With a barrel of Canadian oil now going for the same price as a cup of coffee, some renewable energy experts say it’s time for a different approach to building Canada’s energy sector.
They say the massive job losses and economic turmoil hammering the oil industry could be at least partly offset by a more aggressive shift toward renewables, energy-efficiency retrofits and other sustainable infrastructure.
“There are very practical reasons it would make sense,” said Martin Boucher, of the University of Saskatchewan’s Johnson Shoyama Graduate School of Public Policy.
Western Canada Select crude oil has been selling for less than $5 a barrel since the coronavirus-imposed travel bans and business shutdowns caused demand to plummet more than a month ago. Even last week’s deal between OPEC and other world powers to cut supply by 10 per cent failed to ignite crude prices. On Friday, WCS was listed at $2.87.
“Only gradual increases in crude oil prices are expected through all of 2020 as these factors persist, which could lead to record levels of expected global oil inventory builds in the first half of 2020,” the U.S. Energy Information Administration said in its most recent forecast.
Simply put, the global demand for oil has plunged and oil producers are putting it in storage in the hope of better prices. It will take a long time for that to change.
Saskatoon energy consultant Jason Praski hopes the health and economic crisis caused by the coronavirus may cause more people to care more about their communities and the environment. (submitted by Jason Praski)
Others believe the price could go even lower, and Canada could soon see negative prices. Oil producers who’ve run out of space to store their nearly worthless product “will be paying people to take away our resources,” Alberta Premier Jason Kenney said this month.
That may seem like good news for consumers filling their cars or trucks at the gas station for 60 cents a litre, but it’s a huge loss for the oil-heavy economies of Saskatchewan, Alberta and Newfoundland and Labrador.
Revenue from non-renewable resources like oil could drop as much as $1.2 billion this year in Saskatchewan alone, according to government forecasts released Friday.
Boucher and others say COVID-19 has caused this most recent price crash, but it’s not the only dark cloud hanging over the industry.
Since the July 2008 peak of more than $110 per barrel, the WCS price has steadily declined. In February, before the COVID-19 restrictions were announced, WCS had already dropped to $27.
Trade wars and production increases by the U.S., Saudi Arabia, Russia and other global powers, the lack of pipeline capacity in the landlocked Canadian Prairies are combining with labour-saving technology to decrease prices. That will not change in a post-coronavirus economy, they say. These aren’t things anyone in Saskatchewan or Alberta can control.
That’s why those urging Canada to keep tackling climate change say the post-coronavirus economy must include a more rapid transition to renewables and energy efficient upgrades.
“Stimulus and recovery measures in response to the pandemic must foster economic development and job creation, promote social equity and welfare, and put the world on a climate-safe path,” Francesco La Camera, director-general of the International Renewable Energy Agency, said in a statement this month.
Martin Boucher of the University of Saskatchewan’s Johnson Shoyama Graduate School of Public Policy said a more aggressive shift toward renewable energy and energy-efficient retrofits would help ease the job losses caused by the oil downturn. (submitted by Martin Boucher)
Boucher, who teaches energy transition policy, said this approach will provide far more jobs per dollar invested than investing in the oil industry. He said shifting even a small percentage of the investment and government support currently going to the oil industry would make a big difference.
It could begin with more energy-efficient retrofits of homes and businesses – better windows or thicker insulation, he said. Most of this work would be labour-intensive and done by local contractors and businesses. Profits would stay in the community and homeowners would benefit from lower fuel bills.
“These are simple approaches, but they’re domestic. They don’t put us in a situation where we’re overly exposed to the ebbs and flows of oil and gas,” Boucher said.
Saskatoon energy consultant Jason Praski agreed. Praski and Boucher said Saskatchewan is increasing its renewable energy capacity, but much more could be done. Solar, wind, geothermal and biomass energy from wood and crop waste could all deliver government tax revenue and jobs, they said.
“Saskatchewan’s got so much potential,” Praski said.
Praski said many people have already warmed to these ideas, but the ongoing coronavirus situation could help convince others.
“I think the whole pandemic is helping us pay more attention to each other and look after each other, and the climate change crisis is really a similar problem, it’s just longer term,” Praski said. “As we think about this whole thing, rethinking our lives, you know, it may get us all thinking a little closer toward doing the greener thing if we can.”
No one from the Canadian Association of Petroleum Producers was available for an interview.
Saskatchewan’s Energy and Resources Minister Bronwyn Eyre was not available for an interview but an official sent a written statement detailing more than 500 megawatts of pending wind and solar projects across the province.
It reaffirmed the province’s commitment to reduce greenhouse gas (GHG) emissions by 40 per cent from 2005 levels by 2030 through these projects, as well as other methods such as carbon capture or possible small modular nuclear reactors.
Last week, Eyre announced COVID-19 relief measures for oil companies, including an extension of drilling leases. She pledged more help in the coming days for oil and gas and mining companies. It’s unclear whether that will extend to renewable energy.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
