Oil and Gas Sector-Politics and Image

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.

Derek H. Burney is senior strategic adviser for Norton Rose Canada LLP and a director of TransCanada Pipelines Ltd. Fen Osler Hampson is director of global security at the Centre for International Governance Innovation.

There has been a lot of loose talk of late about the United States becoming “energy independent” by the end of this decade. A more accurate prediction is that North America may become more energy independent in that time frame as the result of developments under way in both Canada and the U.S.

Today, the U.S. consumes 15 million barrels of crude oil a day and imports eight to nine million barrels, more than half of what it needs. The U.S. Energy Information Administration forecast in 2012 that the U.S. will continue to import 7.5 million barrels a day into 2035.

Canada currently exports about 2.2 million barrels of crude oil a day to the U.S., an amount that could easily double if additional pipeline capacity were available. At present, there is little spare capacity, which is why some shippers are turning to rail transport. This limited pipeline capacity contributes to the sharply discounted price ($30 a barrel) for Canadian crude, a discount that negates some $6-billion in taxes and royalties annually for the Alberta treasury.

Deposits in Texas will compete with light, sweet crude from the Bakken region in North Dakota but not with Canadian heavy crude oil.

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

Shale oil boom means security

To fight jihadists, foreign policy hawks have long promoted global warming legislation: If carbon taxes and conservation programs can get us off Middle Eastern oil, the hawks reasoned, oil prices will drop as demand drops and money for terrorist attacks will dry up. Out came global warming legislation touting its benefit for national security, such as the Climate Security Act of 2008, which promised deep cuts to America’s dependence on Middle East oil by 2050.

Those hawks should reconsider. Global-warming legislation has emerged as the single biggest threat to the West’s energy security and the single biggest boon to most of the West’s geopolitical foes. The game changers are shale oil. The U.S. has so much of it that Citigroup, in a report released earlier this month, states that in five years the U.S. could eliminate all oil imports from the Middle East and other hostile suppliers and become a net energy exporter. The U.S. has already halved its oil imports from 2006 levels.

Other expert bodies are equally bullish about the prospects of shale oil. The International Energy Agency forecasts that by 2017 the U.S. will overtake both Russia and Saudi Arabia to become the world’s biggest oil producer, and that by 2035 it will be able to eliminate almost all oil imports, including from Canada. PricewaterhouseCoopers (PwC) believes that U.S. shale oil production could reach four million barrels per day by 2035, more than triple the U.S. government’s official estimates. This has been an overachieving industry, it notes, with a torrid 26% per annum growth rate to date and an estimated 33 billion barrels in the ground, up dramatically from the 2007 estimate of just four billion barrels.

The global prospects — estimates of recoverable shale oil reserves have climbed to as much as 1.5 trillion barrels — change the game again.

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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.

MONTREAL — Quebec could save up to $3-billion a year buying Alberta’s oil instead of importing all the fuel it consumes from Europe or North Africa, according to a new projection.

The savings estimate by National Bank Financial assumes Alberta’s oil could physically get to Quebec, which currently isn’t the case. But with two projects under consideration, buying Albertan oil is no longer a far-fetched scenario for Quebeckers.

Enbridge Inc. wants to reverse the flow of the pipeline it operates between Sarnia, Ont., and Montreal to send oil eastward. The National Energy Board is holding information sessions on the upcoming hearings this week. TransCanada Corp. is looking into refitting and extending an existing natural gas pipeline through Quebec and all the way to New Brunswick. Assuming the company goes ahead with its plan and gets all the necessary approvals, the pipeline could start moving oil in 2017 at the earliest.

Quebec Premier Pauline Marois, who hopes to decrease the province’s reliance on costly imports, is cautiously examining both projects. Quebeckers are divided over Alberta’s oil sands: Many are concerned about the environmental impact, while the business community sees an opportunity to ensure the long-term survival of Quebec’s petrochemical industry.

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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.

OTTAWA — While Alberta Premier Alison Redford frets about the “bitumen bubble” that is robbing her province of badly needed revenue, economists on the left have another concern: the “bitumen cliff” which, they insist, the Canadian economy is headed toward.

The economists are treading on politically fraught ground. Former Ontario premier Dalton McGuinty beat a hasty retreat last year after questioning the national benefits of oil sands expansion, while New Democratic Party Leader Tom Mulcair has been sounding oil-sands-friendlier, albeit with caveats, after warning about the dangers of oil-fuelled “Dutch disease” when he took the helm of the opposition party.

In a report to be released Thursday by the Canadian Centre for Policy Alternatives and the Polaris Institute, the four economists, including Canadian Auto Workers stalwart Jim Stanford, echo one of the country’s great economic historians, Harold Innis, to warn against Canada becoming overly dependent on the extraction and export of raw resources – in this case, oil sands bitumen.

“As staples are exported in raw form to more industrialized trading partners, Canada is left to buy back processed, value-added products and services at a much higher cost,” the economists write. “The combined outcome is a self-reinforcing staples trap [a phrase borrowed from Prof. Innis], whereby the faster Canada exports its latest staple, the less diversified and capable the economy becomes and hence all the more dependent on finding more staples to export.”

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The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

A new study uses an old theory to show that Alberta’s iconic oilsands have clay feet.

Alberta’s oilsands have iconic status in Canada. They are magnets for foreign capital and sources of great wealth. They are credited with keeping this country’s economy alive in the midst of a global slump.

Politically, they symbolize the new Canada — one governed by a prime minister determined to encourage resource extraction at the expense of virtually everything else. But as Albertans are discovering, the icon has feet of clay. Even a brief hiccup in the oilsands boom has sent the province’s finances into a downward spiral.

And the future remains uncertain. Suddenly, the politics of climate change have made Alberta’s carbon-emitting bitumen less welcome in the United States. More to the point, technological changes that favour the production of cheaper shale oil and gas, are transforming the U.S. from an energy pauper into one of the world’s big petroleum players.

To put it another way, Canada’s biggest export market no longer needs the tarsands quite as much as it did. Into this mix comes a new study that tries to make sense of the oilsands phenomenon.

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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.

There are many reasons to doubt a national economic strategy premised centrally on digging out non-renewable resources, then selling them off to foreigners as quickly as possible. But one of the most irrational aspects of the recent energy boom has been its perverse impact on export revenues.

In essence, the faster we extract bitumen and export it, the cheaper it gets. Our regulatory system gives each individual company free rein to export as much as possible, as fast as possible. But the resulting export surge drives down the overall price. Perversely, that undermines each producer’s revenue and fails to serve the public interest in maximizing the value of non-renewable resources.

Canada both exports oil (from the West) and imports it (to the East). However, because of the depressing effect of unrestrained exports on prices, an incredible gap has emerged between what we pay for imports and what we fetch for exports. Last December, that so-called “Canadian discount” surged to more than $60 a barrel. In essence, we had to export two barrels from the West to pay for each barrel imported to the East. The gap has since narrowed, but it still costs Canadians billions of dollars a year – hurting both oil companies and consumers. Almost half of Canada’s petroleum export revenue now goes to pay for petroleum imports.

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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.

MONTREAL — Quebec is sending a discouraging message to potential investors by dithering over development of its potentially huge oil and gas reserves, says former premier Lucien Bouchard.

Those who oppose hydraulic fracturing to extract shale gas have essentially won the battle because the government has indefinitely suspended all such activities, said Mr. Bouchard, who recently stepped down as chairman of the Quebec Oil and Gas Association after his client – Talisman Energy Inc. – withdrew from the group.

His comments add fuel to the heated battle over Quebec’s energy future. While the industry pushes for the province to move quickly to set clear rules on oil and gas exploration, the government says a cautious approach is needed to deal with the environmental issues that surround hydraulic fracturing.

Fracking, as it is commonly called, uses large quantities of water and chemicals to fracture rock to release trapped gas. Opponents say fracking compromises groundwater, a claim the industry disputes. Similar arguments are being heard in many jurisdictions, but in Quebec the topic has become particularly touchy.

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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.

WASHINGTON, OTTAWA AND CALGARY — Thousands rallied on the Mall in Washington, D.C., demanding President Barack Obama say “no” to the controversial Keystone XL pipeline and keep his promises to take action against climate change caused by man-made greenhouse-gas emissions.

Organizers officially said 35,000 or more braved a cold, windy February afternoon for the protest, but turnout seemed significantly smaller. Even some of the protesters who had journeyed cross-country for the widely promoted Forward on Climate rally, voiced disappointment at the numbers.

No matter the size of the rally, Sunday’s protest clearly established that potent political forces are in play on both sides of the Keystone decision. For environmentalists especially, Keystone has become a symbol; it’s not just another “old” energy project, it’s a test of the President’s promises to take serious steps on climate change.

“I wouldn’t read too much into the numbers,” at the rally, said David Biette, director of the Canada Institute at the Woodrow Wilson International Center, a leading think tank. But he sees little room for compromise. “The environmentalists have drawn a line in the sand,” on Keystone, the pipeline that will funnel carbon-laden Alberta oil sands across the United States to Gulf oil refineries.

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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.

Bank of Canada Governor Mark Carney is very capable and impressive, but Britain has no lack of financial experts meeting that description. What differentiates him – and what drove the British government’s determination to recruit him as the next head of the Bank of England – is that he presided over the central bank of the economy that weathered the financial crisis better than other developed countries.

The most often cited reasons for Canada’s performance include sound home mortgage practices and prudent federal fiscal management. While those factors were crucial in the early days of the financial crisis, they don’t explain the country’s continuing strong performance even as our closest neighbour and dominant trading partner suffers through protracted economic doldrums.

So what is it that has made Canada and, by association Mr. Carney, such a star performer? The pivotal factor is that Canada is one of the world’s largest resource exporters.

Natural Resources Canada estimates that in 2010, the energy, mining and forestry sectors generated new capital investment of $95-billion and total exports of $200-billion. The degree to which natural resources underpin Canada’s economic prosperity is illustrated by balance of trade data showing an $84-billion net balance resource trade surplus, while manufacturing incurred a trade deficit of more than $60-billion.

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

 WASHINGTON — It will be a lively President’s Day long weekend for the folks here at the Canadian embassy.

As many as 20,000 environmental activists are expected to march on the White House on Sunday to demand the death of Keystone XL, and embassy staff plan to be on the sidelines to hear what’s said up the street on Pennsylvania Avenue and do their own count of the protesters.

It’s part of their focus on the facts on the consuming issue that has risen to the top of their priorities. In the first major anti-Keystone XL march in August 2011, headlined by celebrities like Daryl Hannah, environmentalists claimed a throng of 10,000 showed up, embassy staff counted 4,000. In another rally last November, protesters claimed 5,000 followers, the embassy counted 3,000.

The exaggeration is typical of the theatre surrounding the Canadian heavy oil pipeline project, targeted by the U.S. environmental movement to make a point about the need to get off fossil fuels — particularly those from the oil sands — and accelerate the adoption of green energy to reduce climate change.

But for many Canadians here who have been defending the pipeline from Alberta to Texas, the oil sands industry and Canada’s environmental record, the really important development is still to come, and they hope that’s where the facts will prevail.

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

Canada’s oil sands are besieged with two myths: That a “clean” coal technology exists and that the oil sands imperil the planet as the world’s dirtiest fuel.

Meanwhile, they are not swarming around America’s biggest carbon dioxide emissions culprit – Southern Company’s Scherer Plant. In 2007, the plant was the single largest source of carbon dioxide in the U.S. and 20th biggest worldwide, spewing out 27 million tons annually.

And while the environmental industry attacked Keystone during the 2012 election campaign with large protests and media noise, there were no dramatic sit-ins or mass arrests in Georgia or other dirty coal plants. In fact, that year the Scherer Plant in Georgia hired KBR Haliburton to build yet-another gigantic smoke stack, increasing emissions.

Comparing a single plant with the oil sands sector may sound unfair, but consider the numbers. The Scherer Plant’s emissions alone are equivalent to 75% of the carbon dioxide produced by Canada’s oil sands and yet the Georgia utility gets a pass while the oil sands are dubbed the pariah of polluters.

Digging deeper, the Georgia emissions are far worse using the “wheel to wheel” measure that environmentalists like to apply to the oil sands.

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The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Tens of thousands of protesters gathered in Washington to demand President Barack Obama stop the Keystone XL pipeline from Canada.

WASHINGTON—Canada’s carbon-intensive oilsands industry was the guest of dishonour in Washington on Sunday, where the largest in a series of nationwide climate rallies demanded President Barack Obama call a halt to the controversial Keystone XL pipeline.

Though precise numbers were in dispute — organizers claimed upwards of 50,000 supporters, with other media assessments suggesting half as many — activists appeared to have met their target of achieving the country’s largest-ever climate rally.

But there was no disputing TransCanada’s proposed Keystone XL pipeline was the anti-star of the Forward On Climate protests, which included companion rallies in more than 20 U.S. cities from here to San Francisco.

“Keystone XL is the flashpoint,” said Carl Whiting of Madison, Wis., who marched in a Grim Reaper costume. “I recognize that it’s clearly not enough to just to stop a single pipeline from Canada. But it will be a huge first step.”

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