Gas Prices...

[Undead]

And people had been trended back to those gas guzzling SUVs for awhile...ever since that last period of high gas prices.

AoD

I believe that was because a few of the smaller and midsize SUV segments have reached approximate parity with similarly sized sedans in terms of gas mileage.

 

[W. K. Lis]

Now the good news...

Alberta projects first surplus in eight years as high oil prices drive dramatic turnaround​

From link.

Alberta expects to post a surplus in the next fiscal year after eight years in the red, as it forecasts near-record royalty payments from high oil prices that have propelled a sharp financial turnaround.

The United Conservative Party government’s budget, released Thursday, predicts Alberta’s revenue will outpace expenses by $511-million in 2022-2023, followed by surpluses in 2023-2024 and 2024-2025. A year ago, the government projected a $10.98-billion deficit in 2022-2023.

Premier Jason Kenney staked his political reputation on reviving Alberta’s struggling economy and cleaning up its books. Sluggish oil prices and the COVID-19 pandemic jeopardized those goals, but his government is now projecting a balanced budget on the strength of surging energy prices and continued spending restraint. New Brunswick is the only other province expected to balance its books in the forthcoming fiscal year.

Travis Toews, the Minister of Finance, acknowledged energy’s role in Alberta’s fortunes, but insisted deficits would have lingered if not for UCP’s commitment to cutting costs.

“There’s no doubt rising energy prices have certainly improved the balance sheet and the bottom line,” Mr. Toews told reporters prior to tabling the budget in the legislature. “But we’ve been focused as a government over the last three years on managing what we can manage.”

Under the UCP, Alberta increased its annual operating spending by less than half a per cent per year over the last three years, compared to 4 per cent annual growth in the preceding years, Mr. Toews said. He said the province has successfully brought Alberta’s per capita spending in line with provinces like Ontario and British Columbia.

“That fiscal discipline is really positioning the province to be much more fiscally sustainable,” he said.

The prospect of budget surpluses could help Mr. Kenney win back support in the party he founded. Mr. Kenney faces a leadership review in early April, giving frustrated United Conservative Party members a venue to judge his handling of the COVID-19 pandemic. UCP members opposed to public-health restrictions pushed for a review, although some residents believe Mr. Kenney has been too quick to eliminate the safeguards.

Further, protesters blocking Highway 4 near the U.S border crossing at Coutts took issue with Mr. Kenney’s restrictions and the premier accelerated plans to ease the rules as the demonstration dragged on, though he said the two weren’t related. He will likely point to the new budget as he argues he deserves to remain leader and Premier. The next provincial election is next year.

Alberta intends to spend $62.1-billion and collect $62.6-billion in revenue in fiscal 2022-2023, according to the budget. The government is banking on $13.8-billion from non-renewable resource revenue, up $9.1-billion from the $4.7-billion it predicted for 2022-2023 a year ago.


If the government’s most recent estimate holds, this would set a new record for bitumen royalties at $10.3-billion and mark the second-best year for non-renewable resource revenue overall. Alberta raked in $14.3-billion in non-renewable resources in 2005-2006, the highest ever.

However, the forecast assumes prices will begin to decline in the next year, bringing conventional crude oil and natural gas royalties on par or slightly lower relative to 2021-22. By 2024-25, the province expects resource revenue to drop to around $10.9 billion, as the global supply-demand imbalance resolves and prices decrease.

The budget is predicated on West Texas Intermediate oil, the North American benchmark, trading at an average of US$70 per barrel in the next fiscal year and US$66.50 by 2024-25. WTI traded above $100 per barrel Thursday, after Russia attacked Ukraine. By Thursday afternoon, it had retreated to around US$93.

Mr. Toews said the “naked aggression that Russia is showing towards Ukraine” is adding a risk premium to the energy sector, but he added that, as with all commodities, oil and gas prices will continue to rise and fall.

“We’ve seen great volatility in the last year and a half, incredible volatility,” he said. “That’s why we’re ensuring that we’re delivering government services most cost-effectively, being informed by our fiscal anchors.”

Alberta earmarked $23.6-billion for the department of health in 2022-2023 and set the COVID-19 contingency fund at $750-million. Mr. Toews conceded spending on health care will not keep pace with inflation and population growth, but argued the increase to baseline funding, combined with government’s effort to deliver services more efficiently, translates to “better service and more cost-effective use of taxpayer dollars.”

The government intends to draw from the $750-million COVID-19 contingency fund to address the surgical backlog in the province. Alberta’s waiting list was exacerbated during the pandemic, when the province halted non-emergency operations in order to secure the equipment and staff necessary to care for COVID-19 patients that were clogging intensive care units.

The UCP has repeatedly said they want Alberta to direct more surgical traffic to private surgical facilities, although those procedures would be covered by the public system. However, the government on Thursday insisted that the money set aside in the 2022-2023 budget to reduce the backlog would not go to chartered facilities. Instead, that cash will be directed toward expanding Alberta Health Services’ facilities over the next three years and covering the costs of executing the surgeries.

Alberta’s throne speech, delivered Tuesday, indicated the budget would contain a consumer rebate program to offset the rising costs of natural gas. The budget, however, deflated hopes of immediate relief. Under the budget, consumers using less than 2,500 gigajoules annually will be eligible for relief should the regulated rate exceed $6.50 per gigajoule. Price now are around $5 per gigajoule, twice what they were last year.

The Alberta New Democratic Party slammed the UCP for side-stepping relief programs.

“I was shocked that this government put nothing in this budget to help with the sky-high bills Albertans are paying right now. Not a cent,” Rachel Notley, the leader of the NDP, said in a statement. “For both gas and electricity, Albertans are on their own this winter.”

The budget sets aside $149-million for carbon capture, utilization and storage (CCUS) projects in the province in 2022-23. Alberta expects to increase that amount to $227-million in 2023-24 and $305-million the year after.

“That’s going to be an important part of our emissions reduction strategy in the energy industry,” Mr. Toews said.

CCUS facilities force carbon-dioxide emissions deep into the ground to keep them out of the atmosphere. The technology can be used in various major industrial sectors, including fossil-fuel production, power generation and manufacturing.

The cash earmarked for CCUS comes from the province’s carbon tax on large emitters, which it expects will generate about $421-million in revenue in the coming fiscal year. However, the province is yet to develop any specific programs to allocate the funds.

A large part of those projects going ahead, however, will rely on the CCUS investment tax credit announced by the federal government as part of its own budget in 2021.

The Alberta government said it wants the federal credit to cover 60 to 75 per cent of CCUS project costs, arguing that something in that range could result in 50 megatonnes of carbon capture per year, helping Canada to hit it ambitious climate targets.

Mr. Toews said while his government is pleased that Ottawa is going ahead with the program, it must be “at least equivalent to the American credit to ensure that we don’t see a flight of capital from Canada down into the U.S.”

“We need the federal government to step up and adequately calibrate this investment tax credit so that is meaningful, and so that it can provide enough incentive an assistance to make those big, large, costly infrastructure investments.”

 

[Admiral Beez]

Looks like Alberta is going to throw away it's short term windfall to attract votes.

https://www.cbc.ca/news/canada/edmonton/alberta-pausing-provincial-fuel-tax-collection-1.6375882

 

[W. K. Lis]

Germany and the EU remain heavily dependent on imported fossil fuels​

From link. Dated 02 Mar 2022.

In the midst of the Energiewende, Germany still relies still heavily on imports of fossil fuels as its domestic resources are largely depleted or their extraction is too costly. Rising European energy prices in 2021/2022 and tensions in countries that are key to the continent’s energy supply have put the question of import dependence and how the switch to renewables could bring some relief front and centre of the debate. This factsheet provides an overview of the current status of Germany’s oil, gas and coal consumption, as well as its main suppliers, and discusses Europe’s dependence on imported energy.

Almost 60 percent of the EU’s energy needs were met by net imports in 2020. Germany’s energy import dependency was still higher at 63.7 percent – a slight decrease compared to the previous year’s 67 percent.

With an increasingly integrated European energy market, the significance of a country-focused analysis of import dependence will decline, and an EU-wide one will come into focus.

Energy import dependency in European countries in 2020 in percent of energy needs covered by net imports. Source: eurostat 2022.

What impact will the Energiewende have on energy imports?​

Energy prices in Europe increased sharply in 2021/2022 in large parts because supply could not keep up with the increase in demand – especially for natural gas – as countries recovered from the coronavirus pandemic. At the same time, Russia’s behaviour as a gas exporter and rising tensions at its border with Ukraine stoked worries about the reliability of Europe’s eastern neighbour as a key energy supplier. All of this has brought the questions of dependence on fossil fuel imports and what effects the ongoing energy transition has back at the top of the public debate.

Overall dependence on energy imports will change dramatically for some countries as the energy transition progresses. The rapid growth of renewable energy is likely to alter the power and influence of some states and regions relative to others, and to redraw the geopolitical map in the 21st century, said a 2018 report published by the International Renewable Energy Agency (IRENA).

The plan to reach climate neutrality by 2045 should all but eliminate fossil fuels from Germany’s energy mix. The German government has introduced interim greenhouse gas emission targets for the years until 2040 with the Climate Action Law.

As fossil oil and gas are being phased out, many see the need to partly replace them with synthetic fuels. Renewable electricity is converted into hydrogen, methane or synthetic petrol (power-to-x) to serve as energy sources in certain areas, for example in industry, road freight transport, shipping or seasonal energy storage. According to several studies and politicians, Germany will have to import significant amounts of these green fuels, because space for generating electricity from renewables is limited in the country and power-to-x fuels could be produced significantly cheaper in other regions of the world. Thus, while Germany will likely reduce its overall dependence on energy imports, it will continue to rely on supply not only from within the European network but also from third countries.

European Union’s import dependence​

The EU produces large parts of its energy domestically, with about a third from renewables and nuclear each, and the rest mostly from solid fuels like hard coal and lignite, and some from natural gas and crude oil.

Still, most energy needs (about 60%) are met with imports. Together, energy imports of oil, gas and coal make up around 15 percent of total EU imports (% of trade in value).

More than two-thirds of the EU’s energy imports in 2020 were petroleum products, followed by gas (about a quarter) and coal (less than 5%). Russia was the main extra-EU supplier in all three categories (25.5% petroleum, 43.9% gas and 54% solid fossil fuels), followed by Norway for natural gas and the U.S. for crude oil.

Energy import patterns vary widely across the EU member states. While more than 80 percent of imports in countries such as Malta, Greece and Sweden are petroleum products, over a third is gas in Hungary, Austria and Italy. The total import dependency rate in 2019 ranged from 5 percent (Estonia) to more than 90 percent in Cyprus, Luxembourg and Malta.

In 2019, the EU member state by far the least dependent on energy imports was Estonia (4.8%), followed by Sweden and Romania (both 30%). Estonia’s high degree of energy self-sufficiency is based on domestically produced oil shale, an energy-rich sedimentary rock that can be either burned for heat and power generation or used for producing liquid fuels, according to the 2019 International Energy Agency (IEA) country report.

...

 

[W. K. Lis]

A breakdown of where the money goes when gas prices soar​

From link.

We’re all shocked by the price of gas these days, an average of $1.84.9 in Toronto is resulting in a touch of sticker shock.

Where does all that money go, though? How much goes to the oil companies, the gas station, the government?

It turns out taxes are the second-biggest part of the price of gas, after what we pay for the crude oil itself. The cost of the raw crude currently sits at about 92 cents per litre, while taxes from both the province and the federal government account for 54.9 cents per litre.

The wholesaler takes about 30 cents per litre and the retailer 8 cents.

Both the federal and provincial governments are doing very well as the price of gas soars. While most gas taxes are a fixed amount per litre, the HST is a tax charged as a percentage of the price.

A year ago, the average price per litre in Ontario was around $1.19. With the price now sitting 64 cents higher than that, the province is pocketing close to 5 cents per litre more in sales taxes, while the federal government is pocketing an extra 3 cents per litre compared to a year ago.

On April 1, the federal government will increase their carbon tax by $10 per tonne adding an extra 2.2 cents per litre to the overall cost of gas.

At midnight Wednesday, drivers can expect to see a market price increase of at least 5 cents per litre, predicted gas price analyst Dan McTeague.

92¢ out of the $1.848 (allegedly, and as of yesterday) goes to Alberta.

 

[Admiral Beez]

With my move to WFH in March 2020 I think I drive about 500 km a year, so I don’t worry too much about my own gas cost. But inflation will hit me.

 

[lenaitch]

A breakdown of where the money goes when gas prices soar​

From link.

We’re all shocked by the price of gas these days, an average of $1.84.9 in Toronto is resulting in a touch of sticker shock.




92¢ out of the $1.848 (allegedly, and as of yesterday) goes to Alberta.

Or Algeria, or Mexico, or the Middle East . . .

Where your gas comes from

The few refineries scattered across Canada supply a wide variety of customers, many with different requirements

www.theglobeandmail.com

Virtually all of the crude oil used in refineries west of Sarnia comes from Canada. Because of the vast distances involved, costs, complexities and environment issues in running pipelines across this country, crude oil used in the eastern refineries comes from offshore, a limited amount from Canada's offshore wells, but the majority comes from foreign countries.​

​

The sources of the foreign oil are: Algeria (17,942 cubic metres per day), United Kingdom-North Sea (15,370), Nigeria (11,835), Norway (11,483), Saudi Arabia (10,922), Iraq (6,376), Venezuela (4,218), Mexico (4,089), United States (1,857) and 29,999 cubic metres a day is purchased on the open market from other sources.​

 

[W. K. Lis]

Price of fuel at pumps in France passes €2 per litre​

The price of fuel at the pumps in France has passed €2 per litre in many areas of the country, driven by market uncertainty following the Russian invasion of Ukraine.


From link. (That's $2.84 CAD.)

According to fuel price comparison site Carbu.com, the average price of unleaded petrol on forecourts across France has risen by more than €0.10 in the past week alone and more than €0.18 in a month; while diesel has jumped nearly €0.20 over the past seven days – and over €0.25 in a month.

For many in rural France, where public transport is poor, running a car is essential and the price hikes have already started to make a painful impact on their wallets.

It is expected that fuel prices will continue to rise as the effects of the war in Ukraine and the EU sanctions become more evident, with some predicting prices at the pump of €2.50 per litre.

 

[W. K. Lis]

From link.

 

[Admiral Beez]

https://www.cbc.ca/news/business/gas-prices-hit-record-highs-across-the-country-1.6443884

The price of gas is going to hit summer road trippers. I've been wfh since Covid started in March 2020 so my car has nearly square tires I think, but soon I'll need to start driving for work again. I'm not looking forward to $2 a litre and up for the next year. Of course in Europe people have been paying that price for years and they figure it out and keep on buying and driving cars.

Maybe there's hope...

 

[tripwire]

We are going to do a road trip to Montreal and Quebec City (with lots of driving to the national parks near QC) for Victoria Day long weekend (with extra vacation days on top). The higher gas prices is not going to help with the budget, but it's the world we live in. Need more charging station accessibility - especially in terms of condo builds.

 

[Admiral Beez]

We are going to do a road trip to Montreal and Quebec City (with lots of driving to the national parks near QC) for Victoria Day long weekend (with extra vacation days on top). The higher gas prices is not going to help with the budget, but it's the world we live in. Need more charging station accessibility - especially in terms of condo builds.

For family road trips I find the gas price still a reasonable portion of our travel cost. For example, we like to visit Myrtle Beach, SC. That’s about 3,000 km round trip. My compact SUV consumes 9.6 L/100 km in the city, 7.5 on the highway and 8.7 combined. I’m going to be almost all highway until we get there, so I’m going to assume 8.0 L/100 km. So I need 2,400 L of regular gas. US $4 a gallon is equal to CAD $1.36/L I need to budget CAD $3.2k for gas. That’s only about $500 more than it would cost any other year and still affordable compared to the cost of the hotel and the buffet clearing locusts that travel with me.

 

[lenaitch]

I went for a ride yesterday - can't recall ever pumping $40 into a motorcycle.

"buffet clearing locusts". Now, that's just plain funny. Said with love, I assume.

 

[begratto]

For family road trips I find the gas price still a reasonable portion of our travel cost. For example, we like to visit Myrtle Beach, SC. That’s about 3,000 km round trip. My compact SUV consumes 9.6 L/100 km in the city, 7.5 on the highway and 8.7 combined. I’m going to be almost all highway until we get there, so I’m going to assume 8.0 L/100 km. So I need 2,400 L of regular gas. US $4 a gallon is equal to CAD $1.36/L I need to budget CAD $3.2k for gas. That’s only about $500 more than it would cost any other year and still affordable compared to the cost of the hotel and the buffet clearing locusts that travel with me.

Don't you mean 240 L instead of 2 400 L?

240 L * 1.36$ / L = 326$ of gas, not 3 200$.

 

[Admiral Beez]

Don't you mean 240 L instead of 2 400 L?

240 L * 1.36$ / L = 326$ of gas, not 3 200$.

Har, silly me, yes. Too much rushing around, not thinking straight.