News Archive - May 2016 View All

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Why it may make sense for Ontario to go it alone on climate change

May 26, 2016
You could call it Ontario’s declaration of energy independence: a radical plan to sweep carbon out of the provincial economy by turning off natural gas in homes and workplaces and switching on electric cars at a cost of $7-billion to taxpayers.

Premier Kathleen Wynne’s Climate Change Action Plan, revealed last week, is certainly ambitious, some critics might say fanciful. Natural gas delivers the heat to three-quarters of the province and the plan proposes that by 2050 gas will be entirely replaced by geothermal, solar and other forms of non-hydrocarbon energy. But, before we even get to the nitty-gritty of how Ontario will banish methane and gasoline from the home and the transportation system and what the private cost to households and businesses might be, there is an interesting political debate about going it alone.

The Ontario government is forging ahead with plans to save the Earth from anthropogenic climate change in the full knowledge that the effect will be to hurt fellow Canadians whose livelihoods are closely linked to the fortunes of the oil and gas industry. Alberta has been hammered by America’s oil glut and natural gas bubble. Bearing in mind the lack of pipelines to new export markets, Western Canadians may be feeling like sacrificial lambs on the altar of urban Ontario’s environmental purity. With her plan to close Ontario as a market for oil and gas, Ms. Wynne could not do more to offend Alberta if she were to announce plans to convert her province to a vegetarian diet.

Still, she may be right to go it alone. The conventional wisdom used to be that political action to solve global problems had to be international. It was the logic that spawned the myriad agencies of the United Nations. Success in some areas, such as eradicating plagues like smallpox, encouraged the world to think that the enlightened self-interest of nations working together (especially when amply funded by American dollars) would end all disease and poverty and save the environment.

It hasn’t worked because self-interest is not always aligned or even very enlightened. Almost two decades on from the original Kyoto protocol, there is no genuine global plan to reduce carbon emissions.

There are many statements of support, much of it sincere and well-intentioned, including (one must assume) those from the 177 nations that signed the agreement in Paris in December. But the new agreement will not be in force until more than 50 countries accounting for 55 per cent of carbon emissions have formally committed to implementing its commitments.

As usual, the European Union is a vocal supporter, but Europe’s efforts to cut its own emissions have foundered in a quagmire of excuses, avoidance and recrimination. The ETS, Europe’s cap-and-trade system, which was intended to set a market price for mitigating carbon, has failed. Member states insisted on keeping national control on the issuance of allowances (permits to emit carbon) to industry; as a result, too many were issued and the current price of an allowance to emit a tonne of carbon is currently just €6 ($9 Canadian).

In the EU today, it pays for power stations to buy permits to emit carbon rather than convert to cleaner fuels. It’s good news for German and Polish coal miners, who still have jobs digging the black stuff, and it explains why the German government is studiously ignoring the campaign by Ségolène Royal, France’s Minister of Ecology and former partner of President François Hollande, to impose a price floor of €30 on the cost of emitting a tonne of carbon. Of course, France is mainly nuclear-powered, but Ms. Royal’s campaign will be endorsed in France’s next finance bill, which will make the €30 carbon floor applicable throughout the country.

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Energy

Newsrooms Launches TechPORTFOLIO to Cover Economic Value of Startup Ecosystems

May 22, 2016
Startups have ended the industrial era and have become the net job creators in many major markets across the globe.

To follow this disruptive change, /newsrooms has launched TechPORTFOLIO, a social media-driven destination that covers the economic value and financial benefit of startup ecosystems as they emerge locally, nationally and internationally.

"TechPORTFOLIO will explore the most important transformations impacting technology, business and economic growth," says Robert Delaney, VP Managing Editor, TechPORTFOLIO. "We're researching and writing about many layers of the ecosystems. TechPORTFOLIO will compare and contrast geographies, approaches, companies, and investment trends in order to understand and evaluate how startup ecosystems are changing."

TechPORTFOLIO combines journalistic coverage and data analysis to profile startups, entrepreneurs, investors, academia and governments shaping startup ecosystems.

TechPORTFOLIO will use IBM Cloud and cognitive technologies, including data and machine learning as part of its journalistic approach to deliver insights relevant to the companies, startups and governments involved in the global startup ecosystem.

"IBM Cloud is the leading platform for data-driven cloud and analytics that enables organizations to meet market demands and open doors to more responsive and innovative ways of doing business," says Nevil Knupp, VP of Cloud, IBM Canada. "By providing the best cloud and cognitive technologies, we are helping TechPORTFOLIO connect to the developer and startup audience and transform the way news is delivered."

"The Canadian startup space is thriving and supporting a culture of innovation with organizations, like TechPORTFOLIO, allows IBM to contribute to a thriving tech environment that can strengthen Canada's position as an ideal place to research and develop new technologies," says Lila Adamec, Program Director, Developer Ecosystem & Startups, IBM Canada.

"TechPORTFOLIO will be a new kind of publication that incorporates data, social media and technology into its operating model and ongoing publishing," says Leigh Doyle, Managing Editor, TechPORTFOLIO. "Editorial instinct and subject matter expertise will take us a long way in our analysis and storytelling around tech and startup ecosystems. When we combine those with our data and social media expertise, we're able to go deep into subjects in ways that were not possible before. That's exciting."

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Makes U Think

As lithium becomes ‘the new gasoline,’ this stock is worth a look

May 21, 2016
Goldman Sachs calls it “the new gasoline,” and while this quote has helped inflate something of a bubble in lithium stocks, it’s not all hype. There’s a lot of substance behind the enthusiasm for this commodity and conditions appear ripe for one of those rare commodity bull runs that create significant wealth. For those with an appetite for the higher risk, higher return ideas, I give you Lithium X Energy Corp., a junior explorer backed by proven people that’s already off to an aggressive start.

Lithium is the new gasoline because it appears that Tesla and other electric-car makers will gradually take market share away from Earth-destroying combustion engines. Goldman expects that share to rise seven-fold, to about 22 per cent, over the next decade. (Lithium is used in lithium-ion batteries in electric cars, as well as many other kinds of batteries, such as those in smart phones.)

Annual lithium carbonate equivalent demand is currently 160,000 tonnes. Goldman estimates that a 1-per-cent increase in electric-battery car penetration will increase demand by a staggering 45 per cent. That supply, meanwhile, is temporarily constrained by a variety of issues, including recent temporary mine shutdowns and the fact big players are buying up future production. As a result, prices have skyrocketed, rising 50 per cent in the first quarter alone after a stiff increase last year. Prices for lithium carbonate in China have risen from about $8,000 (U.S.) a tonne near the end of 2015 to just below $20,000 a tonne now, according to Citi Research.

Elon Musk seems concerned. Tesla Motors Inc., which he founded and leads, has announced 400,000 orders of its new cheaper model, the Tesla 3. The company believes it will sell a total of 500,000 cars in 2018 and 1 million by 2020. The world clearly needs a lot of new lithium production, and fast. Mr. Musk said: “In order to produce half a million cars a year … we would basically need to absorb the entire world’s lithium-ion production.”

So that’s the convincing case for lithium. Here’s the argument for Lithium X: The company launched late last year and its stock has been one of the best stocks in Canada – if not the best – market performers over the past six months, being up more than tenfold since it’s first financing and almost twenty-fold at its recent peak last month.

CEO Brian Paes-Braga started putting the company together last year after concluding, based on observations similar to those above, that there was an opportunity to build a dominant name in lithium.

He was fortunate to be acquainted with Canadian mining titan and philanthropist Frank Giustra, whom he convinced to join the company as a major investor.

“Frank has a Tesla and a lot of respect for Elon Musk, that gave me an opening to pitch him on lithium,” Mr. Paes-Braga says. “He got it right away.”

He also enlisted Paul Matysek, another highly successful Canadian mining veteran who has built up a number of junior mining companies in a variety of resources and sold them to majors. Mr. Matysek is a shareholder and executive chairman.

“A lot of guys have ridden [resources] waves up and down but Paul always had an exit. I want to build something and monetize it,” Mr. Paes-Braga says, referring to the idea that mining wealth is created by financing, proving out, developing and then selling quality deposits to major producers, leaving them the difficult task of building and operating a mine.

So far Lithium X has two principal assets: one in Nevada, next to a producing mine, which is of middling size, and another in Argentina, where some of the best lithium brine deposits are located. Lithium X controls 80 per cent of the deposit and it appears to be of exceptional quality, according to industry observers.

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Makes U Think

Ontario to spend $7-billion on sweeping climate change plan

May 18, 2016
The Ontario government will spend more than $7-billion over four years on a sweeping climate change plan that will affect every aspect of life – from what people drive to how they heat their homes and workplaces – in a bid to slash the province’s carbon footprint.

Ontario will begin phasing out natural gas for heating, provide incentives to retrofit buildings and give rebates to drivers who buy electric vehicles. It will also require that gasoline sold in the province contain less carbon, bring in building code rules requiring all new homes by 2030 to be heated with electricity or geothermal systems, and set a target for 12 per cent of all new vehicle sales to be electric by 2025.

While such policies are likely to be popular with ecoconscious voters, who will now receive government help to green their lives, they are certain to cause mass disruption for the province’s automotive and energy sectors, which will have to make significant changes to the way they do business. And they have already created tension within the government between Environment Minister Glen Murray and some of his fellow ministers who worry he is going too far.

The 57-page Climate Change Action Plan was debated by Premier Kathleen Wynne’s cabinet Wednesday and subsequently obtained by The Globe and Mail. Stamped “Cabinet Confidential,” the document lays out a strategy from 2017 to 2021. It contains about 80 different policies, grouped into 32 different “actions.” Each action has a price tag attached to it, as well as an estimate of the amount of emissions it will cut by 2020.

The Globe had previously uncovered details of the plan, but this is the first time the full blueprint has been revealed. The strategy is scheduled to be further reviewed by cabinet ministers and fine-tuned, sources said, with public release slated for June.

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Energy

Massachusetts eyes $10-billion offshore wind farm boom

May 05, 2016
Lawmakers in Massachusetts are drafting a bill that would jump-start the offshore wind industry in the U.S., helping trigger a $10 billion building spree off the Atlantic coast.

The energy bill may be introduced as early as this month and is expected to require utilities to purchase power from offshore wind farms, according to Representative Thomas Golden, one of the Democrats who control the state legislature.

Still to be determined is how much power utilities would be forced to buy under the bill and, crucially, whether the state’s Republican governor – who has already opposed one offshore project – will sign it.

Developers want legislators to mandate the sale of 2,000 megawatts over a decade, enough to power roughly 1.6 million households. Building the infrastructure to deliver that capacity would cost about $10 billion, said Tom Harries, an analyst at Bloomberg New Energy Finance. It also would give developers their first chance to build the farms on a mass scale outside Europe and Asia, in a region where powerful ocean winds and high energy prices will provide a key proving ground.

“This bill would be the last piece of the puzzle to get the industry going,” said Thomas Brostrom, general manager of North America for Dong Energy A/S, the world’s largest offshore wind developer.

Three companies – Dong, Deepwater Wind LLC and Offshore MW LLC – have leases from the federal government to build in the waters south of Martha’s Vineyard. Deepwater last year began constructing the nation’s first offshore wind farm off Rhode Island. Dong, meanwhile, has opened an office in Boston anticipating the Massachusetts legislation, and is hunting for further sites along the East Coast.

Massachusetts state Senator Marc R. Pacheco said the prospect of Dong and other companies anchoring their U.S. operations in the state may trigger an economic boom.

“We have the opportunity to create an industry,” Pacheco, a Democrat, said in an interview.“We have the opportunity to create thousands of jobs and create a whole supply chain.”

Globally, offshore wind energy has boomed over the last decade as developers installed turbines with more than 11,000 megawatts of capacity, primarily in the U.K. and Germany, according to Bloomberg New Energy Finance. They’re forecast to install another 12,000 megawatts in those areas by 2019.

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Energy