Crescent Point continues to grow production in Kaybob Duvernay

Amanda Stephenson, The Canadian Press

Crescent Point Energy Corp. says its $900-million acquisition of Shell Canada's Kaybob Duvernay assets in 2021 has performed so well that the assets will have paid for themselves by the end of the first quarter of 2023.

"We've been very pleased with this asset since entering the play in 2021," Crescent Point chief operating officer Ryan Gritzfeldt told a conference call to discuss the company's fourth-quarter results. 

"We are currently on track to generate approximately $900 million of excess free cash flow . . . by end of first quarter 2023. This equates to a very quick two-year payback on our original acquisition."

Crescent Point, which has drilling operations in Alberta, Saskatchewan and North Dakota, has been fortifying its position in the Kaybob region of northern Alberta since making that first blockbuster purchase of assets two years ago.

During the third quarter of 2022, the company acquired additional assets in the Kaybob Duvernay for about $87 million, and in December 2022, it announced a $375-million deal with Paramount Resources Ltd. to acquire yet more Kaybob assets.

"After nearly two years of operating within the basin, we made the strategic decision in late 2022 to increase our land position, and in so doing, have increased our drilling inventory in the play to over 20 years," Gritzfeldt said.

He added Crescent Point now plans to grow its Kaybob Duvernay production from 40,000 barrels of oil equivalent per day to over 60,000 boe/d within the next five years.

Crescent Point Energy announced a special dividend Thursday as it reported a loss in its latest quarter, weighed down by a one-time impairment charge.

The company said it will pay a special cash dividend, based on its fourth-quarter results, of 3.2 cents per share on March 17, to shareholders of record as of March 10. The payment is in addition to the company's regular quarterly dividend of 10 cents.

Crescent Point reported a fourth-quarter loss of $498.1 million or 90 cents per share for the quarter ended Dec. 31 compared with a profit of $121.6 million or 21 cents per share in the last three months of 2021.

The company said its adjusted profit from operations amounted to $209.8 million or 38 cents per share for its fourth quarter, up from $160.0 million or 27 cents per share a year earlier.

Average daily production for the quarter amounted to 134,124 barrels of oil equivalent per day, up from 130,407 in the fourth quarter of 2021.

Crescent Point is forecasting crude oil prices for 2023 to hover around the US$75 per barrel for the benchmark West Texas Intermediate.

The company's heavy weighting in oil means that any $5 increase over that $75 WTI price will generate approximately $200 million in additional cash flow.

https://www.shaleexperts.com/plays/duvernay-shale/Overview?menu

Duvernay Shale Overview - Maps - Geology - Counties 

The Duvernay Shales have been credited as the source rock for many of the large Devonian oil and gas pools in Alberta. The most famous is The Leduc Field ...

The Duvernay Shale in Alberta has significant potential for oil and ... 

Jun 30, 2022 ... However, the Duvernay's oil resource is much smaller than the remaining bitumen reserves in Alberta's oil sands (165 billion barrels).

https://en.wikipedia.org/wiki/Duvernay_Formation

Duvernay Formation - Wikipedia 

The Duvernay Formation is a stratigraphical unit of Frasnian age in the Western Canadian ... Calgary-based, Athabasca Oil Corporation (formerly Athabasca Oil Sands ...

JUST WHAT THE TORIES WANT

Canadians fear China swayed elections that put Trudeau in power: Poll

Brian Platt, Bloomberg News

Two thirds of Canadians suspect China attempted to interfere in recent elections that returned Prime Minister Justin Trudeau and his Liberals to power, according to a new poll.

More than half think the alleged meddling represents a serious threat to Canada’s democracy. A similar proportion says Trudeau’s response to the simmering scandal hasn’t been tough enough.

A series of recent media reports that cited secret intelligence documents alleging China attempted to interfere in the 2019 and 2021 votes has brought the issue into the spotlight. Trudeau has so far resisted pressure to call a public inquiry into the matter.

While the strongest belief in Chinese interference comes from supporters of the main opposition Conservatives, the survey published Wednesday by the Angus Reid Institute found majority support for the notion among backers of all parties.

“The political aspect of this is undeniable,” Angus Reid President Shachi Kurl said by email, flagging the belief among Conservatives that China denied them an election win in 2021. “This is significant because it runs the risk of further undermining trust in the election process.”

Overall, 32 per cent of respondents said China definitely tried to interfere in recent Canadian elections and 33 per cent said it probably did. Only 6 per cent answered a definitive no to the question.

‘STOLEN’ VOTE?

On Tuesday, a non-partisan group of government officials released a study on the integrity of the last national vote, in which Trudeau secured a third term but fell short of a parliamentary majority that would have allowed him free reign to pursue the Liberal government’s agenda. 

“National security agencies saw attempts at foreign interference, but not enough to have met the threshold of impacting electoral integrity,” the panel said.

Angus Reid, however, found that 42 per cent of Conservative voters said they thought the 2021 election was “stolen” due to Chinese interference, compared to tiny support among those backing left-leaning parties.

While Trudeau and Chinese President Xi Jinping have clashed in public, the Liberals are seen as more open to doing business with the Asian superpower than the Conservatives, who take a hard line on human rights issues and national security concerns.

China maintains it doesn’t interfere with Canada’s internal affairs and has warned that the northern nation should stop “smearing” Beijing’s government with what it calls unfounded allegations.

It’s too soon to tell if the issue will do lasting damage to Trudeau, according to Kurl. “These data offer an early directional arrow in terms of expecting the PM and his government to be seen to be taking this issue more seriously,” she said. 

The poll found that 53 per cent of respondents think Trudeau’s response to the allegations hasn’t been strong enough, and want to see Canada take further action. About 64 per cent said they believe Canada doesn’t put enough focus on national security and defense.

Asked if Trudeau’s government is “afraid to stand up to China,” 69 per cent said they agree.

Reporting by broadcaster Global News and the Globe and Mail newspaper has alleged Trudeau received secret intelligence briefings saying China attempted to get certain candidates elected to parliament, and preferred to see his Liberals govern the country over the Conservatives.

The prime minister has called the stories inaccurate, but declined to go into detail about what exactly he disputes. The reports included claims that China spread misinformation to hurt certain candidates, and funneled money and volunteers toward people it wanted to see elected. 

A parliamentary committee is studying the matter, and will hear testimony later Wednesday from government witnesses including Trudeau’s national security adviser, Jody Thomas.

The Angus Reid survey was conducted online between Feb. 23 and 25 among a representative randomized sample of 1,622 Canadian adults. The firm said that for comparison purposes, a probability sample of this size would carry a margin of error of 2 percentage points, 19 times out of 20.

Nordstrom closing all of its Canadian stores, cutting 2,500 jobs

Tara Deschamps, The Canadian Press

Nordstrom (JWN:UN)

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Nordstrom Inc. is closing all of its Canadian stores and cutting 2,500 jobs as it winds down operations in the country.

The Seattle-based retailer has six Nordstrom and seven Nordstrom Rack stores in Canada, which it announced Thursday will be shuttered by late June. Its e-commerce business, nordstrom.ca, was due to cease operations by the end of the day.

Chief executive Erik Nordstrom said the closures were the result of regular reviews the company conducts that challenged its longtime plans "to build and sustain a long-term business" in Canada.

"Despite our best efforts, we do not see a realistic path to profitability for the Canadian business," he said in a statement.

"This decision will simplify our structure, intensify focus on our growth and profitability goals and position us to create greater value for our shareholders."

CTV NEWS: These are the locations where Nordstrom will close its stores in Canada

Nordstrom, an upscale department store chain that sold a mix of designer goods, first announced plans to expand to Canada in 2012 and opened its first store in Calgary at CF Chinook Centre in September 2014.

It quickly expanded its presence with stores at CF Rideau Centre in Ottawa, CF Pacific Centre in Vancouver and CF Eaton Centre, Yorkdale Shopping Centre and CF Sherway Gardens in Toronto.

Nordstrom Rack, which promised luxury brands at bargain prices, followed with several locations. When it opened its first Rack store in Canada in 2018 at Vaughan Mills, a mall north of Toronto, it said as many as 15 more could follow.

The company said its Rack stores would deliver savings of up to 70 per cent on apparel, accessories, home, beauty and travel items from 38 of the top 50 brands already sold in its Canadian department stores.

The Canadian closures were "probably the right choice" and show the company has a lack of confidence in how it could continue to support Canadian losses, said Neil Saunders, the managing director of GlobalData, a retail research agency.

"Although the division is relatively small, and the Canadian market has somewhat limited potential because of its size, it is nevertheless a significant admission of failure that Nordstrom cannot make its proposition work financially," he wrote in a note to investors.

"It also underlines the rather tenuous position of the company which wants to focus is finances and firepower on reinvigorating the U.S. operation."

Nordstrom's wind down is being completed through an order obtained by the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act.

It intends to seek court approval later this month for a liquidation sale, which would begin shortly after.

Nordstrom Canada gift cards will continue to be honoured to the end of the liquidation period, though none would be made available for purchase after Thursday.

Returns and exchanges will be permitted until March 17 at which point all sales and returns will be considered final.

The Canadian wind-down came as Nordstrom released its fourth quarter results, which included net earnings of US$119 million in the period ended Jan. 28. That compared with net earnings of US$200 million during the same period the year before.

As a result of the Canadian closures, Nordstrom expected to record US$300 to US$350 million in pre-tax charges in the first quarter of fiscal 2023.

The wind-down is expected to result in a roughly US$400 million decline in net sales.

Suncor Energy selling North Sea offshore assets in deal valued at $1.2B

Amanda Stephenson, The Canadian Press

Suncor Energy Inc. has taken another step toward streamlining its business, signing a deal to sell its offshore assets in the North Sea to Equinor UK Ltd. in an agreement valued at about $1.2 billion.

The deal announced late Thursday comes after Suncor put the assets up for sale last year.

"The decision to sell our UK Exploration & Production business is a clear example of our commitment to optimize our asset portfolio," interim CEO Kris Smith said in a news release.

The deal includes Suncor's non-operated 29.9 per cent stake in the producing Buzzard field as well as its 40 per cent stake in the Rosebank development, which is operated by Norwegian multinational Equinor and located about 130 kilometres northwest of the Shetland Islands.

The transaction is expected to close in the middle of this year.

Suncor has been selling non-core assets to focus on its main oilsands and downstream businesses.

Last year, it announced it would sell its wind and solar assets to Canadian Utilities Ltd. for $730 million and in another deal agreed to sell its exploration and production assets in Norway for $410 million.

The company also considered the possible sale of its Petro-Canada retail chain, but announced in November it would keep the business as it was unlikely to receive the price it believes the chain is worth.

Suncor's efforts to streamline its operations are part of an overall plan to boost performance at the Calgary-based energy giant. Last year, the company reached a deal with activist investor Elliott Investment Management LP, which had expressed frustration with the company's lagging share price, safety record, and streak of operational challenges.

Suncor will also soon have new leadership, as Rich Kruger -- who led Imperial Oil Ltd. as president and CEO from 2013 until 2019 -- will become CEO on April 3.

Kruger was named to the post after a months-long search, and will replace Smith who has been doing the job on an interim basis since Mark Little resigned in July 2022 amid investor pressure.

KOREA

[Editorial] Embarrassing subsidy standards

Just two years ago, big Korean companies’ aggressive investments in the United States were flagged as the symbol of the Korea-U.S. alliance. U.S. President Joe Biden mentioned Korea’s household corporate names for their generous investment every time he met with Korean presidents. During his summit with president Moon Jae-in in May 2021, Joe Biden saluted the representatives of Samsung, Hyundai Motor and SK.

While stopping in Korea for his summit with President Yoon Suk Yeol in May last year, Biden went straight to the chip factory of Samsung Electronics in Pyeongtaek, Gyeonggi, to highlight the “tech alliance” of the two countries. The chip alliance was dubbed a “win-win strategy,” as the U.S. can strengthen its chip ecosystem on home while Korea can penetrate deeper into the U.S. market.

But the provisions of the U.S. CHIPS and Science Act confound us. Under the terms, foreign companies receiving U.S. subsidies must share their excess profit with the federal government and report their finances, including cash flow, in detail. They also cannot expand their chip production facilities in China for 10 years. The U.S. government claims the conditions are necessary in return for the $39 billion tax fund to foreign chipmakers ultimately desgined for the interests of the U.S. economy and security.

But the demands can seriously infringe on corporate sovereignty. Chipmakers are sensitive in disclosing their chip processing technologies. Korean companies could be victimized by the “Make America Great Again” slogan by Biden. He has been as demanding as his predecessor Donald Trump, albeit in less blunt rhetoric.

The Korean government must stand up for its companies. The economy and security must move as one. The Ministry of Foreign Affairs and the Ministry of Trade and Industry last year fought over who should have the jurisdiction over trade diplomacy. They must prove their worthiness if they mean well.

Korea must not make any concessions with its chip competitiveness to maintain the edge over China and the U.S. The most advanced processing technology and R&D facilities must not leave the country. The legislature must hasten with the chip support legislation to help secure the competitiveness of its semiconductor industry.

Multibillion-dollar investments in the U.S. mean less jobs for Korea and less exports for the country. Still, Korean companies went on with massive-scale investments in America on expectations of mutual benefits. The U.S. solely seeking its own benefit while stressing the tech alliance for the realignment in supply chains is not acceptable. The two governments must strike a good balance if they really do not want to damage their bilateral relationship for the future.

Sunday
March 5, 2023

Why Buses are Key to Improving U.S. Public Transport

Rapidly extending bus networks would be the fastest, most economical way to grow transit ridership in the sprawling landscape of American metros.

By Nicholas Dagen Bloom
March 5, 2023

Buses lack the flashiness of other modes of mobility, but they're the most efficient for expanding public transport to those who need it the most.


Public transit in the United States is in a sorry state — aging, underfunded, and losing riders, especially since the COVID-19 pandemic. Many proposed solutions focus on new technologies, like self-driving cars and flying taxis. But as a researcher in urban policy and planning, I see more near-term promise in a mode that’s been around for a century: the city bus.

Today, buses in many parts of the U.S. are old and don’t run often enough or serve all the places where people need to go. But this doesn’t reflect the bus’s true capability. Instead, as I see it, it’s the result of cities, states, and federal leaders failing to subsidize a quality public service.

As I show in my new book, “The Great American Transit Disaster: A Century of Austerity, Auto-Centric Planning, and White Flight,” few U.S. politicians have focused on bus riders’ experiences over the past half-century. And many executives have lavished precious federal capital dollars on building new light, rapid, and commuter rail lines, in hope of attracting suburban riders back to city centers and mass transit.

This was never a great strategy to begin with, and the pandemic-era flight of knowledge workers to home offices and hybrid schedules has left little to show for decades of rail-centric efforts. Meanwhile, countries in Europe and Latin America have out-innovated the U.S. in providing quality bus service.

But it doesn’t have to be this way. Many U.S. cities are coming around to the idea that buses are the future of public transit and are working to make that vision real. And the Bipartisan Infrastructure Law enacted in 2021 is providing billions of dollars for new buses and related facilities. The car-centered U.S. transportation system has impoverished public transit and left many people’s transit needs unmet.

Buses as Disruptors

A century ago, motorized buses were the technological wonder of their day. Rolling fast on tires over newly paved streets, buses upended urban rail transit by freeing riders from aging, crowded, screeching streetcars. In 1922, American buses carried 404 million passengers; by 1930, they were carrying 2.5 billion yearly.

At that time, transit lines were mostly privately owned. But this model was failing as riders became car drivers, new zoning laws prioritized car-friendly single-family housing and government regulators battled transit companies over fares and taxes.

Transit executives trying to eke out a profit saw buses as a way to reduce spending on track maintenance and labor costs for “two-man” operated streetcars. City leaders and planners also embraced buses, which helped them justify removing streetcar tracks to make streets more navigable for cars. From the 1920s through the 1960s, nearly all U.S. streetcar lines were replaced with buses powered by either internal combustion engines or electric overhead wires.

This wasn’t just a U.S. trend. Toronto massively extended bus service across a vast metropolitan area between 1954 and 1974, using buses to feed suburban riders to a new subway system and a few remaining streetcar lines. By 1952, London’s managers had replaced streetcars with the city’s signature fleet of double-decker buses, which complemented its legendary Underground service.

Across Europe, cities relied on buses to support and complement their modernizing tram or subway networks. Political leaders provided deep subsidies to deliver better bus and rail service.

The Auto-Centric U.S. Path

In the U.S., however, federal investments in the same time frame focused on building a national highway system to serve private automobiles. Lacking tax subsidies, bus networks could not compete with cheap cars and government-funded highways. Aging buses and infrequent service became the default postwar reality – and those buses had to travel on local streets crowded with private cars.

Between 1945 and 1960, U.S. transit companies and agencies typically lost half or more of their riders as white Americans moved to urban fringes or suburbs and became car commuters. Bus service remained concentrated in older, central-city neighborhoods, serving a disproportionately nonwhite, low-income ridership.

Many public systems had to cut bus service year after year to balance their books. Only a few cities that were willing to provide significant operating subsidies, including San Francisco and Boston, were able to maintain better bus networks and some trolleybuses.

New, Better Buses

Today, there’s renewed interest in improving bus service in the U.S., inspired by innovations around the globe. The Brazilian city of Curitiba, which is well known for its innovations in urban planning, set a model in the 1970s when it adopted bus rapid transit — buses that run in dedicated lanes, with streamlined boarding systems and priority at traffic signals.

Curitiba helped popularize bi-articulated buses, which are extra-long with flexible connectors that let the buses bend around corners. These buses, which can carry large numbers of passengers, now are in wide use in Europe, Latin America, and Asia.

A bi-articulated bus in Metz, France.

 (Image Credit: Florian Fèvre)

Cities across the globe, led by London, have also aggressively expanded contactless payment systems, which speed up the boarding process. Advanced bus systems and new technologies like these flourish in regions where politicians strongly support transit as a public service.

In my view, buses are the most likely option for substantially expanding public transit ridership in the U.S. Millions of Americans need affordable public mobility for work, study, recreation, and shopping. Car ownership is a financial burden that can be as serious for low-income families as the shortage of affordable housing.

The average yearly cost for U.S. households to own and operate a new car reached $10,728 in 2022. Nor are used cars the bargain they once were. Used car prices are high, financing is often subprime and older vehicles require expensive maintenance.

Rapidly extending bus networks would be the speediest and most economical way to serve these families and grow transit ridership in the sprawling landscape of American metros. U.S. roads and highways are already maintained by the government, eliminating the need to build and maintain expensive rail lines.

There are promising domestic models even amid the pandemic ridership crisis. In the past two decades, Seattle’s Sound Transit has upgraded its bus network, aligning these improvements with increased residential density, low fares, and a carefully considered light rail expansion. San Francisco and New York have developed exclusive bus lanes that move riders along popular routes at higher speeds. Indianapolis is expanding an effective bus rapid transit system. Many cities, including Denver and Boston, are investing in “better bus” upgrades that emphasize frequent service, easy transfers, and better geographic coverage.

Innovations like these will only succeed long-term with sufficient subsidies to maintain innovative services at reliable levels. The history of bus transit is littered with pilot programs that were abandoned on cost grounds just as they were gaining popularity. As I see it, buses don’t need to be faster or more convenient than cars to attract and retain riders — but they need to be, and can be, much better transit options than they are today.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Pandemic spurs tribes to diversify

SUSAN HAIGH Associated Press

MASHANTUCKET, Conn. — When the COVID-19 pandemic shuttered Foxwoods Resort Casino in Connecticut for three months in 2020, its owners, the Mashantucket Pequot Tribal Nation, had to reckon with decades of relying heavily on gambling as the tribe's main source of revenue.

"The fact that the casino revenues went from millions to zero overnight just fully reiterated the need for diverse revenue streams," said Tribal Chairman Rodney Butler.

The 1,000-member tribe has since expanded its efforts to get into the federal government contracting business, making it one of several tribal nations to look beyond the casino business more seriously after the coronavirus crisis.

Tribal leaders and tribal business experts say the global pandemic has been the latest and clearest sign that tribal governments with casinos can't depend solely on slot machines and poker rooms to support future generations.

In Michigan, the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, or Gun Lake Tribe, recently announced a 25-year plan to develop hundreds of acres near its casino into a corridor with housing, retail, manufacturing and a new 15-story hotel.

A non-gambling entity owned by the Little River Band of Ottawa Indians, also in Michigan, is selling "NativeWahl" burger franchises to other tribes after forming a 2021 partnership with Wahlburgers, the national burger chain created by the celebrity brothers Paul, Mark and Donnie Wahlberg.

Some tribes, with and without casinos, got involved in a wide range of non-gambling businesses, such as trucking, construction, consulting, health care, real estate, cannabis and marketing over the past decade or longer while others branched out more recently.

"While enterprise diversification can come with costs, its necessity became clear during the early phases of the pandemic, when tribally owned casinos were shut down to mitigate COVID-19 transmission and gaming-dependent tribes were left with little incoming revenue," according to a new report from the Center for Indian Country Development at the Federal Reserve Bank of Minneapolis.

The report found that tribes are increasingly doing business with the federal government, especially the U.S. Department of Defense.

The Mashantucket Pequots' non-gambling entity, Command Holdings, last year made its largest acquisition to date: WWC Global, a Florida-based management consulting firm that predominantly works with federal agencies, including the defense and state departments. WWC announced in December that it was awarded a $37.5 million contract supporting the federal Cybersecurity and Infrastructure Security Agency.

WWC Global CEO Jon Panamaroff applauded the Mashantucket Pequots' casino and hospitality business but noted that it can be subject to the "ups and downs of the market," making it important to branch out economically. A member of the Sun'aq Tribe of Kodiak, Alaska, he credited the Mashantucket Pequots' tribal leaders with doubling down on diversification efforts during the pandemic instead of "shying away and trying to hunker down."

Butler said the tribe hopes non-gambling revenues, including from a planned family resort with a 91,000-square-foot water park that's expected to open in 2025, will eventually comprise 50% to 80% of the Mashantucket Pequots' portfolio, providing "stability and certainty" when another challenging event undoubtedly will happen.

"You think about the financial crisis in '08 and now COVID. And so, something's going to happen again," Butler said. "We've learned from past mistakes, and we want to be ready for it in the future."

Even before the pandemic hit, some tribal casinos were facing competitive pressures from the advent of other gambling options, including legalized online wagering on sports and casino games in some states. At the same time, traditional patrons of brick-and-mortar casinos are getting older.

"Tribal economies are at an inflection point because gaming markets are maturing across the U.S.," said Dawson Her Many Horses, head of Native American banking for Wells Fargo and an enrolled member of the Rosebud Sioux Tribe of South Dakota. "As casino revenues flatten, tribes will be looking for new business opportunities in other industries."

That doesn't mean tribes are giving up on gambling. Some are even expanding it.

The National Indian Gaming Association reported in August that $39 billion in gross gambling revenue was generated in fiscal year 2021, the most in tribal gambling history. That figure, which accounts for 243 tribes across 29 states, increased 40% over the previous year.

Patrick Davison, vice president of Native American gaming and finance at PNC Bank, said he's been working with tribal officials who still want to build casinos but also want to avoid overbuilding. He said the pandemic was "a real eye-opener for tribes" as officials consider their tribes' futures in the gambling business.


More than 5 million Native Americans live in the United States as members of 574 federally recognized and 63 state-recognized tribes. That number is projected to rise to 10 million people by 2060. A federally recognized tribe is a sovereign entity with a government-to-government relationship with the United States, as well as the rights of self-governance in such areas as tribal law and taxation.

About half of Native Americans live on reservations, of which there are about 326, comprising roughly 56.2 million acres. The 16 million-acre Navajo Nation Reservation in Arizona, New Mexico, and Utah is the largest, and the 1.32-acre Pit River Tribe cemetery in California is the smallest.

Stacker ranked the states with the biggest Native American populations and looked at some of the characteristics and conditions for each community, analyzing data from the U.S. Census Bureau’s 2019 American Community Survey one-year estimate. The U.S. Census Bureau’s definition of “Native Americans” includes Alaskan Natives but excludes Native Hawaiians.

Compared with other U.S. races, American Indians have a life expectancy that is shorter by more than five years. The suicide rate among American Indian youth is 2.5 times higher than among youth in the rest of the country. American Indians are 2.5 times more likely to experience violent crimes than the national average, and more than four out of five American Indian women will experience violence in their lifetimes. Holistically, these issues can be seen as symptoms of several larger issues, including access to social services, educational opportunities, nutritional food, and health care. Property rights pose more significant problems, insomuch as residents who don't have deeds to the land they live on struggle to build credit, which throws a significant barrier in front of upward mobility. Meanwhile, tribal lands are tough sells for franchises and other commercial developers that would bring jobs to reservations, as these companies are often resistant to negotiating contract terms under tribal law.

One effort to mitigate the aforementioned statistics came with the 1968 establishment of the American Indian Movement (AIM) in Minnesota, which advocated for sovereignty and rights. The group famously occupied the Wounded Knee battle site at the Pine Ridge Reservation for more than two months in 1973.

Looking ahead, Rep. Deb Haaland, a member of the Laguna Pueblo in New Mexico, has been tapped to head the U.S. Department of Interior for the upcoming Biden administration. She would be the first Indigenous cabinet secretary in the nation. Among her responsibilities will be the underfunded Bureau of Indian Education and the Bureau of Indian Affairs, the latter of which oversees 55 million acres of tribal land.

Can hydrogen solve Canada’s energy woes?

There is a future for hydrogen, but it is not a panacea


A hydrogen filling station

Ongoing events in Europe, including the war in Ukraine and natural disasters, have raised many questions about the future of energy supply both in Canada and internationally. This, in turn, has placed Canada’s role as an energy supplier in doubt. If you were to believe the Canadian government, hydrogen presents a significant opportunity to both reduce emissions and create a new export product. However, a deeper examination of this strategy reveals some potentially insurmountable problems. These are outlined in an open letter penned by 110 academics and 55 civil society groups which calls on the Trudeau government to reconsider and limit the proposed hydrogen investment tax credit (in the spirit of full disclosure, the author is a signatory to that letter).

When considering hydrogen’s potential, the first, and biggest question is where are we going to get hydrogen? Alberta, currently Canada’s largest energy producer, plans on creating hydrogen from natural gas (the resulting fuel is known as ‘grey’ hydrogen). While this approach is effective in exploiting an existing resource which is plentifully available, the production of grey hydrogen still produces significant amounts of greenhouse gasses (this can be abated using costly carbon capture and storage, or CCUS, technologies to turn it into ‘blue’ hydrogen). A better path is to use existing natural gas, coupled with CCUS—eliminating the extra (and more expensive) process of transforming natural gas into hydrogen. Though even this solution presents challenges, due to the ongoing debate as to whether CCUS is viable in these circumstances. In other words, why build expensive technologies and infrastructure as a stopgap, when those investments could be channeled into other solutions?

The UK has also explored the use of ‘green’ hydrogen, which is produced through electrolysis (the separation of water into hydrogen and oxygen) powered by renewable sources. However, reports have found that it is far more effective to use new renewable energy capacity to take ageing conventional energy systems (such as coal plants) offline, and meet the needs of increasing demand. The International Energy Agency had similar findings, noting that by 2070, using electrolysis to create hydrogen could end up consuming 20 percent of global electricity production. The Canadian Climate Institute anticipates that Canada will need to increase its electricity generation capacity by up to three-and-a-half times by 2050. Will we have the resources to expand our electricity networks to meet consumer needs and build out renewables to create hydrogen?

The second question confronting hydrogen’s potential is what are we going to use hydrogen for? While the uses in industrial cases such as chemical production (including fertilizers) and steel making are significant, the hype behind hydrogen as a transportation fuel lacks supporting evidence. The 2021 Canadian Energy Outlook produced by McGill University’s Institut de l’énergie Trottier finds that hydrogen will comprise a small share of total transport fuels even in 2060, “in part due to current difficulties in assessing the exact technical role it can play.” Obviously, innovation and technology breakthroughs are difficult to predict, but there are some obvious challenges which should be considered.

One challenge is that hydrogen is only a useful fuel in certain contexts. This is not because hydrogen is a poor fuel in general (though its energy density is much lower than gasoline, thereby requiring a larger tank for equal energy or range) but because it is difficult to move around. While current research shows that hydrogen can be safely blended into natural gas by up to 17 percent, pure hydrogen gas cannot be safely transported using existing pipeline infrastructure. When blended, however, hydrogen plays a minor role in the energy provided, as demonstrated by a recent report by BTU Analytics.



What about building new hydrogen infrastructure? A report by the Transition Accelerator suggests that the future of a hydrogen economy will “rely on developing infrastructure for low-cost distribution and delivery of hydrogen.” To this end, the report states, “pure hydrogen pipelines hold the most promise for large scale and low-cost transportation of hydrogen. Nonetheless the construction and installation of pipelines is a costly, complex, and time-consuming process that requires substantial demand for fuel movement to attract private investment.”

Canadian Dimension readers hardly need reminders about Canada’s repeated problems building pipelines. Without extensive physical infrastructure, transporting hydrogen would have to be done by road or rail, options which are significantly less efficient (and more expensive) and already feeling the strain of more demand than capacity.

Other suggested uses include aviation, however, again hydrogen faces steep criticisms. One analysis suggests that powering a single airport (in this case the Paris Orly Airport), would require 18 gigawatt-hours every day, equivalent to the full production of one typical nuclear plant of 900 megawatts. “If, to ensure that hydrogen production actually reduces carbon emissions,” the authors write, “the electricity is produced through solar power, 44 square kilometres of solar panels would be needed—a footprint representing three times the entire surface area of the [Paris] Orly airport itself. Covering the entirety of an airport such as Orly would only produce enough fuel for two to three aircraft a day.” Problems such as these have caused the former CEO of Rolls Royce (the world’s leading manufacturer of aircraft engines) to conclude that relying on hydrogen as a sustainable aviation fuel is simply not an option.

Outside of aviation, contexts in which the volume of hydrogen as a fuel is not restrictive opens up opportunities. The 2021 Canadian Energy Outlook suggests that both marine shipping and rail (and possibly heavy land transport) will be areas where hydrogen will likely become dominant.

Finally, an ambitious claim put forward by proponents is that Canada could become a hydrogen exporter, particularly to Europe, to shore up continental energy demands in the face of distrust of Russian oil and natural gas. While admirable in concept, the problem here is one of time. It is true that Europe is currently in need of alternative energy suppliers, but Canada does not yet possess the aforementioned requisite infrastructure to export hydrogen (or even existing natural gas) to Europe in effective volumes. The necessary export infrastructure would be vast and expansive, and as with Canadian pipelines, would take time to build. An ambitious timeframe would demand that export infrastructure be completed in a matter of years. However, it seems unlikely that European countries would not have adapted or built their own energy supplies (likely renewable energy) in the meantime. This would leave Canada with expensive sunk costs, and no ready market.

While there is potential for decarbonization in industry (the Canada Energy Regulator suggests that the industrial sector will account for 65 percent of hydrogen use by 2050) the idea that Canada could become a hydrogen exporter is currently unrealistic. Rather than focusing on single technologies as ‘silver bullets’ for our climate and energy problems, the Government of Canada needs to broaden its outlook and target specific energy sources for specific uses. In its Big Switch report, the Canadian Climate Institute concludes that a broad mix of energies and technologies, with comprehensive policies and infrastructure to support their roll-out, is necessary for a net-zero transition.

There is a future for hydrogen, but it is not a panacea. Nor is anything about Canada’s energy pathways certain. Further research and modelling is necessary, and upcoming reports like Canada’s Energy Future 2023 (produced by the Canada Energy Regulator) will help guide and inform policy and decision making. What does seem certain, however, is that Canada’s current hydrogen strategy is based on implausible ambitions and fails to grasp the very real obstacles standing in the way of mass adoption.

Burgess Langshaw-Power / February 15, 2023 / 

Burgess Langshaw Power is a former policy analyst currently completing his PhD in Global Governance at the Balsillie School, University of Waterloo. His policy expertise includes climate interventions and energy technologies. Views expressed here are his own and not necessarily those of his school or employer.

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