By July 7, 2017 Read More →

Alberta news brief July 7: 50% of Albertans opposed to carbon tax – Angus Reid

Keystone XL

TransCanada CEO Russ Girling. CBC News photo.

Albertans want government to “push back” against carbon tax, Pengrowth Energy sells Swan Hills assets for $185 million

Wall St. Journal article gets it wrong on Keystone XL crude oil shipper commitments

A recent story in the Wall St. Journal claims TransCanada is having trouble finding customers for its controversial Keystone XL pipeline that is planned to carry 830,000 b/d of crude oil from Alberta to Texas Gulf Coast refineries. The problem, according to the Journal’s unnamed sources, is that oil sands producers are reluctant to commit to the long-term contracts demanded by the Calgary-based pipeline giant.

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Keystone XL proposed route.

“A lot of water has gone under the bridge over the last seven or eight years since we proposed that project with respect to where energy prices are today,” CEO Russ Girling told investors in May. “So it all sort of complicates the negotiation.”

Girling still thinks Keystone XL will be profitable in the long-term, and hopes to begin construction in 2018 for completion in 2020, but must first fill 90 per cent of the project’s capacity before proceeding.

But TransCanada spokesperson Matthew John says the pipeline operator is still confident it will find the customers to proceed with the project.

“As Paul Miller, executive VP and president, liquids outlined, in our recent quarterly results, we’re making progress with our existing shipping group, as well as new entrants, as they work through their analysis and the documentation,” he said in an email.

“We anticipate it will take a couple of months before we firm up our commercial support.”

The Calgary-based company expects to have contractual support similar to what it enjoyed previously, but with a different group of shippers.

“Some of the current shippers may increase their commitments, some of the current shippers may decrease their commitments as they look at their total transportation requirement.  We would also anticipate that we will introduce new parties into the shipper group as well,” said John.

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50% of Albertans oppose carbon tax – Angus Reid poll

A new study from the Angus Reid Institute indicates Canadian support for federal carbon pricing has cooled as the issue morphs from plan to reality. At least half of the population in every region outside of Quebec says it is opposed to Ottawa’s program of setting a mandatory nationwide carbon price for provinces who fail to create their own acceptable plan.

This study also finds a substantial number of Canadians would like to see their own provincial leaders push back against the federal carbon pricing minimums. Four-in-ten Canadians – including slim majorities in Alberta, Saskatchewan and New Brunswick – say their provinces should resist federal standards, which call for a minimum tax of $10 per tonne in 2018, rising to $50 per tonne by 2022 – an addition of approximately 11 cents on a litre of gas at the 2022 rate.

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Source: Angus Reid Institute.

A major concern is cross-border industry competitiveness. More than half of all Canadians (55%) say that this country should not proceed with its carbon pricing plan if it creates a competitive disadvantage with American businesses.

When Angus Reid explored this issue in the spring of 2015, the conversation around carbon pricing was hypothetical, and support for emission reduction policies appeared high. More than half of Canadians said the federal government wasn’t paying enough attention to climate change, and most said they’d be supportive if it implemented a carbon tax. This was the case again in November that same year, shortly after Canadians elected the Trudeau Liberals, who had campaigned on a carbon tax.

In Alberta, Premier Rachel Notley committed to the federal plan after securing the Liberal government’s approval for the Kinder Morgan TransMountain pipeline twinning project. While residents will be buoyed by the pipeline approval, 50 per cent still say they strongly oppose a carbon tax, second only to Saskatchewan in this level of opposition.

Pengrowth Energy sells Swan Hills assets for $185 million

Pengrowth Energy Corporation closed its sale of a portion of its Swan Hills assets in North Central Alberta for $185 million cash. The company continues to work on sale of the remainder of its Swan Hills assets.

The proceeds from this sale will be used to further strengthen the company’s balance sheet.

“Our successful asset divestiture program has provided us with cash proceeds that have allowed us to reduce our outstanding debt by over $670 million thus far in 2017,” said Derek Evans, CEO of Pengrowth Energy.

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