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Price of natural gas could climb higher still after cresting multi-year highs – CBC.ca

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The rising price of oil may grab most of the headlines, but another commodity — natural gas — is on an even wilder ride and expected to hit fresh highs this summer.

The war in Ukraine and resulting concerns about global energy security have driven up commodity prices world-wide. But where the price of oil is up about 85 per cent year-over-year, natural gas is up more than 200 per cent.

As of mid-day Friday, the U.S. natural gas benchmark Henry Hub price was trading around $8.75 US per million British thermal units, or MMBtu. It surged to a 14-year high of more than $9 earlier in the week, from less than $3 at this time last year.

“It’s like if oil went to $200 (per barrel), but it’s not getting the same kind of attention,” said Dulles Wang, a Wood Mackenzie analyst based in Calgary. “And I think there’s probably still more upside potential for natural gas prices.”

Driving the growth in prices are surging liquefied natural gas (LNG) exports from the U.S. Gulf Coast, aimed at helping to meet global demand for energy, along with low North American storage levels.

Consumers could see their bills for natural gas consumption, tracked by meters like the one above, climb above the 14-year highs seen earlier this week. (Kyle Bakx/CBC)

Part of the reason for the low inventory levels, said Robert Fitzmartyn, managing director and head of energy research at Stifel FirstEnergy in Calgary, is increased demand as regions such as Alberta phase out coal-fired power and replace it with natural gas.

Weather and worker shortages 

And the industry, which has gone through more than a decade of depressed prices prior to the current commodities boom and had to lay off many workers, is having a hard time keeping up.

“There’s limited labour availability to satiate elevated demand, so the price is going even higher,” Fitzmartyn said.

Natural gas prices are also heavily influenced by weather and the demand for heating and air conditioning. That means extreme heat this summer, as has been seen in North America in recent years, could spike prices higher, even above the $10 US mark.

In a recent report, the U.S. Energy Information Administration said that “natural gas prices could rise significantly above forecast levels if summer temperatures are hotter than assumed . . . and electricity demand is higher.”

While both Fitzmartyn and Wang are bullish on the outlook for natural gas, Wang said he expects prices will eventually come down as drillers slowly ramp up production capability to meet demand.

“I think if we can get past this summer with relatively normal weather, prices will have more downside potential after the winter of 2023,” Wang said.

Drilling expected to increase

Earlier this month, the Canadian Association of Energy Contractors — which represents contract drillers and well servicing companies — revised its 2022 drilling forecast from the 6,457 rigs it had projected in November of last year to 6,902.

The CAOEC also revised its employment projections for the sector upwards this month by 2,484 jobs to a total of 37,409.

Mark Scholz, president of the Canadian Association of Energy Contractors, said the producers who hire the drilling rig contractors don’t seem as willing to spend money as they were back in 2008, the last time natural gas prices surged. (CBC)

But CAOEC president Mark Scholz said the producers who hire the drilling rig contractors don’t seem as willing to spend money as they were back in 2008, the last time natural gas prices surged.

Instead, they are taking advantage of the high prices to repair their balance sheets, as well as offering share buybacks and dividends to appease investors.

“It’s a much better industry to be in today (than in recent years), but I wouldn’t say we’re growing at 110 km an hour,” Scholz said in an interview Friday. “It’s a gradual acceleration.”

Still, even a gradual acceleration is welcome news in Western Canada, which is home to the majority of the country’s natural gas production and has suffered through years of depressed commodity prices.

Scholz said there’s even more for industry to be optimistic about going forward, with Canada’s first LNG export facility (LNG Canada, currently under construction in Kitimat, B.C.) expected to come online in 2026.

“These are really exciting times, and I think it shows just how important gas is going to be, both in terms of Canada’s energy transition, and also the opportunity to export it internationally,” Scholz said.

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Suspicious deaths of two N.S. men were the result of homicide, suicide: RCMP

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Nova Scotia RCMP say their investigation into two suspicious deaths earlier this month has concluded that one man died by homicide and the other by suicide.

The bodies of two men, aged 40 and 73, were found in a home in Windsor, N.S., on Sept. 3.

Police say the province’s medical examiner determined the 40-year-old man was killed and the 73-year-old man killed himself.

They say the two men were members of the same family.

No arrests or charges are anticipated, and the names of the deceased will not be released.

RCMP say they will not be releasing any further details out of respect for the family.

This report by The Canadian Press was first published Sept. 16, 2024.

The Canadian Press. All rights reserved.



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Turning the tide: Quebec premier visits Cree Nation displaced by hydro project in 70s

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For the first time in their history, members of the Cree community of Nemaska received a visit from a sitting Quebec premier on Sunday and were able to share first-hand the story of how they were displaced by a hydroelectric project in the 1970s.

François Legault was greeted in Nemaska by men and women who arrived by canoe to re-enact the founding of their new village in the Eeyou Istchee James Bay region, in northern Quebec, 47 years ago. The community was forced in the early 1970s to move from its original location because members were told it would be flooded as part of the Nottaway-Broadback-Rupert hydro project.

The reservoir was ultimately constructed elsewhere, but by then the members of the village had already left for other places, abandoning their homes and many of their belongings in the process.

George Wapachee, co-author of the book “Going Home,” said community members were “relocated for nothing.”

“We didn’t know what the rights were, or who to turn to,” he said in an interview. “That turned us into refugees and we were forced to abandon the life we knew.”

Nemaska’s story illustrates the challenges Legault’s government faces as it looks to build new dams to meet the province’s power needs, which are anticipated to double by 2050. Legault has promised that any new projects will be developed in partnership with Indigenous people and have “social acceptability,” but experts say that’s easier said than done.

François Bouffard, an associate professor of electrical engineering at McGill University, said the earlier era of hydro projects were developed without any consideration for the Indigenous inhabitants living nearby.

“We live in a much different world now,” he said. “Any kind of hydro development, no matter where in Quebec, will require true consent and partnership from Indigenous communities.” Those groups likely want to be treated as stakeholders, he added.

Securing wider social acceptability for projects that significantly change the landscape — as hydro dams often do — is also “a big ask,” he said. The government, Bouchard added, will likely focus on boosting capacity in its existing dams, or building installations that run off river flow and don’t require flooding large swaths of land to create reservoirs.

Louis Beaumier, executive director of the Trottier Energy Institute at Polytechnique Montreal, said Legault’s visit to Nemaska represents a desire for reconciliation with Indigenous people who were traumatized by the way earlier projects were carried about.

Any new projects will need the consent of local First Nations, Beaumier said, adding that its easier to get their blessing for wind power projects compared to dams, because they’re less destructive to the environment and easier around which to structure a partnership agreement.

Beaumier added that he believes it will be nearly impossible to get the public — Indigenous or not — to agree to “the destruction of a river” for a new dam, noting that in recent decades people have come to recognize rivers as the “unique, irreplaceable riches” that they are.

Legault’s visit to northern Quebec came on Sept. 15, when the community gathers every year to remember the founding of the “New Nemaska,” on the shores of Lake Champion in the heart of the boreal forest, some 1,500 kilometres from Montreal. Nemaska Chief Clarence Jolly said the community invited Legault to a traditional feast on Sunday, and planned to present him with Wapachee’s book and tell him their stories.

The book, published in 2022 along with Susan Marshall, is filled with stories of Nemaska community members. Leaving behind sewing machines and hunting dogs, they were initially sent to two different villages, Wapachee said.

In their new homes, several of them were forced to live in “deplorable conditions,” and some were physically and verbally abused, he said. The new village of Nemaska was only built a few years later, in 1977.

“At this time, families were losing their children to prison-schools,” he said, in reference to the residential school system. “Imagine the burden of losing your community as well.”

Thomas Jolly, a former chief, said he was 15 years old when he was forced to leave his village with all his belongings in a single bag.

Meeting Legault was important “because have to recognize what happened and we have to talk about the repercussions that the relocation had on people,” he said, adding that those effects are still felt today.

Earlier Sunday, Legault was in the Cree community of Eastmain, where he participated in the official renaming of a hydro complex in honour of former premier Bernard Landry. At the event, Legault said he would follow the example of his late predecessor, who oversaw the signing of the historic “Paix des Braves” agreement between the Quebec government and the Cree in 2002.

He said there is “significant potential” in Eeyou Istchee James Bay, both in increasing the capacity of its large dams and in developing wind power projects.

“Obviously, we will do that with the Cree,” he said.

This report by The Canadian Press was first published Sept. 16, 2024.



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Quebec premier visits Cree community displaced by hydro project in 1970s

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NEMASKA – For the first time in their history, members of the Cree community of Nemaska received a visit from a sitting Quebec premier on Sunday and were able to share first-hand the story of how they were displaced by a hydroelectric project in the 1970s.

François Legault was greeted in Nemaska by men and women who arrived by canoe to re-enact the founding of their new village in the Eeyou Istchee James Bay region, in northern Quebec, 47 years ago. The community was forced in the early 1970s to move from their original location because they were told it would be flooded as part of the Nottaway-Broadback-Rupert hydro project.

The reservoir was ultimately constructed elsewhere, but by then the members of the village had already left for other places, abandoning their homes and many of their belongings in the process.

George Wapachee, co-author of the book “Going Home,” said community members were “relocated for nothing.”

“We didn’t know what the rights were, or who to turn to,” he said in an interview. “That turned us into refugees and we were forced to abandon the life we knew.”

The book, published in 2022 by Wapachee and Susan Marshall, is filled with stories of Cree community members. Leaving behind sewing machines and hunting dogs, they were initially sent to two different villages, 100 and 300 kilometres away, Wapachee said.

In their new homes, several of them were forced to live in “deplorable conditions,” and some were physically and verbally abused, he said. The new village of Nemaska was only built a few years later, in 1977.

“At this time, families were losing their children to prison-schools,” he said, in reference to the residential school system. “Imagine the burden of losing your community as well.”

Legault’s visit came on Sept. 15, when the community gathers every year to remember the founding of the “New Nemaska,” on the shores of Lake Champion in the heart of the boreal forest, some 1,500 kilometres from Montreal. Nemaska Chief Clarence Jolly said the community invited Legault to a traditional feast on Sunday, and planned to present him with Wapachee’s book and tell him their stories.

Thomas Jolly, a former chief, said he was 15 years old when he was forced to leave his village with all his belongings in a single bag.

Meeting Legault was important “because have to recognize what happened and we have to talk about the repercussions that the relocation had on people,” he said, adding that those effects are still felt today.

Earlier Sunday, Legault had been in the Cree community of Eastmain, where he participated in the official renaming of a hydro dam in honour of former premier Bernard Landry.

This report by The Canadian Press was first published Sept. 16, 2024.

The Canadian Press. All rights reserved.



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