Newsletter December 14, 2022
A WORD FROM THE PRESIDENT
2022 – A year of crises
It would be a gross understatement to point out that today’s energy environment is different than two years, or even one year, ago. The numbers tell a tale as dramatic as the headlines. In late November 2021 the average price of natural gas in Europe was US$5.83/million metric BTUs. In the same week in 2022 it was US$20.81, down from the August peak of US$69.98. Imports of Russian gas into the European market have dropped by three-quarters over the same period.
At the beginning of October, the Organisation of Petroleum Exporting Countries (OPEC) announced that its members were coordinating efforts to cut crude oil supply by 2 million barrels per day (bpd). The cuts are nominal, in that they are based on target production levels that have not been reached in recent months. The actual removal of supply from the oil markets has been variously estimated to be between 0.4 million bpd and 1.1 million bpd. Crude prices rose as a result. However, equally important is the political message that OPEC members are not prepared to support Western nations in their response to Russia.
The events of 2022 have forced us to confront two inconvenient truths.
First, energy security is once again a priority policy issue. Russia’s attempt to use energy supplies to exert political pressure undermines a critical premise of globalization. We assumed – hopefully perhaps – that nations would serve their interests best by engaging in rules-based trade, including trade in energy. What we have seen this year is that political ambition and megalomania have arisen at the cost of citizens’ welfare and, indeed, of their lives.
The second circumstance that we face is that the world is still dependent on fossil fuels. It would be ideal to combat petroleum supply disruptions by switching to renewable energy. But those sources have not developed to the point where that is realistic. Encouraging progress has been made, however, including an important recent development in fusion research. Consequently, we are faced with the challenge of finding petroleum solutions for petroleum problems while not taking our eye off the ball in our efforts to eliminate the dangers of GHG emissions.
There are no easy decisions in the energy business.
Canada's Energy Person of the Year 2022
In 2021, the Energy Council of Canada departed from tradition and named Canada’s energy workers as Canada’s Energy Person of the Year. That decision was unprecedented in our approach to recognizing those who made extraordinary contributions to the energy sector; but these are unprecedented times. The Corona virus pandemic has finally begun to abate, but not disappear. 2022 saw new crises arise, as war in Europe unsettled global energy markets. Canadian energy workers had to find ways to respond to our friends in need. At the same time, workers continued their efforts to find new ways – through research and hard work – to reduce or eliminate the impact of energy production and use on the environment. The pandemic and the geo-political disruptions have made life in the energy sector more challenging both professionally and personally for those who work there. We believe the response of those workers has set an example for the rest of us. And so, we once again recognize the Frontline Canadian Energy Worker as our Canadian Energy Person of the Year for 2022.
You can watch a short video about the selection here: English Français
Canada’s Energy Story – Indigenous Energy Across Canada: Volume 2
Canada’s Energy Story 2022 Released
On 14 December, the ECC released its annual publication, Canada’s Energy Story. This year the Council re-visits Indigenous energy.
The document contains articles from industry and Indigenous organizations that demonstrate the importance of the energy sector to Indigenous Canadians and the importance of Indigenous peoples to the sector. It also notes the progress being made in aligning the interests of energy producers and Canada’s Indigenous peoples.
You will find Canada’s Energy Story here.
UPCOMING EVENTS
United States Energy Association – State of the Industry Forum, 26 January 2023
The United States Energy Association (USEA) has announced that its 19th Annual State of the Energy Industry Forum will take place on 26 January 2023. The USEA plans a mainly in-person conference, with the option of remote participation. It will be held from 9 am to 3 pm on the 26th at the National Press Club in Washington, DC.
Energy Council of Canada – 2nd Annual Canada Energy Update, 27 January 2023
In 2022 the Energy Council of Canada held a similar event the day following USEA’s 18th Annual Forum. Both organizations benefited from cross-promotion of their events which was reflected in the attendance figures. In 2023 we plan to do the same. ECC will hold its 2nd Annual Canada Energy Update on 27 January 2023. More information will be provided closer to that date.
ECC Q4 ACTIVITIES
Net Zero Conference and Expo
On 26 October, ECC President & CEO Jacob Irving was the moderator of a panel discussion entitled Federal, Provincial, and Municipal Coordination for Electrification. The panel was part of the inaugural Net Zero Conference and Expo, which took place in Calgary from 25 to 27 October.
The event is the product of a partnership among Petroleum Technology Research Alliance (PTAC), Alberta Innovates, and Clean Resource Innovation Network in collaboration with EventWorx Corporation. The organizers described the initial event as focusing on current and future challenges facing the Canadian oil and gas industry, and taking a closer look at the challenges and opportunities available to support technology innovation and new practices.
EU – ECC Discussion
On 29 November, at the invitation of the Delegation of the European Union to Canada, ECC President Jacob Irving met the representatives of countries in the Europe Union to discuss energy. In a very well-attended session lasting over 2 hours, there was a good discussion of the energy environment in Canada and Europe. To set the scene, Mr. Irving made a brief presentation about Canada’s energy capabilities. The following discussion involved questions from the delegates and exchanges of views on European challenges and how Canada might be able to contribute to addressing them.
The topics included LNG, small modular nuclear reactors, hydrogen. A tentative understanding was reached to continue the conversation, perhaps focusing on selected topics.
Canadian Energy Sector Is called on to assist Ukraine
On 7 December ECC participated in a teleconference with officials from the Government of Ukraine. The call was intended to pass information to the Canadian energy sector on the Ukraine’s requirements to repair war damage and keep its energy systems operating.
ECC offered advice on communications. We explained that NRCan is an important contact for coordinating a Canadian response to the Ukraine crisis. We also indicated that ECC could operate as a clearinghouse for information and requests for specific equipment. The Council can use its network of members and partners to direct requests to the most appropriate Canadian contacts. We also counselled the officials to highlight the successes – especially those attributable to Canada – in Ukraine’s efforts to overcome the destruction caused by Russian forces.
ECC President meets with Poland’s Ambassador to Canada
In the Fall, ECC President Jacob Irving met Poland’s Ambassador to Canada, Mr. Witold Dzielski. The discussion covered the nature of Canada’s energy sector and the energy needs of Poland. Mr. Irving and Mr. Dzielski explored areas where there might be opportunities for mutual benefit between our two countries. ECC views this as the establishment of a relationship between itself and the Polish Embassy that can be expanded.
IN THE NEWS
Construction begins on Hydro-Québec transmission line to New York City
On 30 November, officials from New York State, the Indigenous community of Kahnawà:ke, and Hydro-Québec attended a groundbreaking ceremony in northern New York for the Champlain Hudson Power Express transmission line to New York City. It will make a substantial contribution to the state’s plans to use 70% renewable electricity by 2030. The imports from Hydro-Québec through the line will account for 7% of that and will serve about 1 million households.Nuclear Renaissance
World leaders, industry, the environmental community and the public are beginning to recognize that the transition to energy systems that are low or non-emitting
is urgent. This had led to a re-examination of the benefits – and costs – of expanding the role of nuclear power. At the recent COP 27 in Egypt, US Energy Secretary Granholm surveyed the evidence that in the debate over the forms of energy compatible with the fight against climate change nuclear power is being considered a valuable energy source, worthy of expansion.
Poll shows majority in Quebec majority supports oil and gas development in the province
An Ipsos public opinion poll taken between 10 November and 13 November indicates that 54% of Quebecers support oil and gas projects in Quebec. This is a surprising result for some, given the conventional wisdom that Quebec citizens adamantly and uniformly oppose petroleum development. A partial explanation for the survey result might be found in the fact that of those people surveyed 61% believe that it was the province’s responsibility to help Europeans break free from dependence on Russian natural gas.
Financing announced for phase 2 of Mi’kmaw energy efficiency upgrades
The Federal Government and the Government of Nova Scotia have announced funding for the energy efficiency assessment and retrofitting of 1,000 homes across the 13 Mi’kmaw communities in the province. This the second phase of a program begun in 2019. The program has multiple purposes. It will improve comfort and lower energy costs for residents in the community. It will also lower energy demand and reduce GHG emissions. Phase 1 of the program targeted 1,200 homes. It is estimated that the effect of Phase 1 has been to reduce GHG emissions by 1,000 tonnes. Phase 2 is scheduled to be completed in 2027.
Point, Counter Point: Line 5 and Indigenous Rights
The fate of Enbridge’s line 5, which originates in Canada, traverses the US, and re-enters Canada, remains unresolved. US courts are considering issues of whether Indigenous rights are threatened by Enbridge’s plans. The debate is also carried on in the press. Earlier this year two opposing op-ed pieces were published that argued the different positions.
In one, the authors claim that longstanding treaty rights are under threat and that the Canadian government’s support for the line, by invoking the 1977 treaty protecting energy transported from and to the same country across the other, makes it complicit in that threat.
The opposing piece argues that, in fact, Indigenous rights are being respected. Where Enbridge’s right to cross portions of Indigenous land had expired, it is taking measures to re-locate that part of the line. Moreover, the authors assert that the line is necessary to serve energy consumers in both countries.