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Each term, I set the last assignment to be a submission inspired by Jason Kirby’s annual economists’ charts week, and have them pick a chart that they find interesting and which tests their R skills. They are graded on originality and degree of difficulty.

Things have changed a bit with the advent of AI tools like ChatGPT and Claude, but I have to say that my experience with it in the classroom has remained positive. While students can, of course, rely too heavily on these tools, I believe that this disadvantage is overcome by just how accessible it makes coding for beginners. My students, if they take the time to do the work, leave the class with the confidence that they can produce brilliant data visualizations in R, and that is a win for me.

You can see all of this term’s charts here.

Many of my students have shared contact info, mostly via LinkedIn. Please reach out to the students if you like their work. Hire them if you have a job opening. Pass their work on to others who might want to see it. And, if you don’t like a chart, please keep it constructive or keep it to yourself. I want them to feel great about the work that they’ve done.

Let me highlight a few charts that I really like and tell you a bit about why:

First, I really like this chart from Diya Arora, a graduating Honours student in economics who is off to grad school at UBC in the Fall. Diya’s chart is timely, clean, and really captures the role of global economic conditions, crude prices, and local markets and taxes in setting gasoline prices in Europe and North America.

Maddux Shipton took on mapping all of the potential oil sands projects in Alberta, including those approved, on-hold, or in the application phase. If you read Maddux’s write-up, you will see why this map might soon be on a wall near Premier Smith’s offices at the Legislature.

This graph, from Aayush Mehta is a nice visualization of historic emissions, targets, and projections from the Canada Energy Regulator. It also really shows how much more stringent Canada’s policies are likely to have to be to meet our net-zero goals by 2050.

Finance student Devon Kuzik, from whom I learned more than a few things this term, has a great visual of WTI spot vs. futures prices which includes my two favourite words in energy finance: contango and backwardation.

The graph above you really need to see on the live html site, since Kalathmi Pathiraja has built-in mouse-over info for data showing how Chinese solar panel exports have been distributed across the world.

This year’s award for inadvertently (?) trolling your professor goes to Harmandeep Singh for this graph of growth in Norway’s sovereign wealth fund compared to Alberta’s Heritage Fund. There was no Norwailing warning on the assignment!

Exchange student Olivia Paoli shared some really neat data I had not seen before on UK LNG imports and graphed it to show the impact of sanctions against Russia. One of my favourite parts of this class is that it attracts students from all over the world who are interested in energy policy.

With a big data assist from energy chart guru Rory Johnston, Chase Sattler provided a timely (at least for now) visualization of the dependence of Asia-Pacific countries on imports moving through the Strait of Hormuz. The map/graph combo is great, and it was fantastic to be able to connect Chase with Rory for help that I could not provide.

And, Caitlyn Hajjar put together a really nice visualization of sector-level emissions from world’s five largest sources of greenhouse gases. The side-by-side comparison of China and the US is really quite striking!

And, there are many more. Check them all out in the Charts Week portfolio. You can even see a graph from Ty Glowach who asked if he could do a graph about soccer and, well, if it gets you using R, why not?!?

Finally, some exciting news: for the first time, I will be teaching an open-enrolment energy literacy course at UAlberta.

The fantastic poster below was created by Caitlyn Hajjar, who also has the GHG emissions by sector graph shown above. I’ll have more details on this soon, but please register and/or pass this around to interested potential students!

Each term, I set the last assignment to be a submission inspired by Jason Kirby’s annual economists’ charts week, and have them pick a chart that they find interesting and which tests their R skills. They are graded on originality and degree of difuculty. Importantly, for many, this is a bonus assignment: it’s not worth anything if they already have good R assignment scores. Some, despite that, put together some really great work. And, if you know students that are taking my class and you don’t see their work here, it almost certainly means they’ve done really well on their other data assignments and are prepping for their other finals instead of doing extra R work.

You can see all the charts here.

Many of my students have shared contact info, mostly via LinkedIn. Please reach out to the students if you like their work. Hire them if you have a job opening. Pass their work on to others who might want to see it. And, if you don’t like a chart, please keep it constructive or keep it to yourself. I want them to feel great about the work that they’ve done.

Let me highlight a few charts that I really like and tell you a bit about why:

First, I absolutely loved this chart from Enzo Capenakas, but you have to go to the original to see its full excellence since he’s used Plotly to make the chart interactive. The impact of the tariff annoucements really jumps off the page, but so does the post-election optimism about a Trump presidency. It’s not a complicated data visualization, but it really gets the point across.

I also really liked Hiba Zaidi’s map of World Bank data on trade flows. The particular data, import shares of all fuels, has some really counter-intuitive outcomes (Russia and Norway with high import shares?) but the data say what they say and the important skill that Hiba gained here was the pushing of data onto a map, something we don’t do in class. Her motivation, thinking about energy security, is also very timely.

Finally, I really liked the idea that Payten Semeniuk had in this figure, to show the sources of changes in emissions over time (I almost always think about levels). This graph (it also uses Plotly mouse-overs if you check the original) really highlights not only the sectoral changes but the technology deployment required to meet national goals and/or changes we might see in Canada if the world acts aggressively on climate change. Payten also gets a shout-out because she put together a really nice graph theme that I’ve adopted for some of our class work.

Check out the rest of the charts here. And let us all know what you think.

And now, it’s time for the payoff.

I give them one last assignment inspired by Jason Kirby’s annual economists’ charts week, and have them pick a chart that they really find impactful, interesting, or which tests their R skills. And, this year some of the products are great. And seeing some of the students go from struggles with R to producing great, original work is the best part of my term.

You can see all the charts here.

Many of my students have shared contact info, mostly via LinkedIn. Please reach out to the students if you like their work. Hire them if you have a job opening. Pass their work on to others who might want to see it. And, if you don’t like a chart, please keep it constructive or keep it to yourself. I want them to feel great about the work that they’ve done.

Let me highlight a few charts that I really like and tell you a bit about why:

The most eye-catching chart (and one that I was really pleased to see) was from Ethan Griffiths on electricity generation in Canada vs. the UK. Ethan is from the UK, so after we’d done similar graphs to this with Canadian data, he decided to build a comparison. I was really pleased with this addition and I learned a lot about UK electricity supply too.

Continuing on with electricity, and using some of the same data as Ethan, Claire Hughes shows how different emissions constraints might change electricity supply in Canada. This is, I think, the best aesthetic graph of the bunch and really shows the importance of hydro and nuclear power to Canada’s energy mix too. Don’t get too mad that she left out some big players (Manitoba, Newfoundland and Labrador) in the hydro space.

Next, Business student Austin Hanlan has a nice take on the recently-released oil sands emissions intensity data from the Government of Alberta. You can see the long term improvement in in situ production as well as the oil sands average, but the lack of progress in the past few years is depressing.

I try to get our students to think about current policy challenges in class, and one that we didn’t get much of a chance to talk about this year was LNG. Jack Leblanc brings the LNG discussion to Charts Week with a nice chart showing the differential between Alberta (AESO), Asian (JKM), and European (TTF) gas prices. I told Jack today that this would be a fun graph to combine with Google Trends data for LNG.

Next, we’d remiss if we didn’t have a graph showing consumer carbon pricing impacts, so this one from Ghunaym Yahya. It’s remarkable to think of just how expensive gas was pre-2008. In today’s dollars, those 2006 gas prices are about $22/GJ. Yes, the carbon charge delivers a big boost in natural gas costs, in percentage terms, but all-in gas today remains remarkably inexpensive in real dollar terms.

Now, I’m biased on this last one: economics student Seth Germsheid looks at the evolution of emissions from electricity generation in Alberta and the implementation and evolution in carbon pricing. There’s a lot in this plot, but the acceleration in coal phase-out and the increase in gas generation that followed from the strengthening of the carbon pricing signal (and the TIER modifications from the Kenney government too) are such a remarkable sight to see on a plot.

I hope you all enjoy the charts and please, connect with the students on LinkedIn, tell them you liked their work, and please share this post. And, most of all, constructive criticism and positive reinforcement only please. I ask a lot of my students in making these public. Don’t make it a bad experience for them!

For some reason, my Canada Revenue Agency direct deposit authorization ended this year. I’ve renewed it, but not before I received a couple of physical Climate Action Incentive Payment cheques, otherwise known as the carbon tax rebate. If you live in a province covered by the federal carbon charge, and you filed your income taxes last year, you or someone in your household got one too!

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As a family of four in Alberta, we will be receiving $1544 over the 2023-2024 carbon charge year (the charge increases in April). Our 2023 total was a little below that, since the January 2023 payment was smaller.

The cheque, and the reaction to my posting a picture of it on Xwitter, got me thinking: do I actually get an annual payment large enough to offset what I pay in carbon charges? I don’t think I’d ever really bothered to do the math.

So, the first thing I checked was my natural gas billing. We use gas for our heat and hot water. My supplier, Alberta Coperative Energy (ACE), makes this pretty easy as they allow at data file dump for all of our meter readings, and I can even access daily natural gas and electricity readings. It’s great. So, I have final settlements for January 1, 2023 through December 17th, 2023, and then daily preliminary settlements data through the end of the year. With all of that combined, I used 68.84 GJ of gas (I posted this earlier on Xwitter, but I’d used a different tabulation based on billing data for the year ended December 17, 2023, but this is a bit more accurate) and I paid $199.69 in carbon taxes on those bills.

Here’s the nice little graphic that ACE provides on our bills which shows the numbers I’ve used, except that the balance of December from the daily meter reads was 5.86 extra GJ. Add those to the rightmost green bar. It was a warm December.

I then looked at our household gasoline consumption. This one is harder since we don’t track receipts, but I figured we’d driven roughly 16,000km at 9l/100km when I did my initial calculations for Xwitter purposes. I did a little more digging, and that number is surely an overestimate. Based on odometer readings at vehicle servicing, we’ve likely driven fewer than 12,000km for the 2023 calendar year. At my initial, higher estimate we’d have spent roughly $175 on carbon taxes on fuel, but with my updated numbers, we’d be down closer to $130 assuming our driving is evenly split through the year.

We were also net electricity generators (the last few years have been good for that) in 2023, so we’re not paying any net carbon charges from that, so let’s call that a zero.

So, combined, we’re paying at most about $375, which with GST added would be $393.75, just over the amount on my quarterly rebate cheque. Not bad so far, since there are three more of those cheques.

Now, much of the clamouring on Xwitter felt that this alone was unsatisfactory, and they were right. I haven’t talked about indirect effects of carbon pricing embedded in everything we buy. This one is hard to track individually, but we can use the analysis from this paper by Jen Winter, Brett Dolter, and Kent Fellows as wonderfully translated to an online tool to give us some idea of where those numbers might land.

Here’s where it gets tricky: based on our household income, were pretty low emitters, but that may or may not translate to other parts of our consumption. The online tool, using our houehold income as a proxy for consumption and scaling up to the carbon price levels in 2023, estimates the indirect effects of carbon pricing on our expenses at $769.30 per year. That’s higher than our direct expenses - something which will not likely be true in the broader population - since we’ve pushed our direct expenses down quite substantially through energy efficiency and choosing where we live and how we commute to minimize emissions.

Using that number as a proxy for our indirect costs of carbon pricing, combined with our direct effects above, that would put us at a 2023 carbon pricing expense of $1163.05, almost $300 less than our rebate cheques. And, even without our solar panels, if I included electricity for an average household in our incoome decile from Winter, Dolter, and Fellows, we’d still have credit cash to spare.

This won’t be true for everyone, but it’s much more likely to be true for people in lower income brackets. People often fail to consider just how skewed the distribution of carbon pricing costs is. This graphic from the Winter, Dolter, and Fellows paper shows just how much more high-income-earners pay. The average carbon tax bill is as such much higher than the median carbon tax bill. For example, for Alberta, Winter, Dolter and Fellows found that the average $50 per tonne carbon tax bill would be $1032 per year in Alberta, but the median bill would be much lower at $882. This is why a rebate that returns the average carbon taxes paid to all households can make more than half the households in the country better off.

Don’t forget, though, that this isn’t true for everyone in a given income group. The distribution of net carbon tax costs within income groups is very wide, in particular in Alberta and Saskatchewan (see Figure below, also from Winter, Dolter, and Fellows). This means that no, it is not true that all lower income individuals see a net benefit and nor, as my case would appear to show, is it the case that all higher-income households see a net cost.

You should not consider me to be representative of anything, nor to be claiming to be. I am one data point among millions. That my own emissions would seem likely to be low enough to mean that I get back more in the rebate than I pay in carbon charges tells you nothing about anyone else. Unless they too have a lower-than-average emissions footprint, in which case they too will see a credit that exceeds their costs of carbon pricing.

I guess it also tells you that I might have a few extra dollars to spend at the bike shop.

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In gas markets, supply issues caused by freeze-ups along with the really high heating loads due to the current cold snap appear to have been behind curtailment on the Nova system. Below, you can see the list of bulletins issued, mostly for the Foothills system, through the day today.

This is already leading to spiking prices in BC, and there are signs things could get worse tomorrow.

As I write this, we’re also in a Grid Alert (!!!) on the Alberta electricity system, and things look to get pretty tight between now and 11pm.

The Alberta Electric System Operator (AESO) is, as shown below, expecting very thin margins of error for the next few hours, so let’s hope for no more plant outages.

With the H.R. Milner (300MW) and Sundance 6 (401 MW) natural gas plants offline, and almost no wind and no solar generation this evening, the AESO are asking for conservation and, you’d have to think, hoping it gets a bit windier.

Unfortunately, that doesn’t appear to be in the cards for the next few days, as it’s expected to remain calm as temperatures remain low. Luckily, we should see lower peak demands on the weekend, so hopefully tonight will be the tightest the market gets. The wind seems to be tracking the AESO forecast, which at least means this was not an unexpected event.

Winter troughs present a big challenge for renewable generation in Alberta: when our demand is at it’s highest (we set an all-time record yesterday), both wind and solar generation tend to be at their lowest. And, yes, there’s already a tweet from the Premier.

I’m sure we’ll be hearing even more about this from the Premier in the coming days. Perhaps the Premier will find some solace in the fact that new data released this week shows that, for the first time, average oil production in Alberta averaged more than 4 million barrels per day in November.

As I told my students last week, it’s a great time to study energy because there is always something exciting going on.

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But, that’s all in the past.

Today’s a new day and do I ever have a great post for you.

Last year, I started teaching energy economics in the Department of Economics at the University of Alberta, and I put a lot of emphasis on data visualization during the class. I want students to learn through looking at, wrangling, and presenting data. And, the students have suffered through 10 R assignments on everything from global primary energy supply to AESO electricity loads and prices to my household solar power system.

And now, it’s time for the payoff.

I give them one last assignment modeled off Jason Kirby’s annual economists’ charts week, and have them pick a chart that they really find impactful, interesting, or which tests their R skills. And, this year some of the products are great.

You can see all the charts here.

Reach out to the students if you like their work. Hire them if you have a job opening. Pass their work on to others who might want to see it. And, if you don’t like a chart, please keep it constructive or keep it to yourself. I want them to feel great about the work that they’ve done.

Let me highlight a few that I really like.

First up is Oscar Jaimes’ chart on biofuels. Oscar has really done some great work this year, including being one of only a couple of people to do course assignments in both R and Python. This one really shows off Oscar’s skills.

ALES student Devon Dobchuk is right in my wheelhouse with an oil history chart, and I’m really thrilled. The recent volatility, in context, really jumps out!

I liked Prashanth Rajendra’s electricity chart mostly because it surprised me how volatile these values are. I don’t think I’d ever seen imports graphed like this, so I was taken by it. And, we’re going to talk a lot more about electricity in the coming year, so it’s a nice fit.

Lane Missel used a fivethirtyeight graph template all term, and I’ve now adopted a modified version of it for some of my own work. This is a really neat graph on gas storage cycles too.

And, finally, I think the star of the show this year is Abram Ilcisin’s Shiny app for emissions data. We don’t do Shiny in class, but this was a great piece of work and I learned how to embed Shiny in RMarkdown as a result too!

I want to conclude with one important detail on Charts Week. It’s optional. I don’t make it mandatory for students to do, nor do I make it mandatory for students to publish their charts if they would prefer to remain anonymous. There were several students who didn’t submit because they already had perfect grades in R assignments, and so had nothing to gain from spending time fighting with R this week instead of preparing for finals. Others chose not to have their charts published. Rest assured that, in addition to these great examples of energy data visualization, there are many great students in my class that you don’t see on the charts page, including some with some stellar R skills. I’m always happy to connect them to great opportunities.

This is always such a pleasure to post and I hope you enjoy it as much as I do.

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This term's compilation is available here.

I am so thrilled with these charts, and the work that my students have put in this term. As a sample, here are a couple that I particularly liked:

These are just teasers to get you to click through and see the whole list and to read my students’ write-ups. Beyonfd that, please, connect with the students if you like their charts - many have provided their LinkedIn information and some brief words about themselves - and tell them so. It’s a big ask for them to put their work out in public like this!

I’ve also pushed through an update of the regular energy charts, as usual at https://aleach.ca/charts and included stories from Marc and Yousaff on the federal budget and the Alberta RRO cap.

And finally, today, if you’re still on the RRO, the advice from Blake Shaffer is to swtich to fixed, but make sure you’re not locked in for the long term, and that you can switch to a market rate or a different plan if prices drop.

Enjoy the students’ charts!

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We’ve got two student stories this week (school takes priority at this time of year). Kayla’s got a good news story on recycling drilling waste and Yousaff has a great piece on battery capacity in the US.

Other than that, this week, the inevitable and inexcusable deprecation of the most useful energy data source on the planet, the EIA’s v1 API, has overwhelmed the charts scripts and my debugging time. You’re missing some charts as a result, but the core elements are there. And, you’re missing an update of predictions from the EIA’s Annual Energy Outlook compared to previous years because, well, it’s a major pain and I haven’t been able to fix my code yet.

The past couple of weeks have been ones to forget for oil bulls.

WTI is trading in the mid-60s and Brent nearly sunk below 70 early this week as well. The pain is somewhat muted by the fact that implied WCS had risen against WTI since December, although the past week has still been a bloodbath.

On the electricity front, as predicted a couple of weeks ago, we saw a couple of days with more than a GW of peak solar supply and we’ve seen a few days recently with over 3000MW peaks in renewable supply from wind, solar, hydro and biomass. It’s definitely striking to see peaks over 3000MW and troughs down below 500MW in the same day (see the end of the day on March 18th): so much so that I think we’ll start showing an Alberta net load product over the next few weeks.

There’s a lot of attention on the Alberta electricity market right now, with the Premier promising a new look at electricity rates, specifically the Regulated Rate Option (RRO), the default supply contract for electricity. This raises a number of issues that are worth exploring today.

First, what is the RRO? It’s the contract you are on by default, if you haven’t (or can’t) sign up with any of the other myriad retailers in the province. The price you pay is based on the cost of an advance purchase of (essentially) financial power price hedges made on your behalf. And, the reason you’re hearing a lot about it now is because the cost of electricity under this default contract has gone through the roof.

Prior to this year, the RRO had only once crested $0.15/kWh, in 2012, and it got as low as $0.03/kWh in the depths of the downturn in 2017. Since early 2021, though, rates have been on a steady climb. And, as you can see on the graph above, the slope got really steep in the last 6 months. Thankfully (for consumers) the market looks to be settling back down a bit, although futures prices remain well above last year’s levels.

But, that’s not where this story ends. You see, since January, consumers on the RRO have not been paying the full cost of the power procurement, because government capped the rates at $0.13/kWh. Only, they didn’t actually cap rates, they only deferred them. That’s right: as the Alberta Utilities Commission explains, “any costs above the $0.135/kWh price ceiling will be deferred until rates drop and will be repaid over 21 months (April 2023 to December 2024).” The government basically allowed the default service provider to put some of the RRO costs on a line of credit which will be paid-down over the next 21 months, with interest. As of the last disclosure, for EPCOR alone, the shortfall for January through March 2023 is estimated to be $137,583,627.01.

Yes, $137.6 million. No, I didn’t make up the 1 cent in the estimate.

The government stepping in to cushion the blow of high energy prices isn’t necessarily a bad thing. But, it can be depending on how they do it and who they force to pay for it. And, in this case, there are some bad answers to both of those questions.

The deferred costs will be paid for by those still on the regulated rate (default) contract beyond the end of this month. Remember that the default contract reflects (roughly) the market cost per unit of electricity used by an average customer (different customers use more or less power at peak price periods, and the average cost is based on a forecast load shape for all customers), so the default supply contract plus the repayment of the deferred costs will almost certainly be above the cost of other fixed price contracts available.

That’s right. Even if you benefited from the deferral, you can opt out of paying it back by signing a contract with another retailer.

And, therein lies the problem: not everyone is eligible to sign a contract. New Canadians, people with poor credit histories, or those without the capacity to pay a deposit may have only the default option - they’ll have to stay on the RRO, and it’s these people who will pay back the full cost of the deferral for everyone.

Designing the so-called cap this way was a choice: to place the cost on ratepayers, not taxpayers. But, when you structure it so that some of those who benefited can avoid paying the cost and can shift that burden to those of us least able to shoulder it, that’s a problem.

These paybacks start in 11 days. It’s not too late from the government to fix the problem.

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I’ve posted an update to our energy charts at aleach.ca/charts.

This week, we’ve got a wealth of student stories, mostly because I missed last week’s update. We’ve got stories on a hydrogen community in Strathcona County, the looming battery boom in the US, Pakistan's Renewables Roadmap, residential solar and Alberta hydro power potential.

This week was the Alberta budget, and a return to trend in some ways with a very spendy budget from the Smith government. During budget week, there is no better source for analysis and visuals than the University of Calgary’s Trevor Tombe. I’ve got a few favourite Tombegraphs for the week, and so I thought I’d lead this post by sharing them.

First, this really brings home the degree to which we have become more dependent than ever on oil in Alberta: the sensitivity of government revenues to WTI prices is now up to over $800 million dollars, and has been on a steady climb as more oil sands projects reach payout and as capital investment has lagged revenues in the oil sands.

But, I think the Tombegraph of the week for the budget for me was this one, which really solidifies how much Alberta’s fiscal path has changed over the past 5 years (although, to be fair, taking out COVID and interest expenses does miss part of the true story here). Pre-pandemic, the Kenney government set Alberta on a very clear path - a significantly different one from that of the NDP government. But, it was also a path that seems to have led Albertan conservatives to discover that Albertans may not be quite that conservative. It turns out that, at a time when everything is costing people more, the message from government that we needed to make do with less service and be happy paying more it was not a popular one. As a result, we’ve seen a big shift in this pre-election budget. A shift to the most expensive government we’ve ever had in Alberta.

We also have a few new charts in this week’s update which I’d like to highlight for you.

First, we’re highlighting renewable power generation in Alberta in a new plot. The rise in renewables here has been staggering, and raises some new challenges for the electric system operator, so this one is worth a look.

We’ve also added a graph of the AESO’s solar forecast. As we move into spring, Alberta’s new solar capacity is going to show itself more and more. We hit and all-time record this week (March 1) with 968MW of solar supply averaged over an hour, and we’re heading for a big milestone this week with a forecast by the end of the week of over 1GW of solar supply. With 1165MW (1.165 GW) of industrial solar installed on the grid today (not including distribution-connected and microgenerator systems), any new records set this week will be short-lived.

And, finally for this week, another electricity graph: forward prices. We’ve had this as a product in the charts pack for a while, but the plot was due for a refresh, so here’s a new one for you. We’ve added in average monthly prices over the preceding year for context.

There’s a bit of good news and a bit of bad news in here for consumers. The forward market suggests lower prices this summer than last, but also shows that expectations for this summer’s prices have increased dramatically over time. This summer’s prices could bring a double-whammy for some consumers as the government’s price cap comes off regulated prices, and consumers on the regulated rate option will have to pay back the cost of the price cap on top of their regular power bills for the balance of the year.

Hope you all have a great weekend!

This term was always going to be a tough one, as my change of jobs at the University of Alberta meant two new course preps this term. I’d been doing well at keeping all the balls in the air until…this week. A midterm for my undergrad energy economics students and a new chunk of prep for my law class that took me down several utilities law rabbit holes, along with testimony to the Senate Energy, Environment and Natural Resources committee on Tuesday saw my charts update get pushed to the back burner.

Today, I have updated the charts online at https://aleach.ca/charts and we have three stories this week from Kayla on the Keystone spill, from Marc on the EU response to the IRA, and from Yousaff on a second life for EV batteries.

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For my part, I have five charts for you. First off, with missing last week, I missed my usual EIA STEO update on oil demand.

This month brings an interesting new twist: bearish short-run, with a little more bullish long term, with one of the first upward revisions since I started tracking the STEO forecasts carefully though COVID. We’re still seeing a 4 year delay to get back to where the oil market was expected to be by 2021, so when you’re told that oil demand is growing, keep this chart in mind.

The STEO WTI forecast was also a bit bearish relative to the (very bearish already) WTI forwards, although prices are still well above where expectations would have been at any time from 2016 through 2021.

The second and third charts are from a new report find for me: the International Energy Forum (IEF), via former EIA oil analyst Mason Hamilton. The first of the charts from the IEF this week is a look at other global oil market assessments. Yes, there are some that do show oil demand climbing substantially from current levels. But, I’m not sure that’s the key take-away given some of the very deep cuts in demand forecasts across scenarios modeling any form of aggressive action on climate change.

The second graph, from the IEF’s Upstream Oil and Gas Investment report, shows just how big the drop in global investment has been since 2015. This mirrors EIA data, but the EIA hasn’t yet published their full-year 2022 figures.

We hear a lot in Canada about the impact of the Trudeau government, legislation like C-69, carbon taxes, etc. on oil and gas investment. Don’t be fooled into thinking that correlation implies causation. Unless, of course, you think that the Trudeau-Notley alliance had a global impact that saw oil and gas investment cut more-or less in half relative to the business-as-usual trend.

And, finally, a new one today from the EIA. Despite the efforts of nearly every reply-guy on the internet, investors still seem oblivious to the fact that the sun doesn’t shine all the time (yes, Friends o’ Science, that was sarcasm). Today’s EIA update shows that more than half of new electricity generating investment in 2023 will be solar, and 86% of new capacity will be emission-free (or close to it). Things are sure changing quickly!

That’s all for me for this week.

This week’s (well, technically last week’s) Energy Charts are posted at https://aleach.ca/charts.

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We have stories this week from Marc and Yousaff. Marc is looking at the recent news stories on the potential for [orphaned renewable energy infrastructure](https://www.cbc.ca/news/canada/calgary/alberta-vulcan-county-orphan-wells-jason-schneider-1.6730467) to affect rural lands in the future, just as orphaned oil wells are causing issues today. As Marc points out, there is no split title issue for renewable energy so, if a wind or solar farm is using private land, it’s doing so under an agreement with the landowner just as would be the case for any other private business use of land. And, landowners are free to refuse wind or solar development and/or to impose any conditions they choose on the development. Might there be companies that default on their obligations? Sure. But, that’s not unique to renewable power.

Yousaff has a story on large clean energy investments in India - more than $4 billion dollars. As China and now India move ever faster on clean energy, their sheer scale will lead to spillovers and technological improvements that will benefit the global energy economy far beyond their borders.

Also, a quick update on last week’s mailer: it turns out that there have been 4 days where solar generation has exceeded coal generation in Alberta since last fall.

Other than that correction, I’m using this mailer to get ready for a talk.

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Tonight, along with Kathryn Harrison from the UBC, I am speaking at an event at the University of Alberta for our International Week with a focus on climate policy and recent disruptions in global energy markets.

The presentation ties-in to a paper that Professor Harrison and I have been working on (for too long already) that started as a COVID paper and has evolved to include changes in the climate policy environment in Canada after the Russian invasion of Ukraine.

The paper looks at how the Canadian climate policy environment has evolved since the 2015-16 oil price crash, through the downturn which followed, through COVID, and most recently through the turmoil in global oil and gas markets caused by Russia’s invasion of the Ukraine.

First, some background on climate change and Canada’s policy challenge.

Zeke Hausfather’s annual climate change update came out at CarbonBrief last week, and using Zeke’s always great data visualizations, we can see that the global climate change picture continues to worsen. According to NASA, 2022 was the fifth warmest year on record, and all of the warmer years on record have occurred in the last decade. As usual, there are voices saying “the temperature hasn’t risen on average in the last X years”, which has been true for a number of X-year periods over the past 50 years. But, when you consider the complete time series, the picture is compelling, and more and more worrisome each year.

The picture gets more worrisome if you look at longer-term data.

And, yes, these points are measured with significant error. That doesn’t make things a whole lot better.

From a Canadian perspective, we’ve recently seen the release of Canada’s 5th Biennial Report to the United Nations on Climate Change, and the picture is not great here either.

Canada’s emissions continue to trend downward, and the new report contains at least one model run that shows Canada barely meeting its Glasgow target to see emissions 40-45% below 2005 levels by 2030.

But, there’s an important story buried in the acronyms in the Figure below.

The 5th biennial report (BR5) with measures (WM) line, in light blue, is where our emissions are projected to be if we continue with all the measures currently implemented: the carbon pricing regime, the clean fuels regulation, etc. On that trajectory, our emissions end up at 608 Mt by 2035, 18% below our 2005 levels.

The with-additional-measures (WAM) line which gets Canada to 443 Mt (40% below 2005 levels) by 2030 is good news, but involves a lot of additional heavy lifting from new and existing policies.

What exactly? The BR5 report tells you:

And that’s just the beginning. Table 5A-49 has two pages of new policies, measures, and spending commitments from Ottawa, along with measures from some of the provinces (curiously, nothing is included for Alberta) on pages 317-318 of the BR5 report.

Back to what we’re talking about tonight: three things which have disrupted and will continue to disrupt Canadian action on climate change.

First, the oil price crash from 2015 through 2020:

And the crash in global investment in oil and gas that came with it.

These events meant that Alberta was feeling the pain of job loss and disruption long before many people had heard of the words just transition. This drop was global, as shown above, but it coincided with the imposition of carbon pricing in Alberta under the NDP and the election of Justin Trudeau federally. And, as with the justinflation canard, correlation is as good as causation in politics.

These changes damaged the momentum for carbon policy in Canada, and aided the rise of the resistance - the climate contrarian premiers in Alberta, Saskatchewan, Ontario and other provinces.

The biggest L for the resistance surely came when Justin Trudeau’s Greenhouse Gas Pollution Pricing Act was upheld by the Supreme Court in 2021, but that was overshadowed by what had happened in the year previous: the COVID-19 pandemic had ravaged the world and turned out country and most others upside down.

In oil markets, COVID led to a correction of massive proportions which took the wind out of the sails of the jobs, economy, pipelines promises of Alberta’s government and transformed Jason Kenney into an industrial-policy conservative, if there is such a thing.

For tonight, though, I am focused on the correction in the oil markets that followed the pandemic declaration, and from which we have not yet seen a recovery.

Yes, oil consumption continues to rise, but more slowly than previous increases and forecasts see demand increasing to much lower levels than would have been predicted just a few years ago.

And the gap between the January 2020 forecast and today’s forecast? That’s 1.2x Alberta’s production.

The story is much the same in the long run. And, despite recent price increases, the long run view on the value of oil is still tracking well below some of the older outlooks that underpinned major investments in oil production here in Alberta and elsewhere in the world.

The last factor we’ll talk about tonight is the war in Ukraine, which has disrupted both oil and gas markets globally. The gas price spike in Europe has largely abated, thanks both to a warmer-than-expected winter and massive conservation efforts.

In Canada, this has led to renewed calls for the country to build LNG, increasing scrutiny on the Prime Minister’s comments regarding the business case for new terminals, and increased pressure on Ottawa and BC to relax climate change measures to permit and underpin new gas production and exports. Of course, not often present in those discussions is the reality that any new Canadian exports of natural gas are most of a decade away, and the world energy market will look substantially different by that time.

The business case for LNG conversation forces Canada (and the potential investors in any new plant) to wrestle not with the markets today, but what gas markets might look like in a world acting (or not acting) on climate change.

It’s going to force Canada to wrestle with its commitment to domestic targets, to domestic energy security, and to its allies.

There will be much talk of three-legged stools, I’m sure.

In the end, while the oil price shock of 2015 and the COVID crisis unquestionably took pressure off Canada in terms of policies to reduce emissions, the rebound in oil prices this year and, in particular, the war in Ukraine have put that pressure squarely back on. Canada has tough choices to make, as do many of its provinces.

I hope that we’ll see some of you tonight for more discussion of these issues.

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We’ve got great students stories with the whole team in the mix this week. Erica’s writing on the pressure on banks to reduce financed emissions, Marc’s got a piece on how global spending on fossil fuel alternatives exceeded spending on fossil fuel production, Yousaff has a piece on solar in Africa, and Kayla’s got a story on Imperial’s renewable diesel plant in Alberta.

I also added a couple of products to the weekly charts, including coverage of the Brent to Urals differential.

But, for this week, one piece of data stopped me in my tracks. As I was pulling together this week’s charts, I noticed the increasing daily solar power peaks and, looking at the 24th of January, I wondered if maybe…just maybe…we had crossed a major milestone in Alberta.

In fact, we had.

Yes, you’re seeing that correctly.

At a little before 2pm on January 24th, Alberta’s industrial solar power facilities fed more electricity onto the grid than the province’s coal units for the first time. And, for much of the next hour, Alberta used more solar power than coal power. Wow.

Informed observers will point out that Capital Power’s Genesse 3 facility is still dual-fuel. And, others will point out that these figures don’t include residential and commercial solar power. To my mind, neither takes away from how much this graph captures the changes we’ve seen in Alberta over the last few years.

January 24th was a historic day in Alberta.

And, before I leave you, a shout-out to my Econ 366 students who spent the week fighting with (learning?) R-Markdown, and they are well on their way to creating cool products like the weekly charts update. But, it was a tough week for many and they worked really hard. I want them (and you) to know that I’m proud of them.

And that’s all I have for you this week.

A bit late this week but better late than never. This week’s charts are posted at https://aleach.ca/charts.

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This week, we have two student stories from Kayla Layden including one on the groundbreaking deal between the BC Government and the Blueberry River First Nation on development. Other Treaty 8 First Nations are expected to sign similar agreements in the coming days, in a process that will be closely watched in Alberta, especially in the oil sands region.

This follows the landmark decision of the Supreme Court of British Columbia in June of 2021 which held that the Crown had infringed Treaty 8 by “permitting the cumulative impacts of industrial development” which meaningfully diminished the treaty rights of the Blueberry River First Nation (see Yahey v British Columbia, 2021 BCSC 1287 (CanLII) at para 1884).

Other than that, I’ve got three bonus pieces for you this week.

First, I think we’ve all spent too much time talking about the Just Transition legislation this week, in the wake of Alberta Premier Danielle Smith’s apparently willful misunderstanding of a federal memo initially posted by Blacklock’s. The memo, which was prepared for testimony to the Natural Resources Committee of the House of Commons, details the size of the labour force in some of the key resource sectors of our economy - sectors which are expected to be affected by the energy transition. It turns out that, if you add up all the jobs in manufacturing, buildings, agriculture, transportation and energy, you get 2.7 million workers. There is no way to read the memo as claiming that all of these 2.7 million people will lose their jobs, but that’s where we are in Alberta politics today.

The second controversial part of the memo states the outwardly obvious: some skills are important in multiple sectors, and don’t change much when you go from working for an oil and gas company to a solar energy company. The memo chose janitors or drivers, perhaps a bit sloppily, but it could just as easily have read accountants, lawyers, administrators, and project managers. Yes, some people will see their jobs disrupted, and some communities will be hit hard by the energy transition (or simply by the consistent churn of the energy economy) but neither they nor the country or province as a whole were served by the dishonest rhetoric we saw from our government this week on this file.

The second interesting bit I want to flag for you this week is this graph from Rystad (via Keith Stewart). Wow, that’s a gut punch for the oil sands. It shows that, on a levelized cost- and emissions-per-barrel basis, new production from the oil sands is likely to be more expensive and higher emissions than all other remaining global oil resources. Ouch. Rystad tends to be a bit bearish on the oil sands, and as experts like the University of Calgary’s Kent Fellows pointed out, existing oil sands production is very low cost in a global context.

I did a little bit of oil sands emissions graphing of my own this week, updating my visuals for California’s low carbon fuel standard. As you can see, even relative to the average barrel refined in California, Canadian crude streams perform pretty poorly. Although, relative to California’s domestic production, we come out okay.

One more oil-related graph for you this week: gas prices. As of January 1, 2023, Alberta removed its fuel tax as part of election vote buying affordability measures and the impacts 20 days into this are interesting to say the least.

Relative to December average prices, you can see Edmonton and especially Calgary prices saw a huge spike before January 1, and prices here (like many Canadian markets) remain above December averages today. Interestingly, at least for Calgary, for much of the Christmas season, its prices were further below December averages than any other city in the country. Today, Calgary prices are almost 10% above the city’s December average, while most other cities have seen smaller increases.

Some things get lost to comparisons to averages. Edmonton and Calgary gas prices remain among the cheapest in the country but, contrary to what you might have expected, the gap between us and the average appears to have narrowed initially before and just after the gas tax cut, then we moved back closer to normal, before a big jump again this week.

Perhaps someone in the Premier’s office can make a phone call and see if the gas tax holiday is…

Too soon? Yes, probably too soon.

This week’s Energy Charts are posted at https://aleach.ca/charts.

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It’s been really interesting week back in the classroom for me, and there’s been lots going on in Canadian energy too.

This week, our students have 3 great links for you. Kayla’s got the timely story of the week with a look at Canadian LNG and the visit of the Prime Minister of Japan (more on that below). Marc’s got a piece on rare earth mining for renewable energy. And Yousaff is featuring the IEA Renewables 2022 report.

When talk turns to the IEA and renewable power, I’m always reminded of Auke Hoekstra’s famous graph, reproduced below. The degree to which major energy forecasts have missed the booming renewable energy market is lamentable, and it’s not even clear that we’re getting better at it. We might, in fact, be getting worse. As Yousaff points out, the IEA’s forecast has been (again) revised upwards this year, but the question is whether it’s been revised upwards enough. If history is any guide, the answer is no.

Other than this graph, I have a few other things to share this week.

First, I hope you had a chance to read my CBC piece on the so-called just transition this week. I tried to combine a bit of history, a mention of the Miramichi (one of my favorite places on earth), and a bit of scorn for both Prime Minister Trudeau and Premier Smith’s approach to this file.

Next, with respect to the business case for LNG in Canada, I ran across a graph I hadn’t noticed before in the IEA’s World Energy Outlook 2022 while prepping for class this week.

It shows three LNG demand scenarios, under the IEA’s current policies (STEPS), announced pledges (APS) and net-zero (NZE) scenarios compared with capacity currently-operating and in-construction. It’s stark. The message is clear: in the IEA’s view, at least on average, new LNG capacity is a bet against action on climate change. Now, this needs to be taken with a bit of a grain of salt. Gas use in aggressive climate mitigation scenarios is subject to really large uncertainty, as shown below (the scenarios get less climate-friendly as you go from left to right).

Still, the long-run business case for new Canadian LNG in a world acting aggressively on climate change is far from certain. It is possible that the world will follow a gas-based decarbonization, at least in the medium term. But, it’s also plausible that the combination of local supplies and gas alternatives mean that there is a limited role for LNG in a climate-constrained world.

Next, it’s STEO week, so I’d be remiss if I didn’t re-post my favorite oil demand graph from that report, tracking changes in forecasts since COVID was first reported. The picture remains one of an incomplete recovery, even with renewed activity in China.

And, finally, while I won’t bore you with a long rendition on the constitutionality of a federal cap on oil and gas emissions, a couple of things that the Premier has said on the topic this week are, at least in my view, incorrect. As she’s quoted in this column by Chris Varcoe, the premier feels that:

There is, at least based on my research in the area, nothing which would suggest that this specific statement is true. Federal policies including taxes, emissions pricing, fisheries legislation, and environmental standards affect resource production in the provinces all the time. Federal legislation can’t be specifically in relation to the primary production from natural resources in the provinces, but it can most certainly affect resource production. For example, consider the Supreme Court of Canada decision in Quebec (Attorney General) v. Moses in which the Court was to determine (among other things) whether the federal government could require a fisheries permit for a vanadium mine. The answer from the Court is an unequivocal yes - the province can legislate in relation to mining, but section 92A offers no immunity from the application of federal fisheries legislation:

[36] There is no doubt that a vanadium mining project, considered in isolation, falls within provincial jurisdiction under s. 92A of the Constitution Act, 1867 over natural resources.  There is also no doubt that ordinarily a mining project anywhere in Canada that puts at risk fish habitat could not proceed without a permit from the federal Fisheries Minister, which he or she could not issue except after compliance with the CEAA. The mining of non‑renewable mineral resources aspect falls within provincial jurisdiction, but the fisheries aspect is federal.

The question for a future court will be whether an oil and gas emissions cap is valid federal legislation, and it may or may not find as the Premier hopes. However, whether or not such an emissions cap causes oil production to be lower than it might otherwise be is unlikely to be a key determinant for the Court. To read more on the history of s. 92A, you can read my paper with Nigel Bankes on the subject here.

Have a great week.

Today’s updated energy charts are posted at https://aleach.ca/charts.

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For me, the most striking charts this week are in the natural gas section, with the global benchmarks chart showing the drop in European gas prices back to pre-Russian-invasion levels. This year, a warm winter in Europe is good news.

North American hub prices are also down strikingly from laste summer highs, in particular in Ontario and on the US Gulf Coast. Alberta and BC prices have been all over the map this Fall, so it’s hard to say whether we call this past month an increase or a decrease!

Our students have a couple of stories this week on coal, one on Alberta employment and the latest spat with Ottawa, and one on lithium markets this week. As I always tell my students, there’s an IEA report for every viewpoint, you just have to look. This week, Yousaff is reporting on the IEA’s coal report, which showed new record coal demand. And, Marc’s got a little plug for yours-truly on the federal Just Transition legislation. Erica’s lithium story serves to tee-up my first little tidbits of the week below.

Lithium was already on my mind after one of my favourite Twitter follows, Hannah Ritchie at Our World In Data, had a great thread on lithium reserves and resources, and Rory Johnson was tweeting about reserves and resources and how these numbers tend to lead people to panic. I want to highlight a couple of graphs from Dr Ritchie’s thread here.

The first graph in Dr. Ritchie’s thread is similar to graphs which we’ve seen for countless resources over time, yet one from which we never learn the appropriate lessons. Reserves are not, at least in any limited sense of the word, a physical concept. They are an economic concept - the ultimate endogenous variable. We don’t explore for that which we don’t value, nor in areas in which we are confident that any resource that exists could not be profitably extracted. Of those resources we do find, only those which are technically and economically (read: profitably) recoverable count as reserves. And, if you’re getting down to corporate reserves (the 1P and 2P reserves in a company’s annual reporting), those essentially boil down to a high-confidence production forecast conditioned on a price outlook. The amount of a resource that may be recoverable (and thus converted to reserves) under different pricing and technology assumptions can be radically different. And, that’s part of why Dr. Ritchie’s first graph is not surprising at all: the global lithium market has changed dramatically, as Erica’s story this week shows, and so more of the lithium we know about is now expected to be economically recoverable.

The next graph in Dr. Ritchie’s thread also shows that we’re finding more lithium. Again - the market has led to us to look for it, and we’re finding it.

Worries that we’re not going to have enough resources are as old as mineral resource use. This thread led me to take a wander back in time to the 1860s and William Stanley Jevons (yes, the Jevons paradox guy) and his book The Coal Question where, not surprisingly, he’s worried about coal stocks.

This is an important question because, you see, there are no real substitutes for coal.

And we’re going to run out and it’s going to be bad.

Of course, we’ve found many substitutes for coal in most of its 1860s uses (steelworks remain very coal-centric) and, as if to put a fine point on this, more than 160 years after Jevons’ worrying, the UK just announced the permiting of a new coal mine! And, of course, as Yousaff reports, we just saw record global coal consumption.

Other than coal and 1860s energy fears, I have a few other things to bring your way this week.

First, the quarterly oil and gas finance survey from the EIA is up. It was up a bit earlier than expected, so I’m late to it. I’m never sure why these reports get so little play (maybe because they’re buried on the site and the data aren’t in the API?) but they have some important information. This graph, showing than Q3 capital expenditures was the first quarter in which we saw the oil and gas industry back to pre-pandemic capital expenditure levels was the most striking.

Let’s take a bit of a deeper look though. One of my issues with this report is that they don’t report with a long time-series in the quarterlies, but they do have some longer graphs in their annual report. So, let’s zoom out and back to reports from a few years back. If you’ll note the y-axis, you’ll see that the expenditures we’re reporting for Q3 2022 right now are about $70 billion, while Q3 2015 (which was just as things were really crashing globally) was down to $80 billion (in money of the day).

On this December’s graph, the 2018 data look like a boom. Well, this visiual should remind you all of how that year compares to what was happening in 2014, for example.

And, before I move on, I should remind you of one more thing that you can get from these reports: a sense of how investment in oil and gas has evolved globally by country and year (only in the annual report).

This is always my favorite graph, since it reminds us all just how far reaching the Notley-Trudeau alliance really was. They single-handedly cut global oil and gas investment in half, and it’s never recovered.

And, the last bit before I get back to course prep: Alberta gas and electricity prices. We had a great thread this morning from Blake Shaffer showing people that power forward prices remain well-above the current offered fixed price regimes, especially when you account for the fact that staying on the regulated rate option price will include paying back the government caps through deferral accounts later on. But, it’s the second graph in the thread that’s really interesting. Natural gas has now dropped enough that forward contracts are settling below the fixed price offerings available right now for Alberta consumers. Professor Shaffer says it’s time to float!

With natural gas prices well below $5, it’s really striking that power forwards haven’t moved much at all. Must be the carbon tax...

Have a great week, and wish me better computer luck next week!

This week’s Energy Charts are posted at https://aleach.ca/charts.

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This week, we’ve got stories from Marc Vermette on Nova Scotia Biomass and two from Erica Beattie on Keystone and German coal. Erica’s German coal story was the one that most caught my attention, since we’ve heard a lot over the years about how far ahead Germany is in the energy transition. For a time, you could not talk about renewable power without someone extolling the virtues of the Energiewende…it was almost as bad as the Norwailing that comes when anyone talks about oil wealth in Alberta. The reality, of course, was always more muddled. Germany was building new coal plants as Alberta was planning a phase out, walked away from its nuclear fleet, and relied much more on Russian gas than was adviseable at the time. And now, they’re needing to find a way to reduce that reliance, in a hurry.

Before I move on to my hot takes for the week, a bit of staffing news. As the semester winds to a close, we’ll say goodbye to two of our writers, Keshinee Moonian and Debosree Mukherjee. Marc, Erica, and Yousaff Habib will join Kayla Layden writing through next term, along with some guest spots from a few of our students doing interesting new electricity research. Thanks, Deb and Keshi for your work getting the weekly charts back up and running over most of the last year.

This week, I want to highlight four things.

First, of course, we set two new peak load records in Alberta power this week, with peak system load of 12,187MW on December 19th between 5 and 6 pm, and then a slightly lower 12,101MW peak on December 20th (although a more challenging grid situation because of less wind that day), and a new record 12,193MW on December 21st.

Prices were pinned to the $1000/MWh cap for much of the day on the 21st after the coal-converted-to-gas Keephills-3 power plant was unepectedly offline for much of the early part of the day, and then record loads and limited import availability hit later in the day. We were lucky that the wind was blowing a bit on the evening of the 21st, or things might have been a lot different as reserve margins were perilously thin in the early evening.

Looking ahead, Alberta forward power prices continued to creep up, with the flat contracts now settling above $300/MWh for the coming months and pushing up a bit in the back part of the 2023 calendar year too.

For the rest of the week, all eyes turn south to the US grids where reliability issues are already rearing their heads as much of the US grapples with the coldest Christmas in 40 years.

The second highlight I’ll raise for you is the continued spike in California gas prices, which settled at nearly $60 per MMBtu on a cash basis yesterday. Prices were down a bit today, but that’s definitely something to watch as the price effects ripple into the power market.

Next, on the climate change front, this thread from Hannah Ritchie at Our World in Data is fantastic. It’s easy to lose sight of how much things have changed both globally and in Canada with respect to our emissions projections and energy transition expectations. We still have a long way to go, but don’t let anyone tell you we’re not making progress.

And, finally, a little bit of an early Christmas present for Alberta Premier Danielle Smith and Finance Minister Travis Toews as oil prices had a much better week this week. We’re not talking about a staggering recovery or anthing, but the trend pushed back a bit in the right direction for the provincial budgets.

The WTI forward contract has seen a significant jump in the front months, with almost no movement further out in the strip. Combined, this has pushed us back into backwardation across the WTI forward market. Yes, I just wanted to sneak that word into the weekly again.

For next week, I’ll probably run a quick update just to wrap the year, and I’ll hopefully have some new graphs for you as I work to prep for Winter term teaching as well. Students will be off for a couple of weeks, or at least they’re not expected to write anything, but you never know…

Happy holidays and stay warm!

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In this week’s student stories, Youssaf Habib has a piece on this week’s fusion news, and deserves a shout out because he was the first person to bring the news to my attention. You can feel his excitement about it in the piece. Marc Vermette’s got a story on Vietnamese renewable funding to fill in some international news.

I’ve got six things for you this week.

First off, I must make up for my missed EIA STEO update from last week.

My focus with the STEO continues to be the liquids demand outlook which, true to form, keeps trending downward, with consumption now not expected to get back to pre-COVID levels before late 2023. Pre-COVID, the EIA had forecast 105 million barrels per day of demand by the time last year. At it sits, we’re likely to be much closer to 100 million barrels per day than 105 million. A reminder that I keep a cache of a few STEO graphs updated here and you can access this and other similar data pages at my Projects page, although some I only update when specific classes are in session.

Still on the oil front, I should highlight another great piece from Rory Johnston at Commodity Context on the Keystone spill. As you can see from Rory’s slide below, the point of the spill, just downstream of the Wood River/Patoka lateral, means that this spill will have less immediate impact on the price of Canadian crude since, south of Steele City, there are other alternatives not available north of that point.

And, this afternoon, via Giovanni Staunovo, I learned that a specific Strategic Petroleum Reserve deal would help compensate for some of the barrels stranded by the spill.

Closer to home, Calgary economist Blake Shaffer tweeted this image of Alberta power forwards, with a few comps that we don’t have in our weekly graph, so I thought it was worth sharing (and maybe also worth modifying ours).

The not at all a forecast of winter prices implied by the forward settlements just keeps getting worse for consumers (better for generators) for this winter and over the longer term as well as shown in our graph clipped below.

Also in the wholesale power market, we got really close to a coal-free hour this week, with a period with only one coal plant operating in the province. When will we see the first coal-free hour? My bet is sometime in late-April or early-May.

Next, as some of you will know, I’m teaching a utilities law class in the Faculty of Law this winter (yes, there are still seats!) and that’s led me to spend a lot of time in the bowels of the AUC eFiling system this week building a reading list. But, one thing you don’t have to go too far to see is the new rates for electricity distribution for 2023, and they’re not pretty. For a typical residential consumer, both EPCOR (10.8%) and ENMAX (15.6%) have been approved for large increases, while Fortis (6.2%) was approved today for a smaller increase.

Thanks to Blake Shaffer (again) and Jim Wachowicz for keeping me in the loop on these changes.

And, finally, make sure you take note of our North American gas hubs chart this week, with Algonquin (New England) joining the California hubs in pricing through the roof, although all three are down a bit at close yesterday. I’ve added SoCal Citygate pricing to our usual set this week, although the PG&E hub price captured the trend well before.

Have a great week. I’ll have some updates (likely story-free) over the break, and then we’ll be back to regular programming.

This week’s energy charts are posted at https://aleach.ca/charts. A few missing charts this week due to another EIA API outage.

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Our lead story this week is the 14,000 barrel spill on the Keystone pipeline in Kansas. That’s a big spill - one of the largest on-shore spills in US history - and it will raise more questions about the safety of the controversial Keystone project.

The Keystone spill is also bad news for an already tumbling western crude oil outlook. Discounts on Canadian crude have been steep all Fall, and if Keystone is offline for any length of time, this will get worse quickly. Combine this picture with another $10 per barrel drop in crude oil prices this week, and there’s a lot of bad news for Canadian oil producers.

Our students (exam procrastination is real!) have additional stories this week on Canadian oil majors’ investment outlooks, renewable energy for remote northern regions, and the IEA Renewables outlook.

Normally, we’d be doing EIA STEO charts since it was out this week, but that’s squashed due to the API outage. You might see some bonus charts this weekend (grading procrastination is real!). In lieu of the STEO, I’ve got two items for you this week, both focused on Alberta electricity.

First, for Jason Kirby’s annual chart week (now at the Globe and Mail), I’ve decided to focus on the evolution of Alberta’s electricity mix and the pending coal phase out. I wanted a simple chart that really got the point across, so here it is:

This week, I also decided to update my solar power reports for my household system (7.6kW, south-facing in Edmonton), and I thought I would share a couple of those.

First, it turns out that the sun doesn’t shine all the time. While this may not be shocking to many of you, I can assure you that I will receive at least one reply emphasizing the point. As you can see, while our days are highly variable, the monthly average pattern is quite predictable from year-to-year.

You might be interested in how the system is performing financially, and so far it’s much better than expected. The recent high prices haven’t changed matters much since I am generally on a high-priced contract over the summer. The winter will see some larger bills for sure, with December and January likely to see my highest bills since we installed the system, and not much generation as you can see above. Still, we’re saving about $82/month from our solar system, and the system cost us a bit more than $13,000 to install in 2017. If this keeps up, we’ll see a subsidized return of about 5.5%, while the unsubsidized return would have been about 2%.

And, finally, here’s a sense of how far we are from net-zero overall. We’ve had two years (2017-18 and 2021-22) where we’ve generated more than we’ve used but, since we installed the system, we’re about 320kWh short. We have 27 panels on the roof, and we either needed a 30 panel (8.4kW) system or we would have had to be a bit more judicious in our power use to end up net-zero overall.

I still get a lot of non-use value from my solar array, and so my private return on investment is well in-the-black. It’s a bonus that the financial returns are a bit above the rates of interest on my mortgage, which is probably where we would have otherwise put the money we spent on the panels!

Have a great weekend.

It’s been quite the week here in Alberta, and our weekly charts are posted at https://aleach.ca/charts.

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As we head into December, the student story pipeline dries up a bit as, not surprisingly, they have other demands on their time, and so this week’s charts are story-free.

However, you still get a follow-up from me on a few things happening around Alberta.

First, after my rant of last week, Nigel Bankes flagged some important information in the Market Surveillance Administrator’s quarterly report for Q3 2022 that addresses some of the causes of high power prices in Alberta right now. Let’s start with gas prices: in last week’s rant, remember that I took issue with AESO CEO Mike Law’s characterization that “everybody knows, I think within Alberta, the price of natural gas has gone up fairly significantly over the last year or so. So input costs have gone up, as have carbon taxes that are applied to the large generators.” So, let’s look at how natural gas prices (red) have evolved since 2020 on the graph below vs. how power prices (in blue) have evolved. Even before the recent price spikes, the Alberta market had become decoupled from natural gas prices.

Natural gas prices are certainly up, but since early 2021, after the expiry of the last of the power purchase arrangements (PPAs), offers made by the largest firms in the market changed dramatically. You can see below how, almost overnight, this led to less capacity offered into the market at low prices.

And, another way to visualize this, we went from 88% of the market installed capacity available at prices less than $120/MWh last year to only about 73% of the market this year, and saw 20% of the market’s capacity offered in at prices above $700/MWh, compared to 5% of capacity a year earlier. Gas prices didn’t increase that much, Mike.

Carbon pricing provides another interesting angle. From 2021 to 2022, carbon prices did increase, by $10 per tonne to $50/tonne in Alberta. The average emissions intensity in the province has been dropping rapidly, and this year ranged from 0.4 to 0.6 tonnes per MWh. All participants are eligible for carbon credits at a rate of 0.37t/MWh, so that means that the total impact of the carbon price on average costs ranged between $0 and $12/MWh during Q3 2022, basically the same as the range from 2021 when emissions were higher but nominal carbon prices were lower. If you’re looking for what’s causing triple-digit increases in power prices, it’s not carbon pricing.

All the figures above are sourced from the MSA. And, to be clear, there is nothing wrong with firms charging more for electricity and taking profits in times of market tightness: that’s how our system is designed. But, the system operator should either take a pass on commenting on market price outcomes or should be honest with Albertans about what’s truly behind the cost increases and what the evidence truly shows is that it’s market concentration and more economic withholding.

The good news for consumers, if there is any this week, is that the power forwards were down a bit for the coming couple of months.

Other news this week:

On the climate-change front, re-insurance giant Swiss Re issued its estimate of $115 billion of insured losses from natural disasters this year, a bit below last year, but well above the 10-year average (h/t ).

In oil markets, we saw agreement today on a Russian oil price cap, which seems unlikely to change a lot in crude markets overall. We might see more action after the OPEC+ meeting on December 4th in terms of overall reaction.

In gas markets, the AECO-NIT resurgence continues, with prices now back to par or close to it with Henry Hub, and even Station 2 showing lower basis differentials than we’ve seen for some time.

Globally, we’ve seen a renewed increase in European gas prices and a continued slow climb in Asian LNG settlements.

And, domestically, gasoline prices continue to moderate dramatically (not as much when measured in Bitcoins/litre, mind you) while diesel (ex Ontario, where prices have come down) remains high.

Finally, for this week, a bit of an Alberta fiscal update. I think this graph says it all.

One of my enduring theories of Alberta politics was broken this year, as confirmed by the November 24th fiscal update. Historically, the Premiers who saw significant per-capita real revenue growth are the legends, Klein and Lougheed, while others who saw revenue stagnate or decline are unpopular or worse. However, Jason Kenney seems poised to have broken that trend with both the highest rate of growth and highest level of per-capita government income during his time as Premier. I’ll share a graph of that with you all next week after I port all this data to R.

Have a great weekend.

Andrew