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Federal regulations threaten Ontario’s ability to meet electricity demand

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4 minute read

From the Fraser Institute

By Kenneth P. Green

“Newer forms of supply, such as energy storage, are not ready to operate at the scale that would be needed to compensate; nor is there enough time or resources to build the necessary generation and transmission infrastructure to replace gas generation within an eight-year timeframe.”

A new report from Ontario’s Independent Electricity System Operator (IESO) suggests that electric vehicles and artificial intelligence facilities will drive a massive increase in demand for electricity in Ontario’s not-too-distant future.

The IESO estimates that overall electricity demand will grow by a projected 75 per cent by 2050, which is higher than the 60 per cent increase previously forecasted. The IESO attributes that growth in demand to a number of factors including industrial electric vehicle (EV) production and data centres (increasingly AI-driven). In fact, the IESO reportedly forecasts at least 16 new data centres will be in service by 2035, driving 13 per cent of the new electricity demand.

But where will all that electricity come from?

Under Canada’s current climate and energy policies, it won’t come from fossil fuels, which are to essentially regulated out of use by 2050 per the Trudeau government’s “net zero” greenhouse gas (GHG) plan and proposed Clean Electricity Regulations expected to be enacted by the end of this year. Assuming those frameworks remain in place in coming years, the increased demand for electricity must be met with low- or zero-GHG emitting forms of generation, which include wind power, solar power, hydropower, nuclear power and biomass power generation.

But Ontario already faces a stiff challenge in replacing existing fossil fuel electricity generation with renewables, even before all this new EV/AI-driven demand. In 2021, IESO released a study assessing the impacts of phasing out natural gas generation by 2030. It found that natural gas generation “provides a level of flexibility to respond to changing system needs that would be impossible to replace in the span of just eight years [the province’s current goal].”

The IESO also noted that natural gas power generation in Ontario provides almost three-quarters of the system’s ability to respond quickly to changes in demand. And that the proposed alternate energy technologies are not ready for widespread implementation: “Newer forms of supply, such as energy storage, are not ready to operate at the scale that would be needed to compensate; nor is there enough time or resources to build the necessary generation and transmission infrastructure to replace gas generation within an eight-year timeframe.”

In other words, meeting Ontario’s growing electricity demand by 2030 with low- and no-GHG emitting technologies—without raising electricity prices or destabilizing the grid—will be challenging to say the least.

In light of projected increased electricity demand from AI and EVs (not to mention newer technologies that AI might spawn), the Ontario government should demand relief from the Trudeau government’s forthcoming Clean Electricity Regulations. Without such relief, Ontario might not be able to meet future electricity demand, which would stifle not only the future EV market and the AI revolution, but all other electricity-consuming industries, costing Ontario a great deal of potential economic growth and the prosperity that accompanies it.

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Energy

National media energy attacks: Bureau chiefs or three major Canadian newspapers woefully misinformed about pipelines

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From the Fraser Institute

By Kenneth P. Green

These three allegedly well informed national opinion-shapers are incredibly ignorant of national energy realities.

In a recent episode of CPAC PrimeTime Politics, three bureau chiefs from three major Canadian newspapers discussed the fracas between Alberta Premier Danielle Smith and Prime Minister Mark Carney. The Smith government plans to submit a proposal to Ottawa to build an oil pipeline from Alberta to British Columbia’s north coast. The episode underscored the profound disconnect between these major journalistic gatekeepers and the realities of energy policy in Canada.

First out of the gate, the Globe and Mail’s Robert Fife made the (false) argument that we already have the Trans Mountain pipeline expansion (TMX), which is only running at 70 per cent, so we don’t need additional pipelines. This variant of the “no market case” argument misunderstands both the economics of running pipelines and the reality of how much oilsands production can increase to supply foreign markets if—and only if—there’s a way to get it there.

In reality, since the TMX expansion entered service, about 80 per cent of the system’s capacity is reserved for long-term contracts by committed shippers, and the rest is available on a monthly basis for spot shippers who pay higher rates due largely to government-imposed costs of construction. From June 2024 to June 2025, committed capacity was fully utilized each month, averaging 99 per cent utilization. Simply put, TMX is essentially fully subscribed and flowing at a high percentage of its physical capacity.

And the idea that we don’t need additional capacity is also silly. According to S&P Global, Canadian oilsands production will reach a record annual average production of 3.5 million barrels per day (b/d), and by 2030 could top 3.9 million b/d (that’s 500,000 b/d higher than 2024). Without pipeline expansion, this growth may not happen. Alberta’s government, which is already coordinating with pipeline companies such as Enbridge, hopes to see oilsands production double in coming years.

Next, Mia Rabson, Ottawa deputy bureau chief of the Canadian Press, implied that Smith’s proposal is not viable because it comes from government, not the private sector. But Rabson neglected to say that it would be foolish for any company to prepare a very expensive project proposal in light of current massive regulatory legislative barriers (tanker ban off B.C. coast, oil and gas emission cap, etc.). Indeed, proposal costs can run into the billions.

Finally, Joel-Denis Bellavance, Ottawa bureau chief of La Presse, opined that a year ago “building a pipeline was not part of the national conversation.” Really? On what planet? How thick is the bubble around Quebec? Is it like bulletproof Perspex? This is a person helping shape Quebec opinion on pipelines in Western Canada, and if we take him at his word, he doesn’t know that pipelines and energy infrastructure have been on the agenda for quite some time now.

If these are the gatekeepers of Canadian news in central Canada, it’s no wonder that the citizenry seems so woefully uninformed about the need to build new pipelines, to move Alberta oil and gas to foreign markets beyond the United States, to strengthen Canada’s economy and to employ in many provinces people who don’t work in the media.

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Carbon Tax

Back Door Carbon Tax: Goal Of Climate Lawfare Movement To Drive Up Price Of Energy

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From the Daily Caller News Foundation

By David Blackmon

The energy sector has long been a lightning rod for policy battles, but few moments crystallize the tension between environmental activism and economic reality quite like David Bookbinder’s recent admission. A veteran litigator who’s spent years spearheading lawsuits against major oil companies on behalf of Colorado municipalities — including Boulder — Bookbinder let the cat out of the bag during a recent Federalist Society panel.

In an all-too-rare acknowledgement of the lawfare campaign’s real goal, Bookbinder admitted that he views the lawsuits mainly as a proxy for a carbon tax. In other words, the winning or losing of any of the cases is irrelevant; in Bookbinder’s view, the process becomes the punishment as companies and ultimately consumers pay the price for using oil and gas and the industry’s refined products.

“Tort liability is an indirect carbon tax,” Bookbinder stated plainly. “You sue an oil company, an oil company is liable. The oil company then passes that liability on to the people who are buying its products … The people who buy those products are now going to be paying for the cost imposed by those products. … [This is] somewhat of a convoluted way to achieve the goals of a carbon tax.”

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The cynicism is so thick you could cut it with a knife.

On one hand, the fact that winning is irrelevant to the plaintiff firms who bring the cases has become obvious over the last two years as case after case has been dismissed by judges in at least ten separate jurisdictions. The fact that almost every case has been dismissed on the same legal grounds only serves to illustrate that reality.

Bookbinder’s frank admission lands with particular force at a pivotal juncture. In late September, the Department of Justice, along with 26 state attorneys general and more than 100 members of Congress, urged the Supreme Court to grant certiorari in one of the few remaining active cases in this lawfare effort, in Boulder, Colorado.

Their briefs contend that allowing these suits to proceed unchecked would “upend the constitutional balance” between federal and state authority, potentially “bankrupt[ing] the U.S. energy sector” by empowering local courts to override national energy policy.

For the companies named in the suits, these cases represent not just a tiresome form of legal Kabuki Theater, but a financial and time sink that cuts profits and inhibits capital investments in more productive enterprises. You know, like producing oil and gas to meet America’s ravenous energy needs in an age of explosive artificial intelligence growth.

“I’d prefer an actual carbon tax, but if we can’t get one of those, and I don’t think anyone on this panel would [dis]agree Congress is likely to take on climate change anytime soon—so this is a rather convoluted way to achieve the goals of a carbon tax,” Bookbinder elaborated in his panel discussion.

John Yoo, the eminent UC Berkeley law professor and former Bush-era official, didn’t hold back in his analysis for National Review. He described the lawfare campaign as a “backdoor” assault on the energy industry, circumventing the federal government’s established role in environmental regulation.

“There are a variety of cities and states that don’t agree with the federal government, and they would like to see the energy companies taxed,” Yoo explained. “Some of them probably like to see them go out of business. Since they can’t persuade through the normal political process of elections and legislation like the rest of the country, they’re using this back door,” he added.

What we see in action here is the fact that, although the climate alarm industry that is largely funded by an array of dark money NGOs and billionaire foundations finds itself on the defensive amid the aggressive policy actions of the Trump 47 administration, it is far from dead. Like the Democrat party in which they play an integral role, the alarmists are fighting the battle in their last bastion of power: The courts.

As long as there are city and county officials willing to play the role of plaintiffs in this long running Kabuki dance, and a Supreme Court unwilling to intercede, no one should doubt that this stealth carbon tax lawfare effort will keep marching right along.

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