Archive | Oil and Gas Sector-Politics and Image

A minority government in British Columbia means political risk just skyrocketed for resource projects – by Claudia Cattaneo (Financial Post – May 26, 2017)

British Columbia’s election results are finally in. No matter how you cut them, they are not encouraging for planned resource projects. Those that are already advanced, like Kinder Morgan’s Trans Mountain pipeline expansion and some liquefied natural gas proposals, may try to march forward. A lot of money has been spent and such projects are designed to withstand electoral change over decades.

There is no denying that if B.C. was a risky place to do business when it had a majority Liberal government, due to its unique combination of having an aggressive environmental lobby and a powerful aboriginal population. But now that the Liberals have been reduced to a minority and will need the support of the Greens to stay in power — or that the left-leaning NDP and the Greens could get together to form a government of their own — the political risk has skyrocketed.

To be sure, B.C. is known as a place of wacky politics. The difference this time is that the world is watching, since much of the cash on the line comes from abroad, whether Malaysia, Europe or the United States. Continue Reading →

Rex Murphy: Notley learns a hard truth about social licence — it’s not meant to be granted, ever. That’s the point – by Rex Murphy (National Post – May 20, 2017)

Social licence is one of those phrases, like cultural appropriation, or — a while back — civil society, that just seem to pop into lexical existence, almost out of nowhere, and instantly take on the authority of unchallenged and long-accepted concepts. They are mouthed in every parliamentary speech, are munched over by the solons of the afternoon panel shows, and crowd the editorial and opinion pieces of all the finest newspapers.

Yesterday they were unheard and unseen. Today they are presumed to be the boundary stones of argument and discussion. It is all so fast. One other note on usage: these terms and their semantic kin usually emerge from the fertile lexicography of the social justice camp, which is only appropriate since “social justice” is itself a term from the same fertile semantic factory.

Today, I turn to social licence (I’m saving “cultural appropriation” and its many novelties and self-contradictions for another day). Justin Trudeau is a fan of social licence. Speaking before the high council of the Sanhedrin at the Calgary Petroleum Club, before he was prime minister, Trudeau (as is his way with nebulous but high sounding concepts) gave the vague, trendy formulation full authority: Continue Reading →

Forcing Trans Mountain through could make things ugly for Trudeau. Not building it might be worse – by Andrew Coyne (National Post – May 18, 2017)

In the messy aftermath of the B.C. election, everyone is talking about the coming confrontation over Kinder Morgan’s Trans Mountain pipeline. Given federal approval just last November — Justin Trudeau travelling to the province to confer his benediction, in unusually personal terms — the project suddenly must contend, not with Christy Clark’s pipeline-supporting Liberals, but a probable minority government that, Liberal or NDP, is propped up by the pipeline-hating Greens.

Just getting the pipeline approved was no small feat in itself: before cabinet signed off, there were years of hearings before the National Energy Board, whose endorsement came with 157 conditions attached. But regulatory and cabinet approval are in today’s Canada only the start.

There must first be an appeal of the NEB’s ruling, to be heard this fall in Federal Court, which is fair enough. But opponents of Trans Mountain have made clear they will be no more deterred by a court decision in its favour than they were by the opinions of either the regulator or the duly elected government of the land. Continue Reading →

Why Canada may have missed the boat on building a viable LNG industry – by Claudia Cattaneo (Financial Post – May 6, 2017)

“The company now owns the only LNG project out of the 20 or so proposed for
the B.C. coast that is poised for takeoff. The rest are on hold, being
restructured or dropped, casualties of snail-paced government decision-
making, tough regulations, environmental and aboriginal opposition, and
changing market conditions, while the United States has already forged
a formidable LNG industry of its own.”

SQUAMISH, B.C. — The race to build a liquefied natural gas industry in British Columbia has had many twists and turns this decade and could be headed for another sharp one if the May 9 provincial election results in a change in government. But one of the oddest is found by taking a boat across Howe Sound — a network of spectacular fjords just north of Vancouver — to an abandoned pulp mill site on the traditional territory of the Squamish Nation.

The tranquil area, flanked by mountains and accessible only by water or helicopter, used to house a bustling community of nearly 1,000 people who toiled in one of Canada’s busiest mills, known as Woodfibre, complete with staff housing, bowling alleys and even churches.

The mill was shut down in 2006 after a century of operation, leaving behind significant environmental damage; a cluster of buildings including an ample warehouse, an old power station and storm-damaged docks that either had to be fixed or demolished; and an aboriginal community motivated to see its ancestral land cleaned up and put to good use. Continue Reading →

First Nations actually want resource development — if paid activists would just get out of their way – by Cody Battershill (Financial Post – May 11, 017)

It’s always unsettling to see paid activist groups like Greenpeace pretending to speak for Canada’s indigenous peoples. Recent Canadian history has shown that non-indigenous activist groups should think twice before claiming to speak for indigenous populations. After all, indigenous people in this country are more than able to speak for themselves. And there’s no doubt their views are on the record.

Many First Nations have gone public recently in order to ensure their positions are known, especially as those positions relate to oil and gas development and the construction of pipelines. Here’s some of what the recent record reflects:

-Fully 174 First Nations in Canada — more than 25 per cent of all Canadian First Nations — produce oil and gas now or want to in the future.

-In British Columbia there is overwhelming majority support from all First Nations eligible for the Pacific Trail, Coastal GasLink, Prince Rupert Gas and West Coast Connector projects. In some cases, there is 100-per-cent support. Continue Reading →

‘We are very disappointed’: Loss of Northern Gateway devastating for many First Nations, chiefs say – by Claudia Cattaneo (Financial Post – April 10, 2017)

“They understand that it was a political decision, and not a decision acting in the best
interests of Canadians,” Swampy said. “They weren’t asked about the financial effect,
the lost employment. They are trying to get themselves out of poverty, the welfare system that they are stuck to, and every time they try to do something like that, it’s destroyed.
“This (was) a multi-generational opportunity to eliminate poverty in over two dozen of
our first nations and metis communities,” he said.

CALGARY — Most aboriginal communities in northern British Columbia impacted by the Northern Gateway pipeline supported the $7.9 billion project and are angry Prime Minister Justin Trudeau rejected it, say representatives of three of the bands.

Elmer Ghostkeeper of the Buffalo Lake Metis Settlement, Chief Elmer Derrick of the Gitxsan Nation, and Dale Swampy of the Samson Cree Nation said on the sidelines of a private meeting in Calgary on Friday with oilpatch leaders they are disappointed in the “political decision,” which they say was made without their input. Continue Reading →

Shell’s high-tailing is annoying, but there is lots to like about the Canadianization of the oilsands – by Claudia Cattaneo (Financial Post – March 15, 2017)

After a couple of decades of globalization, the oilsands are back to being owned and run by a tight oligopoly of Canadian companies.

The rush of foreign players brought capital, research and development, employment and an international flavour to the industry. But it also pushed up costs because of an escalation of competition, moved control and profits abroad, slowed down decision making and attracted a lot of bad publicity to the deposits by making them the poster child for the international anti-fossil fuel movement.

You won’t find too many complaints in Calgary about the international retreat, which hit a high point last week with Royal Dutch Shell PLC’s oilsands’ selloff. The last time so many oil multinationals backed out of Canada in the 1980s the Canadian oil and gas industry flourished and spawned scores of startups. Continue Reading →

The Permian Basin: An existential threat to Canadian oil as war on cost heats up – by Jesse Snyder (Financial Post – February 21, 2017)

Amid concerns in Canada over the resilience of the U.S. shale industry, one region presents a particularly imposing figure: the Permian Basin of West Texas and southeast New Mexico.

Major producers have continued to refocus their operations around the low-cost Permian as prices remain locked in the low-US$50 range. Oil prices on Friday stood at US$53.42, paring recent gains during the week on fears that U.S. producers continue to pump out higher volumes of crude, in effect neutralizing OPEC’s bid to raise prices by curbing oil supplies. A significant portion of growing U.S. oil production is expected to come from its shale fields, and in particular the Permian Basin.

Production there is expected to reach 2.5 million barrels per day by the end of 2017, up from roughly 2.1 million bpd today, according to estimates by Sam Burwell, an analyst with Canaccord Genuity Inc. based out of Houston. If prices remain approximately at today’s levels, that number could reach three million bpd by the end of 2018—a nearly one million bpd jump in two years. Continue Reading →

Anxiety builds in Alberta on fears oilsands carbon cap policy set to pick favourites – by Claudia Cattaneo (Financial Post – February 3, 2017)

As the Alberta government prepares to deliver the last big piece of its climate leadership plan, a cap on emissions in the oilsands industry, anxiety is building that it will pit company against company, project against project, and could even be based on political favour, according to industry observers.

With the remaining carbon budget expected to be used up in a decade, and more projects vying for a piece of it than will be available, there is concern that companies that supported Rachel Notley’s NDP plan will get preferential treatment, at the expense of those that didn’t.

“People are very concerned that (the changes are) not being designed for the industry as a whole, but the interests of a few,” said Glen Schmidt, president and CEO of oilsands startup Laricina Energy Ltd., said in an interview. “If you are in the cartel and part of the group that has a favoured hearing, you are pushing design elements that favour your interests.” Continue Reading →

Electric Cars Could Cause Big Oil This Much Damage – by Jess Shankleman (Bloomberg News – February 1, 2017)

The growth of battery-powered cars could be as disruptive to the oil market as the OPEC market-share war that triggered the price crash of 2014, potentially wiping hundreds of billions of dollars off the value from fossil fuel producers in the next decade.

About 2 million barrels a day of oil demand could be displaced by electric vehicles by 2025, equivalent in size to the oversupply that triggered the biggest oil industry downturn in a generation over the past three years, according to research from Imperial College London and the Carbon Tracker Initiative, a think tank, published Thursday.

A similar 10 percent loss of market share caused the collapse of the U.S. coal mining industry and wiped more than a 100 billion euros ($108 billion) off the value of European utilities from 2008 to 2013, the report said. Continue Reading →

Why is Alberta’s economy the only one the Trudeau Liberals are plotting to ‘phase out’? – by Kevin Libin (Financial Post – January 31, 2017)

Which Canadian leader will finally lay out a national plan to phase out Ontario’s auto industry? Obviously, with the auto sector accounting for half-a-million jobs in Canada, at least 1,200 Ontario parts and equipment suppliers, and about 20 per cent of Ontario’s GDP and 12 per cent of Canada’s, it’s not something we can phase out tomorrow, naturally.

But the more than two-million vehicles produced in Ontario annually burn billions of litres of carbon-heavy gasoline every year, emitting tens of millions of tonnes of carbon dioxide. This cannot go on.

Even if we could make the entire sector switch, against sensible economics, to hybrids and electric vehicles (Ontario’s factories currently only produce one of each of those), the sheer volume of carbon emissions connected to mining the metals and producing the steel, rubber and plastics for these alternate vehicles would often equal the CO2 levels spewed by the gasoline vehicles over their lifetime. Continue Reading →

Time to step up: resource sectors need Canada’s media more than ever – by Bill Whitelaw ( – January 28, 2017)

Click here for policy document, The Shattered Mirror:

In this age of thought-leadership reports and white paper discussions that flutter around our lives like so much wedding confetti, there’s one document out there that deserves immediate attention – particularly in Canada’s resource sectors.

For those sectors read: energy, mining, forestry and agriculture – the industries that are the supporting vertebrae of Canada’s economic backbone. The sectors everybody increasingly seems to want to despise.

Every senior management team and board of directors in companies that derive their livelihoods from those various sectors should make this particular report required strategic reading. It will give them profound insights into what happens when a business model collapses dramatically in a way that directly impacts their own businesses, especially in terms of public perception. Continue Reading →

How Russia sold its oil jewel Rosneft without saying whether Glencore bought it (Australian Financial Review/Reuters – January 26, 2017)

More than a month after Russia announced one of its biggest privatisations since the 1990s, selling a 19.5 per cent stake in its giant oil company Rosneft, it still isn’t possible to determine from public records the full identities of those who bought it.

The stake was sold for €10.2 billion to a Singapore investment vehicle that Rosneft said was a 50/50 joint venture between Qatar and the Swiss oil trading firm Glencore.

Unveiling the deal at a televised meeting with Rosneft’s boss Igor Sechin on December 7, President Vladimir Putin called it a sign of international faith in Russia, despite US and EU financial sanctions on Russian firms including Rosneft. Continue Reading →

As Ottawa and Alberta dither, Trump embraces the oilsands with Keystone XL nod – by Claudia Cattaneo (Financial Post – January 25, 2017)

U.S. President Donald Trump delivered on his promise to approve the Keystone XL pipeline, signing an executive order Tuesday to advance its construction and giving Canada’s battered oilsands industry his support.

“We are going to renegotiate some of the terms” of the Keystone XL project, Trump said to reporters. “And if they like (them) we will see if we can get that pipeline built – a lot of jobs, 28,000 jobs, great construction jobs.”

He took the same action on the Dakota Access pipeline project, saying that it would be “subject to terms and conditions negotiated by us.” He decreed that American steel should be used for pipelines built in the United States. Continue Reading →

Trump signs orders to advance controversial Keystone XL, Dakota Access oil pipelines – by Julie Pace (Associated Press/Toronto Star – January 24, 2017)

WASHINGTON—U.S. President Donald Trump has signed executive actions to advance the construction of the Keystone XL and Dakota Access oil pipelines. The move is expected to be cheered by Republicans and some union groups who backed the projects.

Former President Barack Obama stopped the proposed Keystone XL pipeline in late 2015, declaring it would have undercut U.S. efforts to clinch a global climate change deal that was a centerpiece of his environmental legacy.

The pipeline would have carried almost one-quarter of Canada’s oil exports to U.S. refineries in the Gulf Coast. The U.S. government needed to approve the pipeline because it crossed the border. Continue Reading →