October 01, 2018

Affordable Energy News Service for October 1, 2018

Affordable Energy News Service for October 1, 2018

Trudeau stands alone as Canada – and the world – abandons green energy — Lawrence Solomon

Ontario Premier Doug Ford’s repeal of the Green Energy Act and balks by premiers of other Canadian provinces at Prime Minister Justin Trudeau’s climate agenda aren’t rearguard moves by Donald Trump wannabes. They are part of a worldwide trend rejecting renewables, rejecting climate change alarmism, and embracing coal and other fossil fuels. Renewables and the high electricity rates they ushered in drove individuals into energy poverty and led industry to flee, putting the lie to the claim that wind and solar are the fuels of the future. Oil, gas, and coal remain the fuels of the future. While China, once lauded as poster boy of the renewable industry, is pulling back from renewables, its plunging into coal. The decline of government funding for renewables in countries like Germany, Japan, and more recently, the United States, follows years of public opinion polls that consistently show the public isn’t much fussed about climate change. Canadian Prime Minister Justin Trudeau is now looking like the last man standing.  - National Post


Premier Doug Ford ending Drive Clean plan — Robert Benzie

Premier Doug Ford announced Friday that as of April 1, the mandatory program would end for passenger cars and trucks. Instead, the Progressive Conservative government will clamp down on big commercial polluters by enhancing the smog checks on transport trucks and other industrial vehicles. Transportation Minister John Yakabuski said details of the new anti-smog push for heavy-duty vehicles will be unveiled in the coming months. Environment Minister Rod Phillips noted that over the past 19 years, Drive Clean has outgrown "its usefulness" because there was a steady annual decrease in the number of cars that failed tests. "By ending Drive Clean tests and repairs for passenger vehicles, this government is reducing the burden on residents and families who own a car,” the premier said, adding the government will save $40-million a year. - Hamilton Spectator


UCP Leader Kenney, Ontario Premier Ford to hold Calgary anti carbon tax rally — CP

Alberta’s United Conservative Party has invited Ontario Premier Doug Ford to Calgary for a “Scrap the Carbon Tax Rally.” Kenney, the leader of Alberta’s Opposition, has promised to repeal the province’s carbon tax if his party wins the 2019 spring election. He has also pledged to fight any attempt by Ottawa to impose a national price on carbon. Ford’s new Progressive Conservative government is challenging the federal government’s carbon pricing plan in court. A United Conservative party official says both leaders will give speeches at the rally. - National Post


Big money pours into fight over Washington carbon fee — Phuong Le

A campaign bankrolled by the oil industry has raised $20.46-million to defeat a carbon pollution fee on the ballot in Washington state aiming at tackling climate change. The money raised so far by the “No on 1631” campaign is sponsored by the Western States Petroleum Association, an oil industry trade group. If approved by voters Nov. 6, Initiative 1631 would make Washington the first state in the U.S. to impose a direct carbon fee or tax by voter initiative. THe initiative would charge large carbon emitters fees on fossil fuels used or sold in the state or electricity generated within the state. The fees would raise an estimated $2.3-billion in the first five years to fund a wide range of programs intended at cutting greenhouse gas emissions. Supporters of the measure have raised $6.1-million. The measure comes two years after Washington voters rejected a carbon tax that would have been the first in the nation. - National Post


Final investment decision on LNG Canada project expected in days, source says — Brent Jang, Justine Hunter, Shawn McCarthy

A $40-billion project to export liquified natural gas from northern British Columbia is rapidly gaining momentum as the co-owners strive toward making an announcement for LNG Canada’s go-ahead within days. Two of the five partners in Shell-led LNG Canada approved the project on Friday, leaving the remaining three poised to publicly announce plans to forge ahead with constructing the terminal in Kitimat on the West Coast. A final investment decision by all five co-owners will come any time in the next week to 10 days, a source told The Globe and Mail on Sunday. After PetroChina and South Korea’s Kogas gave the green light, attention turned on the weekend to Royal Dutch Shell PLC, Malaysia’s state-owned Petronas and Japan’s Mitsubishi Corp. Kitimat Mayor Phil Germuth said that in contrast to the ill-fated Northern Gateway oil pipeline proposal, which Ottawa rejected in 2016, there is widespread support for LNG Canada. “The federal government wants to see this LNG project happen, too. Ottawa knows there is support for LNG from northeast B.C. to Kitimat,” Mr. Germuth said. - Globe & Mail


Taking short cuts won’t get Trans Mountain pipeline built any faster — Barrie McKenna

Federal Conservative Leader Andrew Scheer wants to get the Trans Mountain pipeline built 0 like, yesterday, Mr. Scheer has unveiled what he would do to fast-track construction of the stalled federally owned pipeline expansion, which would carry Alberta crude to the coast in Burnaby, B.C. His plan includes legislation to bypass a new court ordered National Energy Board hearing as well as appointing a special envoy to win over recalcitrant First Nations. Many Canadians, particularly in the West, see Trans Mountain as the key to opening up new export markets and ensuring a healthy future for the country’s energy sector. And they want to see the project proceed as fast as possible. But surely, construction of the Trans Mountain pipeline is that taking short cuts and ignoring legitimate opposition is what got Ottawa into this mess. - Globe & Mail


Small businesses feeling pinched by rising gas prices — Brenda Bouw

The rising cost of gasoline is forcing small-business owners to cut costs in order to cope with what experts say will be the new normal for fuel prices. Gasoline costs have risen by about 15% year-over-year for Jason Boyne’s Goodbye Graffiti Business. His company uses gasoline to fuel his eight heavy-duty Ford F350 and Dodge 3500 trucks and the power washing equipment he uses to remove graffiti. “The biggest cost for us is gilling up the trucks,” says Mr. Boyne, who says his business now pays about $160 to fill up each truck in the Vancouver area, whiere gasoline prices hit a record of $161.90 at the end of April. The spike in fuel prices comes alongside other rising costs for small business owners, ranging from wages and new payroll taxes to increased costs from suppliers as a ripple effect moves across the supply chain. Half of small-business owners in Canada say rising fuel and energy costs are a “major cost constraint that is limiting their ability to grow and be successful,” according to Dan Kelly, the head of the Canadian Federation of Independent Business. - Globe & Mail


Husky launches hostile takeover bid for MEG Energy Corp. — Geoffrey Morgan

In a release Sunday, Calgary-based oil giant Husky announced that — despite being rebuffed by its target company’s executives over the summer — it is offering $11 per share to buy MEG Energy. In a  deal that is worth $6.4-billion, it is a sign of more transactions to come. That price is 37% higher than MEG’s most recent closing price of $8.03 per share, valuing the company’s stock at $3.3-billion. MEG has long been considered a prime takeover target and the potential deal would continue a trend of consolidation in the Calgary oilpatch, Canoe Financial portfolio manager Rafi Tahmazian said. “We are in consolidation mode, and it’s about survival of the strongest and fittest,” Tahmazian said. He said only a few other companies in the sector could match or exceed what Husky is offering, including Suncor Energy Inc., Canadian Natural Resources Ltd. and Imperial Oil Ltd. - Windsor Star


Natural gas sector poised for big boost if LNG Canada moves ahead — Geoffrey Morgan

Bloomberg News cited filings from the Hong Kong Stock Exchange Friday that showed PetroChina Co., China’s largest oil and gas company and 15% owner of LNG Canada, had approved spending US$3.46-billion for its share of the project. Korea Gas Corp. made a similar announcement in Seoul about its 5% stake. The other project partners have yet to announce their decisions. LNG Canada would be the first major domestic gas export project to be commissioned in the country and provide a sentiment boost to the country’s beleaguered gas sector. “A positive FID could the first step toward repairing Canada’s damaged reputation as a country in which energy infrastructure projects are perceived as almost impossible to advance.” Western Canadian natural gas prices have been depressed for years but, the combination of an LNG Canada decision, along with new tolling arrangements on the main natural gas export pipelines beginning in 2020, would help “reset” the links between AECO gas prices and North American benchmarks, according to an analyst. - Calgary Herald


B.C. gets a north coast export project — with pipeline — Don Braid

This week, it was reported that the $40-billion LNG terminal planned for Kitimat will get federal relief from tariffs on steel modules. There will be a new pipeline to supply the terminal with natural gas from Alberta and Northeastern B.C. and TransCanada is ready to spend $4.8 billion on the Coastal Gaslink line as soon as investment in the terminal is approved. But the decisions that led to this LNG project have done enormous damage to Alberta’s economy and the oilsands. First, Ottawa killed the Northern Gateway pipeline in 2016, after the Federal Court found its approval lacking, and with the no room left in the existing pipelines the real danger these days is bitumen riding the rails in B.C. Bill C-48, now before the Senate, doesn’t apply to ships carrying LNG. It doesn’t even prohibit tankers. It only bans export of products listed in the bill — Alberta exports, as it happens.  The Alberta government says the ban will kill billions of dollars in plans for exporting refined products. - Calgary Herald


Legislature resumes but opposition partnership on LNG and taxes remain unlikely — Rob Shaw

The Greens have broken with their NDP power-sharing partners on climate change, threatening to bring the government down over the pollution to be caused by a new liquefied natural gas plant in Kitimat by LNG Canada. Green Leader Andrew Weaver has said the NDP government’s pursuit of a big-polluting LNG industry is a betrayal of its climate promises, which call for a reduction in greenhouse gas emissions of 40% below 2007 levels by 2030. For the Liberals, any successful co-operation could be used by advocates of proportional representation as evidence that minority governments work. Also, both the Liberals and Greens support demands from local mayors to give communities an opt-out from the NDP’s controversial speculation tax. Mayors at the Union of B.C. Municipalities voted last month to demand they be allowed to opt out of the tax, saying it will hurt development and tourism. Weaver and Liberal Leader Andrew Wilkinson both support that demand and together could amend the legislation. - Vancouver Sun


Customers in crisis tap B.C. Hydro fund for $295,000 in first months — Derrick Penner

Hydro has made about 700 one-time payments, worth a total of $295,000, from the customer-crisis fund that was approved by the B.C. Utilities Commission during its last rate-design application. “It’s really for those one-time situations, a one-time grant for people facing extreme situations where they’ve exhausted every other option available to pay their bills,” said Hydro spokeswoman Mora Scott. The fund generated backlash from some customers, however, who complained in social media about being surprised when the customer-crisis-fund charge started showing up on their bills and called it an additional tax. The fund isn’t intended to cover delinquent accounts, but rather pay out one-time grants up to $600 to help customers in emergency situations, such as the loss of a job, an illness or death of family member. And for the customer crisis fund, Scott said any money that isn’t paid out or used in the fund’s administration will be held in a separate account until the end of the pilot period and then returned to customers. - Vancouver Sun


United States

New Nafta Shows Trump’s Trade Strategy for Balancing Labor, Business Interests — Jacob M. Schlesinger

The Teamsters have nice things to say about the new North American Free Trade Agreement. Big banks can also claim a victory. In attempting to please both ends of the economic and political spectrum, the new Nafta illustrates President Trump’s evolving trade strategy, as he seeks to win over labor unions long opposed to free-trade pacts, while maintaining support from business groups that have generally supported them. American energy trade groups—and their powerful advocates in the Texas delegation in Congress—had originally raised concerns about the new Nafta and how it might treat ISDS. “Now we’re feeling more comfortable and inclined to support the direction that’s going,” said an oil-and-gas industry official who has studied closely the new agreement. “We’re willing to live with this.” - Wall Street Journal


Nordstream 2 gas pipeline important for Europe: German energy minister — Nina Chestney

The Nordstream 2 pipeline is important to secure energy supplies and Russia is a safe and reliable provider of gas for Germany, Thomas Bareiss, German state secretary for energy, said at a conference in London on Monday. The Nordstream 2 pipeline will allow Russia to bypass Ukraine in transporting gas to Europe. Gas is due to start flowing at the end of 2019. The pipeline has drawn criticism from the United States. U.S. President Donald Trump has said the project increases reliance on Russian gas and has warned Western firms invested in the pipeline that they are at risk of sanctions. Gazprom and its European partners say the Nordstream 2 project is aimed at ensuring energy security in the region as gas production falls in Europe and as Gazprom remains in conflict with Ukraine. - Reuters



Robust LNG market toughens task on east coast gas prices — Angela MacDonald-Smith

East coast manufacturers can expect little relief from high gas prices with the extension of a deal between the federal government and Queensland's LNG exporters on local gas supply, as the tight global market for LNG puts renewed pressure on domestic prices. The agreement between the Queensland LNG exporters and the Prime Minister, which was renewed on Sunday, requires the three ventures in Gladstone to offer all available gas not committed under contract to customers in Asia to domestic users first, before any spot market shipments overseas. But it comes as evidence firms of a China-driven strengthening in the LNG export market to which the east coast market is firmly tied since the start-up of LNG exports from Queensland in 2015. Despite large chunks of new LNG production capacity coming online, analysts including Wood Mackenzie and JPMorgan are no longer expecting oversupply to plague the market late this decade ahead of a shortage expected to kick in early next decade. - Australian Financial Review


Scott Morrison defends rising CO2 emissions  Ben Potter

Prime Minister Scott Morrison vigorously defended the federal government record of increasing carbon dioxide emissions after new data showing a 1.3% increase in the year to March. Mr Morrison told ABC's Insiders program that Australia would meet its international climate obligations easily despite the most recent official government projections saying the nation will fall short of its Paris commitment for a 26% to 28% economy-wide emissions cut by 2030 by a cumulative 868-934 million tonnes without new policies. He said he was comfortable with the government's Paris pledge and contrasted it with Labor's 45% emissions cuts target, which he said – without evidence – would add $1400 to annual electricity bills "for every household in the country". Mr Morrison accused critics of the government's emissions performance of cherry picking data by focusing on aggregate emissions – the measure targeted in the Paris agreement – rather than per capital emissions, which have been falling since 2007. - Australian Financial Review