There has been no shortage of news stories on the recent drop in oil prices. In the last couple of months, journalists across Canada have written a steady stream of articles – many with sensationalist headlines – about what these events will mean for the economy. Some look exclusively at Alberta; others predict effects on Saskatchewan, Newfoundland and Labrador, and even Ontario and Quebec. Most wrap up with a similar conclusion: things will continue to change – with regards to federal and provincial revenues, job creation, housing markets – but this is unlikely to be permanent.
After the last couple of months, readers are used to these forecasts. Though experts continue to weigh in, there don’t seem to be many big surprises, at least not at the moment. But as many self-help junkies will tell you, sometimes the journey is more interesting than the destination (or, for our purposes, though it’s not very succinct – sometimes open exploration of a topic can lead to more interesting results than the search for a direct answer to a specific question).
With this in mind, here are four intriguing (and unexpected) articles turned up during a recent Gnowit search for topics related to oil and gas prices in Canada.
Editorial: Ferries and LNG go well together
Published in: The Times Colonist
Feb 4, 2015
On February 4th, more than two months into the media frenzy surrounding the drop in oil prices, The Time Colonists ran a different kind of story related to the oil and gas industry. According to the newspaper, B.C. is about to start embracing liquified natural gas (LNG). One of the province’s energy companies, FortisB.C., will export LNG to Poland, where it will be used to power three new ferries. In addition, the two largest ferries run by B.C. Ferries – The Spirit of Vancouver and The Spirit of British Columbia – will soon be refitted to operate on LNG.
Given recent events affecting Canada’s oil and gas industry, there has been much speculation about whether premier Christy Clark can attain her vision of B.C., a vision that prominently features LNG. Though the article in The Times Colonist suggests that the LNG goals of the province’s leadership are far from fruition, it nonetheless maintains that the use of the fuel in ferries is a step in the right direction. LNG is considered to be cleaner than its frequently-used alternatives, and (according to the article) it’s up to 30 percent cheaper than the fuel that currently powers B.C.’s ferries.
Prairie State power complex at centre of Midwest fights over electric rates, environment
Distributed by: The Canadian Press
Feb 8, 2015
Though it doesn’t originate in Canada, an Associated Press story about the midwestern Prairie State power complex is sure to be of interest to anyone following attitudes towards traditional energy. The article notes that the complex, a “1,600-megawatt generating operation, mine and landfill” is one of only a small number of coal plants built in the U.S. within the past 30 years. Canadian readers will remember how Ontario made headlines last year for its complete elimination of coal as an energy source.
Customers of the project have been surprised by unexpected overcharges, and many are pushing back against Peabody Energy and the municipalities that invested in it. This push back included a class action suit against city-paid consultants in Batavia, Illinois and the threat of ballot action in Galion, Ohio. Compliance with EPA regulations are the stated reason for the elevated costs, and Kent Carson (spokesman for American Municipal Power, a company that part owns the project) blames environmentalists for the backlash.
The story is particularly interesting from a marketing perspective. How did Peabody Energy convince a large number of municipalities – many of which signed strict contracts – to invest in a form of energy that so many jurisdictions are abandoning? If environmentalists are playing a role in the backlash against the project, how were their objections kept at bay in the early stages of the project’s development, and at what point did things start to go south? The Associated Press article raises many questions.
2014 big step back for Manitoba Hydroelectricity
Published in: The Winnipeg Free Press
Feb 9, 2015
An editorial in the Winnipeg Free Press discusses two Manitoba Hydro projects, Keeyask and Bipole III. The Keeysak generating station, which is expected to produce 4,400 gigawatt hours of electricity a year, will have a nation-wide impact.
The editorial laments Manitoba Hydro’s decision to increase its energy output instead of enacting greater efficiency measures. Its author suggests that “Keeysak may end up benefitting Alberta more” than Manitoba. Much of the generating station’s power – 40 percent, according to the Manitoba Public Utilities Board – is reserved for the Enbridge Line 3 and TransCanada Energy East pipeline projects. As a result, Keeysak has important implications not just for Manitoba, but all of Canada.
The editorial demonstrates the interconnectedness of Canada’s energy infrastructure, and offers a glimpse into attitudes held by the often-overlooked centre of the country (commenters on the article seem to agree with the author’s position).
Trudeau takes aim at conservative heartland
Pubished in: The Leader Post
Feb 9, 2015
A February 9th article in Regina’s Leader Post points out that, on February 6th, when the attention of many Canadians was turned to Supreme Court and its decision on physician-assisted death, Justin Trudeau was making a somewhat surprising speech in Calgary.
The Liberal MP advocated for carbon pricing, a concept that is either already or soon to be implemented in provinces representing the majority of Canada’s economic activity. Due to the wide provincial support for carbon pricing, it is politically inconvenient for Conservatives to disagree with Trudeau’s idea. But, as the author of the Leader Post article points out, the most noteworthy aspect of his speech may have been the “coded messages” it contained. In addition to “repeated laudatory references” to Alberta premier Jim Prentice and negative remarks about Pierre Elliott Trudeau’s National Energy Program, Justin Trudeau asserted that each province should be able to decide how it will implement carbon pricing.
Many have observed that Canada does not have a unified energy policy. In a recent interview, retired CAPP (Canadian Association of Petroleum Products) president David Collyer discussed the variation in policies from one province to the next, noting “a loss of confidence in institutions, such as the National Energy Board”. Trudeau’s speech suggests that, under his leadership, provincial sovereignty would continue with regards to energy issues.
Some will view Trudeau’s speech as a preview of what is to come if he successfully courts conservative voters; others will focus more on analyzing his “coded messages”. One thing is certain: those with an interest in energy policy will want to continue following what he has to say.
When Exploration Pays Off
The idea that one can stumble upon gold is a popular one. Consider the enduring quality of the story about Sir Issac Newton and his apple tree, or Colombus and his aspiration to find a shorter route to India. If gravity and North America can be found by accident, why not a piece of information that will help you achieve your business objectives? We often find our greatest insights when we’re not really looking for them.
The articles above have enriched my understanding of ongoing developments related to oil prices and the Canadian economy, and I didn’t set out to find them. While performing routine media monitoring tasks (those ongoing searches that are set up as part of an early threat-detection system), you’re likely to achieve a deeper understanding of the topics that will impact your organization. Better yet, you might find something that will change everything for the better.
Feature Image Courtesy of: Mike Mozart