Page 10 - NorthAmOil Week 44

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Alberta to keep carbon tax, with some adjustments for large emitters
ALBERTA
THE United Conservative Party (UCP) govern- ment of Alberta has said it will keep its provincial carbon tax at CAD30 ($23) per tonne. However, new legislation announced last week will replace the previous New Democratic Party (NDP) gov- ernment’s rules for most large greenhouse gas (GHG) emitters in the province.
Alberta Minister of Environment Jason Nixon said he believed the new policy would sat- isfy the federal Canadian government’s require- ments for carbon pricing on large emitters. The carbon tax under the new plan is being set at a higher level per tonne than Alberta Premier Jason Kenney promised during the provincial election campaign earlier this year – CAD30 instead of CAD20 ($15). However, this move is being made in order to ensure that the provin- cial government’s plan is in compliance with the federal climate law. If the plan were not in compliance, it could pave the way for Ottawa to impose its own pricing system on Alberta’s large emitters instead.
The new policy, known as Technology Innovation and Emissions Reduction (TIER), replaces regulations for emitters including oil sands facilities, natural gas producers, chemical
manufacturers and fertiliser plants. The rules for electricity generators will be left largely unchanged.
Under TIER, instead of being compared to their peers as a group, facilities will be assessed based on their own past performance. High-per- forming facilities can choose to meet a more stringent, sector-wide target instead.
“It’s anticipated that by transitioning to TIER, industry will save over CAD330mn [$251mn] in avoided compliance cost in 2020,” the Alberta government said in a briefing.
The changes could provide a boost to oil sands operators that are improving their perfor- mance but not as much as their peers.
“The ones that stand to save the most are the worst performers, from a carbon perspective,” a research fellow at the University of Calgary, Sara Hastings-Simon, who studies carbon-pricing policy, told CBC News.
TIER will not affect the federal consumer carbon tax, which will be introduced in Alberta on January 1, 2020, after the UCP scrapped the province’s own such tax. The UCP opposes the federal tax, arguing that it is unconstitutional.™
PROJECTS & COMPANIES
Encana announces name change, relocation
NORTH AMERICA
CALGARY-BASED Encana has announced some major changes alongside the release of its third-quarter results that indicate a shift away from its Canadian roots. The company has unveiled plans to be rebranded as Ovintiv and establish corporate domicile in the US.
Encana said in an October 31 statement that the move was expected to occur in early 2020, pending shareholder, stock exchange and court approval.
“A domicile in the United States will expose our company to increasingly larger pools of investment in US index funds and passively managed accounts, as well as better align us with our US peers,” Encana’s CEO, Doug Suttles, said. “The change in corporate domicile will not change how we run our day-to-day activities. However, our actions show that we will leave no stone unturned to capture the value we deeply believe exists within our equity.”
In co-ordination with the change in corpo- rate domicile, the company has announced a consolidation and share exchange for effectively one share of common stock of Ovintiv for every
five common shares of Encana. A special meet- ing of Encana shareholders is set to be held in early 2020 to approve the name change, the share consolidation and the US domicile. The changes require approval by two-thirds of voters.
Encana also reported net earnings of $149mn, or $0.11 per share, for the third quarter of 2019, up from $39mn in the same quarter a year ago. Its production in the quarter reached 605,100 barrels of oil equivalent per day (boepd), up 4% year on year and exceeding guidance for the second half of 2019.
The company’s core areas of focus are the Per- mian and Anadarko basins in the US, as well as the Montney shale play in Western Canada.
Encana said it expected to continue gen- erating significant free cash flow in the fourth quarter of 2019. It has increased its production guidance for the year while lowering cost guid- ance and maintaining the mid-point of its orig- inal capital guidance. The company has noted that it is now guiding to the bottom end of its previously announced $12.75-13.25 per boe cost range.™
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w w w . N E W S B A S E . c o m Week 44 05•November•2019