23rd July 2015

Commodity rout shows no signs of slowing as loonie hits decade-low – by Carrie Tait (Globe and Mail -July 23, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

CALGARY — The rout in commodities ranging from gold to oil is showing no sign of letup, taking the Canadian dollar down to its lowest level in more than a decade.

The widespread slide is tied to factors that include speculation interest rates are about to rise in the United States, and concerns that strong oil and iron ore companies will continue to increase production in hopes of squeezing their less-efficient counterparts out of the market.

This comes as the prospect for global economic growth remains weak and as the World Bank on Wednesday released ugly predictions for commodity prices.

Gold fell for its 10th consecutive day – its longest slip since 1996. The commodity hit a five-year low on Monday. The loonie was down 0.50 of a cent (U.S.) at 76.71 cents. That’s the lowest level since September, 2004, and oil prices retreated below $50. The S&P/TSX composite index dropped 69 points on Wednesday, bringing the loss to 2.3 per cent so far this week. Read the rest of this entry »

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23rd July 2015

B.C. not prepared to consider more LNG concessions – and it shouldn’t – by Claudia Cattaneo (National Post – July 23, 2015)

The National Post is Canada’s second largest national paper.

The British Columbia legislature passed late Tuesday evening the Liquefied Natural Gas Project Agreements Act, removing one of two final conditions to the start-up of the first LNG plant in the province.

The bill means that the Pacific NorthWest LNG project can now count on a 25-year fiscal deal that protects it from targeted tax increases.

In this age of energy-infrastructure bashing, aboriginal unrest, high environmental expectations, low oil and gas prices, the B.C. government’s ratification of the first LNG project agreement is historic.

“We believe we have arrived at a balanced approach that ensures we represent a competitive jurisdiction where proponents can invest and derive a fair rate of return, while at the same time ensuring that British Columbians who own the resource that lies at the heart of this industry receive a fair return for granting access to that resource,” B.C. Finance Minister Michael de Jong said in an interview.

“Today we are able to say with confidence that an international consortia of companies, including companies from Malaysia, China, Japan and India and others, agreed with us.” Read the rest of this entry »

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18th July 2015

Is Brad Wall the only premier who cares about 2015, not just 2050? – by Rex Murphy (National Post – July 18, 2015)

The National Post is Canada’s second largest national paper.

The distant future is a politician’s most useful friend — it is where every good and noble thing they promise actually happens. It is where the clutter of present events and the roiling fortunes of this busy harsh and confounding world do not impinge on their their wildest wishes.

For example, under Ontario’s green ambitions, we are given to understand the goal is to reduce carbon dioxide emissions by a full 80 per cent by 2050. This is Premier Kathleen Wynn’s pledge, a commitment that will take merely 35 years to be tested — a generous breathing space by any standards for a political commitment, and which happily just might be the identical term it takes to learn all there is to know about the infamous billion-dollar cancellation of a couple of Ontario gas plants a couple of elections ago.

We have long since learned, and from a thousand examples, that the promises of most politicians barely survive the time it takes to make them. Antiques like me remember the bitter mocking Pierre Trudeau once gave Robert Stanfield on the latter’s promise to introduce wage and price controls — “Zap! You’re frozen!,” said the wily Trudeau — only to pirouette mere days after an election to introduce … wage and price controls.

Pledges three, four or 10 decades out are perfect vapourings. To call them useless is to elevate their dignity. To build present-day policy under the umbrella of such projections is to blend fantasy and irresponsibility. Read the rest of this entry »

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17th July 2015

Nexen pipeline leak in Alberta spills 5 million litres (CBC News Edmonton – July 16, 2015)

http://www.cbc.ca/news/canada/edmonton

Nexen Energy spill south of Fort McMurray covers about 16,000 square metres

One of the largest leaks in Alberta history has spilled about five million litres of emulsion from a Nexen Energy pipeline at the company’s Long Lake oilsands facility south of Fort McMurray.

The leak was discovered Wednesday afternoon. Nexen said in a statement its emergency response plan has been activated and personnel were onsite. The leak has been stabilized, the company said.

The spill covered an area of about 16,000 square metres, mostly within the pipeline corridor, the company said. Emulsion is a mixture of bitumen, water and sand. The pipeline that leaked is called a “feeder” and runs from a wellhead to the processing plant.

“All necessary steps and precautions have been taken, and Nexen will continue to utilize all its resources to protect the health and safety of our employees, contractors, the public and the environment, and to contain and clean up the spill,” the company said in the statement issued Thursday. Read the rest of this entry »

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17th July 2015

Brad Wall blasts Energy East critics, cites ‘growing sense of frustration’ in the West – by John Ivison (National Post – July 17, 2015)

http://www.bnn.ca/

The National Post is Canada’s second largest national paper.

“Brad Wall’s suggestion that central Canadian premiers might be more
amenable to a pipeline through their provinces if it pumped equalization
payments will do little to endear him to his fellow minor league leaders.”

“It’s another example that left-of-centre governments in Canada’s two
largest provinces have lost sight of the need to generate revenue before
they can spend it.” (John Ivison – National Post)

Brad Wall’s suggestion that central Canadian premiers might be more amenable to a pipeline through their provinces if it pumped equalization payments will do little to endear him to his fellow minor league leaders.

The Saskatchewan premier flew in late to St. John’s because of the fires in his province, to join the annual Council of the Federation whinge-fest. Read the rest of this entry »

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14th July 2015

Iran Nuclear Deal Is Reached With World Powers – by David E. Sanger and Michael R. Gordon (New York Times – July 14, 2015)

http://www.nytimes.com/

VIENNA — Iran and a group of six nations led by the United States said they had reached a historic accord on Tuesday to significantly limit Tehran’s nuclear ability for more than a decade in return for lifting international oil and financial sanctions.

The deal culminates 20 months of negotiations on an agreement that President Obama had long sought as the biggest diplomatic achievement of his presidency. Whether it portends a new relationship between the United States and Iran — after decades of coups, hostage-taking, terrorism and sanctions — remains a bigger question.

President Obama, in an early morning appearance at the White House that was broadcast live in Iran, began what promised to be an arduous effort to sell the deal to Congress and the American public, saying the agreement was “not built on trust, it is built on verification.”

ut Mr. Obama made it abundantly clear that he would fight to preserve the deal in its entirety, saying, “I will veto any legislation that prevents the successful implementation of this deal.” Read the rest of this entry »

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13th July 2015

In northern development, put northerners’ unique realities first – by Adam Fiser ad Brent Dowdall (Globe and Mail – July 13, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Adam Fiser and Brent Dowdall are senior research associate and senior manager for research and business development, respectively, at the Conference Board of Canada.

Many of Canada’s pressing socio-economic, political and environmental challenges are most intense in the North. Blessed with resource endowments, the North has much potential for economic growth, but resource development doesn’t automatically lead to sustainable development. How we prepare and plan for this growth will determine whether northerners benefit.

Initiating and sustaining a broad-based response to that challenge has been a mission of the Conference Board of Canada since 2009. A recently published compendium report of the Centre for the North affirms that the obstacles are complex, but not insurmountable.

Meeting the challenge requires an acceptance of the North’s unique realities. Not only are northern and southern Canada vastly different, but provincial and territorial northern regions themselves vary in geography and climate, demographics and culture, economic resources and business potential, governance structures and public services. Read the rest of this entry »

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13th July 2015

Confusion reigns on aboriginal rights when court rulings meet reality – by Jeffrey Simpson (Globe and Mail – July 11, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

VANCOUVER — A year and a bit later, people with good intentions and big brains in British Columbia are still trying to figure out the impact of the latest Supreme Court aboriginal-rights decision.

Learned law articles have been penned. Certain aboriginal spokesmen have told the provincial government, as a consequence of the decision, to recognize aboriginal title everywhere and get on with it. Resource companies and other private-sector enterprises don’t quite know what to make of the Tsilhqot’in decision.

Tsilhqot’in essentially recognized aboriginal title over a swath of territory for a previously nomadic aboriginal group. In this territory, with a few restrictions, the group now has de jure sovereignty, a precedent that, if extended over time, would leave B.C. pockmarked with little self-governing, largely sovereign aboriginal territories over which the Crown’s writ would barely run.

What’s clear about the Tsilhqot’in decision – and the long trail of previous aboriginal-rights cases – is that it makes for steady and remunerative work for lawyers. Essentially, the courts, and especially the Supreme Court of Canada, are making laws in this field. Read the rest of this entry »

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10th July 2015

Teck Resources delays Frontier oil sands project by five years – by Jeff Lewis (Globe and Mail – July 10, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

CALGARY — Teck Resources Ltd. is delaying the planned startup of a multibillion-dollar oil sands mine by at least five years, becoming the latest company to push back development as shaky energy markets threaten profits in the high-cost sector.

Vancouver-based Teck told regulators that production from its proposed Frontier oil sands mine about 110 kilometres north of Fort McMurray, Alta., won’t start until 2026, instead of 2021 as originally planned. The company now says it will build the 260,000-barrel-a-day mine in two phases instead of four, with construction starting in 2019, according to an update filed with the Canadian Environmental Assessment Agency.

The moves are fresh evidence of a broader pullback under way in northern Alberta, as oil prices show no sign of recovering to triple-digit territory – a threshold analysts say is needed to justify new mining developments such as Frontier.

Teck, which has not committed to building the mega-mine, has pegged the cost of Frontier at roughly $20.6-billion, making it one of the most expensive oil sands projects contemplated to date. Read the rest of this entry »

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8th July 2015

Refracking the hot new craze sweeping across shale oil fields – by Dan Murtaugh, Lynn Doan and Bradley Olson (National Post/Bloomberg News – July 8, 2015)

The National Post is Canada’s second largest national paper.

The technique itself is nothing new. Oil crews across the world have been schooled on its simple principles for generations: Identify aging, low-output wells and hit them with a blast of sand and water to bolster the flow of crude. The idea originated somewhere in the plains of the American Midwest, back in the 1950s.

But as today’s engineers start applying the procedure to the horizontal wells that went up during the fracking boom that swept across U.S. shale fields over the past decade, something more powerful, more financially rewarding is happening.

The short life span of these wells, long thought to be perhaps the single biggest weakness of the shale industry, is being stretched out. Early evidence of the effects of restimulation suggests that the fields could actually contain enough reserves to last about 50 years, according to a calculation based on Wood Mackenzie Ltd and ITG Investment Research data.

If the word fracking has carved out a spot in the lexicon of Americans as the nation advances toward energy independence, then refracking, as roughnecks have begun calling it, could be next. Read the rest of this entry »

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7th July 2015

Oil prices fall nearly 8%, dashing hopes for recovery – by Jeffrey Jones (Globe and Mail – July 7, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Calgary — Hope for a mid-year recovery in the oil patch has been dashed.

A confluence of bearish factors – from the Greek economic crisis to the delicate state of nuclear talks with Iran to worries about slowing Chinese demand – helped knock oil prices down nearly 8 per cent on Monday, burying a slow rebound that began in March and looked to be in jeopardy last week.

Now, signs point to deeper cuts in capital spending and potentially more layoffs in the sector following a brutal first half of 2015, when the Organization of Petroleum Exporting Countries made good on a pledge to relinquish its role as the world’s protector of oil prices. Instead, the cartel seized on protecting market share.

Many Canadian oil producers that hedged commodity prices at lucrative levels last year are bracing for those forward sales to expire in the coming months, pointing to severe drops in corporate cash flow in some cases, Judith Dwarkin, chief energy economist at ITG Investment Research, said. Read the rest of this entry »

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6th July 2015

A decline in Alberta’s fortunes means a decline in Quebec’s – by Gwyn Morgan (Globe and Mail – July 6, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

TransCanada Corp.’s 4,600-kilometre Energy East pipeline would carry Alberta crude oil to refineries in Quebec and New Brunswick that are dependent on Middle East imports.

Last November, the Quebec government declared that, for the pipeline to cross the province, it must generate economic benefits. Then on June 23, Quebec Premier Philippe Couillard told reporters that he didn’t see much economic value for his province in being a “transit place” for the pipeline.

New Brunswick Premier Brian Gallant was quick to respond: “The province of Quebec is … estimated to receive … about 4,000 jobs … an increase of about $3-billion in the GDP and, on top of that, about $700-million in extra tax revenue.”

Given the size of those economic benefits and that they are roughly twice those that would accrue to Premier Gallant’s own province, Mr. Couillard’s statement is indeed baffling. Perhaps it’s simply a matter of the anti-oil bias he illustrated later in the interview: “I prefer a world without fossil fuel, only electric, you know.” Read the rest of this entry »

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3rd July 2015

BP reaches $18.7 billion settlement over deadly 2010 spill – by Tery Wade and Kristen Hays (Reuters U.S. – July 2, 2015)

http://www.reuters.com/

HOUSTON – BP Plc will pay up to $18.7 billion in penalties to the U.S. government and five states to resolve nearly all claims from its deadly Gulf of Mexico oil spill five years ago in the largest corporate settlement in U.S. history.

The agreement adds to the $43.8 billion that BP had previously set aside for criminal and civil penalties and cleanup costs. The company said its total pre-tax charge for the spill now stands at $53.8 billion. (link.reuters.com/duz94w)

BP shares jumped more than 5 percent in New York trading as investors said the British company, often mentioned as a potential acquisition target, could now turn the page on one of the darkest chapters in its century-long history.

Under the agreement with the U.S. Department of Justice and the states, BP will pay at least $12.8 billion for Clean Water Act fines and natural resource damages, plus $4.9 billion to states. The payouts will be staggered over as many as 18 years. The preliminary settlement, subject to all sorts of variables, avoids a substantial amount of further litigation. Read the rest of this entry »

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2nd July 2015

UNESCO to send group to Wood Buffalo National Park, says First Nations delegate – by Jodie Sinnema (Edmonton Journal – July 1, 2015)

http://www.edmontonjournal.com/index.html

Party will look at environment impact of oilsands development

UNESCO has agreed to send a monitoring committee to Wood Buffalo National Park to look at cumulative effects of oil, gas and hydro development on the environment, says a northern Alberta First Nation representative.

During a convention in Bonn, Germany this week, UNESCO — the United Nations Educational, Scientific and Cultural Organization — reviewed concerns raised by the Mikisew Cree Nation about the sprawling national park that straddles the Alberta-Northwest Territories border.

The Mikisew Cree had petitioned to have Wood Buffalo — a World Heritage Site since 1983 — deemed “in danger” because of the Site C hydroelectric dam on the Peace River approved by the British Columbia and federal governments, as well as oilsands development and proposed open-pit mining near the northern Alberta park.

“The Mikisew have reported that First Nations have expressed significant concern about (the hydroelectric dam’s) impacts on their hunting, fishing and agricultural areas,” reads a document posted on UNESCO’s website. Read the rest of this entry »

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2nd July 2015

Brace yourselves for more job losses in Alberta’s oil and gas sector, economist says – by David Howell (Edmonton Journal – July 2, 2015)

http://www.edmontonjournal.com/index.html

EDMONTON – A torrent of layoffs in Alberta’s energy sector appears to have slowed as 2015 hits the halfway mark but more job losses may be around the corner, an economist warns.

“I think we are probably over the hump of the majority of layoffs but I don’t think it’s quite over yet,” Todd Hirsch, chief economist at ATB Financial, said this week.

“Over the summer months we will see, I think, a few more probably big announcements and some more layoffs in that oil and gas sector.”

Thousands of Albertans lost their jobs in the first six months of 2015. The cuts were deepest in the energy sector, as oil producers, drilling contractors and service companies reacted to the sharp decline in oil prices that started last fall.

Prices for benchmark West Texas Intermediate crude oil fell from $107 US per barrel in June 2014 to less than $50 in January, and dipped below $50 a second time in March. Workforce reductions — sometimes called “organization rightsizing” — have been widespread. Read the rest of this entry »

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