In the pool that was the energy news over the last week, there’s no doubt the biggest splash was made by the Federal government in announcing the Carbon Tax will climb to $170/tonne by 2030. To give this announcement some context, on November 19th Bill C-12, the “Net-Zero by 2050” Bill, had its first reading in the House of Commons of Canada; it is now in the Second Reading stage. The Bill sets the stage for the Federal Government to create milestone targets that will help it reach this 2050 end-game goal. Enter, the first interim target Trudeau announced last Friday: Ottawa wants to slightly surpass Canada’s goal of reducing emissions by 30% below 2005 levels by 2030 and just one measure to achieve it is to gradually increase the Carbon Tax to $170/tonne. As part of the 2030 plan, entitled “A Healthy Environment and a Healthy Economy”, the Feds want to spend $15 billion on climate initiatives that include electric vehicle charging infrastructure, rebates for vehicles themselves, home and community building retrofits, among many others. The plan includes a quarterly rebate for households and incentives for businesses to help forge the path to zero-emissions. For more detailed information on Canada’s strengthened Climate Plan, click here. True to Liberal style, there will be some hoops to jump through in order to minimize the fiscal pain these changes may cause struggling businesses. There’s no doubt that as the world’s 2nd largest per capita emitter, Canada does have to step up to the plate. As regulations change to accommodate the plan we’ll be there to help.
Regarding the natural gas markets, Henry Hub natural gas futures for January are trading at US$2.64/MMBtu as of 1:30pm EDT Thursday afternoon. Prices climbed higher over the past week with colder weather patterns across the US. The EIA estimated working gas storage was 3,726 Bcf for the week ending December 11th, 2020, following a withdrawal of 122 Bcf. This slightly bullish report is in line with market expectations which ranged widely from 112-135 Bcf, but not enough to push prices significantly higher today. Storage levels are now 8.3% above year-ago levels and, relative to the 5-year average, 7% greater.
In Canada, prompt-month futures for AECO are trading at C$2.65/GJ, while Dawn is trading at C$3.08/GJ. Prices for both AECO and Dawn trended higher week-over-week by C$0.28/GJ and C$0.34/GJ, respectively. Canadian natural gas storage for the week ending December 11th, 2020, was sitting at 735.3 Bcf, after an overall withdrawal of 18.7 Bcf, up 2.48% from last week and up 32% from last year at this time.
– Karyn Morrison, Energy Data Analyst / Grace Wilton, Energy Data Analyst
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