Canada lagging in wind power development

Ukraine Energy Grid Attacks intensify as missile strikes and drone raids hit power plants, substations, and transmission lines, causing blackouts, disrupted logistics, and humanitarian strain during winter, despite repairs, air defense, and allied aid.

Key Points

Missile and drone strikes on Ukraine's power grid to force blackouts, strain civilians, and disrupt military logistics.

✅ Targets: power plants, substations, transmission lines

✅ Impacts: blackouts, heating loss, hospital strain

✅ Goals: erode morale, disrupt logistics, force aid burdens

Russia’s continued strikes on Ukraine have taken a severe toll on the country’s critical infrastructure, particularly its energy grid, as Ukraine continues to keep the lights on despite sustained bombardment. In recent months, Western Ukraine has increasingly become a target of missile and drone attacks, leading to widespread power outages and compounding the challenges faced by the civilian population. These strikes aim to cripple Ukraine's resilience during a harsh winter season and disrupt its wartime operations.

Targeting Energy Infrastructure

Russian missile and drone assaults on Ukraine’s energy grid are part of a broader strategy to weaken the country’s morale and capacity to sustain the war effort. The attacks have primarily focused on power plants, transmission lines, and substations. Western Ukraine, previously considered a relative safe haven due to its distance from front-line combat zones, is now experiencing the brunt of this campaign.

The consequences of these strikes are severe. Rolling blackouts and unplanned outages have disrupted daily life for millions of Ukrainians, though authorities say there are electricity reserves that could stabilize supply if no new strikes occur, leaving homes without heating during freezing temperatures, hospitals operating on emergency power, and businesses struggling to maintain operations. The infrastructure damage has also affected water supplies and public transportation, further straining civilian life.

Aimed at Civilian and Military Impact

Russia’s targeting of Ukraine’s power grid has dual purposes. On one hand, it aims to undermine civilian morale by creating hardships during the cold winter months, even as Ukraine works to keep the lights on this winter through contingency measures. On the other, it seeks to hinder Ukraine’s military logistics and operations, which heavily rely on a stable energy supply for transportation, communications, and manufacturing of military equipment.

These attacks coincide with a broader strategy of attritional warfare, where Moscow hopes to exhaust Ukraine’s resources and diminish its ability to continue its counteroffensive operations. By disrupting critical infrastructure, Russia increases pressure on Ukraine's allies to step up humanitarian and military aid, stretching their capacities.

Humanitarian Consequences

The impact of these power cuts on the civilian population is profound. Millions of Ukrainians are enduring freezing temperatures without consistent access to electricity or heating. Vulnerable populations, such as the elderly, children, and those with disabilities, face heightened risks of hypothermia and other health issues.

Hospitals and healthcare facilities are under immense strain, relying on backup generators that cannot sustain prolonged use. In rural areas, where infrastructure is already weaker, the effects are even more pronounced, leaving many communities isolated and unable to access essential services.

Humanitarian organizations have ramped up efforts to provide aid, including distributing generators, warm clothing, and food supplies, while many households pursue new energy solutions to weather blackouts. However, the scale of the crisis often outpaces the resources available, leaving many Ukrainians to rely on their resilience and community networks.

Ukraine's Response

Despite the challenges, Ukraine has demonstrated remarkable resilience in the face of these attacks. The government and utility companies are working around the clock to repair damaged infrastructure and restore power to affected areas. Mobile repair teams and international assistance have played crucial roles in mitigating the impact of these strikes.

Ukraine’s Western allies have also stepped in to provide support. The European Union, the United States, and other countries have supplied Ukraine with energy equipment, financial aid, and technical expertise to help rebuild its energy grid, though recent decisions like the U.S. ending support for grid restoration complicate planning and procurement. Additionally, advanced air defense systems provided by Western nations have helped intercept some of the incoming missiles and drones, though not all attacks can be thwarted.

Russia’s Escalation Strategy

Russia’s focus on Western Ukraine reflects a shift in its strategy. Previously, attacks were concentrated on front-line areas and major urban centers in the east and south. However, by targeting the western regions, Moscow seeks to disrupt the relatively stable zones where displaced Ukrainians and critical supply chains are located.

Western Ukraine is also a hub for receiving and distributing international aid and military supplies. Striking this region not only undermines Ukraine’s internal stability but also sends a message to its allies about Russia’s willingness to escalate the conflict further.

Broader Implications

The attacks on Ukraine’s energy grid have broader geopolitical implications. By targeting infrastructure, Russia intensifies the pressure on Ukraine’s allies to continue providing support, even as Kyiv has at times helped Spain amid blackouts when capacity allowed, testing their unity and resolve. The destruction also poses long-term challenges for Ukraine’s post-war recovery, as rebuilding a modern and resilient energy system will require significant investments and time.

Moreover, these attacks highlight the vulnerability of civilian infrastructure in modern warfare, echoing that electricity is civilization amid winter conditions. The deliberate targeting of non-combatant assets underscores the need for international efforts to strengthen the protection of critical infrastructure and address the humanitarian consequences of such tactics.

The Russian attacks on Western Ukraine's power grid are a stark reminder of the devastating human and economic costs of the ongoing conflict. While Ukraine continues to demonstrate resilience and adaptability, the scale of destruction underscores the need for sustained international support. As the war drags on, the focus must remain on mitigating civilian suffering, rebuilding critical infrastructure, and pursuing a resolution that ends the violence and stabilizes the region.

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Air-gen Protein Nanowire Generator delivers clean energy by harvesting ambient humidity via Geobacter-derived conductive nanowires, generating continuous hydrovoltaic electricity through moisture gradients, electrodes, and proton diffusion for sustainable, low-waste power in diverse climates.

Key Points

A device using Geobacter protein nanowires to harvest humidity, producing continuous DC power via proton diffusion.

✅ 7 micrometer film between electrodes adsorbs water vapor.

✅ Output: ~0.5 V, 17 uA/cm2; stack units to scale power.

✅ Geobacter optimized via engineered E. coli for mass nanowires.

They found it buried in the muddy shores of the Potomac River more than three decades ago: a strange "sediment organism" that could do things nobody had ever seen before in bacteria.

This unusual microbe, belonging to the Geobacter genus, was first noted for its ability to produce magnetite in the absence of oxygen, but with time scientists found it could make other things too, like bacterial nanowires that conduct electricity.

For years, researchers have been trying to figure out ways to usefully exploit that natural gift, and they might have just hit pay-dirt with a device they're calling the Air-gen. According to the team, their device can create electricity out of… well, almost nothing, similar to power from falling snow reported elsewhere.

"We are literally making electricity out of thin air," says electrical engineer Jun Yao from the University of Massachusetts Amherst. "The Air-gen generates clean energy 24/7."

The claim may sound like an overstatement, but a new study by Yao and his team describes how the air-powered generator can indeed create electricity with nothing but the presence of air around it. It's all thanks to the electrically conductive protein nanowires produced by Geobacter (G. sulfurreducens, in this instance).

The Air-gen consists of a thin film of the protein nanowires measuring just 7 micrometres thick, positioned between two electrodes, referencing advances in near light-speed conduction in materials science, but also exposed to the air.

Because of that exposure, the nanowire film is able to adsorb water vapour that exists in the atmosphere, offering a contrast to legacy hydropower models, enabling the device to generate a continuous electrical current conducted between the two electrodes.

The team says the charge is likely created by a moisture gradient that creates a diffusion of protons in the nanowire material.

"This charge diffusion is expected to induce a counterbalancing electrical field or potential analogous to the resting membrane potential in biological systems," the authors explain in their study.

"A maintained moisture gradient, which is fundamentally different to anything seen in previous systems, explains the continuous voltage output from our nanowire device."

The discovery was made almost by accident, when Yao noticed devices he was experimenting with were conducting electricity seemingly all by themselves.

"I saw that when the nanowires were contacted with electrodes in a specific way the devices generated a current," Yao says.

"I found that exposure to atmospheric humidity was essential and that protein nanowires adsorbed water, producing a voltage gradient across the device."

Previous research has demonstrated hydrovoltaic power generation using other kinds of nanomaterials – such as graphene-based systems now under study – but those attempts have largely produced only short bursts of electricity, lasting perhaps only seconds.

By contrast, the Air-gen produces a sustained voltage of around 0.5 volts, with a current density of about 17 microamperes per square centimetre, and complementary fuel cell solutions can help keep batteries energized, with a current density of about 17 microamperes per square centimetre. That's not much energy, but the team says that connecting multiple devices could generate enough power to charge small devices like smartphones and other personal electronics – concepts akin to virtual power plants that aggregate distributed resources – all with no waste, and using nothing but ambient humidity (even in regions as dry as the Sahara Desert).

"The ultimate goal is to make large-scale systems," Yao says, explaining that future efforts could use the technology to power homes via nanowire incorporated into wall paint, supported by energy storage for microgrids to balance supply and demand.

"Once we get to an industrial scale for wire production, I fully expect that we can make large systems that will make a major contribution to sustainable energy production."

If there is a hold-up to realising this seemingly incredible potential, it's the limited amount of nanowire G. sulfurreducens produces.

Related research by one of the team – microbiologist Derek Lovley, who first identified Geobacter microbes back in the 1980s – could have a fix for that: genetically engineering other bugs, like E. coli, to perform the same trick in massive supplies.

"We turned E. coli into a protein nanowire factory," Lovley says.

"With this new scalable process, protein nanowire supply will no longer be a bottleneck to developing these applications."

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Brazil Energy Emergency Loan Package aims to bolster utilities via BNDES as coronavirus curbs electricity demand. Aneel and the Mines and Energy Ministry weigh measures while Eletrobras privatization and auctions face delays.

Key Points

An emergency plan supporting Brazilian utilities via BNDES and banks during coronavirus demand slumps and payment risks.

✅ Modeled on 2014-2015 sector loans via BNDES and private banks

✅ Addresses cash flow from lower demand and bill nonpayment

✅ Auctions and Eletrobras privatization delayed amid outbreak

Brazil’s government is considering an emergency loan package for energy distributors struggling with lower energy use and facing lost revenues because of the coronavirus outbreak, echoing strains seen elsewhere such as Germany's utility troubles during the energy crisis, an industry group told Reuters.

Marcos Madureira, president of Brazilian energy distributors association Abradee, said the package being negotiated by companies and the government could involve loans from state development bank BNDES or a pool of banks, but that the value of the loans and other details was not yet settled.

Also, Brazil’s Mines and Energy Ministry is indefinitely postponing projects to auction off energy transmission and generation assets planned for this year because of the coronavirus, even as the need for electricity during COVID-19 remained critical, it said in the Official Gazette.

The coronavirus outbreak will also delay the privatization of state-owned utility Eletrobras, its chief executive officer said on Monday.

The potential loan package under discussion would resemble a similar measure in 2014 and 2015 that offered about 22 billion reais ($4.2 billion) in loans to the sector as Brazil was entering its deepest recession on record, and drawing comparisons to a proposed Texas market bailout after a winter storm, Madureira said.

Public and private banks including BNDES, Caixa Economica Federal, Itau Unibanco and Banco Bradesco participated in those loans.

Three sources involved in the discussions said on condition of anonymity that the Mines and Energy Ministry and energy regulator Aneel were considering the matter.

Aneel declined to comment. The Mines and Energy Ministry and BNDES did not immediately respond to requests for comment.

Energy distributors worry that reduced electricity demand during COVID-19 could result in deep revenue losses.

The coronavirus has led to widespread lockdowns of non-essential businesses in Brazil, while citizens are being told to stay home. That is causing lost income for many hourly and informal workers in Brazil, who could be unable to pay their electricity bills, raising risks of pandemic power shut-offs for vulnerable households.

The government sees a loan package as a way to stave off a potential chain of defaults in the sector, a move discussed alongside measures such as a Brazil tax strategy on energy prices, one of the sources said.

On a conference call with investors about the company’s latest earnings, Eletrobras CEO Wilson Ferreira Jr. said privatization would be delayed, without giving any more details on the projected time scale.

The largest investors in Brazil’s energy distribution sector include Italy’s Enel, Spain’s Iberdrola via its subsidiary Neoenergia and China’s State Grid via CPFL Energia, with Chinese interest also evidenced by CTG's bid for EDP, as well as local players Energisa e Equatorial Energia. 

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New York Green New Deal accelerates clean energy and climate action, targeting carbon neutrality with renewable energy, offshore wind, solar, energy storage, and green jobs while advancing environmental justice and economy-wide decarbonization.

Key Points

New York's plan for 100% clean power by 2040 and 70% renewables by 2030, with a just transition and green jobs.

✅ 100% carbon-free electricity by 2040; 70% renewables by 2030

✅ 9,000 MW offshore wind and 3,000 MW energy storage targets

✅ Just transition focuses on jobs, equity, and affordability

New York Governor Andrew M. Cuomo announced the Green New Deal, a nation-leading clean energy and jobs agenda that will aggressively put New York State on a path to net-zero electricity and economy-wide carbon neutrality, is included in the 2019 Executive Budget. The landmark plan provides for a just transition to clean energy that spurs growth of the green economy and prioritizes the needs of low- to moderate-income New Yorkers.

"Climate change is a reality, and the consequences of delay are a matter of life and death. We know what we must do. Now we have to have the vision, the courage, and the competence to get it done," Governor Cuomo said. "While the federal government shamefully ignores the reality of climate change and fails to take meaningful action, we are launching the first-in-the-nation Green New Deal to seize the potential of the clean energy economy, set nation's most ambitious goal for carbon-free power, and ultimately eliminate our entire carbon footprint."

During Governor Cuomo's first two terms, New York banned fracking of natural gas, committed to phasing out coal power by 2020, mandated 50 percent renewable power by 2030, and established the U.S. Climate Alliance to uphold the Paris Agreement, reflecting the view that decarbonization is irreversible under a clean energy economy. Under the Reforming the Energy Vision agenda, New York has held the largest renewable energy procurements in U.S. history, solar has increased nearly 1,500 percent, and offshore wind is poised to transform the State's electricity supply to be cleaner and more sustainable. Through Governor Cuomo's Green New Deal, New York will take the bold next steps to secure a clean energy future that protects the environment for generations to come while growing the clean energy economy.

100 Percent Clean Power by 2040 Coupled with New Nation-leading Renewable Energy Mandates

The Green New Deal will statutorily mandate New York's power be 100 percent carbon-free by 2040, the most aggressive goal in the United States and five years ahead of a target recently adopted by California state policymakers. The cornerstone of this new mandate is a significant increase of New York's successful Clean Energy Standard mandate from 50 percent to 70 percent renewable electricity by 2030. This globally unprecedented ramp-up of renewable energy will include:

• Quadrupling New York's offshore wind target to 9,000 megawatts by 2035, up from 2,400 megawatts by 2030
• Doubling distributed solar deployment to 6,000 megawatts by 2025, up from 3,000 megawatts by 2023
• More than doubling new large-scale land-based wind and solar resources through the Clean Energy Standard
• Maximizing the contributions and potential of New York's existing renewable resources
• Deploying 3,000 megawatts of energy storage by 2030, up from 1,500 megawatts by 2025
• Develop an Implementation Plan to Make New York Carbon Neutral

The Green New Deal will create the State's first statutory Climate Action Council, comprised of the heads of relevant State agencies and other workforce, environmental justice, and clean energy experts to develop a comprehensive plan to make New York carbon neutral by significantly and cost-effectively reducing emissions from all major sources, including electricity, transportation, buildings, industry, commercial activity, and agriculture. The Climate Action Council will consider a range of possible options, including the feasibility of working with the U.S. Climate Alliance to create a new multistate emissions reduction program that covers all sectors of the economy, including transportation and industry, and exploring ways to leverage the successful Regional Greenhouse Gas Initiative to drive transformational investment in the clean energy economy and support a just transition.

At the national level, a historic climate deal is reshaping incentives and standards for clean energy deployment across the country.

The Green New Deal will also include an ambitious strategy to move New York's statewide building stock to carbon neutrality. The agenda includes:

Advancing legislative changes to strengthen building energy codes and establish appliance efficiency standards

Directing State agencies to ensure that their facilities uphold the strongest energy efficiency and sustainability standards

Developing a Net Zero Roadmap to chart a course to statewide carbon neutrality in buildings

A Multibillion Dollar Green New Deal Investment in the Clean Tech Economy that will Reduce Greenhouse Gas Emissions

Demonstrating New York's immediate commitment to implementing the nation's most ambitious clean energy agenda and creating high-quality clean energy jobs, Governor Cuomo is announcing $1.5 billion in competitive awards to support 20 large-scale solar, wind and energy storage projects across upstate New York. These investments will add over 1,650 megawatts of capacity and generate over 3,800,000 megawatt-hours of renewable energy annually - enough to power nearly 550,000 homes and create over 2,600 short and long-term jobs. Combined with the renewable energy projects previously announced under the Clean Energy Standard, New York has now awarded more than $2.9 billion to 46 projects statewide, enough to power over one million households.

The Green New Deal also includes new investments to jumpstart New York's offshore wind energy industry and support the State's world-leading target of 9,000 megawatts by 2035. New York will invest up to $200 million in port infrastructure to match private sector investment in regional development of offshore wind. This multi-location investment represents the nation's largest infrastructure commitment to offshore wind and solidifies New York's position as the hub of the burgeoning U.S. offshore wind industry.

These new investments build upon a $250 million commitment to electric vehicle infrastructure by the New York Power Authority's EVolve program, $3.5 billion in private investment in distributed solar driven by NYSERDA's NY-Sun program, and NY Green Bank transactions mobilizing nearly $1.75 billion in private capital for clean energy projects.

A Just Transition to a Clean Energy Economy

Deliver Climate Justice for Underserved Communities: The Green New Deal will help historically underserved communities prepare for a clean energy future and adapt to climate change by:

Giving communities a seat at the table by codifying the Environmental Justice and Just Transition Working Group into law and incorporating it into the planning process for the Green New Deal's implementation.

Directing the State's low-income energy task force to identify reforms to achieve greater impact of the public energy funds expended each year in order to increase the effect of funds and initiatives that target energy affordability to underserved communities.

Directing each of the State's ten Regional Economic Development Councils to develop an environmental justice strategy for their region.

Finance a Property Tax Compensation Fund to Help Communities Transition to the Clean Energy Economy: Governor Cuomo is introducing legislation to finance the State's $70 million Property Tax Compensation Fund to continue helping communities directly affected by the transition away from dirty and obsolete energy industries and toward the new clean energy economy. Specifically, this funding will protect communities impacted by the retirement of conventional power generation facilities.

Protect Labor Rights: To ensure creation of high-quality clean energy jobs, large-scale renewable energy projects supported by the Green New Deal will require prevailing wage, and the State's offshore wind projects will be supported by a requirement for a Project Labor Agreement.

Develop the Clean Tech Workforce: To prepare New York's workforce for the transition, New York State will take new steps to support workforce development, including establishing a New York State Advisory Council on Offshore Wind Economic and Workforce Development, as well as investing in an offshore wind training center that will provide New Yorkers with the skills and safety training required to construct this clean energy technology in New York.   

Richard Kauffman, Chairman of Energy and Finance for New York, said, "Governor Cuomo's Green New Deal will advance New York State further into the clean energy future, and we won't let the Trump Administration push us backwards. Governor Cuomo's new commitments ensure New York is the undisputed national clean energy and climate leader, and we will continue to build upon the foundations of the REV agenda to achieve a sustainable economy and healthy environment for generations of New Yorkers to come."

Alicia Barton, President and CEO, NYSERDA, said, "Climate scientists have made frighteningly clear that averting the worst effects of climate change will require bold action, not incremental steps, and Governor Cuomo's Green New Deal boldly goes where no others have before. His unwavering climate agenda includes the most aggressive clean energy target in U.S. history, the largest commitments to renewable energy and to offshore wind in the nation, a massive mobilization of clean energy jobs and an unprecedented investment in offshore wind port infrastructure. Together these actions make New York the clear national leader in the fight against climate change, and will show the world that New York can and will achieve a clean energy future for the sake of future generations."

DEC Commissioner Basil Seggos said, "The threat of climate change calls for bold action like Governor Cuomo's comprehensive agenda to make New York State carbon neutral. The Green New Deal ensures New York is continuing our nation-leading efforts to capitalize on the economic potential of the clean energy economy, while making sure those most vulnerable to climate change are benefitting from the state's efforts and investments. I look forward to working with my agency and authority partners on the Climate Action Council to develop and implement meaningful solutions to reduce greenhouse gas emissions from all sectors of our economy."  

John B. Rhodes, CEO, Department of Public Service, said, "With this nation-leading Green New Deal, Governor Cuomo puts New York on the path to fully clean electricity and to carbon neutrality with the strongest renewable energy goals in the nation. This will deliver the energy system that New York needs - cost-effective, reliable, and 100% clean.”

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Hydro One CEO Pay Cap sets executive compensation at $1.5 million under Ontario's provincial directive, linking incentives to transmission and distribution cost reductions, governance improvements, and board pay limits at the electricity utility.

Key Points

The Hydro One CEO Pay Cap limits pay to $1.5M, linking incentives to cost reductions and defined targets.

✅ Base salary set at $500,000 per year.

✅ Incentives capped at $1,000,000, tied to cost cuts.

✅ Board pay capped: chair $120,000; members $80,000.

Hydro One has agreed to cap the annual compensation of its chief executive at $1.5 million, the provincial utility said Friday, acquiescing to the demands of the Progressive Conservative government.

The CEO's base salary will be set at $500,000 per year, while short-term and long-term incentives are limited to $1 million. Performance targets under the pay plan will include the CEO's contributions to reductions in transmission and distribution costs, even as Hydro One has pursued a bill redesign to clarify charges for customers.

The framework represents a notable political victory for Premier Doug Ford, who vowed to fire Hydro One's CEO and board during the campaign and promised to reduce the annual earnings of Hydro One's board members.

In February, the province issued a directive to the board, ordering it to pay the utility's CEO no more than the $1.5 million figure it has now agreed to, as part of a broader push to lower electricity rates across Ontario.

Hydro One and the government had been at loggerheads over executive compensation, with the company refusing repeated requests to slash the CEO pay below $2,775,000. The board argued it would have difficulty recruiting suitable leaders for anything less, even as customers contend with a recovery rate that could raise hydro bills.

Further, the company agreed to pay the board chair no more than $120,000 annually and board members no more than $80,000 — figures Energy Minister Greg Rickford had outlined in his directive last month, amid calls for cleaning up Ontario's hydro mess from policy commentators.

"Hydro One's compliance with this directive allows us to move forward as a province. It sets the company on the right course for the future, proving that it can operate as a top-class electricity utility while reining in executive compensation and increasing public transparency," Rickford said in a statement issued Friday morning.

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Canada Oil Recession Outlook analyzes the Russia-Saudi price war, OPEC discord, COVID-19 demand shock, WTI and WCS collapse, Alberta oilsands exposure, U.S. shale stress, and GDP risks from blockades and fiscal responses.

Key Points

An outlook on how the oil price war and COVID-19 demand shock could tip Canada into recession and strain producers.

✅ WTI and WCS prices plunge on OPEC-Russia discord

✅ Alberta oilsands face break-even pressure near 30 USD WTI

✅ RBC flags global recession; GDP hit from blockades, virus

A war between Russia and Saudi Arabia for market share for oil may have been triggered by the COVID-19 pandemic in China, but the oil price crash contagion that it will spread could have impacts that last longer than the virus.

The prospects for Canada are not good.

Plunging oil prices, reduced economic activity from virus containment, and the fallout from weeks of railway blockades over the Coastal GasLink pipeline all add up to “a one-two-three punch that I think is almost inevitably going to put Canada in a position where its growth has to be negative,” said Dan McTeague, a former Liberal MP and current president of Canadians for Affordable Energy. The situation “certainly has the makings” of a recession, said Ken Peacock, chief economist for the Business Council of British Columbia.

“At a minimum, it’s going to be very disruptive and we’re going to have maybe one negative quarter,” Peacock said. “Whether there’s a second one, where it gets labeled a recession, is a different question. But it’s going to generate some turmoil and challenges over the next two quarters – there’s no doubt about that.”

RBC Economics on March 13 announced it now predicts a global recession and cut its growth projections for Canada's economy in 2020 by half a per cent.

Oil price futures plunged 30% last week, dragging stock markets and currencies, including the Canadian dollar, down with them, even as a deep freeze strained U.S. energy systems. That drop came on top of a 17% decline in February, due to falling demand for oil due to the virus.

The latest price plunge – the worst since the 1991 Gulf War – was the result of Russia and the Organization of Petroleum Exporting Countries (OPEC), led by Saudi Arabia, failing to agree on oil production cuts.

The COVID-19 outbreak in China – the world’s second-largest oil consumer – had resulted in a dramatic drop in oil demand in that country, and a sudden glut of oil, with the U.S. energy crisis affecting electricity, gas and EV markets.

OPEC has historically been able to moderate global oil prices by controlling output. But when Russia refused to co-operate with OPEC and agree to production cuts, Saudi Arabia’s state-owned company, Aramco, announced it plans to boost its oil output from 9.7 million barrels per day (bpd) to 12.3 million bpd in April.

In response to that announcement, West Texas Intermediate (WTI) prices dropped 18% to below US$34 per barrel while the Canadian Crude Index fell 24% to US$21. Western Canadian Select dropped 39% to US$15.73.

The effect on Alberta oilsands producers was severe and immediate. Cenovus Energy Inc. (TSX:CVE) saw roughly $2 billion in market cap erased on March 9, when its stock dropped by 52%, which came on top of a 12% drop March 6.

The company responded the very next day by announcing it would cut spending by 32% in 2020, suspend its oil-by-rail program and defer expansion projects.

MEG Energy Corp. (TSX:MEG), which suffered a 56% share price drop on March 9, also announced a 20% reduction in its 2020 capital spending plan.

Peter Tertzakian, chief economist for ARC Energy Research Institute, wrote last week that Russia’s plan is to try to hurt U.S. shale oil producers, who have more than doubled U.S. oil production over the past decade.

Anas Alhajji, a global oil analyst, expects that plan could work. Even before the oil price shock, he had predicted the great shale boom in the U.S. was coming to an end.

“Shale production will decline, and the myth of ‘explosive growth’ will end,” he told Business in Vancouver. “The impact is global and Canadian producers might suffer even more if the oil that Saudi Arabia sends to the U.S. is medium and heavy. This might last longer than what people think.”

The question for Alberta is how Canadian producers can continue to operate through a period of cheap oil. Alberta producers do not compete on the global market. They serve a niche market of U.S. heavy oil refiners, and Biden-era policy is seen as potentially more favourable for Canada’s energy sector than alternatives.

“On the positive side, the industry is battle-hardened,” Tertzakian wrote. “Over the past five years, innovative companies have already learned to endure some of the lowest prices in the world.”

But he added that they need WTI prices of US$30 per barrel just to break even.

“But that’s an average break-even threshold for an industry with a wide variation in costs. That means at that level about half the companies can’t pay their bills and half are treading water.”

Just prior to the oil price plunge, the International Energy Agency (IEA) updated its 2020 forecast for global oil consumption from an 825,000 bpd increase in oil consumption to a 90,000 bpd decrease, due to the COVID-19 virus and consequent economic contraction and reduction in travel.

The IEA predicts global oil demand won’t return to “normal” until the second half of 2020. But even if demand does return to pre-virus levels, that doesn’t mean oil prices will – not if Saudi Arabia can sustain increased oil production at low prices, and evolving clean grid priorities could influence the trajectory too.

The oil plunge was greeted in Alberta with alarm. Alberta Premier Jason Kenney warned Alberta is in “uncharted territory” as consumers are urged to lock in rates and said his government might have to review its balanced budget and resort to emergency deficit spending.

While British Columbians – who pay some of the highest gasoline prices in North America – will enjoy lower gasoline prices at a time when prices are usually starting a seasonal spike, B.C.’s economy could feel knock-on effects from a recession in Alberta.

“We sell a lot of inputs, do a lot of trade with Alberta, so it’s important for B.C., Alberta’s economic health,” Peacock said, “and recent tensions over electricity purchase talks underscore that.”

Last week, the Trudeau government announced $1 billion in emergency funding to cope with the virus and waived a one-week waiting period for unemployment insurance.

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