Andrew Leach's energy and climate blog
In today’s Edmonton Journal/Calgary Herald on-line leaders debate (a great format, BTW), the leaders were asked the following question:
Do you believe in climate change? What should be the provincial government’s response to climate change, or should the provincial government wait for a plan from the federal government?
Bitumen royalties accounted for 10% of total Alberta government revenues in 2010-2011, and that is expected (according to the most recent Alberta Budget) to climb to approximately 20% of total government revenues, or $9.9 billion dollars by 2014-2015. Both royalty revenue estimates and royalty rates make for contentious subjects in Alberta, and this post is intended to provide a primer into how the royalty regime works and how it impacts investment decisions. My hope is that every Albertan will become more engaged in how this resource is managed, and the first step in that direction is understanding how it’s managed now, so here you go.
What will determine my vote on April 23rd? I suppose it will surprise no one that I will vote based on the energy and environmental policies of the parties. My key issue list includes 5 categories: 1) Savings, transparency, and accountability; 2) Market access; 3) Local environmental management; 4) Global environmental credibility; and 5) Getting the most value for our resources. Here are some of the questions I’ll ask the candidates who visit my house during the campaign, and some context for why I’m asking them. How does your party line up?
Oil price forecasts are wrong. That’s not going to change. Today’s Alberta budget has one in it, it’s aggressive, and it will be wrong. Will it be proven to be too high or too low? I haven’t a clue. But, in a province where approximately 1/3 of future provincial revenue depends directly on energy prices, their derivatives, and production quantities, forecasts are crucial and should be scrutinized. More than whether they are right or wrong, we should ask whether the forecasts are based on the best available information.
Yesterday, NDP leadership candidate and environmental hawk Thomas Mulcair announced his intention to implement a, “new comprehensive plan to combat climate change.” According to his press release, “Mulcair’s new plan would still be industry-focused and based on the principle that ‘polluters pay’, but it would expand beyond the 700 largest emitters in Canada to cover all major sources of climate change pollution.” Want to understand what this means? Here are three questions you should ask – Who’s covered? What’s the cap? Who gets the permits?
With the co-operation of each of the PC Leadership candidates, I will be putting together an Energy and Environment Q&A on the Globe and Mail‘s Economy Lab site. This evening, I have sent the following three questions to each of the candidates, and asked that they respond, in 200 words or less for each question, … Read more
As information continues to trickle out about the NDP cap-and-trade program, I thought I should go back to the NDP budgets quickly. An issue arose today with respect to the eventual gas price impacts of their cap-and-trade policy, and whether an NDP policy which does not price transportation emissions could reach their budget targets. It could. In fact, the math lines up very nicely. The practical likelihood of getting such a system on line in 2012 remains minuscule, but let’s put that aside for now.
Here’s what you need to know about the NDP program and gas prices. The NDP cap-and-trade program would require “big emitters” including oil refineries and major producing sites including oil sands facilities to buy emission permits at auction, with a price floor at $45/ton. This will increase the costs of producing oil and refining gasoline. … Read more
There’s a hole in the Conservative platform…a hole so big, you could fit Canada’s oil and gas sector or every single one of our fossil-fuel power plants into it. The hole is projected to get bigger, and will be large enough to fit every single car, truck, SUV, train, bus, and ATV in Canada into … Read more
The corporate tax implications of each of the parties’ greenhouse gas (GHG) policy proposals will run in the billions of dollars per year. GHG policies will induce significant expenditures, whether they follow the regulatory approach proposed by the Conservatives, the cap-and-trade approaches proposed by the Liberals and the NDP, or the broad carbon pricing approach … Read more