“Suncor shares have underperformed peers and crude oil prices in 2020 following the 55 per cent cut to its dividend and third quarter operating challenges in its oilsands business,” BMO Capital Markets analyst Randy Ollenberger said in an Oct. 1 research note.
Ollenberger said he believed the shares offer “under appreciated value” and could recover as the company’s refining business improves.
The company has integrated operations with refineries in Alberta, Ontario, Quebec and Colorado.
Refineries have been hit hard during the coronavirus outbreak as commuters have stayed home and air travel has been severely curtailed since March.
In addition, Suncor is one of the higher cost oilsands mining companies and the cuts announced Friday should help bring the company’s operating costs per barrel into line, said New York-based Eight Capital analyst Phil Skolnick.
“How permanent are those cuts? If oil were to come back to $55 or $50, and we’re out of the pandemic, then how much of those come back?” Skolnick said, adding that the market and investors are looking for permanent cost reductions.
He said it’s not clear yet how a 15 per cent staff reduction would drive down break-even operating costs.
RBC Capital Market analysts expectSuncor to re-establish momentum onseveral fronts in the quarters ahead, and maintained its outperformrecommendation on the company stock with a one-year price target of $25 pershare.
“Suncor has no plans to leap into renewables on a grandscale,’ RBC analyst Greg Pardy said in a note, after hosting a virtual roadshow with Suncor CEO Little for European investors. “Rather, the company is likely to emerge as a niche player, targeting ESG (environmental, social and governance) investments, which generate at least mid-teen returns. These are likelyto include biofuels, hydrogen, C02sequestration, and select wind projects.”
United Nations Secretary-General Antonio Guterres urged countries on July 9 to invest in reliable, clean and economically smart renewable energy.
“I am encouraged that some COVID response and recovery plans put the transition from fossil fuels at their core,” he said at the first-ever International Energy Agency (IEA) Clean Energy Transitions Summit.
At a virtual meeting chaired by IEA Executive Director Fatih Birol, ministers representing over 80% of the global economy discussed how to achieve a definitive peak in global carbon dioxide emissions and put the world on course for a sustainable and resilient recovery.
EU Energy Commissioner Kadri Simson participated as well as ministers from the world’s largest energy users, including, China, United States, India, Japan, United Kingdom, Brazil, Canada, Italy, South Africa, Mexico, Indonesia and Spain.
Speakers highlighted that the IEA Summit comes at a pivotal moment when the world faces urgent and shared challenges to build back economies, create jobs and accelerate clean energy transitions, the IEA said in a press release.
Guterres noted that the EU and the Republic of Korea have committed to green recovery plans. Nigeria has reformed its fossil fuel subsidy framework. Canada has placed climate disclosure conditions on its bail-out support.
“And a growing number of coalitions of investors and real economy stakeholders are advocating for a recovery aligned with the goals of the Paris Agreement. But many have still not got the message. Some countries have used stimulus plans to prop up oil and gas companies that were already struggling financially. Others have chosen to jumpstart coal-fired power plants that don’t make financial or environmental sense,” Guterres said, citing new research on G20 recovery packages released this week, which shows that twice as much recovery money — taxpayers’ money – has been spent on fossil fuels as clean energy.
“Today I would like to urge all leaders to choose the clean energy route for three vital reasons — health, science and economics,” the UN Secretary General said.
He warned that worldwide, outdoor air pollution is causing close to 9 million early deaths every year and shortening human lifespans by an average of three years.
Moreover, he noted that all around the world, every month, there is new evidence of the increasing toll of climate disruption. “We must limit temperature increase to 1.5 degrees Celsius to avert more and worse disasters. This means net-zero emissions by 2050, and 45 percent cuts by 2030 from 2010 levels. This is still achievable,” Guterres said.
He stressed that clean energy makes economic sense. “Per kilowatt hour, solar energy is now cheaper than coal in most countries. If we had any doubt about the direction the wind is blowing, the real economy is showing us. The business case for renewable energy is now better than coal in virtually every market. Fossil fuels are increasingly risky business with fewer takers,” he said.
The IEA Executive Director issued a first call in March to put clean energy at the heart of the Covid-19 recovery. This early marker was followed by a comprehensive series of ‘damage assessments’ for how the crisis is impacting all fuels and all technologies; actionable recommendations for economic recovery plans; and the full utilisation of the IEA’s ever-growing convening power, the EIA said.
The World Energy Investment report in May warned of a 20% plunge in global energy investment in 2020, with worrying implications for clean energy transitions and security.
The IEA’s Sustainable Recovery Plan sets out 30 actionable, ambitious policy recommendations and targeted investments. The Plan, developed in cooperation with the International Monetary Fund, would boost global economic growth by 1.1% per year, save or create 9 million jobs per year, and avoid a rebound in emissions and put them in structural decline. Achieving these results would require global investment of USD 1 trillion annually over the next three years.
According to the IEA’s Sustainable Recovery Plan, 35% of new jobs could be created through energy efficiency measures and another 25% in power systems, particularly in wind, solar and modernising and strengthening electricity grids. Participants at the IEA summit underlined the particular importance of energy efficiency, and expressed appreciation for the work of the Global Commission for Urgent Action on Energy Efficiency.
In the Summit’s High-Level Panel on Accelerating Clean Energy Technology Innovation, co-chaired by Norway’s Minister of Petroleum Tina Bru and Chile’s Energy Minister Juan Carlos Jobbed participants commended the new Energy Technology Perspectives Special Report on Clean Energy Innovation, which shows the vital importance of innovation for meeting shared energy and climate goals, the IEA said. Participants drew upon the IEA’s five key innovation principles and discussed how to scale up critical emerging technologies like batteries; hydrogen; carbon capture, utilisation and storage (CCUS); and bioenergy.
In the High-Level Panel on an Inclusive and Equitable Recovery, co-chaired by Canada’s Natural Resources Minister Seamus O’Regan of and Morocco’s Energy, Mining, and Sustainable Development Minister Aziz Rabbah, participants discussed the need to put people at the centre of recovery plans, including the most vulnerable, in order to fully harness diverse talents, backgrounds and perspectives. According to the IEA, they underscored the need to protect workers in the short term and to develop skills necessary for the sustainable, resilient energy systems of the future. Participants reinforced the importance of having a clear understanding for how to advance inclusive growth and to track progress, and held up the Equal by 30 campaign to advance gender equality as a valuable model.
Also, in the the High-Level Panel on a Resilient and Sustainable Electricity Sector co-chaired by Commissioner Simson and Thailand’s Energy Minister Sontirat Sontijirawong, participants recognised how indispensable electricity has been for citizens across the world during the crisis. A number of participants emphasised the transition towards a climate-neutral economy, the IEA said, adding that they noted the crucial role of electricity in clean energy transitions, participants underscored the historic opportunity to modernise and improve the sustainability, reliability and security of electricity systems with a diverse generation mix and higher flexibility to integrate larger shares of variable renewables.
Canadian and international investors have had a hard time getting shovels in the ground on their projects, even after securing regulatory approval. The reasons have been many: pure economics, political divisions, Indigenous disapproval and environmental concerns.
All of the above factors have left a slew of projects stranded as Canadians are unable to agree on our need to develop resources and at the same time fight climate change. Together, they make up around $150 billion of lost investment opportunity that would have generated taxes, jobs and businesses for the domestic economy.
Here are some of the major energy projects over the past few years that never saw the light of day:
Project: Frontier Oilsands Mine
Cost: $20.6 billion Company: Teck Resources Ltd.
The proposed oilsands mine in northern Alberta was expected to produce 260,000 barrels of oil per day. It was cancelled by the proponent over the weekend amid a major fight between Ottawa and Alberta over climate change issues, a lack of pipeline capacity and low oil prices. The project was expected to push up Canadian carbon emissions and was opposed by environmental groups, but enjoyed the support of many First Nations in the region.
Project: Northern Gateway Cost: $7.9 billion Company: Enbridge Inc. The proposed pipeline to bring oil from northern Alberta to a port in Kitimat B.C. was approved by Stephen Harper’s government in 2014, but was quashed by a Federal Court of Appeal two years later. It was rejected by the Liberal government in 2016.
The pipeline was expected to ship 525,000 barrels of oil per day to international markets and boost pipeline capacity to meet the needs of surging Canadian oil production.
Project: Energy East Cost: $16 billion Company: TransCanada Corp. (now TC Energy Corp.)
A proposed pipeline to carry 1.1 million barrels of crude oil per day from Alberta and Saskatchewan to coastal refineries in New Brunswick. TransCanada planned to build 1,500 kilometres of new pipe and reverse the direction on another 3,000 km of an existing pipeline. It faced heavy opposition in Quebec and Ontario and the environmental review process was marked by controversy. The National Energy Board, the regulator at the time, ultimately asked the company to restart the environmental review process. TransCanada scrapped the project in October 2017.
The proposed LNG pipeline and export terminal in Prince Rupert B.C. on the Pacific Ocean was to export as much as 18 million tonnes of natural gas per year. The Malaysian state-owned oil and gas company and its international partners said high upfront investment costs along with plummeting global prices for natural gas reduced the feasibility of the project. The project also faced a lengthy environmental review process, with concerns raised by local Indigenous groups about the project’s impact on fragile salmon spawning grounds in the area. It was cancelled by Petronas in July 2017.
Project: Aurora LNG Cost: $28 billion Lead company: Nexen Energy
The proposed LNG export terminal was expected to be built south of Prince Rupert in B.C. The project was a partnership between Nexen, the Chinese-oil company based in Calgary, and Japan-based INPEX Gas. It was expected to handle between 10 to 12 million tonnes of natural gas each year, but the proponents announced in September 2017 that they would scrap the project.
Project: Prince Rupert LNG Cost: $16 billion Lead company: Royal Dutch Shell
The proposed LNG export facility in Prince Rupert B.C. was expected to have an export capacity of up to 21 million tonnes per year. It was cancelled in March 2017, after its developer BG Group was acquired by Royal Dutch Shell.
Shell said that it was cancelling the project because it wished to focus on its other B.C. LNG project in Kitimat B.C. The LNG Canada export terminal will connect resources in B.C. to Asian markets via the Coastal Gaslink — the pipeline opposed by some hereditary Wet’suwet’en chiefs who are upset that the pipeline traverses through their unceded territory. The opposition has led to rail blockades across the country and has emerged as another flashpoint in the debate over Indigenous issues and resource development.
Project: WCC LNG Cost: $25 billion Lead company: Exxon Mobil Corp.
A proposed LNG export facility in Prince Rupert B.C. which was expected to export 15 million tonnes of natural gas per year, with room to expand to up to 30 million tonnes per year. It was being developed as a joint partnership between Exxon Mobil Corp. and its subsidiary the Calgary-based Imperial Oil Ltd. The project was shelved indefinitely in December 2018.
Ukraine can focus in developing the country’s renewable energy sector and improve the much-delayed energy efficiency now that the former Soviet republic has concluded the gas transit agreement with Russia, the European Union’s energy chief said on 12 January.
“Meeting with Ukraine’s Minister of Energy Oleksiy Orzhel: after the conclusion of the gas transit agreement, Ukraine can focus on the future of energy and the development of renewable and energy efficiency” European Energy Commissioner Kadri Simson wrote in a tweet, adding that the EU would support Ukraine’s efforts. Simson also said that the Commissioner is looking forward to the next high-level dialogue between the EU and Ukraine.
The former Soviet republic that is reliant on fossil fuels is planning to reduce CO2 emissions by developing a green energy transition and increasing energy efficiency, especially in industry and buildings.
Simson met Orzhel on the sidelines of the 10th session of the International renewable Energy Agency (IRENA) General Assembly in Abu Dhabi at the United Arab Emirates. She also held a meeting with UAE Climate Change and Environment Minister Thani Bin Ahmed Al Zeyoudi on the EU Green Deal and the way to reach climate neutrality. “I am happy to see their active engagement and readiness to continue cooperation,” she said.
Tareq Emtariah is Director of the Department of Energy at the United Nations Industrial Development Organization (UNIDO)
VIENNA, Dec 13 (IPS) – At a time when the world is battling unprecedented drought, bushfires, rising sea levels and water shortages, reducing energy use across industry is one powerful way to fight climate change in the immediate term.
However, historic slowdowns in energy efficiency progress persist. As we conclude another Conference of Parties (COP25) on climate change, and move into a new decade with unprecedented environmental challenges, governments have to put industrial energy efficiency back on the agenda before it is too late.
I have worked in the energy sector for nearly 25 years. During this time, I have witnessed some incredible advances. Yet, now, when we should be doing everything in our power to reduce the unnecessary use of fossil fuels, we are instead witnessing a slowing of progress on energy efficiency, with the International Energy Agency reporting last month that progress on energy efficiency had declined to its slowest rate since this decade began.
Among the many reasons for this “historic slowdown” is a lack of national government commitment for the cause, which is seriously hampering wide-scale change.
Prioritising industrial energy efficiency is one way that governments can simultaneously ease pressure on the economy, enhance energy security and the environment in the here and now. It’s what we at UNIDO refer to as the “invisible solution”.
Tareq Emtariah – Credit: UNIDO
A large-scale shift toward more energy efficient practices in industry would enable companies to massively reduce their power bills. In economic terms, industrial energy efficiency can increase productivity, lower manufacturing costs, and create more jobs.
When it comes to the environment, the widespread adoption of energy efficiency measures could reduce industrial energy use by over 25%. This potential is a significant reduction of 8% in the global energy use and 12.4% reduction in global CO2 emissions.
With this in mind, here are five practical steps governments can take to harness industrial energy efficiency against climate change:
1. Phasing out fossil fuel subsidies, at least for those industries which are large enough to afford it. Analysis commissioned by the IMF this year found that if fossil fuels had been priced appropriately, global carbon emissions would be reduced by 28 per cent and governments revenues would increase 3.8 per cent of GDP. Developed economies and nations such as those in the United States and European Union should be leading by example on this issue.
Meanwhile, in major emerging economies like Argentina, Indonesia, South Africa, Turkey and Russia fossil fuel subsidies have historically kept the cost of energy artificially low.
As a result, there has never really been a major concern for industries to makes changes. When industries don’t fully understand the potential of energy efficiency, and energy costs are bearable, it’s a lot easier for them to become complacent.
One just has to look to Morocco for inspiration. In 2014 the North African nation ended subsidies of gasoline and fuel oil and begun to cut diesel subsidies as part of its drive to repair public finances.
Fast forward to today and Morocco is considered one of the most progressive countries when it comes to its national energy commitments and efforts to prioritise industrial energy efficiency.
2. Breaking down barriers to finance. In developing economies in particular, investors’ lack of awareness of the commercial benefits of best practices in energy efficiency is preventing much needed investment. In countries like Brazil, ‘high-risk’ perceptions surrounding energy efficiency projects mean that interest rates are often impossibly high for companies eager to invest in industrial energy efficiency advancements.
The public sector must pinpoint the best ways to design and implement energy efficiency policies to effectively mobilise finance and investment. Co-funded blended finance schemes, tax breaks, financial sector training and project bundling are just some of the many ways governments can help to simultaneously incentivise and de-risk investments into industrial energy efficiency.
Improving the competitiveness of Brazil’s industrial sector, which contributes to 20 per cent of the country’s GDP, requires significant investment into energy efficiency. UNIDO’s Industrial Energy Accelerator undertook three energy efficiency workshops aiming to change perceptions among investors. Credit: UNIDO
3. Supporting SMEs. Often in emerging economies, small-to-medium sized enterprises make up the majority of the industrial sector. However, many of these small businesses lack the formal qualifications and the collateral needed to access finance and adhere to newly introduced industrial energy efficiency regulations.
In Mexico for example, where small-to-medium sized enterprises form the backbone of the national economy, the government is working to introduce a labour competencies standard for internal energy auditors that responds specifically to the needs of SMEs.
4. Making the invisible, visible. Despite offering so many win-win benefits, industrial energy efficiency is often referred to as an invisible solution. Energy efficiency interventions require changing behaviours and they are often technical.
Retrofitting the insulation level of pipes or replacing an old inefficient boiler is not as appealing as investing into multimillion-dollar renewable energy projects panels or as noticeable as saving forests.
However, government leaders can help change this by working with industry to advocate and discuss the potential of implementing industrial energy efficiency measures to consumers and other stakeholders. To facilitate and amplify this conversation, UNIDO recently launched a dedicated Industrial Energy Accelerator website and Linkedin community.
5. Joining forces. We cannot solve this challenge country-by-country, we must work together under a coordinated and ambitious multilateral framework. At the end of the day we are calling on competitive multinational companies to overhaul their production processes, incentivize their global supply chains and invest in long-term sustainability measures.
In order to enable this, countries must create a level playing field for businesses to operate within by aligning national incentives and energy pricing systems.
Government is absolutely critical to the energy efficiency transition. Even with the willpower of the private sector, without coordinated government incentives, – such as support for SMEs, advocacy and effective policy- industrial energy efficiency will be impossible to achieve on a large scale.
As we conclude another COP and move into a new decade with unprecedented environmental, social and economic challenges, on behalf of UNIDO and the Industrial Energy Accelerator, I urge all governments worldwide to put industrial energy efficiency back on the agenda. We have the knowhow, we have the technology, now is the time for leadership and effective policy to help us implement the solutions.
UNIDO’s Industrial Energy Accelerator works on the ground to rally government, business and finance around solutions for industrial energy efficiency. Next year the programme will enter phase two of project implementation in the Accelerator’s first five partner countries, and we will begin work in new countries including: Palestine, Sri Lanka, India, Ukraine and Ghana.
Industrial Energy Efficiency is a Climate SolutionFriday, December 13, 2019
AUDIO: If We Are to Achieve Zero-leprosy by 2030, This Is the Best Time and OpportunityFriday, December 13, 2019
Haiti’s Cry for Help as Climate Change is Compared to an Act of Violence against the Island NationFriday, December 13, 2019
How Climate Change is Fuelling the Insurgency of Nigeria’s Armed Group Boko HaramFriday, December 13, 2019
Mainstreaming Leprosy-affected People a Big Challenge in BangladeshThursday, December 12, 2019
The Ignoble Fall of a Nobel Peace Prize WinnerThursday, December 12, 2019
Commonwealth: Commitment to Limit Global Warming or Face Irreversible ImpactsThursday, December 12, 2019
Sasakawa Vows to Continue Support for Fighting Leprosy in BangladeshThursday, December 12, 2019
Coordinated Global Action Is the Best Way to Control the Fall Armyworm PestWednesday, December 11, 2019
Taking Bangladesh to Zero-Leprosy, One New Case at a TimeWednesday, December 11, 2019
Related In-depth Issues
Learn more about the related issues:
Bookmark or share this with others using some popular social bookmarking web sites:
Link to this page from your site/blog
<p><a href="http://www.globalissues.org/news/2019/12/13/25957">Industrial Energy Efficiency is a Climate Solution</a>, <cite>Inter Press Service</cite>, Friday, December 13, 2019 (posted by Global Issues)</p>
… to produce this:
Industrial Energy Efficiency is a Climate Solution, Inter Press Service, Friday, December 13, 2019 (posted by Global Issues)