Welcome to Net Zero, your daily industry brief on clean energy and Canadian-resource politics.
The International Energy Agency (IEA) has said that increasing oil prices could expedite the transition toward electric vehicles, but it may come at the expense of the economic recovery from the COVID-19 pandemic.
In June, the world’s demand for crude oil surged by an average of 3.2 million barrels a day compared to the previous month, but oil production has failed to match the increase, which has caused a steady in rise in oil prices. The IEA warned that oil prices could climb even higher and lead to market volatility unless big oil producers begin to ramp up production. As a result, many drivers around the world are facing record high prices to fill up their tanks because of the rising oil market prices.
“While prices at these levels could increase the pace of electrification of the transport sector and help accelerate energy transitions, they could also put a drag on the economic recovery, particularly in emerging and developing countries,” the IEA said.
In comparison, the increasingly cheaper price of running an electric vehicle may incentivize more motorists to make the switch sooner than originally anticipated, which would help cut carbon emissions from the transportation industry. However, there are concerns that higher fuel prices could prompt cost inflation across the global economy, particularly in developing countries.
The IEA predicted that between July and September oil demand could rise to 3.3 million barrels per day higher than the previous quarter, which may only serve to exacerbate these problems. The Guardian has more.
The European Union is set to unveil its most ambitious climate change plan yet, aiming to pull ahead in the race among the world’s biggest economies to turn far-off green goals into concrete action this decade. The plan will detail how the bloc’s 27 countries can meet their collective goal of reducing greenhouse gas emissions by 55 per cent from 1990 levels by 2030.
Among the policies expected to be featured in the plan include increasing the cost of emitting carbon for heating, taxing high-carbon aviation and shipping, and charging importers at the border for carbon they emitted to make products such as cement and steel abroad.
“It’s going to be the biggest climate package in our history,” said Jytte Guteland, the Swedish lawmaker who was European Parliament’s lead negotiator on the EU’s climate targets. “Our economic sectors, our industries, everyone has to adapt to something new.” Reuters has that story.
Staying in Europe, talks between the Czech Republic and Poland with regard to the disputed Turow open-pit coal mine are progressing, according to a Czech deputy environment minister. Earlier this year, the Czechs filed a lawsuit against Poland claiming that the Turow mine, which is situated directly next to the border, is impacting water supplies and damaging Czech communities nearby.
The Czechs are seeking financial compensation for damages and also the establishment of technical improvements to safeguard the area around the mine. Higher level talks between the two nations are expected to resume next week.
Meanwhile, despite U.S. President Joe Biden’s efforts to pause the sale of oil and gas leases on federal land, approvals for such activities are on pace this year to reach their highest level since George W. Bush was president.
The Interior Department approved about 2,500 permits to drill on public and Indigenous lands in the first six months of the year, including more than 2,100 drilling approvals since Biden took office Jan. 20, according to the Associated Press.
On Wednesday morning at 8:54 a.m., West Texas Intermediate was trading at US$75.01 and Brent Crude was going for US$76.36.
With the possibility of a federal election looming, the Yellowknives Dene First Nation (YKDFN) says Ottawa must move forward and sign a series of agreements intended to apologize and compensate for the legacy of the Giant Mine. For 70 years, Yellowknife’s Giant Mine produced over 237,000 tons of arsenic trioxide, which has caused the area to become one of the most contaminated sites in Canada.
In recent months, efforts from the First Nation to receive an apology and compensation from the government have gained momentum, but there are concerns that an election call could significantly delay much of the progress made in the last six months.
“It is imperative over the coming weeks that we realize the signing of these historic agreements to begin the healing,” said YKDFN CEO Jason Snaggs. CBC News has the full story.
Innovation Minister François-Philippe Champagne announced a $40 million investment toward the Centre for Excellence in Mining Innovation to accelerate innovation in the mining sector. The funding will help establish the Mining Innovation Commercialization Accelerator Network, a pan-Canadian initiative which aims to support research and development related to mining.
“Today’s announcement will help bridge the innovation-to-commercialization gap for the benefit of both Canadian mining companies and innovators by providing them with the tools, knowledge and expertise they need to meet the future demands for Canada’s critical minerals. The mining sector is playing a pivotal role in our green recovery and our progress toward net zero, and I look forward to the innovations and the job creation that will come from these new collaborations,” Champagne said following the announcement.
Finally, AngloGold Ashanti, a South African gold mining company, has submitted an offer to buy the stake in Corvus Gold Inc. that it does not already own for about $460 million. AngloGold Ashanti already holds a 19.5 per cent indirect interest in Vancouver-based Corvus, but the company is offering $4 in cash per Corvus share, including payments for the Canadian company’s outstanding options. The Canadian Press has that story.
Canadian Crude Index was trading at US$60.33 and Western Canadian Select was going for US$62.10 this morning at 8:55 a.m.