Hello Chestermere! Like you I am enjoying a warm home due to natural gas heat. We all watch the news and hear about oil prices, pipeline constraints, and the price differential. There is more to this story though and in this column I would like to talk briefly about the “forgotten child” of the energy industry – natural gas. Alberta is blessed with abundant supplies of natural gas and an energy industry that leads the world in extracting it efficiently. Again, as I write this, natural gas fueled electricity generation is supplying over 50% of Alberta’s electricity needs. It’s nice to know that when we flip the switch the power will come on, isn’t it?
Unfortunately, we are victims of our success in producing natural gas. A combination of our world class energy industry and changes in market conditions have left us with a serious problem which has serious consequences for Alberta’s prosperity. Advances in technology have blessed us and our traditional US export market with abundant supply. Various regulatory issues have also restricted the ability of our Alberta producers to get their product to market. The combination of huge supply with restricted market access has led to significant bottlenecks and historic low prices for Alberta natural gas. You may think initially, “That’s great! My bills will go down.” Unfortunately, the current price of natural gas in many cases is far below the cost of production. All wells decline and if producers cannot make money they will not drill new wells to make up for that. Down the road this will inevitably cost you money and it’s already cost many Albertans their jobs.
So, let’s talk about solutions. In the short term we need to ensure that our producers can access existing markets. Your Government recognizes this and Dale Nally, Associate Minister Of Natural Gas, has spearheaded the following initiatives:
• A reduction in property taxes, saving industry over $23 million.
• Flexibility in statutory payments, recognizing short term cash flow challenges.
• Measures to ensure that our pipeline system makes market access a priority. This is vital. Over the past few months Minister Nally has brought together the stakeholders and facilitated cooperation to ensure our gas producers can get their gas to market. This is in everyone’s best interests and has already improved prices. On November 29, 2018 Alberta Spot Gas was trading at $0.46/GJ. This was almost $5.00/GJ less than the benchmark “Henry Hub” price for North American natural gas. On November 29, 2019 Spot Gas was trading at $2.58/GJ, and the discount to Henry Hub prices was about $0.60/GJ. In fact, at the UCP AGM this past weekend one delegate asked Minister Nally where he hung up his superhero cape, which was a nice compliment and well deserved.
In the long term, we need new markets and this means LNG. I am a born and raised Albertan with relatives in India. When I visit them the air pollution and poverty is appalling. Do you remember the worst air pollution from the BC fires? They live with that every day. Access to clean Alberta natural gas and Alberta technology would:
• Immediately improve air quality and health.
• Enhance opportunities. Which would you rather see, a child operating a hand powered irrigation pump for 12 hours a day or an electricity powered pump allowing the same child to go to school.
• Raise millions from poverty.
Make no mistake, this is not strictly an economic issue, it is a human rights issue. Exporting our natural gas and our technology will immeasurably improve the lives of millions and we will be the richer for it also.
Another human rights issue will be an uncomfortable one for many people. I am talking about Female Genital Mutilation or FGM. This is the practice, unfortunately common in many parts of the world, of removing parts or all of the external genitalia of young girls for various putative reasons ranging from hygiene to prevention of “promiscuity” to so-called “cultural” practices. There is no basis for any of these stated “reasons”. This can and does cause lifelong physical and mental health problems and often leads to death from complications. FGM occurs in all religions and cultures and yes, it does happen here. Worldwide it is estimated that one vulnerable child is cut every 11 seconds. Make no mistake, this is child abuse, it is a violent assault on a vulnerable child and it is a gross violation of human rights. In recent years many of the victims have started to speak out, many young girls are fleeing their parents and communities to seek refuge from those who would assault them, and the cone of silence surrounding FGM is slowly but surely being eroded. I am happy to say that many men from communities where this is practiced are starting to speak out and many countries have outlawed it. Those of you who follow me on Twitter or Facebook know that I am passionate about this issue and I was proud to host a screening of the film “In The Name Of Your Daughter” and a panel discussion about this issue.
This vile practice has no place in Canada or anywhere else. It is illegal in Canada and classed as assault. If you think this is happening in your community, please speak out. If you are unsure about where to turn please contact my office at 403-962-0126 and we will assist you. Break the cone of silence, we owe it to our beautiful, perfect children. As always we love to hear from you.