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Enbridge CEO hopes for more carbon capture support in upcoming federal budget

The Canadian Press

The CEO of energy infrastructure giant Enbridge Inc. says he hopes the federal government will unveil more incentives for carbon capture and storage in the upcoming federal budget.

Greg Ebel says the U.S. is currently a more attractive place for companies seeking to invest in carbon capture technology.

He says the Inflation Reduction Act in the U.S. offers incentives that reduce the capital costs as well as on ongoing operating costs for carbon capture.

Canada's energy industry has identified carbon capture and storage as key to its plan to reduce greenhouse gas emissions.

Companies have proposed approximately 25 different projects aiming to capture carbon from Alberta's oil and gas sector.

Among these is Enbridge's Open Access Wabamun Carbon Hub to be located northwest of Edmonton.

Enbridge earmarks $3.3 billion for Gulf Coast storage plant, other projects

Amanda Stephenson, The Canadian Press

ENBRIDGE INC (ENB:CT)

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A U.S. Gulf Coast gas storage facility and a stake in a company developing fuel from waste food are among a string of new investments announced by Canadian energy giant Enbridge Inc. on Wednesday.

At its annual investor day event, the Calgary-based company announced $3.3 billion in new investments it says will help Enbridge grow to meet increasing global demand for energy.

The new investments include a deal to acquire Tres Palacios Holdings LLC from Brookfield Infrastructure Partners and Crestwood Equity Partners LP for US$335 million. Tres Palacios is a natural gas storage facility in the U.S. Gulf Coast region, which has been a focus for Enbridge in the last several years.

The deal is expected to close in the second quarter of 2023.

Enbridge will also acquire a 10 per cent stake in Divert Inc., a food waste management company expanding into renewable natural gas, for US$80 million.

That agreement includes further investment opportunities to develop RNG projects across the U.S., Enbridge said, providing potentially more than $1 billion in new capital growth. 

And the company said it will go ahead with plans to build the Enbridge Houston Oil Terminal for an initial capital cost of $240 million. The facility will focus on heavy crude and will have access to the Houston region's refining complex and export opportunities through the Seaway docks at Freeport and Texas City.

On Wednesday, Enbridge reaffirmed its 2023 earnings guidance of $15.9-$16.5 billion, and also said it expects its earnings per share to grow at a compounded annual rate of between four and six per cent through 2025.

In his remarks to investors, CEO Greg Ebel said 2022 was an "inflection" point for Canada's energy industry as years of underinvestment coupled with Russia's invasion of Ukraine to drive unprecedented commodity price spikes.

He said Enbridge is well positioned to help "rebalance" the global energy system.

"The bottom line is we see plenty of executable growth across our business units and the existing asset base," Ebel said.

"We are excited about our growth opportunities in the short and medium term."

Ebel said as the energy transition takes hold, renewable energy will continue to grow and Enbridge continues to explore opportunities in new, low-carbon forms of energy such as renewable natural gas.

But he said natural gas and oil will remain critical parts of the energy mix for the foreseeable future. Natural gas, in particular, will be needed as a reliable backup given the intermittent nature of wind and solar power, he said.

Enbridge also announced on Wednesday $2.4 billion of new gas transmission modernization and utility spending to its secured capital program.

The company also said it will build a 14-kilometre natural gas pipeline in Ontario to help ArcelorMittal Dofasco's plan to change the way it makes steel.

Enbridge's medium-term growth expectations "appear reasonable," said RBC Dominion Securities analyst Robert Kwan in a note, adding the investor day updates Wednesday were consistent with the market's expectations.

This report by The Canadian Press was first published March 1, 2023.

Oil and gas investment in Canada to 

hit $40 billion in 2023, industry group 

says

The Canadian Pres

The Canadian Association of Petroleum Producers says it expects investment in oil and natural gas production in this country to hit $40 billion this year. 

The industry group says that's 11 per cent higher than last year and also surpasses pre-COVID-19 pandemic levels.

Upstream oil and natural gas investment in Canada reached a low of $22 billion in 2020, as prices collapsed due to the pandemic.

CAPP says conventional oil and natural gas capital investment for 2023 is forecast at $28.5 billion, while oilsands investment is expected to reach $11.5 billion.

CAPP says much of this year's increased spending will go towards maintenance and incremental growth projects, as well as managing inflationary pressures.

The lobby group says spending is also expected to go towards emission reduction technologies such as advancing the development of carbon capture utilization and storage (CCUS).

This report by The Canadian Press was first published March 1, 2023.

Enbridge eyes US$1B of projects to turn food waste into gas

Kevin Orland, Bloomberg News

ENBRIDGE INC (ENB:CT)

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Enbridge Inc. is committing as much as US$1 billion to building plants that turn discarded food into renewable natural gas as part of a pledge to reduce its emissions and provide customers with greener products.

North America’s largest pipeline company also is investing $80 million in Divert Inc., the company that created the waste-to-gas technology that will be used in the plants, according to a release on Wednesday. Current investor Ara Partners is leading a group that’s investing an additional $20 million.

Enbridge would generate a return from the facilities and the gas they’d produce while also making progress on a goal of reducing its emissions intensity 35 per cent by 2030. The partnership with Divert could offset 400,000 metric tons of carbon dioxide emissions a year, according to the statement.

“It’s a perfect drop-in fuel to our existing infrastructure that offers that lower, or negative carbon-intensity fuel for our customers and for us,” Caitlin Tessin, vice president of strategy and market innovation at Enbridge, said in an interview.

Divert is looking to build facilities within 100 miles of 80% of the US population in the next eight years, and plants also will be considered for Canada.

Recycling gold? Oxford researcher says it's something to consider

Iva Poshnjari, BNN Bloomberg

Investors often seek safety in gold, especially during inflationary times, but one expert says instead of mining it, reusing what is already above ground should be considered.
 
A circular gold economy would involve the transition out of gold mining to instead, recycling the commodity that is already available above ground, Oxford researcher Stephen Lezak, who specializes in commodities and infrastructure, told BNN Bloomberg in a TV interview on Tuesday. 
 
“When we say a circular gold economy, we’re talking about a world in which gold is still consumed. People will still buy it for jewelry, for investment, it will still wind up in technology and medicine, but the vast majority of it will come from recycled sources,” he said.
 
Lezak argued that the world already has thousand of years of above ground gold stocks to draw on, and these stocks already supply about 25 per cent of the gold that’s consumed every year. 
 
“Gold functions as an investment because of its scarcity, and so making it more scarce is in some ways taking gold and making it into renaissance art, or a Stradivarius violin. It doesn’t become any less valuable — in fact the opposite is true." 
 
 In what he refers to as a ‘responsible drawdown’ of gold mining, a slow but steady transition out of mined gold would not bring a shock to the markets. Instead, investors would still retain the same amount of capital they have currently invested in gold, but the physical representation would be smaller, he added. 
 
The price of gold rose to US$1,847.60 as of March 1. Over the past two years, gold prices have been volatile as tight monetary policy measures have made the commodity costlier to hold. 
 
“We would be talking about redirecting and essentially being smarter about this resource that is so costly to extract,” he said. 

Check out the full video to learn more.

Industry minister faces anger no matter what he decides on Rogers-Shaw: Analyst

Holly McKenzie-Sutter, BNN Bloomberg 

Canada's industry minister has no good options as he considers whether to approver Rogers Communications Inc.’s $20-billion takeover of Shaw Communications Inc., according to one industry expert who predicts the minister could take months to come to a final decision.

The companies have set March 31 as the closing date for the drawn-out telecommunications sale, which has been extended multiple times as the parties cleared most major legal hurdles. The deal still needs approval from Industry Minister François-Philippe Champagne.

Despite the looming deadline, telecom consultant Dvai Ghose said he expects Champagne could take another three to four months to decide whether to approve the sale, as he faces anger from corporate Canada if he rejects it, or from Canadian consumers if he approves it.

“You can perhaps understand why he's procrastinating,” said Ghose, who is also CEO of Ghose Investment Corp.

“If he rejects the deal, then Bay Street will go crazy and say, ‘So you're rejecting all (mergers and acquisitions)? Why was this rejected?’ And there's an argument there. On the other hand, if he accepts the deal, then every consumer group, the NDP, many Conservatives and even members of the Liberal parliamentary group are generally concerned about the deal.”

Canada’s competition czar opposed the sale before the Competition Tribunal, arguing it would lead to worse, more expensive service for Canadians and lessen competition—concerns that have been echoed by other critics.

The Tribunal rejected those arguments and sided with the companies, who had argued that the sale would not lessen competition because they planned to sell Shaw’s Freedom Mobile to Quebecor for $2.85 billion. The Federal Court of Appeal later dismissed an application from the Competition Bureau to overturn the Tribunal decision.

Ghose said Champagne’s decision-making is further complicated by the Quebecor aspect of the deal, and uncertainty about whether conditions aimed at maintaining competition in the sector will play out as intended.

Deciding quickly could also appear as if Champagne is “being bullied” by the companies, Ghose said, pointing to another reason the minister may take his time.

“If I were him, I'd delay as well, and that's exactly what I expect,” he said