Jump to content

Recommended Posts

B.C. First Nation and partners propose new $10B LNG megaproject

 

Project aims to be the largest net-zero LNG export facility in world

 
kyle-bakx.JPG
Kyle Bakx · CBC News · Posted: Jul 19, 2021 4:00 AM ET | Last Updated: 4 hours ago
 
ksi-lisims.jpeg
Construction of the Ksi Lisims facility could begin in 2024. The proposed site is located at Wil Milit, approximately 35 kilometres east of Gingolx, a B.C. coastal community about 80 kilometres north of Prince Rupert. The land is undeveloped, but was previously logged. (Nisga’a Lisims Government)

A British Columbia First Nation is proposing a new liquified natural gas (LNG) export facility to be built on the community's treaty land and is making an environmental pledge to reach net-zero emissions within three years of commencing operations.

The Nisga'a Nation, whose territory is north of Prince Rupert near the Alaska border, is partnering with a group of Western Canadian natural gas producers called Rockies LNG Partners and a Texas-based energy company called Western LNG.

 

The project is called Ksi Lisims LNG and would include a pipeline to transport natural gas from the northeast corner of the province to the coast. The facility itself is estimated to cost $10-billion.

The chilled natural gas would be loaded on to ships and exported to Asia.

The project proponents are scheduled to announce the project on Monday, and will begin applying for the necessary government permits and start formal talks with communities in the region.

The project will undergo an environmental assessment as part of a joint-regulatory review by the federal, provincial and Nisga'a governments.

In 2000, the Nisga'a and the governments of Canada and B.C. signed a treaty that gave the Nisga'a control over about 2,000 square kilometres of territory in the Nass Valley in B.C.'s northwest. 

 
eva-clayton.jpg
Eva Clayton, president of the Nisga’a Nation, says there will be comprehensive engagement with her community. (Nisga’a Lisims Government)

"Attracting an economic base to our treaty lands in the Nass Valley has long been a priority for the Nisga'a Nation," said Nisga'a Nation President Eva Clayton, in a release.

"This is why, for close to a decade, our Nation has worked to attract a world-leading LNG project to our treaty lands, and why we are proud today to commence the formal regulatory process for our project, Ksi Lisims LNG."

The project comes at a time when many other LNG proposals for B.C.'s coast have either been shelved or cancelled.

Asian prices for LNG are at multi-year highs as global demand for natural gas is robust to meet the power generation needs of many countries this summer.

Net-zero goal 

Ownership of Ksi Lisims LNG is still being determined as the proponents continue to finalize commercial agreements.

The economic impact of Ksi Lisims LNG is estimated to be $55-billion including the facility, pipeline and the production of natural gas over 30 years.

Ksi Lisims LNG is negotiating with two companies to build a pipeline. Enbridge's Westcoast Connector Gas Transmission project and TC Energy's Prince Rupert Gas Transmission project both already have environmental approvals in place as they were meant to transport natural gas for now-cancelled LNG export projects in the Prince Rupert area.

 
lng-graphic.jpg
A look at how natural gas is produced, shipped and received around the world. (Supplied by Wartsila)

Company officials say the LNG facility could be operational in late-2027 or 2028 and reach net zero emissions within three years of startup through the use of hydroelectricity, energy efficiency, carbon offsets and potential carbon capture and storage. 

Net-zero emissions mean that any emissions of greenhouse gases produced are offset by other measures.

The floating liquefaction facility would be located near the village of Gingolx, a coastal community about 80 kilometres north of Prince Rupert. The project will be capable of producing 12 million tonnes of LNG per year and generate 4,000 construction jobs.

The facility would be nearly the same size as the first phase of the LNG Canada project, which is led by Shell Canada and is now under construction near Kitimat. The initial phase would be able to export 14 million tonnes of natural gas.

A much smaller project near Squamish, Woodfibre LNG, is expected to reach a final investment decision later this year on its proposed facility, which will produce 2.1 million tonnes of LNG per year.

Last month, the Haisla Nation announced a partnership with Pembina Pipeline on a three-million-tonnes planned project near Kitimat called Cedar LNG.

Link to comment
Share on other sites

The Dirty Truth About Hydrogen Fuel

Jeff Brown  | Feb 15, 2021  | Bleeding Edge | 5 min readPrint 

Dear Reader,

Today is Presidents’ Day, a market holiday. So in lieu of our normal edition of The Bleeding Edge, I thought I’d share my thoughts on a topic that readers have been asking about – hydrogen power.

I’m often asked about hydrogen as the next great source of clean energy to fuel transportation. It’s such an exciting topic.

The thought of powering our cars, trucks, trains, and even planes with the most abundant element in the universe sounds like the solution to greatly reducing global carbon emissions. After all, its only byproduct is water when used.

And it’s true that hydrogen seems perfect on the surface. It stores three times as much energy per unit of mass compared to gasoline. When it is combined with air, the energy that is released can power a vehicle. And it combines with oxygen to produce water.

We can’t do much better than that, right?

Well, that’s not the full story…

The Bigger Picture

We must understand how hydrogen is made to see the whole picture.

Hydrogen is produced from water. About 70 million tons of hydrogen are produced each year. This is primarily used for ammonia fertilizer. And 96% of hydrogen production is made by a process known as steam-methane reformation.

Here’s the problem. This process uses energy created by natural gas, coal, and oil to produce that hydrogen. In all, the industry produces 830 million metric tons of carbon dioxide every year to produce this “clean” hydrogen fuel.

Not so clean after all.

In fact, I would argue… what’s the point?

If we have to burn massive amounts of carbon-based fuel just to put hydrogen in our cars, we aren’t helping the environment at all. We are only displacing where the carbon emissions take place, not whether they happen in the first place.

It is really no different than fueling our electric vehicles with electricity produced from coal, natural gas, or oil. It is nonsensical to think that we are helping the environment by doing this.

As for the remaining 4% of hydrogen production, it is produced using electrolysis. This process uses electricity to split the hydrogen out of the water.

And on the surface, this sounds better than steam-methane reformation.

But where does the electricity really come from? Again, the answer is almost entirely from fossil fuel power plants or nuclear fission power plants (radioactive waste).

So where does this leave us?

The True Cost of Hydrogen

We can use carbon capture technology to capture the carbon dioxide that is emitted when we produce hydrogen. That works, but it is not perfect. 

At least 10–20% of emissions are not captured in this process. It’s better than 100%. But that’s still not clean energy production.

We can make up for the difference by using carbon offsets. For example, we can plant more trees halfway around the world.

But the fact remains that we’d still be burning fossil fuels in the production of the hydrogen.

It’s worth noting that using carbon capture technology will also result in hydrogen that is about twice as expensive as that produced using steam-methane reformation. And if we can make the leap to producing hydrogen with 100% renewable energy, the costs will still be four times higher than steam-methane reformation.

Why is this important?

Well, hydrogen is fuel. Consumers and businesses have to pay for it. We can think of a gallon of gas as having about the same amount of energy as a kilogram of hydrogen.

But a hydrogen fuel-cell system is twice as efficient as a gasoline system. We can expect about 70 miles per kilogram of hydrogen fuel for a small hydrogen fuel-cell car. That’s the equivalent of 70 miles per gallon.

To put things in perspective, it takes about 50–55 kilowatt hours of electricity to produce a single kilogram of hydrogen fuel. That’s the equivalent of almost two days of electricity consumption for an average home in America.

We should think about that.

Almost two days of an entire household’s energy consumption… just to produce one kilogram that provides enough fuel to travel 70 miles. Does that make sense?

 

A Problem of Volume

Hydrogen is truly problematic in its volume. It takes up a lot of space, so we can only carry about 5 to 6 kilograms of hydrogen in a single tank. The other tricky nuance is that hydrogen molecules are so tiny that they easily leak out of most containers.

The average price of hydrogen fuel in California, which has the highest number of hydrogen cars, is about $16 per kilogram. That works out to the equivalent of about $5­–6 a gallon of gasoline. And we have to remember that almost all of the hydrogen was produced by burning fossil fuels.

Without billions of dollars in subsidies, hydrogen just doesn’t make economic sense. And because of where the energy comes from – mainly fossil fuels and other “dirty” energy sources – it doesn’t even make environmental sense.

For hydrogen fuel cells to be both environmentally sustainable and economical, the world must address how it produces base load power.

This is the kind of power required to manufacture the 70 million tons of hydrogen produced every year. Until we address the underlying costs for producing this so-called “clean” energy, hydrogen will remain unsustainable for the foreseeable future.

Carbon-free emissions with no radioactive waste could inform a sustainable energy production strategy. And it’s one that we would all benefit from. It’s something very tangible that the industry can work toward.

The most promising technology to achieve this is a kind of nuclear fusion (not fission) technology that produces no radioactive waste. And I’m on record saying that we will see the first net energy production from nuclear fusion sometime in the next five years.

Thank you to all readers of The Bleeding Edge for submitting your questions on this topic. I hope you enjoy your holiday with friends and family. And I’ll speak to you again tomorrow.

Regards,

Jeff Brown
Editor, The Bleeding Edge

P.S. We are living in an age of rapid technological development that has brought us explosive trends like 5G wireless technology, artificial intelligence (AI), and the next wave of sustainable energy production. These are the technologies that are eliminating scarcity and creating a world of abundance right before our eyes.

Even better, these trends are giving us the chance to invest in some of the most exciting tech companies in the world. If you’d like to learn more, I recently recorded a special presentation for my readers… You can go right here to watch.

Jeff Brown's Tech Investing & Insights | Brownstone Research

Link to comment
Share on other sites

TransAlta completes second of three planned Alberta plant conversions to natural gas

Conversion of Keephills Unit 2 cost $31.5 million

The Canadian Press · Posted: Jul 19, 2021 7:10 AM MT | Last Updated: 1 hour ago
 
transalta-agm-20140429.jpg
TransAlta has said it wants to reduce its annual greenhouse gas emissions by 60 per cent, or 19.7 million tonnes by 2030 over 2015 levels and achieve carbon neutrality by 2050. (Larry MacDougal/The Canadian Press)
2
comments

TransAlta Corp. has taken another step in its goal of becoming carbon neutral by completing the second of three planned coal-to-gas conversions at its Alberta Thermal power generation facilities near Wabamun.

The conversion of Keephills Unit 2 to natural gas is part of the Calgary company's plan to entirely generate clean energy in Alberta by the end of the year.

 

TransAlta has said it wants to reduce its annual greenhouse gas emissions by 60 per cent, or 19.7 million tonnes by 2030 over 2015 levels and achieve carbon neutrality by 2050.

Chief executive John Kousinioris says the latest conversion maintains its current generation capacity and reduces carbon dioxide emissions by more than half to about 0.51 tonnes CO2e per MWh.

The Keephills conversion cost $31.5 million while another $64.7 million was spent on system upgrades, gas infrastructure and maintenance projects.

It was the second conversion project after Sundance Unit 6 was converted in February. Keephills Unit 3 will be converted later this year.

"This not only highlights TransAlta's commitment to meet Alberta's need for safe, reliable and low-cost electricity but also our commitment to meet our sustainability goals focused on clean electricity generation," stated Kousinioris.

Link to comment
Share on other sites

Nisga'a Nation, partners move ahead with large LNG export project in B.C.

Group launches regulatory process, boasts of planned lower emissions

  • Calgary Herald
  • 20 Jul 2021
  • BARBARA SHECTER

The development of a liquid natural gas export project based in British Columbia with estimated economic impact of $55 billion took a major step forward Monday as the group behind the proposal kicked off the regulatory process by filing an initial project description with the federal and provincial governments.

The project is a partnership between The Nisga'a Nation, Texas-based LNG export facilities developer Western LNG and Rockies LNG, a limited partnership of oil-and-gas producers that collectively produce about 20 per cent of Canada's natural gas.

The proposed 12-million-tonneper-year project is to be located at Wil Milit on the tip of Pearse Island in northern B.C. near the Nisga'a village of Gingolx, with Asia targeted as a key export market. Commercial operations at The Ksi Lisims LNG project are to begin in late 2027 or 2028.

“Attracting an economic base to the Nass Valley has long been a priority for the Nisga'a Nation,” said Eva Clayton, president of the Nisga'a Nation. “This is why, for close to a decade, our Nation has worked to attract a world-leading LNG project to our treaty lands.”

The Ksi Lisims LNG project is moving forward despite the cancellation of several other multi-billion-dollar LNG export projects in B.C., including the $36-billion Pacific Northwest LNG project near Prince Rupert and Exxon Mobil Corp.'s $25-billion West Coast Canada LNG project.

Western LNG founder and chief executive Davis Thames said Ksi Lisims LNG will produce one of the world's lowest unit carbon emissions rates for a large-scale LNG export project, and added that the project's “floating design” would be central to delivering it to the remote location on time and on budget. “We are very excited to work with the Nisga'a Nation and Rockies LNG to bring the Ksi Lisims LNG project to market,” he said. “This project will be important to the global LNG industry as it navigates the energy transition.”

In a news release, the partners noted that more than 70 per cent of primary energy demand in Asia is currently met by coal and oil.

“Replacing coal and oil with LNG exported from Ksi Lisims LNG would result in a reduction of global carbon emissions of more than 45 million tonnes per year, or 1.3 gigatonnes over a 30-year period, which is equivalent to nearly two years of total carbon emissions from Canada,” they said.

Charlotte Raggett, CEO of Rockies LNG, said the project would provide Canadian natural gas producers with new access to growing global energy markets, and “importantly, global LNG prices.”

Two natural gas pipeline projects are being evaluated for Ksi Lisims LNG, according to the release.

Both have received regulatory approvals following environmental assessment processes and can connect resources in northeastern B.C. to the proposed project site.

The selected pipeline would be owned and operated by a third party. If the Ksi Lisims LNG project moves ahead as intended, it will generate public revenues, jobs — including up to 4,000 construction jobs — training and business opportunities for First Nations and other communities in British Columbia and Alberta.

Total direct and indirect economic impact including infrastructure and upstream activities is estimated at about $55 billion.

The latest step in the project's development comes two decades after the Nisga'a Nation entered into the first modern treaty in B.C.

The Nation has treaty rights to more than 26,000 square kilometres, including the proposed site at Wil Milit.

In the release, the partners said the Ksi Lisims LNG project “aligns with the Nisga'a Nation's vision for self determination and is enabled by the Nisga'a Final Agreement and the United Nations Declaration on the Rights of Indigenous Peoples.”

In June, Canada's Senate passed Bill C-15, which requires the government to ensure laws conform with the United Nations declaration enshrining Indigenous rights including the right to self-determination.

Ksi Lisims LNG would result in a reduction of global carbon emissions of more than 45 million tonnes per year.

Link to comment
Share on other sites

Once again Quebec closes the door.

Montreal

Quebec nixes LNG plant that would have carried Western Canadian natural gas to overseas markets

Premier Legault had initially supported the project, but it was met with widespread opposition

CBC News · Posted: Jul 21, 2021 3:09 PM ET | Last Updated: 1 hour ago
 
ship-saguenay-fjord.JPG
The proposed GNL Quebec project would contribute to 200 additional ships circulating annually on the Saguenay river. (Julia Page/CBC)

The Quebec government has refused to approve construction of a natural gas facility in the Saguenay, north of Quebec City, following years of opposition from citizens, Indigenous communities and environmental experts.

The decision, announced today by Environment Minister Benoit Charette, is all but certain to halt a $14-billion project that would have carried natural gas from Western Canada across Quebec to the Saguenay port, and then shipped it to markets overseas.

 

Premier François Legault's government had initially been a proponent of the project.

But in March, the province's independent environmental review agency issued a report that was critical of the plans to build a plant and marine terminal in the Saguenay.

The project was likely to increase greenhouse gas emissions in Canada by eight million tones annually, the agency concluded.

Last month, federal environmental agencies determined the project, which would involve large tankers transiting along the Saguenay River, threatened beluga whales.

And last week, three Innu communities vowed to oppose the project because of the negative impact it would have on the environment.

This is a developing story and will be updated.

Link to comment
Share on other sites

Just now, Kargokings said:

Once again Quebec closes the door.

Montreal

Quebec nixes LNG plant that would have carried Western Canadian natural gas to overseas markets

Premier Legault had initially supported the project, but it was met with widespread opposition

CBC News · Posted: Jul 21, 2021 3:09 PM ET | Last Updated: 1 hour ago
 
ship-saguenay-fjord.JPG
The proposed GNL Quebec project would contribute to 200 additional ships circulating annually on the Saguenay river. (Julia Page/CBC)

The Quebec government has refused to approve construction of a natural gas facility in the Saguenay, north of Quebec City, following years of opposition from citizens, Indigenous communities and environmental experts.

The decision, announced today by Environment Minister Benoit Charette, is all but certain to halt a $14-billion project that would have carried natural gas from Western Canada across Quebec to the Saguenay port, and then shipped it to markets overseas.

 

Premier François Legault's government had initially been a proponent of the project.

But in March, the province's independent environmental review agency issued a report that was critical of the plans to build a plant and marine terminal in the Saguenay.

The project was likely to increase greenhouse gas emissions in Canada by eight million tones annually, the agency concluded.

Last month, federal environmental agencies determined the project, which would involve large tankers transiting along the Saguenay River, threatened beluga whales.

And last week, three Innu communities vowed to oppose the project because of the negative impact it would have on the environment.

This is a developing story and will be updated.

 

Link to comment
Share on other sites

Yet at the same time on the other coast,,,,

https://www.cbc.ca/news/business/bakx-ksi-lisims-lng-1.6107901

B.C. First Nation and partners propose new $10B LNG megaproject

Project aims to be the largest net-zero LNG export facility in world

 
kyle-bakx.JPG
Kyle Bakx · CBC News · Posted: Jul 19, 2021 4:00 AM ET | Last Updated: July 19
 
ksi-lisims.jpeg
Construction of the Ksi Lisims liquified natural gas facility could begin in 2024. The proposed site is located at Wil Milit, approximately 15 kilometres northwest of Gingolx, a B.C. coastal community about 80 kilometres north of Prince Rupert. The land is undeveloped, but was previously logged. (Nisga’a Lisims Government)

A First Nation in British Columbia is proposing a new liquified natural gas (LNG) export facility to be built on the community's treaty land and is making an environmental pledge to reach net-zero emissions within three years of commencing operations.

The Nisga'a Nation, whose territory is north of Prince Rupert near the Alaska border, is partnering with a group of Western Canadian natural gas producers called Rockies LNG Partners and a Texas-based energy company called Western LNG.

 

The project is called Ksi Lisims LNG and would include a pipeline to transport natural gas from the northeast corner of the province to the coast. The facility itself is estimated to cost $10 billion.

The chilled natural gas would be loaded onto ships and exported to Asia.

The project proponents are scheduled to announce the project on Monday, and will begin applying for the necessary government permits and start formal talks with communities in the region.

The project will undergo an environmental assessment as part of a joint-regulatory review by the federal, provincial and Nisga'a governments.

In 2000, the Nisga'a and the governments of Canada and B.C. signed a treaty that gave the Nisga'a control over about 2,000 square kilometres of territory in the Nass Valley in B.C.'s northwest. 

 
proposed-site-for-ksi-lisims-lng-project
The proposed site for the Ksi Lisims LNG project. (CBC News)

"We want to bring sustainable economic activity, not only to the Nass Valley but to the region. It's going to also assist in helping to fight poverty and to bring a prosperous future," said Nisga'a Nation President Eva Clayton, in an interview.

The project comes at a time when many other LNG proposals for B.C.'s coast have either been shelved or cancelled.

Asian prices for LNG are at multi-year highs as global demand for natural gas is robust to meet the power generation needs of many countries this summer.

 
eva-clayton.jpg
Eva Clayton, president of the Nisga’a Nation, says there will be comprehensive engagement with her community. (Nisga’a Lisims Government)

Negotiations for pipeline construction 

Ownership of Ksi Lisims LNG is still being determined as the proponents continue to finalize commercial agreements.

The economic impact of Ksi Lisims LNG is estimated to be $55-billion including the facility, pipeline and the production of natural gas over 30 years.

"It is a big project. It's a lot of money. But will the economics be there for it in the long run?" said Martin King, a natural gas analyst with RBN Energy.

"That's the ultimate arbiter of everything that happens in building these projects — will it meet economic thresholds?"

Ksi Lisims LNG is negotiating with two companies to build a pipeline.

Enbridge's Westcoast Connector Gas Transmission project and TC Energy's Prince Rupert Gas Transmission project both already have environmental approvals in place as they were meant to transport natural gas for now-cancelled LNG export projects in the Prince Rupert area.

 
lng-graphic.jpg
A look at how natural gas is produced, shipped and received around the world. (Supplied by Wartsila)

Net-zero goal

Company officials say the LNG facility could be operational in late-2027 or 2028 and reach net zero emissions within three years of startup through the use of hydroelectricity, energy efficiency, carbon offsets and potential carbon capture and storage. 

Net-zero emissions mean that any emissions of greenhouse gases produced are offset by other measures.

"The nation is very much concerned with the ever-changing climate," said Clayton. "We want to be able to assist with providing low-carbon energy."

The floating liquefaction facility would be located near the village of Gingolx, a coastal community about 80 kilometres north of Prince Rupert. The project will be capable of producing 12 million tonnes of LNG per year and generate 4,000 construction jobs.

The facility would be nearly the same size as the first phase of the LNG Canada project, which is led by Shell Canada and is now under construction near Kitimat. The initial phase would be able to export 14 million tonnes of natural gas.

A much smaller project near Squamish, Woodfibre LNG, is expected to reach a final investment decision later this year on its proposed facility, which will produce 2.1 million tonnes of LNG per year.

Last month, the Haisla Nation announced a partnership with Pembina Pipeline on a three-million-tonnes planned project near Kitimat called Cedar LNG.

No matter the project, some environmental leaders say natural gas projects may struggle to compete financially with renewable sources of energy, since the cost of wind and solar electricity has fallen considerably in recent years.

Critics also say hydrogen is emerging as a competing source of energy to the LNG industry.

"The long-term future isn't LNG, it's cleaner fuels," said Merran Smith, executive director of Clean Energy Canada. 

ABOUT THE AUTHOR

 
kyle-bakx.JPG
Kyle Bakx

Reporter

Kyle Bakx is a Calgary-based journalist with CBC's network business unit. He's covered stories across the country and internationally.

 
Link to comment
Share on other sites

Battle looming over retreat from oil

 

  • Calgary Herald
  • 22 Jul 2021
  • DON BRAID Don Braid's column appears regularly in the Herald dbraid@postmedia.com Twitter: @Donbraid Facebook: Don Braid Politics
img?regionKey=lKREzcOgYLeauiRN4woUcg%3d%3d  

A monumental Alberta issue slipped into the mainstream Tuesday with barely a ripple.

The federal Liberals announced consultations for a “just transition” away from oil and other resources to a green economy.

By the end of this process there will be a national law that enables (forces?) transition for workers across sectors and regions, at the pace set by Ottawa.

Canadians are invited to email their thoughts. There will be virtual stakeholder sessions (invitation only) in August and September. Sometime in the fall, the Liberals will emit a report on “what we heard.” Then would begin the march to a law and implementation.

All this dovetails neatly with the federal election campaign widely expected in early autumn.

The goals are lifted bodily from the national NDP and Greens. The Liberals hope to gather all progressive forces under their banner on election day.

As a national project, Just Transition comes close to former Green Leader Elizabeth May's call for a wartime-style attack on climate change.

It's impossible to say what this will mean for the pace and detail of changes to the energy industry. Federal language is elusive. An entire discussion paper doesn't mention the word “oil” once.

But the focus is on people who are going to lose their employment in resource industries, or see it change radically.

“Workers in the natural resource sectors helped build this country,” said Natural Resources Minister Seamus O'regan.

“These same workers will build our low-carbon future. It is their skills, determination and ingenuity that will get us to net zero and ensure our continued prosperity. They won't be left behind — they will lead the way.”

That would be a fine thing, although it's hard to imagine Prime Minister Justin Trudeau letting oilpatch workers lead him anywhere.

The Liberals embarked on a transition project for coal workers in 2019. This new phase includes the whole economy, with heavy emphasis on resources, and especially oil and gas.

The reaction across the country was muted. The Liberals have made their goals so clear, perhaps, that the step to formalizing transition was hardly worth noting.

But Alberta Energy Minister Sonya Savage lit up like a prairie gas flare.

“The federal government's intention to hastily phase out Canada's world-class oil and gas industry is extremely harmful to the hundreds of thousands who directly and indirectly work in the sector, and will be detrimental to Canada's economic recovery.”

She said Alberta's industry

“is already at the forefront of innovation and a diversified energy future with emerging opportunities like hydrogen, helium, geothermal development and petrochemicals … we have invested billions of dollars in technologies that reduce — and in some cases eliminate — emissions, such as carbon capture, utilization and storage.

“These new opportunities clearly demonstrate that the industry has already been transforming to meet post-pandemic energy demand, with many producers having set ambitious net-zero emissions goals.

“None of this is possible without the hard work of our skilled oil and gas workers.”

Both sides here recognize the need for helping workers with the changes to come. The fight will be over details and control as much as goals.

Alberta's jurisdiction over natural resources, which once seemed written in stone, has been steadily eroded by court rulings and aggressive federal legislation.

On March 25, ruling in Ottawa's favour on carbon tax, the lead Supreme Court judge said climate change is a matter of pressing national concern that allows Ottawa to pass laws overriding provincial powers.

Savage says a lot of the transition consultation is pre-election rhetoric.

She notes that O'regan still sees a role for oil and gas. Ottawa's plan is “completely unrealistic” and doesn't reflect what's happening in the industry.

But still, it's clear who has the momentum in federal-provincial disputes. If Ottawa misuses its growing power in typically casual fashion, the transition may not look very just in Alberta.

  • Thanks 1
Link to comment
Share on other sites

2 hours ago, Kargokings said:

Battle looming over retreat from oil

Great balls of Fire 👏👏👏👏👏

 That’s one sure fire way to kill off any votes from Alberta…Let’s hope the other provinces sit up and take notice what a dictatorship looks like.

Edited by Jaydee
  • Like 1
Link to comment
Share on other sites

Meeting Paris emissions targets would bring more energy jobs globally, but not for Canada: study

TORONTO -- A new study has found that if the world were to meet the targets set out in the Paris Agreement, there would be eight million more jobs globally by 2050.But in this scenario, researchers say some fossil fuel-dependant economies such as Canada would actually see fewer energy jobs.
  •  

The signatories of the Paris Agreement agreed in 2015 to reduce carbon emission in order to keep the rise in global temperatures to "well below" 2 C above pre-industrial levels, ideally limited to 1.5 C.

But many political leaders around the world, including in Canada, have raised concerns over the jobs that would potentially be lost in the fossil fuel sector as a result of decarbonization policies.

The international team of researchers based in Europe and Canada published their findings in the journal One Earth on Friday. They analyzed the job footprints in 50 countries and found that job losses in the fossil fuel industry would be outweighed by the gains in jobs created in clean energy.

Currently, around 18 million people are directly employed in the energy sector, the researchers estimate. Around 70 per cent are employed in fossil fuel industries, 26 per cent are employed in renewable energy and four per cent are employed in nuclear.

Under current trends, the number of energy jobs is expected to increase to 21 million by 2050. Researchers call this the "reference scenario."

However, if countries were to adequately transition away from fossil fuels in order to meet the Paris targets, researchers project that jobs in the energy sector would grow to 26 million.

In this scenario, 84 per cent of jobs would be in renewables and five per cent would be in nuclear, with only 11 per cent in fossil fuels.

Much of these job gains would come from manufacturing in the solar and wind industries.

"Manufacturing and installation of renewable energy sources could potentially become about one third of the total of these jobs, for which countries can also compete in terms of location," said study author Johannes Emmerling in a news release.

The Middle East, Southeast Asia, Indonesia and the United States could see the biggest job gains, given that these regions have a high potential for renewable energy and their fossil fuel sectors don't employ a large number of people.

But countries like Canada that have a significant number of jobs tied to fossil fuel extraction would actually see fewer jobs if the Paris targets were to be met, compared to the reference scenario, the study states.

"Extraction sector jobs are more susceptible to decarbonization, so there needs to be just transition policies in place," said first author Sandeep Pai in a news release.

Other economies reliant on fossil fuel extraction include Mexico, Australia, South Africa, Nigeria and Angola.

Pai, who recently completed his PhD at the University of British Columbia, says the large number of fossil fuel jobs in these countries also pose a barrier to getting climate policies passed in order to meet the Paris targets.

"In many cases, fossil fuel workers also hold political influence because of their history and high rates of unionization among others, so as we move to low carbon sources, it is important to have a plan in place for the general acceptability of climate policies," said Pai.

The next step for the research team is to study how the transition away from fossil fuels would affect wages, skill levels and educational requirements for workers. 

Link to comment
Share on other sites

Ontarians want Line 5 to keep operating: poll

July 27, 2021
 

Ontarians disagree with Michigan Governor Gretchen Whitmer’s attempts to shut down Enbridge’s Line 5 pipeline, according to a recent poll by Angus Reid.

In November 2020, Governor Whitmer issued an executive order to Enbridge to shut down the project, citing environmental concerns. At its peak operation, the pipeline carries 540,000 barrels of oil from Sarnia, Ontario to Superior, Wisconsin and supplied energy to Ontario and Quebec.

According to the Angus Reid poll, when asked if the pipeline should stay open or be shut down, 49% of Ontario residents said “keep it open,” 28% favoured shutting it down and 22% were unsure. Michiganders echoed similar sentiments, with 48% saying “keep it open,” 25% wanting to shut it down and 27% unsure. 

On the other hand, when Quebeckers were asked the same question, only 36% were in favour of keeping the pipeline open. 

A shutdown of the cross-border Enbridge Line 5 pipeline would have a profound impact on both the Canadian and US economy. Ontario estimates that 5,000 direct jobs and over 23,000 indirect jobs will be put at risk if Line 5 shuts down.

A shutdown will also lead to increased truck and rail traffic. According to IHS Markit, 45,000 additional trucks or 15,000 more railcars would be required to deliver resources between the regions should Line 5 halt operations. 

The Angus Reid poll also revealed that if Michigan turns off the tap on Line 5, three-quarters of Ontarians (76%) and 58% of Quebecers believe the Energy East project should be revived. 

Energy East was a 4,500-kilometre pipeline proposed to carry 1.1 million barrels of crude oil per day from Alberta and Saskatchewan to Eastern Canada. Due to stringent regulations set out by the Trudeau government, TransCanada cancelled the Energy East pipeline in 2017.

  • Thanks 1
Link to comment
Share on other sites

Low-carbon hydrogen is not cheap and needs support, says major energy organization

PUBLISHED WED, JUL 28 20215:01 AM EDT
KEY POINTS
  • World Energy Council says “environmental and political drivers” are “sending encouraging signals to the market.”
  • While discussions about the future of hydrogen take place, a number of firms are beginning to make plays in the sector.

In this article

 

Low-carbon hydrogen isn’t “cost competitive with other energy supplies in most applications and locations” and the situation is unlikely to change unless there’s “significant support to bridge the price gap,” according to the World Energy Council.

Published Tuesday, the analysis – which was put together in collaboration with PwC and the U.S. Electric Power Research Institute – raised the question of where funding for such support would come from, but also pointed to the increasing profile of the sector and the positive effect this could have.

 

In an announcement accompanying a briefing, the London-based energy organization said “environmental and political drivers” were “sending encouraging signals to the market and prompting growing interest.” Globally, many pilot projects were being developed, built or in operation, it added.

 

Described by the International Energy Agency as a “versatile energy carrier,” hydrogen has a diverse range of applications and can be deployed in sectors such as industry and transport.

It can be produced in a number of ways. One method includes using electrolysis, with an electric current splitting water into oxygen and hydrogen. If the electricity used in the process comes from a renewable source, such as wind or solar, then some call it green or renewable hydrogen.

Currently, the vast majority of hydrogen generation is based on fossil fuels, and green hydrogen is expensive to produce. Efforts are being made to drive costs down, however.

The U.S. Department of Energy recently launched its Energy Earthshots Initiative and said the first of these would focus on cutting the cost of “clean” hydrogen to $1 per kilogram (2.2 lbs) in a decade. According to the DOE, hydrogen from renewables is priced at around $5 a kilogram today.

 

For its part, the World Energy Council said some countries were “actively developing bilateral partnerships to help form global hydrogen supply chains and secure clean hydrogen supply.”

“With the appropriate policies and technologies to enable hydrogen scale up, some projections suggest that it could be cost competitive with other solutions as soon as 2030,” it added.

The sector does seem to be at a crossroads, with a number of issues to resolve as it looks to expand. The WEC’s report claimed the hydrogen economy was facing a “chicken and egg problem” related to supply and demand. Both of these, it argued, lacked “secure volumes from the other to help establish the value chain.”

There was also a discussion to be had about the benefit of using colors – including brown, blue, gray and pink, to name a few – to differentiate between various production methods.

“Colour has been used to simplify the conversation about the carbon footprint of hydrogen production,” the WEC’s report said, “but it has become more complex with no universally agreed colours for specific technologies and some disagreement as to which colour matches which supply.”

The debate about color required clarity, “as it could risk prematurely excluding some technological routes that could be more cost and carbon effective,” it said.

Partnerships and projects

While discussions about the future of hydrogen take place, a number of firms are beginning to make plays in the sector.

Just this week, it was announced that SSE Renewables and wind turbine giant Siemens Gamesa Renewable Energy had signed a memorandum of understanding centered around exploring opportunities related to the production and delivery of so-called green hydrogen.

In a statement Monday, SSE Renewables said the partnership would involve itself and Siemens Gamesa aiming to “co-locate hydrogen production facilities at two selected onshore wind farms … from which the partners will begin production and delivery of green hydrogen through electrolysis.”

One of the wind farms will be in Scotland, while the other will be located in Ireland. Jim Smith, who is managing director of SSE Renewables, said hydrogen was “rapidly becoming an important and exciting component of the strategy to decarbonise power production, heavy industry and transport, among other sectors.”

Link to comment
Share on other sites

What the heck is "low Carbon Hydrogen"?  Hydrogen does not contain ANY Other element.  Hydrogen is hydrogen. 

This has clueless marketing team written all over it

 

  • Thanks 1
  • Confused 1
Link to comment
Share on other sites

Controversy Surrounds The Cancellation Of Grassy Mountain Coal Project

10 hrs ago  Controversy surrounds the cancellation of Grassy Mountain Coal Project - Alberta Native News

Like1 Comment|3

Canada's rowing tradition continues at Tokyo 2020 — and beyond

Canada's policies and practices on Israel-Palestine don't add up

(ANNews) – Last month, a joint panel made up of the Alberta Energy Regulator (AER) and the Impact Assessment Agency of Canada (IAAC) denied the proposed Grassy Mountain project in the Rocky Mountains.

The AER and the IAAC determined that the open-pit coal mining project was “not in the public interest” due to the mining company’s lacking ability in mitigating environmental risks.

“In some cases the claimed effectiveness of the proposed measures was overly optimistic and not supported by the evidence,” the report says. “As a result, we are not confident about the technical and economic feasibility of some proposed mitigation measures.”

The ruling by the panel has been applauded by environmental groups and advocates, however the mining company Benga and two First Nations have launched an appeal regarding the decision.

Benga, the company who owns the project, said that they’re submitting an appeal because the panel didn’t consult with First Nations, improperly relied on non-expert and unfounded opinions over science, and denied the company fairness after the panel cited insufficient information in the application despite telling the company it met their requirements prior.

Benga believes that the AER’s conclusions and reasons contain material errors of law and contraventions of procedural fairness,” said Benga CEO John Wallington.

“Among the reasoning in its report, the AER dismissed the full support of the relevant First Nations without consultation, demonstrated a lack of familiarity with the provincial royalty regime, and gave preference to non-expert layman analysis over expert, science-based evidence,” Wallington said.

Piikani Nation

The Piikani Nation, one of the First Nations also attempting an appeal, is in full support of the project.

Stanley Grier, Chief of the Piikani, has said that “While we respect the regulatory process, we disagree with its findings. We are now exploring the best route to challenge the recent decision opposing the project.”

“Grassy Mountain is an important part of our plans for prosperity now, and for future generations of Piikani people,” Grier said.

However, It should be noted that the Piikani Chief and Council did not consult with band members before voicing their support of the coal mining project, and many Piikani members are against the Nation’s support of the coal mine.

Such groups as the “Mountain Child Valley Society” (MVCS) have been regularly speaking out against the leadership.

Adam North Peigan, Chairman of the MVCS, said that “we the members have a responsibility to protect our ancestral lands and we are exercising our right to freedom of speech as we will no longer be silenced or oppressed by our leadership.”

“It’s our responsibility to protect those traditional gathering and hunting and places where we used to pick our medicinal herbs; we have a responsibility to protect that contrary to what leadership is doing,” said North Peigan.

Chief Grier responded to the band member outrage by saying, “I know there are members of my nation who take a different view, and I respect them and fully support their right to speak out.”

“However, that does not change the position of the Piikani Nation.”

Stoney Nakoda Nation

 The Stoney Nakoda appeal is a bit of a different situation. Despite appealing the panel’s decision, the Stoney Nakoda Nation reiterated that they are against any coal mining exploration and development in sensitive areas of the Rockies.

However, the Nations has decided to appeal the decision because the AER and the panel report fails to consider Stoney Nakoda Nations’ right to self determination.

The decision states that the project is not in SNN’s best interest, but never had any consultation with the Nations.

Stoney Nakoda believes that this decision could have detrimental impacts on First Nations all across Alberta.

“This decision essentially states that having the support of SNN, and every other Treaty 7 Nation, is irrelevant, and that the AER/JRP is within their rights to ignore our support for a proposed project, or even lack of support,” read their press release.

“If such a precedent were left unchallenged, it would have long-term implications for the strength of Indigenous support or opposition for future proposed projects.”

“This cannot stand.”

Jacob Cardinal, Local Journalism Initiative Reporter, Alberta Native News

lberta Native News is a monthly, independent tabloid newspaper that features national and regional news and focuses on issues that are important to the Aboriginal communities across the country. Alberta Native News uniquely promotes Aboriginal culture and showcases artwork by emerging and acclaimed Native artists.
www.albertanativenews.com/about/

image.png

Link to comment
Share on other sites

  • 1 month later...

Suncor, Indigenous partners to buy TC Energy’s stake in Northern Courier Pipeline

By Staff  Reuters
Posted September 16, 2021 8:08 am
 

A pedestrian is reflected in a Suncor Energy sign in Calgary, Monday, Feb. 1, 2010. THE CANADIAN PRESS/Jeff McIntosh

Canada’s Suncor Energy said on Thursday it had partnered with eight Indigenous communities to buy all of TC Energy Corp’s 15 per cent stake in the Northern Courier Pipeline Limited Partnership.

70c8fc80

Suncor, three First Nations and five Métis communities will own a 15 per cent stake in this pipeline asset with a value of about $1.3 billion.

Oil and gas companies have been increasingly partnering with Canada’s First Nations on projects as they play a pivotal
role in Canada’s oil industry. Governments and companies have a legal duty to consult and accommodate First Nations before proceeding with resource projects affecting their territories.

However, some Indigenous groups oppose such partnerships and deals.

 

The partnership is expected to generate gross revenues of about $16 million annually for its partners and provide
reliable income, Suncor said in a statement.

The indigenous communities’ participation in the deal is funded through a non-recourse financing that is supported by a
loan guarantee of up to $40 million from the Alberta Indigenous Opportunities Corp.

The Northern Courier Pipeline asset consists of two 90-kilometer pipelines that transport bitumen and diesel or crude from Fort Hills in Alberta’s Athabasca region to a storage, blending and cooling facility located about 30 kilometers north of Fort McMurray, Alberta.

(Reporting by Arunima Kumar in Bengaluru; Editing by Amy Caren Daniel)

 
Link to comment
Share on other sites

Europe’s energy crisis is making the market nervous. And analysts expect record-high prices to persist

PUBLISHED THU, SEP 16 20211:48 AM EDTUPDATED 4 HOURS AGO
KEY POINTS
  • European power prices have spiraled to multi-year highs on a variety of factors in recent weeks, ranging from extremely strong commodity and carbon prices to low wind output.
  • What’s more, the record run in energy prices is not expected to end any time soon, with energy analysts warning market nervousness is likely to persist throughout winter.
  • Europe’s energy supply crunch is “making the market nervous as we approach winter,” Stefan Konstantinov, senior analyst at ICIS Energy, a commodity intelligence service, told CNBC.
 

LONDON — European power prices have spiraled to multi-year highs on a variety of factors in recent weeks, ranging from extremely strong commodity and carbon prices to low wind output.

What’s more, the record run in energy prices is not expected to end any time soon, with energy analysts warning market nervousness is likely to persist throughout winter.

The October gas price at the Dutch TTF hub, a European benchmark, was seen to climb to a record high of 79 euros ($93.31) a megawatt-hour on Wednesday. The contract has risen more than 250% since January, according to Reuters, while benchmark power contracts in France and Germany have both doubled.

In the U.K., where electricity bills are now the most expensive in Europe, power prices have soared amid the country’s high dependence on gas and renewables to generate electricity.

British day-ahead electricity prices rose nearly 19% to reach 475 pounds ($656.5) on Wednesday, Reuters reported. The contract was already trading near record highs shortly after a fire at a U.K.-France power link cut electricity imports to Britain.

“By far the biggest factor is gas prices,” Glenn Rickson, head of European power analysis at S&P Global Platts Analytics, told CNBC via email.

Higher gas prices have also been a “big driver” in lifting carbon and coal prices to record highs too, Rickson said, although he noted there are other supporting factors at play, such as low wind generation and nuclear plant unavailability across the continent.

Carbon prices in Europe have nearly trebled this year as the European Union reduces the supply of emissions credits. The EU’s benchmark carbon price climbed above 60 euros per metric ton for the first time ever in recent weeks, trading slightly below this threshold on Thursday.

The EU’s Emissions Trading System is the world’s largest carbon trading program, covering around 40% of the bloc’s greenhouse gas emissions and charging emitters for every metric ton of carbon dioxide they emit. Record carbon prices have made highly polluting sources of energy generation even less attractive because coal, for example, emits more carbon dioxide when burnt.

Rickson said the outlook for European power prices this winter will be “highly dependent” on gas prices, adding that he expects gas prices to rise even further in the coming months. “Aside from the ‘average’ picture, we expect prices to be highly volatile, with swings from low or even negative hourly prices when wind generation is high, to very high prices as already seen when wind is low, and demand is high.”

How did we get here?

European gas prices have accelerated since the start of April, when unseasonably cold weather conditions meant Europe’s gas in storage dipped below the pre-pandemic five-year average, indicating a potential supply crunch.

Europe has since struggled to bring gas supplies that are necessary for the winter period back to where they should be. An economic rebound as countries eased Covid-19 restrictions also coincided with higher-than-expected demand that led to a shortage of gas.

This deficit is “making the market nervous as we approach winter,” Stefan Konstantinov, senior analyst at ICIS Energy, a commodity intelligence service, told CNBC. “That is coupled with the very significant competition for LNG supplies from Asia and South America, which is driving gas prices up.”ATCsupply going into winter: Wood Mackenzie

 

Further to this, Russia has been seen to slow its delivery of piped natural gas to the region, raising questions about whether this may be a deliberate move to bolster its case for starting flows via Nord Stream 2.

The controversial pipeline, bringing natural gas to Europe from Russia, bypassing Ukraine and Poland, is soon expected to be fully operational and could potentially resolve some of the region’s supply problems.

“It is worth noting our view is that the start-up of flows in Nord Stream 2 is not going to materially reduce prices this winter,” Murray Douglas, research director at Wood Mackenzie, told CNBC’s “Street Signs Europe” on Thursday.

“We look like we are going to be locked into pretty high prices through the winter and I think particularly once we get into the New Year in January and February, where we get more of those cold snaps, we are going to be quite vulnerable to some sort of big intraday spikes,” he added.

Climate crisis concerns

Earlier this month, soaring gas prices and low wind output prompted the U.K. to fire up an old coal power plant to meet its electricity needs.

The move raises serious questions about the government’s environmental commitments amid the climate crisis. To be sure, coal is the most carbon-intensive fossil fuel in terms of emissions and therefore the most important target for replacement in the proposed pivot to renewable alternatives.

When asked how the U.K.’s decision to turn to coal could possibly be squared with the urgent need to dramatically scale down fossil fuel use, Konstantinov replied: “It’s a bit ironic isn’t it?”

“If there was enough wind, it could maybe meet more than half or two-thirds of U.K. power demand on a relatively low power demand day. But instead what we are seeing is that actually we’ve got no wind and we are forced to fire up polluting coal-fired generation.”

“At first glance, that doesn’t tally up with the government’s ambition to decarbonize. But this is very much driven by the intermittent nature of renewables: both wind and solar,” he added.

The U.K. has committed to phasing out coal power completely by Oct. 2024 to cut carbon emissions.

“The fundamental drivers, i.e. high gas prices and high carbon prices, we at ICIS believe they are here to stay for the coming months,” Konstantinov said.

Link to comment
Share on other sites

3 hours ago, deicer said:

It is interesting how globally the energy market is so manipulated to artificially keep prices high.

Manipulated or perhaps the alternate energy sources are failing to meet demand?  Then of course short falls in energy sources do increase the price of what is available. Hardly manipulation, just normal supply / demand and cost. 

It is also quite apparent that those who jumped on the alternate energy bandwagon and passed laws to support that, did not factor in the need to provide adequate supplies of green energy.   Classic example of a wish coming back to kick you in the ass.  🙃

Link to comment
Share on other sites

1 hour ago, Kargokings said:

Manipulated or perhaps the alternate energy sources are failing to meet demand?  Then of course short falls in energy sources do increase the price of what is available. Hardly manipulation, just normal supply / demand and cost. 

It is also quite apparent that those who jumped on the alternate energy bandwagon and passed laws to support that, did not factor in the need to adequate supplies of energy.   Classic example of a wish coming back to kick you in the ass.  🙃

I have been making good money on the carbon producing markets investments. I guess I will use some of it to pay my carbon taxes.

  • Like 1
Link to comment
Share on other sites

3 hours ago, Kargokings said:

Manipulated or perhaps the alternate energy sources are failing to meet demand?  Then of course short falls in energy sources do increase the price of what is available. Hardly manipulation, just normal supply / demand and cost. 

It is also quite apparent that those who jumped on the alternate energy bandwagon and passed laws to support that, did not factor in the need to provide adequate supplies of green energy.   Classic example of a wish coming back to kick you in the ass.  🙃

I don't believe that alternative energy has anything to do with it.

There is an overabundance of oil and gas in this planet.  The problem is that three major players, who have the majority of reserves, are controlling the flow and pricing.  This is all led by the U.S.  

The U.S. has the largest reserves of oil and gas on the planet.

https://money.cnn.com/2016/07/05/investing/us-untapped-oil/index.html

The U.S. was also a net exporter of oil and gas not long ago.  So who is controlling the taps?

The pandemic drove down the price of oil due to lack of demand, and it is my opinion that they will manipulate the flow and pricing until they make back the profit that was lost.

Adding to the problem is that a lot of oil is in contango.  Therefore the price has to rise before it will be released.

https://www.reuters.com/article/us-global-oil-prices-graphic-idUSKBN2BN1QA

One only has to look at the number of oil tankers that are sitting off the port of Singapore as storage.

https://www.marinetraffic.com/en/ais/home/centerx:104.2/centery:1.4/zoom:10

We're only along for the ride.

 

Link to comment
Share on other sites

1 hour ago, deicer said:

I don't believe that alternative energy has anything to do with it.

There is an overabundance of oil and gas in this planet.  The problem is that three major players, who have the majority of reserves, are controlling the flow and pricing.  This is all led by the U.S.  

The U.S. has the largest reserves of oil and gas on the planet.

https://money.cnn.com/2016/07/05/investing/us-untapped-oil/index.html

The U.S. was also a net exporter of oil and gas not long ago.  So who is controlling the taps?

The pandemic drove down the price of oil due to lack of demand, and it is my opinion that they will manipulate the flow and pricing until they make back the profit that was lost.

Adding to the problem is that a lot of oil is in contango.  Therefore the price has to rise before it will be released.

https://www.reuters.com/article/us-global-oil-prices-graphic-idUSKBN2BN1QA

One only has to look at the number of oil tankers that are sitting off the port of Singapore as storage.

https://www.marinetraffic.com/en/ais/home/centerx:104.2/centery:1.4/zoom:10

We're only along for the ride.

 

Actually, we can thank the 'progressives' for the high prices. Here is a good example:

Los Angeles County votes to phase out oil and gas drilling (msn.com)

Another oil source lost for good. The progressives shut in the oil permanently and then some of them say that it is all led by the U.S. I suppose it is in a way as this link is an American story. But it is the progressives around the world that are lifting the oil prices. Vote for them if that is OK with you.

 

 

  • Like 2
Link to comment
Share on other sites

British energy firms fear collapse as Europe’s gas crisis sees prices surge 250%

PUBLISHED MON, SEP 20 202110:32 AM EDTUPDATED 24 MIN AGO

 

LONDON — Britain’s energy industry could be headed for a significant shakeup, industry insiders have warned, as countries all over Europe grapple with an unprecedented crisis in the power sector.

Wholesale gas prices have spiked across the region, with the U.K. being hit particularly hard.

 

The front-month gas price at the Dutch TTF hub, a European benchmark for natural gas trading, gained on Monday to trade at 73.150 euros ($85.69) per megawatt-hour,hovering close to the record high seen last week.

 
 

Since January, the contract has risen more than 250%.

image.png.8e2673e9099065eb39103ca167a65eb1.png

 

In the U.K., day-ahead energy prices for Monday reached an average of 291.18 euros per megawatt-hour, according to energy analysis firm LCP Enact. However, the maximum price for the U.K. on Monday could be as high as 1,083.78 euros per megawatt-hour, LCP Enact’s analysis showed.

Impact for energy firms

Robert Buckley, head of relationships and development at Cornwall Insight, told CNBC that the crisis was being caused by a “cocktail of pretty potent things” that were outside of suppliers’ control.

These included strong competition for natural gas deliveries between Europe and Asia, some outages at U.S. production facilities and a tightening of EU carbon market rules, as well as various other factors.

 

“All suppliers will be finding it very tough at the moment,” Buckley said. “Some of them are bigger and more resilient than others. But scale doesn’t equal automatically resilience.”

He added that “it looks like it’s going to get worse before it gets better” in terms of suppliers leaving the British electricity and gas market.

″[Suppliers are] caught between this rapture of the rising energy price wholesale market and the default tariff cap, and depending on who you who you believe, this is anywhere up to £200, £250 below what a market related cost would be at the moment, so that’s 20% of the total bill,” he said, referring to a cap on consumer energy prices in Britain. “That’s -20% of gross margins. Very few [companies] can sustain that for any length of time.”

Meanwhile, Bill Bullen, founder of U.K. supplier Utilita Energy, warned that surging wholesale prices would inevitably lead to more insolvencies in the energy sector.

“We’re heading back to an oligopoly at this rate and going backwards,” he said in an email Monday.

According to a report from Cornwall Insight, in the fourth quarter of 2010, the six largest energy firms supplied 99.5% of the domestic energy market in the U.K. By the second quarter of 2021, that figure had fallen to 69.1%.

“I wonder how it will look at the end of Q3 2021,” Bullen said.

Start-up Bulb, the country’s sixth-largest supplier, is seeking a bailout, while four smaller competitors recently ceased trading, the BBC reported.

According to industry body OGUK, wholesale energy prices have surged with a 70% rise since August alone. “OGUK predicts that UK North Sea output will roughly halve by 2027 unless new fields are opened, making the U.K. even more reliant on imports,” Will Webster, the organization’s energy policy manager, told CNBC via email.

A spokesperson for British energy regulator Ofgem told CNBC in an emailed statement. “This is a global issue … Ofgem is working closely with government to manage the wider implications of the global gas price increase.”

Political fallout

Governments are keen to take action to stop the crisis hitting consumers too hard.

The British government is considering bailout loans for energy suppliers, according to local media reports. Business Minister Kwasi Kwarteng met with British energy companies on Monday, in what he said was an effort to “ensure that any energy supplier failures cause the least amount of disruption for consumers.”

Seeking to reassure the public on Sunday, Prime Minister Boris Johnson described the pricing crisis as “temporary,” Bloomberg reported.

The U.K. has limits on how much suppliers are able to charge consumers for energy, with price caps reviewed by the government every six months.

In a note on Monday, Eurasia Group warned the continent’s soaring energy prices were also beginning to have political ramifications across the wider region.

Spain’s government released a decree this week to cap retail energy prices. Eurasia analysts speculated that if more EU member states imitate Spain, prioritizing cheap energy above the green transition, the EU’s credibility as a climate leader could be damaged.

“If Madrid’s actions find imitators across the EU this winter, the bloc’s efforts to push for more ambitious climate action at the upcoming global talks in November may suffer,” they said in Monday’s note.

 

  • Like 1
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

 Share

×
×
  • Create New...