Calgary Herald

 

The hypocrisy of fossil fuel protesters Paige MacPherson

The fossil fuel divestment movement is picking up steam, with everything from the city of New York to Laval University committing to divestment. In Canada, it’s worthwhile to consider what else we would be divesting from. The movement is a walking contradiction – protesters go home at the end of the day to their heated apartments, and use their electricity, hot water, etc – none of which could be done without oil. But protesters will say we can’t reasonably criticize them for using fossil fuels until accessible alternatives exist. The core is morality: but would the outcome be moral if we stopped burning fossil fuels? The fossil fuel industry contributes serious income to governments supporting other things the protesters support, like poverty alleviation programs, improved women’s health services and free tuition. Unless these protesters are also arguing for dramatic fiscal belt-tightening by government, students and families alike, the price to be paid may not be so righteous after all. - Toronto Sun  

 

Pipelines, the carbon tax standoff, and spinning stories on Boushie John Gormley

For the second time in less than a week, Prime Minister Justin Trudeau jetted to Regina, this time to let Evraz steel workers know that he’s supporting their industry and resisting U.S. tariffs on steel which have so far exempted Canada. At Evraz, Mr. Trudeau stood in the midst of people who manufacture pipelines. Yet he won’t stand up to the B.C. NDP-Green government’s unconstitutional attempts to kill the Kinder Morgan’s Trans Mountain Pipeline extension. The growing concern is that Mr. Trudeau will linger on the sidelines, as well financed enviro-activists delay the project until Kinder Morgan packs up and quits. In other news, the Saskatchewan-Canada carbon tax standoff took an interesting turn this week, with Minister Catherine McKenna lecturing Sasktachewan on the need for a carbon tax. Saskatchewan hasn’t budged and is pursuing its own carbon strategy – one that won’t saddle our industries and businesses with taxes that will make us less competitive. - The Saskatoon Star Phoenix  

 

Canadian oilpatch must innovate or perish — Deborah Yedlin

An unmistakable mantra has emerged in the global energy sector: innovate or die. Every presentation and session at the recent CERAWeek by IHS Markit in Houston included a discussion about technology, innovation and how companies are adopting new approaches to make their businesses stronger, more nimble and able to withstand the volatility of the commodity price cycle. The general observation is that U.S. producers are further ahead of their Canadian peers when it comes to recognizing the potential of technology and analytics. A strong indicator of the proverbial light bulb having switched on in terms of technology is the fact IBM’s Watson has become a verb. The oilpatch is being “watsoned” quipped one CERAWeek participant. “We need to keep improving. Prices of US$60 per barrel are helpful, but we don’t know where prices are going,” said Greg Leveille, ConocoPhillips’ chief technology officer. “One thing I do know is that if we improve our business we are profitable, regardless of price.” - Calgary Herald  

 

Transit users likely to pay price for province's new carbon tax — Scott Billeck

The province’s newly-minted carbon tax could lead to job cuts for Winnipeg Transit employees and more rate hikes for transit users, the Amalgamated Transit Union said on Friday. Figures from the City of Winnipeg on Friday suggested that a 6.71 cents-per-litre tax on diesel fuel would cost the city and extra $1.16 million per year in fuel costs. ATU 1505 president Aleem Chaudhary agreed that climate change reducing emissions need to be addressed and said investing in transit helps the environment — including more electric buses for the city’s fleet. A plan to address the new carbon tax on diesel will be considered as part of the 2019 budget process. The new carbon tax is set to take effect on Sept. 1. - Winnipeg Sun  

 

TransCanada says no material change expected from U.S. pipeline tax change CP

TransCanada Corp. says a recent U.S. tax ruling that eliminated a tax break for owners of certain interstate pipelines will have no material impact on its operations. The decision by the U.S. Federal Energy Regulatory Commission to no longer allow master limited partnerships to recover an income tax allowance from cost of service tariffs came in response to a 2016 court ruling that found its long-standing tax policy could result in double recovery of costs. TransCanada says about half of its U.S. natural gas pipelines 2018 revenues come from negotiated or discounted tariffs and therefore would not be materially impacted by the regulator’s actions. - Financial Post

 

Electricity export a tough market — Garland Laliberte

Late last year, Xcel Energy decided to shutter two coal plants in Pueblo, Colorado but only if lower-cost alternatives could replace their 660 MW and cover the added cost of winding them down 10 years earlier than planned. Xcel is Manitoba Hydro’s most loyal export customer with sales going back to 1970. It is also currently Hydro’s largest customer with existing contracts for firm energy between 375 and 500 MW. But Hydro’s contracts with Xcel run out in 2025, now only seven years away, and there has been no news yet that they have been renewed. It is significant that Xcel’s prices are for energy backed up by storage making them more than fully competitive with our hydroelectric energy. It is hard to imagine how Hydro’s export revenue forecasts can be realized. On the other hand, failure will be disastrous to ratepayers and taxpayers in Manitoba. - Winnipeg Sun  

 


United States

Why is Russian gas in Boston Harbor? — Drew Johnson

A tanker arrived in Boston Harbor carrying natural gas that would keep residents’ homes warm for the rest of the winter. The late-January delivery came from Siberia. Why are some parts of America reliant on Russian natural gas, especially when domestic gas production has surged? The problem is entirely political. In 2016 officials in Massachusetts and New Hampshire blocked financing for the $3 billion Access Northeast Pipeline, which would have reliably provided fuel to three New England states. That same year a report from Massachusetts Attorney General Maura Healey’s office claimed the state could “maintain electric reliability” without new infrastructure. The Russian gas heating Boston homes this winter suggests otherwise. Politicians are opposing pipeline projects to curry favor with increasingly radical environmentalists. For example, the Sierra Club is pushing the U.S. to abandon all fossil fuels, claiming the country is ready for 100% renewable energy. These ideas might sound nice, but they would hurt America’s most vulnerable citizens. Blocking natural-gas pipelines needlessly inflates consumers’ energy bills and destabilizes the electrical grid. - The Wall Street Journal  

 

NY panel to look at ending state fossil fuel investments — AP

There's a new state panel investigating how New York's pension system can pull investments in fossil fuel companies. Gov. Andrew Cuomo and state Comptroller Thomas DiNapoli announced the creation of the "Decarbonization Advisory Panel" earlier this month. Made up of experts from the investment, energy, environmental and legal industries, the panel will advise DiNapoli on ways the state's more than $200-billion pension system can reduce its investments in fossil fuel companies while increasing investments in clean energy. Cuomo and DiNapoli, both Democrats, say the goal is to encourage advancements in clean energy while reducing investment risk. Divesting from fossil fuels has long been a goal of many environmental advocates, who say the state shouldn't invest in fossil fuel companies when it's working to reduce its carbon emissions. - The Wall Street Journal  

 

Opposition to offshore drilling hardening in Massachusetts — Steve LeBlanc

Opposition to a Trump administration proposal to allow oil and gas drilling in coastal waters, including those off the Atlantic coast of Massachusetts, continues to grow on Beacon Hill. Just this week, Massachusetts Attorney General Maura Healey announced she's considering taking legal action against the administration to protect "the people, economy and natural resources of Massachusetts from the grave risks posed by unprecedented oil and gas leasing.” Despite concerns from the fishing industry, clean energy developers, marine scientists and thousands of residents up and down the coast that depend on a healthy ocean, this administration has repeatedly ignored the serious economic and environmental risks of offshore drilling," Healey said as she filed comments with the U.S. Bureau of Ocean Energy Management opposing the plan. Healey isn't alone. Fellow Democratic attorneys general from a dozen coastal states, including neighboring Rhode Island and Connecticut, have also written Interior Secretary Ryan Zinke protesting the drilling plan. - Chicago Tribune  

 

Kelp farms and mammoth windmills are just two of the government’s long-shot energy bets — Brad Plummer

Off the coast of California, the idea is that someday tiny robot submarines will drag kelp deep into the ocean at night, to soak up nutrients, then bring the plants back to the surface during the day, to bask in the sunlight. The goal of this offbeat project? To see if it’s possible to farm vast quantities of seaweed in the open ocean for a new type of carbon-neutral biofuel that might one day power trucks and airplanes. Unlike the corn- and soy-based biofuels used today, kelp-based fuels would not require valuable cropland. Of course, there are still some kinks to work out. “We first need to show that the kelp doesn’t die when we take it up and down,” said Cindy Wilcox, a co-founder of Marine BioEnergy Inc., which is doing early testing this summer. Ms. Wilcox’s venture is one of hundreds of long shots being funded by the federal government’s Advanced Research Projects Agency-Energy. Created a decade ago, ARPA-E now spends $300 million a year nurturing untested technologies that have the potential — however remote — of solving some of the world’s biggest energy problems, including climate change. - New York Times  

 

Opponents say Block Island wind farms are causing problems across prime fishing grounds — David Abel

The five enormous turbines that have been generating electricity off Block Island over the past year are considered a model for the future of offshore wind. But the nation’s first ocean-based wind farm also has exposed what fishermen say are serious threats to them caused by scattering massive metal shafts and snaking underwater cables across prime fishing grounds. With state officials poised to announce the winners of bids to develop much larger wind farms south of Martha’s Vineyard, fishermen across the region have been pressing officials for answers to their concerns about where the turbines will be located, how far apart they’ll be built, and the placement of the cables to the mainland. - Boston Globe  

 


Australia

Electranet number-crunching on interconnector done by June — Simon Evans

South Australia's electricity transmission network provider Electranet expects to make a firm decision by June on whether the economics stack up for an interconnector with NSW, a key promise of the new Marshall government. Mr. Marshall has pledged $200-million to help bankroll a new connection to the national electricity grid through an interconnector fund as part of his energy plans to try to bring more reliable and affordable power to households and businesses in South Australia. But he acknowledged there was still more modelling to be completed to ensure that it was a net benefit to the state and wouldn't push power prices higher. Mr. Marshall said on Monday an interconnector would be a regulated asset. "We're going to put $200-million towards that fund but ultimately we believe that will be a regulated asset so ultimately it will be paid for by consumers," he said. It would be some time before it would be operating. "Our plan is for the 2021-22 year," Mr. Marshall said. Experts predict the total cost of the project would be between $500-million to $700-million. - Australian Financial Review  

 

New SA Premier Steven Marshall will work closely with Turnbull government — Simon Evans

The new South Australia government led by Premier Steven Marshall will work much more closely with the federal government on both energy policy and in the defence industry to repair a fractious relationship which led federal minister Christopher Pyne not to speak to his state counterpart for more than three years. Mr. Marshall, who was sworn in as the state's 46th Premier on Monday morning, said the state's previous government under Jay Weatherill had delivered a "failed, go-it-alone policy" on renewable energy which had forced power prices up and been a drag on business and households. But he promised not to unravel any contracts which had been signed by Mr. Weatherill's government. Some big investments have been made by global investors such as Tesla's Elon Musk and British billionaire Sanjeev Gupta on renewable energy, with Mr. Marshall saying the emphasis would now swing to "affordable, reliable energy" which was crucial in delivering momentum for the local economy. - Australian Financial Review  

 

Renewables rush resulting in riskier projects: Bank of Tokyo-Mitsubishi UFJ — Angela Macdonald-Smith

The world's biggest commercial lender to the renewable energy sector has called attention to the increasingly aggressive strategies being adopted by some solar project investors in Australia amid a rush of investment into the sector that has fuelled expectations that some proposed plants will fall by the wayside. "It's an aggressive market and we're seeing increasingly aggressive assumptions being used to take projects forward," said Rob Ward, managing director and head of advisory at The Bank of Tokyo-Mitsubishi UFJ, or MUFG, pointing to the number of plants being proposed that have some exposure to wholesale electricity prices. "It's reflective of the appeal of the sector and the rush to be in first." Australia is seeing enormous growth in new solar power capacity, with some 2.1 gigawatts of new large-scale solar plants expected to start up this year among a total of 3.5 GW of new renewable energy plants, according to consultancy Rystad Energy. Ongoing commitments to new projects point to a further 3 GW of solar and wind capacity coming online in 2019. - Australian Financial Review  

 


Other International

The biggest solar parks in the world are now being built in India — Shashank Bengali

Weeds poke listlessly from the flat, rocky earth as the temperature climbs to the mid-90s. On a cloudless March afternoon, the blue horizon stretches out uninterrupted, as if even birds are too weary to fly. On this unforgiving patch of southern India, millions of silver-gray panels glimmer in the sun, the start of what officials say will be the biggest solar power station in the world. When completed, the Pavagada solar park is expected to produce 2,000 megawatts of electricity, enough to power 700,000 households — and the latest milestone in India’s transition to generating more green energy. Long regarded as a laggard in the fight against climate change, India is building massive solar stations at a furious clip, helping to drive a global revolution in renewable energy and reduce its dependence on coal and other carbon-spewing fossil fuels blamed for warming the planet. - Chicago Tribune

 

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