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Flat copper, EV glut, imploding wind power equal green crash

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From the Frontier Centre for Public Policy

By Ian Madsen

Large fissures are appearing in the ‘Green Transition’ story climate crusaders tell themselves.  They are trying to foist it on a reluctant public and skeptical business world. One recent such crack is the carve-out on carbon taxes for heating oil in the politically-fickle Atlantic provinces.  Provincial premiers are trying to get the same treatment for other fossil fuel heating fuels.

Yet, politicians who still hew to the Climate Crisis orthodoxy remain unrepentant.  Montreal’s city council has announced that all new buildings of three stories or less will not be permitted to use natural gas heating. Taller buildings would face the ban later.  Several cities and states in the United States are also trying to restrict natural gas use.  Their efforts seem desperate.

A recent U.K. study concluded that heat pumps are much more expensive than employing natural gas (also true in Canada), and resistance heating is even worse.  Due to the study and public pushback, the planned U.K. heat pump mandate was cancelled – and ‘Net Zero’ postponed beyond 2035.

Extreme policy adopted by voting-block-pandering politicos notwithstanding, other constituents of the artificially-sustained Green Transition show signs of weakness.  For some, notably wind power, outright impending collapse looms.

Wind turbine companies’ share prices have slumped.  The main reason is that wind power contracts are being cancelled in many places.  A large project off the New Jersey coast is the latest example.  Component and material costs are the main culprits. They caused wind developers to raise requested electricity prices to unaffordable levels, and higher interest rates made capital costs rocket skyward. Recent revelations about the high costs of recycling wind turbine blades have soured governments and the public on this dubious ‘alternative energy’.

Electric vehicles, ‘EV’s’, are another darling of the climate lobby.  There is now a large accumulation of unsold EV’s on dealer lots, not just in North America but in China.  It takes a very large ‘rebate’ to get anyone to consider buying one – an indication of fundamental unpopularity.

It takes many minutes to recharge the battery pack at a ‘supercharge’ station; or, sometimes, hours at a regular charging station.  The former is expensive, the latter is an unacceptable time and opportunity cost for owners.  The bigger issue is a woeful lack of chargers for highway driving yet over reaching politicians are pushing a fantasy ban on gasoline  vehicles by 2035.  Forget that, it won’t be happening.

However, the best indication that the Green fever dreams of excitable politicians and disingenuous so-called Climate activists are becoming a nightmare is the price of copper.  Slow expansion of copper production and the increasing demand for it in Green Transition technologies such as EV’s, wind turbines, and solar panels and for all the grid connections and upgrades that they entail should force the copper price to soar.  Yet, it is just about where it was three years ago.

Mining companies are reluctant to buy or develop new copper deposits, or expand existing operations, with no visibility for a substantially higher copper price.  Costs have risen, too, and particularly for fuel and financing, making future positive returns look implausible.

Energy consumers, households and businesses, are rejecting the hysterical climate extremism that attempts to compel the use of uneconomic and unreliable energy forms and technologies, and the rejection of proven, affordable ones. Politicians should listen, and change.

Ian Madsen is the Senior Policy Analyst at the Frontier Centre for Public Policy

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Energy

Government policies diminish Alberta in eyes of investors

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From the Fraser Institute

By Julio Mejía and Tegan Hill

Canada’s economy has stagnated, with a “mild to moderate” recession expected this year. Alberta can help Canada through this economic growth crisis by reaping the benefits of a strong commodity market. But for this to happen, the federal and provincial governments must eliminate damaging policies that make Alberta a less attractive place to invest.

Every year, the Fraser Institute surveys senior executives in the oil and gas industry to determine what jurisdictions in Canada and the United States are attractive—or unattractive—to investment based on policy factors. According to the latest results, red tape and high taxes are dampening the investment climate in the province’s energy sector.

Consider the difference between Alberta and two large U.S. energy jurisdictions—Wyoming and Texas. According to the survey, oil and gas investors are particularly wary of environmental regulations in Alberta with 50 per cent of survey respondents indicating that “stability, consistency and timeliness of environmental regulatory process” scared away investment compared to 14 per cent in Wyoming and only 11 per cent in Texas.

Investors also suggest that the U.S. regulatory environment offers greater certainty and predictability compared to Alberta. For example, 42 per cent of respondents indicated that “uncertainty regarding the administration, interpretation, stability, or enforcement of existing regulations” is a deterrent to investment in Alberta, compared to only 9 per cent in Wyoming and 13 per cent in Texas. Similarly, 43 per cent of respondents indicated that the cost of regulatory compliance was a deterrent to investment in Alberta compared to just 9 per cent for Wyoming and 19 per cent for Texas.

And there’s more—41 per cent of respondents for Alberta indicated that taxation deters investment compared to only 21 per cent for Wyoming and 14 per cent for Texas. Overall, Wyoming was more attractive than Alberta in 14 out of 16 policy factors assessed by the survey and Texas was more attractive in 11 out of 16.

Indeed, Canadian provinces are generally less attractive for oil and gas investment compared to U.S. states. This should come as no surprise—Trudeau government policies have created Canada’s poor investment climate. Consider federal Bill C-69, which imposes complex, uncertain and onerous review requirements on major energy projects. While this bill was declared unconstitutional, uncertainty remains until new legislation is introduced. During the COP28 conference in Dubai last December, the Trudeau government also announced its draft framework to cap oil and gas sector greenhouse gas emissions, adding uncertainty for investors due to the lack of details. These are just a few of the major regulations imposed on the energy industry in recent years.

As a result of these uncertain and onerous regulations, the energy sector has struggled to complete projects and reach markets overseas. Not surprisingly, capital investment in Alberta’s oil and gas sector plummeted from $58.1 billion (in 2014) to $26.0 billion in 2023.

The oil and gas sector is one of the country’s largest industries with a major influence on economic growth. Alberta can play a key role in helping Canada overcome the current economic challenges but the federal and provincial governments must pay attention to investor concerns and establish a more competitive regulatory and fiscal environment to facilitate investment in the province’s energy sector—for the benefit of all Canadians.

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Energy

Proposed legislation seeks to suppress speech about climate change and fossil fuels

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NDP MP Charlie Angus

From the Fraser Institute

By Kenneth P. Green

Canada is a constitutional parliamentary democracy where differences of opinion are to be resolved through elections, which people are persuaded by words and ideas, not threats of violence. Stripping people of the right to express themselves freely will introduce violence into the democratic process, disenfranchising some people and disenchanting others.

It’s rare, in today’s political world, for someone in power to whip off the velvet glove and show the iron fist beneath. It’s a bit gauche for our times. But that’s what happened recently when federal NDP natural resources critic Charlie Angus tabled a member’s bill that would clap anyone who says negative things about the government’s fossil-fuel-phobia into the pokey—and rob them on the way to jail. We’re not talking about a slap on the wrist, but about million-dollar fines and years in jail for simply expressing a positive thought about fossil fuels. So much for the fundamental freedom of expression in Canada.

Angus’ Bill C-372 would fine and jail people for the most innocuous of speech relating to climate change or fossil fuels. Even daring to speak the obvious truths such as “natural gas is less polluting than coal” could land you in jail for one year and cost you $750,000. If you produce fossil fuels and are found guilty of “false promotion,” you’d face two years in jail and a $1.5 million fine.

Enacting such speech restrictions would be destructive of the fabric of Canadian society, and even though this member’s bill (like most) will go nowhere, it should trouble Canadians that we’ve reached a level of political discourse where members of Parliament feel they can blatantly propose stripping Canadians of their freedom of expression, obviously convinced they’ll not pay a price it.

Specifically, Bill-372 and its pernicious idea of speech control would cause harm to two major elements of Canadian civilization—our democracy, which depends on the free exchange of ideas as Canada elects its leaders, and our mixed-market economic system where actors in the market require a free flow of information to make informed decisions that can produce positive economic outcomes and economic growth.

Let’s start with that democracy thing. Canada is a constitutional parliamentary democracy where differences of opinion are to be resolved through elections, which people are persuaded by words and ideas, not threats of violence. Stripping people of the right to express themselves freely will introduce violence into the democratic process, disenfranchising some people and disenchanting others. Canada already has to work hard to promote engagement by the public in the political process. Things like Bill C-372 would not make this easier. A less politically engaged public cedes ever more power to entrenched politicians and political activists, and leaves power in the hands of smaller minorities with extreme enough views who think opposing ideas must be suppressed with force.

Regarding free speech, consider this. Without a robust mixed-market economy, the voluntary exchange which leads to economic activity does not happen. Productivity declines and scarcity, the eternal scourge of humanity, resurges and people suffer. Freedom of expression is central to the operation of market economies. People must be free to share information about the value of things (or lack thereof) for decisions to be made, for prices to manifest, and for markets to function effectively. Without open communication in markets, diversity of goods and services will diminish as some goods and services won’t be promoted or defended while others are freely to advertised.

Bill C-372 should and likely will die an ignominious death in Parliament, but all politicians of all parties should denounce it for what it is—an attempt by government to suppress speech. Unlikely to happen, but one can always hope for sanity to prevail.

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