Andrew Leach

What The Oilsands Sell-Off Actually Means

Oilsands trucks

The last few months have been marked by some massive shifts in the oilsands.

In December, there was the $830 million Statoil sale to Athabasca Oil, followed in January and February by the writing down of billions of barrels of reserves by Imperial Oil, ConocoPhillips and ExxonMobil.

On March 9, Shell sold a majority of its oilsands assets to Canadian Natural Resources Limited (CNRL) in a huge $7.25 billion sale, while Marathon Oil split its Canadian subsidiary between Shell and CNRL for a total of $2.5 billion.

The question is: why are all of these companies selling their oilsands assets? While some celebrate the moves as successes for the climate movement, others blame the Alberta NDP for the exodus of internationals.

Tweet: Experts say #oilsands sell-off has more to do w/ a broader shift that’s made oilsands uneconomical http://bit.ly/2nK3zyQ #ableg #cdnpoliBut experts say the reality has more to do with a broader economic shift that’s made oilsands uneconomical — for the time being at least.

Five Handy Facts About Alberta’s New Carbon Tax

Installing wind turbine

As of January 1, 2017, Alberta’s carbon tax has officially arrived.

And, as expected, there’s plenty of misinformation swirling around about what the tax will mean for Alberta citizens and businesses.

Ultimately, the idea behind the carbon tax is to put a price on polluting the atmosphere. Tweet: #CarbonTax encourages activities we do want (investment, innovation) & reduces those we don’t (GHG emissions) http://bit.ly/2hHsaNe #ablegIt sends a market signal to encourage the economic activities we do want (investment and innovation), while reducing those we don’t want (greenhouse gas emissions).

Doesn’t sound totally outlandish, right? But what will a price of $20 per tonne of carbon emissions really mean for Albertans?

DeSmog Canada did some digging to find out. Here are five handy facts to help you get clear on what the new tax means for you.

Alberta Climate Announcement Puts End to Infinite Growth of Oilsands

Alberta Climate Change Announcment

The days of infinite growth in Alberta’s oilsands are over with the Alberta government’s blockbuster climate change announcement on Sunday, which attracted broad support from industry and civil society.

This is the day that we start to mobilize capital and resources to create green jobs, green energy, green infrastructure and a strong, environmentally responsible, sustainable and visionary Alberta energy industry with a great future,” Premier Rachel Notley said. “This is the day we stop denying there is an issue, and this is the day we do our part.”

Notley and Environment & Parks Minister Shannon Phillips released a 97-page climate change policy plan, which includes five key pillars.

Alberta’s Climate Consultations: The Good, The Bad and The Downright Crazy

Much of the country is understandably pre-occupied with Monday’s federal election. But while we have all been watching the national drama unfold, something monumental happened in Alberta.

In a nutshell: big coal is pushing for renewable energy and big oil is re-iterating its push for a carbon tax.

Close to 500 individuals (including at least one alien — more on that to come), companies and NGOs submitted proposals to Alberta’s Climate Change Advisory Panel (chaired by University of Alberta economics prof Andrew Leach) about the kind of policies they think the new government should introduce to address spiking greenhouse gas emissions.

The significance of this for Alberta’s climate politics cannot be overstated. After years of stalling or stifling meaningful conversations, the province has now pulled off one of the country’s most important and interesting climate consultation processes.

The submissions, now accessible online, largely consist of the classic combo of recommendations from the usual suspects: phasing out coal-fired power plants, incentivizing renewable energy sources and introducing a proper carbon tax.

But there were also some fairly surprising sources of support for such recommendations.

Alberta Takes First Step to Clamp Down on Carbon Emissions

Oilsands emissions

It’s finally happening: after years of stalling by the Progressive Conservatives, Alberta’s new NDP government announced Thursday it will double the province’s meager carbon levy on large emitters by 2017.

Industry and environmentalists alike welcomed the decision, while also saying it doesn’t go far enough. 

Currently, any facility that emits more than 100,000 tonnes of greenhouse gases per year must reduce its emissions by 12 per cent below typical performance or pay $15 per tonne for emissions over the baseline. By 2017, the new framework will require companies to lower emissions by 20 per cent below typical performance, with a $30-per-tonne levy for emissions above that target.

It’s not going to drive the meaningful reductions or give the market incentives that we need,” said Ed Whittingham, executive director of the Pembina Institute.

What the NDP's Alberta Win Means for Energy and Climate Change

In a stunning and historic move, Alberta elected a majority New Democrat government on Tuesday.

The Progressive Conservatives, which finished in third place, consistently mismanaged the environmental and climate change file.

Ralph Klein, controversial premier from 1992 to 2006, despised the Kyoto Protocol and infamously flipped the bird at an activist who was protesting against a new Al-Pac pulp mill. Subsequent premiers often talked about improving environmental regulations, but seldom acted on it.

It’s yet to be known how different things will be under the NDP, but their win certainly marks a significant shift in sentiment.

Alberta Election Was a Referendum on Entitlement

It was the cherry on top of the ice cream sundae of entitlement.

On Monday, the day before the Alberta election, the province’s four largest newspapers — the Edmonton Journal, Edmonton Sun, Calgary Herald and Calgary Sun — endorsed the Progressive Conservatives.

Now, newspapers endorsing parties is nothing new, but every major newspaper in Alberta being owned by one company is new. (Postmedia acquired the Calgary Sun and Edmonton Sun this March when the Competition Bureau signed off on the purchase.)

What else appears to be new is that the Edmonton Journal (which did not endorse in 2012) was asked to endorse not by local management, but by head office in Toronto, according to editor-in-chief Margo Goodhand.

Asked by Canadaland who chose to endorse the PCs, Goodhand responded: “The owners of the Journal made that call.”

How Useful is the Norway Vs. Alberta Comparison?

Think of Norway and your mind likely conjures up a Narnia-like folklore: vikings, salmon, fjords, Svalbard reindeer.

But there’s another element — albeit slightly less fabled — that’s been added to the list recently: the Government Pension Fund Global. It’s also known as the “most successful sovereign wealth fund in the world,” according to a February 2015 report from the MacDonald-Laurier Institute.

It might not be popular enough to inspire a cable television show, but it’s prominent nonetheless.

There’s almost this myth about Norway,” acknowledges Andrew Leach, energy policy professor at University of Alberta, referring to Norway’s sovereign wealth fund.

Canada's Climate Incoherence is Killing Keystone XL

Keystone XL protest 350.org

This post originally appeared in Maclean's magazine and is republished here with permission.

There’s no shortage of blame being passed around in the wake of another delay in the U.S. regulatory approval process with respect to TransCanada’s Keystone XL pipeline which, it was announced recently, will now drag on for at least another six months.

Among other reasons cited for the decision, the Calgary Herald’s Deborah Yedlin and others have cited a lack of greenhouse gas policies applied to Canada’s oil sands. Yedlin is direct, saying that, “the evidence to date suggests (that the Harper government hasn’t listened to what is being said in Washington) because the Harper government has not moved on anything resembling a policy on greenhouse gas emissions.”

I think she’s right, to a point, but I think the problem is not that we haven’t been listening, but that our governments, both in Edmonton and in Ottawa, have yet to establish a coherent vision on anything which includes the words climate change and oil sands.

This One Change Would Make the Oilsands No Longer Worth Developing

oilsands, carbon emissions

This article originally appeared in Maclean's magazine and is republished here with permission.

It was reported recently that Exxon-Mobil will begin disclosing the degree to which its assets are exposed to future greenhouse gas policies. This risk is at the heart of what has become known as the carbon bubble, a term advanced by UK group Carbon Tracker, which suggests that assets may be over-valued as a result of not accounting for potential future limits on fossil fuel extraction imposed to fight climate change.

The so-called carbon bubble should be a concern to investors in oil sands stocks, and you only need to consider two numbers to understand why: 80 and 320. First, the number 80: oil sands producers and the Alberta government are quick to tell you that up to 80 per cent of the life-cycle emissions from oil sands occur from refining and combustion, not from extraction and upgrading.

That’s comforting, until you consider that this means that most of the carbon policy exposure for these projects comes from emissions-control policies and innovations far beyond the jurisdictions and markets in which oil sands companies operate.

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