The future of New England’s electric power market is becoming clearer, signaling operational and price volatility as significant risks. The regional grid is soon to lose a major nuclear power plant to retirement. It has struggled to keep other fossil fuel plants online for grid stability in the face of low natural gas prices and growing renewable power. With more New England states boosting clean energy mandates, the risk of grid stability increases. Clean energy mandates boosting renewable power lie beyond the scope of ISO-NE. Moreover, these new energy sources are given preferential access to the grid, adding more power intermittency to the system. New England is gradually returning to its prior regulated power structure, only this time it is the states rather than utilities dictating which power plants will be built and what their electricity will cost. With the loss of more fossil fuel and nuclear capacity, by 2024, it is projected that 57% of the region’s power will depend on natural gas, highlighting a significant risk if the region cannot access sufficient supply, and potentially higher prices in the future. The system may be heading for a cliff that few see.
The unfettered use of open-loop scrubbers by ships to meet the IMO 2020 low-sulfur fuel regulation coming into effect in 10 months is being restricted by various governments and ports who do not want the wash-water discharged in their waters. The European Commission has rushed a rule request before the IMO panel’s meeting in May so it may deal with the issue in hopes of gaining clarity. Exactly what their objective is remains unclear. Is it a standardization of how wash-water will be handled worldwide, or is it a backhanded attempt at discouraging the use of these systems? Scrubbers have been approved by the IMO following extensive review of the scientific evidence of their success in removing sulfur from exhaust gas while not creating environmental issues with the wash-water discharge. The May hearing will provide resolution of the uncertainty behind the EC request, and whether it become another hurdle for shipping companies to overcome in order to comply with IMO 2020.
The State of the Polar Bear Report 2018 says they are doing just fine, thank you. That is not the message environmentalists would like you to believe, which is why they pounced on a news story about 50 aggressive polar bears besieging a Russian town. The report, based on faulty reporting, said the bears were hungry due to climate change limiting their food supply. The reality is these bears were fat and healthy, but had discovered it was easier to scrounge food from three garbage pits located by the village than hunt for themselves. Susan Crockford, a zoologist and long-time student of polar bears, and someone we have communicated with in the past, wrote the new report for the Global Warming Policy Foundation. One thing she pointed out is how the Inuit, who co-exist with the two-thirds of the polar bear population living in the Canadian Arctic, are upset with the views of “scientists” who claim the population is shrinking. The Inuit believe these scientists value polar bear lives more than they do humans. Importantly, the Inuit, because of their political position, may change the regulation of polar bears in the Arctic, effectively changing the entire debate.
Canada continues to struggle with an oil industry seeking to grow, but lacking adequate pipeline and rail export capacity. This production/export imbalance weighed on oil prices in 2018, forcing Alberta to institute a mandatory output cut. The Trans Mountain pipeline expansion was once again approved by the NEB, but it still faces more of the regulatory process, and likely further legal challenges. This comes as Enbridge announces a year’s delay in its Line 3 expansion startup. More oil-by-rail capacity is coming, as Alberta has announced details about the startup of its new operation. All of this oil industry activity will be caught up in the upcoming election battles in Alberta and nationally this year. Add to the mix the current political scandal engulfing Prime Minister Justin Trudeau’s government over the criminal prosecution of SNC-Lavalin, a global energy engineering company headquartered in Montreal, for illegal acts. The turmoil that engulfed the Canadian oil industry last year is not about to end anytime soon.