ARC ENERGY IDEAS

Last week the IEA described the oil markets as ‘fragile.’ In contrast, the price of oil has soared back from all time lows (and negative pricing) to its pre-COVID levels. This week Peter and Jackie discuss the arguments of the bulls and the bears. The bears are focused on weak oil demand, slow vaccine roll outs and prolonged lockdowns. The bulls see beyond this near-term fragility to the demand recovery.Next, we consider the climate impacts of constraining North American oil production. Rating agencies are downgrading oil and gas companies because of climate risk. New permits for oil and gas drilling on US Federal lands are paused. The presidential permit for the KXL pipeline is canceled. But how do these actions reduce GHG emissions and fight climate change?Subscribe to the Energyphile email to learn about future book club events.In Total’s recent investor outlook, slide 14, they present an outlook for a 10 MMB/d shortfall in oil supply by 2025.Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/ 

The UN reported that net zero pledges from local governments and business have roughly doubled in less than a year. Canada has introduced a bill that would legally bind the government to achieving net-zero emissions by 2050. But what do the people of Alberta think?This week, our guests – Linda Coady, the executive director of the Pembina Institute, and Janet Brown, a pollster and political commentator – share the results from a poll of Albertans commissioned by the Pembina Institute. Here are some of the questions they asked: Is Alberta too dependent on oil and gas? What is the cause for the decline in investment in Canada’s oil and gas industry? How effective have efforts from the Alberta Government been in enhancing the reputation of the province’s oil and gas sector? And, do Albertans support or oppose the federal government’s net zero 2050 goal?See Pembina Institute’s press release on the polling titled “Two thirds of Albertans support reaching net-zero emissions by 2050”,  including the detailed polling results.See the Energyphile vignette on hybrid products that have smoothed the energy transition in the past: “Easing into a New Energy Paradigm.”Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/ 

Oil and gas stocks can hardly compete for news headlines with the wild volatility of GameStop and the soaring price of Tesla. Yet there is good news to report. Year-to-date oil and gas equities have outperformed the overall market. Relative to March 2020 - when the stocks were crushed - some public oil and gas names are now up 3 or 4 times.This week, our guest Trent Boehm, Vice Chairman and Head of Energy Sales for STIFEL FirstEnergy, explains the equity markets. Peter and Jackie asked Trent: The overall market seems to have COVID immunity, has the strong performance surprised you? What has driven the recent move up in oil and gas stocks? How do investors value oil and gas companies now?  How do investors value clean energy companies? What about other natural resource stocks, like lithium, copper and other battery metals, how have they performed?Read Peter’s recent commentary on the metal intensity of the energy transition “In With the New…and the Old Too.”Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/ 

This week our guest is Dale Swampy, President of the National Coalition of Chiefs (NCC). Dale recently wrote an op-ed titled “UNDRIP will slow, not hasten Indigenous development.”  UNDRIP (the United Nations Declaration on the Rights of Indigenous Peoples) was drafted by the United Nations in 2007 with the goal of recognizing basic human rights of Indigenous people and their right to self-determination. While these goals are laudable, the concern is that the legislation could create even greater uncertainty for natural resources projects in Canada.Peter and Jackie ask Dale:  What are your concerns with Bill C-15? Based on the 2020 Wet'suwet'en LNG pipeline conflict, consent for projects is already ambiguous, how does UNDRIP make it worse?  How much consultation with Indigenous communities occurred prior to tabling the Bill? What is the status of Trans Mountain Indigenous equity ownership? Is there a better way to advance major projects on Indigenous lands in Canada?Visit the NCC’s website: https://coalitionofchiefs.ca/Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/ 

This week our guest is Diane Cameron, Director of the Nuclear Energy Division at Natural Resources Canada. Canada is already a global leader in nuclear energy and safety. Canada is the second largest producer of uranium and home to the world’s largest fully operational nuclear power generation facility in Ontario. The next chapter in Canadian leadership is well underway with the development of Small Modular Reactors (SMR).  On the podcast, Diane tells us about the government’s Action Plan, that aims to deploy SMR technology in Canada within the decade.Peter and Jackie ask Diane: What is the state of nuclear energy internationally? How do the small units differ from the traditional large nuclear plants? When and where are small modular reactors likely to be deployed first in Canada? Is there an opportunity to export Canadian SMR technology abroad?View the Canadian government’s SMR Roadmap (2018) and the SMR Action Plan (2020).Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/ 

The news flow has started off 2021 with a bang! Saudi Arabia surprised the oil markets announcing a voluntary 1 MMB/d cut to their production for February and March. The Democrats gained two seats in the Georgia election, granting them greater power in the US Senate. The stock markets saw the change as a positive signal for clean energy companies. Bitcoin is attracting attention, but are digital currencies consequential for energy?Next, after a tough year for making predictions in 2020, we introduce some foolproof predictions for 2021. See Peter Tertzakian’s recent commentary “Look Into 2021.”Finally, we review the barrage of policy strategies, draft legislation, and action plans released by the Canadian Federal Government at the end of 2020:December 11, 2020: “A Healthy Environment and a Healthy Economy”December 16, 2020: Hydrogen Strategy for CanadaDecember 18, 2020: Small Modular Reactors Action PlanDecember 19, 2020: Draft Clean Fuel Standard LegislationWe debate the $170/tonne carbon tax by 2030.  How would the tax impact energy prices, and how do the rebates work?  Will the policy result in people reducing their GHG emissions?Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/ 

On this week’s podcast we look back on the events that shaped the challenging year that was 2020.  Early in January, tensions between the United States and Iran briefly pushed oil prices over $60/B.  But when Coronavirus spread from China to the rest of the world, oil price plunged. The darkest days of the pandemic were in April, when oil demand dropped over 20% and price momentarily fell to negative $US 37/B (WTI).  By summer, historic production cuts by OPEC+ and increasing demand brought more stability to the oil markets. Other issues came into focus, including climate change and the death of George Floyd. As 2020 wraps-up, vaccines are rolling out and bringing hope that 2021 will be a better year!Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/

The Canadian federal government is developing a Clean Fuel Standard (CFS) policy.  The draft rule for liquid fuel (including gasoline and diesel) is expected later this month.  Subsequently, rules for gaseous and solid fuels will be developed.This week’s episode is a primer on clean fuel standards. What is CFS? What jurisdictions have CFS policies already in place?  What is the policy’s objective? Who is responsible? What are the compliance options? Is the clean fuel standard just another carbon tax?  What are the potential opportunities and concerns?See the recent Canada West Foundation report on the Canadian CFS “A Citizen’s Guide to the Clean Fuel Standard.”Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/ 

This week our guest is Doug Hooper, Director of Policy and Regulations at Advanced Biofuels Canada. Advanced Biofuels Canada is a national industry association established to promote the production and use of advanced biofuels In Canada.Here are some of the questions that Peter and Jackie asked Doug: Why is there a push to increase the use of biofuels in Canada? What feedstocks and processes are used to produce biofuels? How do biofuels compare with petroleum on the basis of greenhouse gas emissions and cost? Does Canada import biofuels today? Is there an opportunity to increase domestic production? How much could Canada’s emerging Clean Fuel Standard policy increase the demand for biofuels?See the Energyphile vignette on harnessing the energy in food using animal power: https://energyphile.org/vignettes?vid=V0082View the Navius Research report on Biofuels in Canada: https://www.naviusresearch.com/publications/2020-biofuels-in-canada/View a summary on the implications of Canada’s proposed Clean Fuel Standard, as well as a link to the full report by World Agricultural Economics and Environmental Services (WAEES): https://advancedbiofuels.ca/cfsanalysisbackgrounder/Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/ 

On this week’s episode, we discuss the Canadian federal government’s plans to legislate net-zero greenhouse gas emissions by 2050. What is the reaction from the oil and gas industry?Next up, we consider the importance of energy efficiency for achieving low carbon goals.  History has shown that energy demand growth is difficult to curb. Yet, according to the International Energy Agency (IEA), a third of the emissions reductions in the Sustainable Development Scenario must come from efficiency. Shell Canada is now offering consumers carbon-neutral driving. People can choose to pay two cents extra per litre at the pump to offset their GHG emissions. What is the reaction? Is driving an electric vehicle (EV) considered to be carbon neutral driving?Finally, we turn to the oil markets.  Where is demand now?  What is the situation with supply and OPEC+ spare capacity? Does the positive vaccine news change the picture?View Peter’s Energyphile Vignette “Old Fashioned Energy Conservation.”Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/