Year End: The Big Themes for 2021

Peter and Jackie discuss the latest energy headlines and policy announcements on this week's podcast. Listed below are the topics covered:

• The Alberta Government is lifting the moratorium on new wind and solar project permits, a policy that was enacted in the summer of 2023. 
• The Alberta Government introduces its 2024 fiscal budget.  Before the budget announcement, Premier Danielle Smith made the case for rebuilding the Alberta Heritage Savings Trust Fund to help eliminate the revenue roller coaster that results from volatile oil and gas prices.  The budget also included Carbon Capture and Storage (CCS) funding and a registration tax of $200 per year for each electric vehicle.  
• Qatar announced it will add more LNG capacity by 2030. Given Shell’s recent projection of more than 50% growth in global LNG demand by 2040 and that the US will supply 30% of total demand by 2030, what are the implications on LNG markets and the Canadian opportunity for LNG exports? 
• The IEA has been criticized for prioritizing climate advocacy over energy security. 

 Content referenced in this podcast: 

• Alberta Government’s News Conference to Lift the Renewables Moratorium “Renewed path forward for renewable energy – February 28, 2024”   
• Alberta Government’s Budget 2024 
• Blake Shaffer Tweet on the flat road tax for electric vehicles  
• Shell LNG Outlook 2024 
• Robert McNally’s Wall Street Journal Op-ed on the IEA “Climate Politics Neuters Energy Watchdog”
• A New York Times article on the development of white paints to cool the planet by scientists at the University of Purdue  

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On February 16, 2024, Environment and Climate Change Canada (ECCC) announced some proposed changes to the draft Clean Electricity Regulations (CER). Initially released in August 2023, the draft legislation requires electricity production in Canada to be net zero by 2035. Peter and Jackie start the podcast by reviewing the recently proposed changes and discuss whether these changes are enough to win over the provinces that object to the proposed CER, including Alberta, Saskatchewan, and Ontario.

Next, they introduce this week’s guest, the Honourable Todd Smith, Ontario’s Energy Minister and MLA for the Bay of Quinte in Ontario. Since the Conservatives came to power in 2018, Todd Smith has held various cabinet positions.

Here are some of the questions that Peter and Jackie asked Minister Smith: When the Ontario Conservatives first came into power, renewable electricity projects that were agreed to under the Liberal government’s feed-in tariff (FIT) program were canceled, yet now Ontario is procuring new capacity for wind, hydro, biomass, and solar generation, why the change? Is Ontario having a nuclear renaissance? What are the plans to expand nuclear electricity? Where will Ontario source the enriched uranium for the new nuclear power plants? Is it realistic to see nuclear plants operating in other parts of Canada, such as Saskatchewan and Alberta? What is the role of natural gas for power generation and residential heating in Ontario? In November 2023, the Ontario IESO wrote a letter to the Federal Government on the proposed CER, saying, “The CER as drafted is unachievable by 2035 in Ontario…the policy would cause a resource shortfall”; what are your concerns and do the changes announced on February 16th improve the situation? Are you working with any other provinces that oppose the CER?

Content referenced in this podcast:
- ECCC’s Proposed Changes to the CER (February 16, 2024)
- The Ontario IESO’s letter to the federal government on the proposed CER

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This week, our guest is Ellis Ross, an MLA in the British Columbia Legislature since 2017, representing the Skeena riding for the BC United political party (formerly the Liberal Party). His region includes the communities of Kitimat and Terrace on the northern coast of British Columbia. 

Ellis also currently serves as the Shadow Minister for Energy and LNG. Before being elected to the British Columbia legislature, Ellis Ross was the Chief Councillor for the Haisla Nation, in that position, he signed an agreement with an LNG developer to build a plant on the Haisla Nation reserves. 

Here are some of the questions that Peter and Jackie asked Ellis: Why did you enter provincial politics and why have you decided to run in the next federal election for the Conservative Party?  How has the LNG Canada project impacted people in your community?  What is the status of LNG Canada? What is the status of Cedar LNG, a smaller project in collaboration with the Haisla Nation and Pembina Pipeline Corporation also located in Kitimat?  Is BC’s requirement for net zero LNG by 2030 effectively a ban on new LNG development?  What is the status of the transmission line and electricity supply, if LNG must be net zero by 2030? How do you think Canada should tackle the climate challenge and energy projects differently?  What is the potential for blue ammonia shipments by rail and tanker from the Northern West Coast to Asia? 

Other content referenced in this podcast: 

• Edison Motors is a privately owned Canadian Clean Technology Company. In 2023, we built Canada’s first Production Electric Hybrid Truck; consisting of Edison make Powertrain, Chassis and Cab. 

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This week, our guest is Greg Lyle, Founder and President of Innovative Research Group. Innovative Research Group is a full-service market research firm with offices in Vancouver and Toronto. The firm has recently done some interesting polling on how Canadians are thinking about energy infrastructure and energy transition. Greg also talked politics, giving us some insight into how Canadians would vote (based on polling) if a federal election were held today. 

Here are some of the questions that Peter and Jackie asked Greg: How much do Canadians know about the energy transition? How do they feel it will impact them financially? How do they feel about energy projects in general and near where they live? How important is climate as an issue versus affordability? If a federal election were held now, what political party would win? Do the Conservatives need a credible climate plan for the next election? 

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This week, our guest is Carlos Pascual, Senior Vice President of Global Energy at S&P Global Commodity Insights.  

Carlos's past roles include establishing and directing the new Energy Resources Bureau at the US Department of State and serving as a senior advisor to the Secretary of State on energy issues. He has also previously been a United States Ambassador to Mexico and Ukraine. 

Here are some of the questions that Carlos tackled:  How do you expect the US will react to the recent attack on an American base in the Middle East that killed three soldiers?  What is Iran’s motivation in the escalating proxy war? Is it possible that Donald Trump will be elected president in 2024? How does the US election factor into the US strategy on the Middle East conflict? What are your thoughts on COP28 and the “transitioning away from fossil fuels” language that was adopted? Do you think a peace deal between Ukraine and Russia is possible? What is driving the growing divide between the Global North and Global South? Do you expect OPEC and Saudi Arabia will continue constraining oil production despite strong non-OPEC supply growth?

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This week on the podcast, our guest is David Detomasi, an associate professor and distinguished faculty fellow in international business at the Smith School of Business at Queens University. He is also the author of “Profits and Power: Navigating the Politics and Geopolitics of Oil.”

First, Jackie and Peter discuss the potential impact of the Canadian government’s proposed cap on oil and gas emissions on smaller oil and gas producers. A reminder that the deadline for providing feedback on the Federal Government’s “Regulatory Framework for an Oil and Gas Sector Greenhouse Gas Emissions Cap" is February 5th, 2024.

Next, Jackie and Peter interview David about his perspectives on the politics and geopolitics of oil. Here are some of the questions they asked him: Why is the expanding conflict in the Middle East having little impact on oil prices? Do you expect additional sanctions on Iran? Will the United States continue to protect the Middle East and critical waterways despite having less dependency on the region’s oil versus the past? Describe the United States and Saudi Arabian relationship and how it has been changing. How would you describe Donald Trump’s energy policy from 2017 to 2021? How should we think about the geopolitics of oil from a Canadian perspective? How can Canada balance climate goals with producing gas and oil?   

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This week, our guest is Roger Dall’Antonia, President and CEO of FortisBC.  FortisBC is a leading energy provider in British Columbia (BC), Canada. The utility serves about 1.1 million natural gas customers and 185,000 electricity customers. 

Roger explains the benefits of using natural gas to meet the peak winter heating demand and the challenges of using electricity to do the same. Because of the unique ability of gaseous fuels to flex up and meet demand, even on the coldest days, Roger sees a long-term future for gas. He explains how natural gas can become cleaner over time through a broad set of measures, such as increasing the amount of renewable natural gas (RNG) and clean hydrogen and efficiency measures that use less natural gas. 

 Here are some of the questions that Peter and Jackie asked Roger: What is the outlook for the supply and demand of electricity in BC? How will Site C hydroelectric demand change the market? Is BC too reliant on hydro, considering concerns around drought? Why has BC recently decided to launch a call for renewable power from large-scale wind and solar farms? What is RNG and how much potential supply is there? How are you involving Indigenous partners in your projects? What are your thoughts on the Clean Electricity Regulations targeting net zero electricity by 2035? Considering Atlantic Canada’s exception from the retail carbon tax for heating oil, could this be the beginning of the end for the retail carbon tax in Canada?  

Other content referenced in this podcast:  

Other content referenced in this podcast:  

• The Canadian Association of Petroleum Producers (CAPP)’s Data Centre 
• FortisBC’s Clean Growth Pathway to 2050 
• BC Renewable and Low-Carbon Gas Supply Potential Study 
• Pathways for British Columbia to Achieve its GHG Reduction Goals  

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Peter and Jackie start the year by reviewing the extreme cold in Alberta that caused a spike in electricity demand, resulting in the Alberta Electricity System Operator (AESO) issuing four grid alerts between January 12th and 15th. The electricity supply-demand balance was the tightest on Saturday evening (January 13th), causing the Alberta Government to issue an emergency alert to people's mobile phones. About 200 MW of demand fell off the system within minutes of issuing the notice.  

Peter and Jackie also discuss other storms brewing on the horizon and introduce the 2024 energy themes to watch along with some predictions. Here are the energy-related topics they will be closely following: 

• The US Election 
• Canadian Politics and Energy Policy  
• Interest Rates 
• Military Conflicts and the Risk of Oil Supply Outages  
• Oil and Gas Markets 
• Climate Change Policy 
• Nuclear Power 
• Electric Vehicle Adoption 
• Artificial Intelligence (AI) and Energy 
• Clean Energy Investing 
• Oil and Gas Mergers and Acquisitions  

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On this week’s podcast, Jackie and Peter review the final takeaways from COP28. Next, they discuss the key energy themes that shaped the past year.  The 2023 top themes include:

1)  Artificial intelligence (AI) becomes mainstream
2)  Investors now understand the clean energy interest rate nexus
3)  2023 will be the hottest year on record 
4)  Affordability issues slow the uptake of clean energy technologies
5)  Policy-driven energy transition led by the US Inflation Reduction Act (IRA)
6)  Oil and gas markets shrug off geopolitical risk
7)  Big year for Canadian policy development – some opportunity and some frustration
8)  Canada has two CCS wins in 2023 – Air Liquide Net Zero Hydrogen/Imperial Renewable Fuels and Dow Chemical’s Zero Emissions Ethylene Cracker
9)  IEA appears to switch into climate advocacy mode 

 Content referenced in this podcast:  

· December 13, 2023 UN COP28 Global Stocktake
· December 6, 2023 CNN “2023 will officially be the hottest year on record, scientists report”
· December 15, 2023 The Hill “NOAA: Almost 100 percent chance 2023 will be the hottest year recorded” 

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Peter and Jackie start this week's podcast by discussing the latest developments at COP28 in Dubai, including whether the wording “phase-out” or “phase-down” of fossil fuels will be included in the final text.

Next, they talk about the Canadian energy policy announced by the Canadian federal government at COP28, including draft legislation to reduce methane from oil and gas by 75% from 2012 levels by 2030.  The government also issued a document on the proposed cap on oil and gas emissions, with a deadline to submit feedback by February 5, 2024, draft legislation by 2024, and final regulations in 2025.

Lastly, Kim Sturgess, CEO of WaterSMART Solutions, joins the podcast. WaterSMART Solutions is a leading consultancy for water management solutions.  With funding and support from Alberta Innovates, ATCO, Capital Power, Hydrogen Naturally, Kiwetinohk Energy Corporation, and the Municipal District of Greenview, the consultancy published a study titled “Water Impacts from Hydrogen Development in Alberta in 2023.”  Kim explains that water is consumed to make clean, blue, and green hydrogen and that the water source must be considered early in project planning. The report demonstrates that the full development of the hydrogen sector within Alberta is likely to both cause water supply challenges and be limited by water availability.

Other content referenced in this podcast:

- Draft legislation for the reduction of Canada’s oil and gas methane emissions by 75% by 2030 (versus a 2012 baseline)

- Regulatory framework for an oil and gas sector greenhouse gas emissions cap (for feedback by February 5, 2024) 

- WaterSMART Study of Water Impacts of Hydrogen Development in Alberta, 2023

- WaterSMART Infographic: Water for Alberta’s Hydrogen Economy, 2023

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