Oil and Gas Sector-Politics and Image

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 — There’s a buyers’ strike in the oil sands. At least a half dozen energy companies have come up dry in efforts to attract the rich bids they envisaged when they put oil sands assets on the auction block in the past year, showing downward pricing pressure on a sector touted as the cornerstone of Canada’s economic growth.

Would-be buyers and joint venture partners are balking at deals amid a combination of wildly volatile Canadian crude prices, rising development costs and weakening returns, a situation that could force the industry to temper heady expectations for long-term oil sands production growth.

Marathon Oil Corp., Murphy Oil Corp. and Athabasca Oil Corp. had sought buyers and partners in the Northern Alberta oil sands, but now have changed their minds – or in Athabasca’s case, have told investors to hang tight after the company failed to clinch deals that had once appeared imminent.

Those companies join ConocoPhillips Co., Koch Industries Inc. and Royal Dutch Shell PLC in being disappointed after putting properties up for sale that may have once attracted bids totalling in the billions of dollars. Those three say they have rethought their plans after offers failed to meet expectations.

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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 pipeline company behind the proposed Trans Mountain expansion from Alberta to the West Coast says the B.C. Liberals’ electoral victory this month is a “pro-economy, jobs and investment” result, and provides greater clarity as to what conditions the company must meet in order to get shovels in the ground.

Kinder Morgan Canada president Ian Anderson said when he heard the Clark Liberals had won on May 14, “what I felt is we had a greater clarity of what those conditions were and what the interests were that we were facing in British Columbia.”

Speaking to reporters after a panel discussion with Mr. Anderson in Calgary on Thursday, Vern Yu of Enbridge Inc. – the proponent of the proposed Northern Gateway pipeline project – also said he believes the B.C. Liberals under Christy Clark have a more firm idea “of what’s necessary to get the project across the finish line” than their NDP challengers.

Both pipeline companies are keen to take advantage of what is burgeoning demand to ship growing volumes of Alberta bitumen to foreign buyers. But the rush to markets from the West Coast has been impeded by concerns about the environmental consequences of spills or an increased number of supertankers travelling from B.C. ports.

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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 – Texas-based Valero Energy Corp. will invest as much as $200-million in its Quebec refinery if Enbridge Inc. proceeds with its plan to reverse its Line 9 pipeline, a project one Quebec business leader described Wednesday as critical to the province’s refining and petrochemical industry.

In a presentation to analysts, Valero chief executive officer Brian Klesse said the San Antonio-based company has committed to take “substantial volume” of light crude from Enbridge’s Line 9, which, subject to regulatory approval, will be reversed to bring oil from western North America to Montreal. Valero will then deliver the crude from Montreal to its refinery near Quebec City by company-owned ships down the St. Lawrence.

Valero plans to invest between $110-million and $200-million to overhaul its handling capacity at the refinery, including increased tankage and new crude-carrying ships, in order to increase access to North American crude. That will provide it with a competitive advantage over Atlantic basin refineries that rely on high-priced imports.

In addition to supporting Enbridge’s Line 9B reversal, Valero is expanding the 265,000-barrel-a-day refinery’s ability to receive western crude by rail and will import up to 50,000 barrels a day from Texas’s prolific Eagle Ford tight oil play.

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

TORONTO — Moratoriums and new regulations in Quebec are sending a signal to the investment community to take their business elsewhere, Françoise Bertrand, president and CEO of Fédération des chambres de commerce du Québec said Wednesday.

Ms. Bertrand was in Toronto to push her 1,200 members’ pro-pipeline message as Quebec’s minority government under Premier Pauline Marois takes a tough stance on fossil fuel development. This month, the government proposed a five-year ban on fracking and has also proposed higher royalties on mining companies.

“We are very concerned with energy,” Ms. Bertrand said in an interview, noting companies are leaving the province due to high royalty and moratorium proposals being proposed by the government.

“I think she [the Premier] was sincere when she met the Alberta Premier [Alison Redford], but I think it’s more difficult than she had envisaged in terms of delivery.”

Five Quebec refineries have closed down in the past 30 years as they slowly lost their competitive edge. Shell, meanwhile, shuttered its 161,000-barrels-per-day Montreal refinery two years ago and is in the process of dismantling the facility, snuffing out any hopes of reviving the project.

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

You’ve been hearing about the many liquefied natural gas projects that are planned for British Columbia’s west coast over the next few years. What you might not know is the degree to which LNG is already dominating the work done by energy lawyers in Calgary.

The oil sands are still chugging along, and the battle to build oil pipelines won’t end soon — especially with the surprise re-election of the pipeline friendly BC Liberals in British Columbia. The oil files alone can fill the desks of a great many energy lawyers. Yet the chase for LNG projects is well underway. There’s a bit of a gold rush mentality in the air.

“LNG feels like the next Fort McMurray,” says Chad Schneider, a partner with Blake, Cassels & Graydon LLP in Calgary. Adds Brock Gibson, chairman of Blakes: “People are already working around-the-clock on those deals.”

“Each of the larger projects would be amongst the largest things ever constructed in B.C.,” says Paul Wilson, a partner in the Vancouver office of Fasken Martineau DuMoulin LLP. “It’s probably more than half of what we’re doing day to day.”

Proponents are backing the development of at least 10 multi-billion dollar LNG plants for B.C.’s west coast. Many are early stage proposals, and not all will be built. Mountains of paperwork and millions of dollars in fees are needed to transform such complicated projects from dream to reality. Yet the projects are backed by some well-financed and technically able players — BG Group PLC, Imperial Oil Ltd., Nexen Inc., Royal Dutch Shell PLC, just to name a few.

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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.

CALGARY—Politics in British Columbia has always been volatile and unpredictable, as last week’s election again proved. But it also was instructive in another way.

It was the first major election campaign in Canada to feature both the economy and the environment as key issues. That is surely a sign of the times. And even though Premier Christy Clark and her intense focus on the economy garnered the most seats for the Liberals, the popular vote tells another story.

The Liberals raked in 44 per cent of the popular vote but the combined vote of Adrian Dix’s NDP (39) and the Green party (8) totals 47 per cent. B.C. voters rendered a split decision when trying to decide whether they favour protecting the environment or protecting their province’s prosperity.

So the question remains: how will British Columbians reconcile these two competing interests? And how will that affect the rest of the Canada? Of most interest to Albertans is whether or not two proposed pipelines crucial to the Alberta economy will proceed through B.C. and under what conditions. During the election campaign, those pipelines came to symbolize the choice between economic growth and environmental protection.

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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.

Disputes over Arctic development are not ultimately a ‘clash of civilizations’ but a clash of world views.

In the summer of 2010, while I was visiting an ecological research station near Tobermory, Ont., the British Petroleum (BP) Deepwater Horizon oil rig was gushing out of control approximately 1,500 miles due south in the Gulf of Mexico.

Gazing across the turquoise waters of Georgian Bay, I wondered how I would feel if a collapsed oil rig were fouling this clear, remarkably beautiful expanse of the Great Lakes. I winced internally imagining the waters and arresting vistas that had become so meaningful to me becoming blackened by such a tragedy.

Perhaps such thoughts also crossed the minds of native groups in the Arctic last week as they called for a moratorium on oil extraction in their homelands, which are now rapidly opening up to mining and development owing to a warming North.

In a statement released in Kiruna, Sweden, May 13 shortly before a meeting of the eight-nation Arctic Council, 42 aboriginal signatories from Scandinavia, Russia, Canada and the U.S. called for a halt to offshore oil drilling and a hold placed on northern energy projects until local native groups have consented to such interventions.

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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.

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

CALGARY – With the public increasingly worried about oil spills, some aboriginal groups calling for an Arctic drilling moratorium, and the oil industry as keen as ever to tap Northern deposits, oil spill response preparedness was a big topic of discussion at the Arctic Council meeting in Sweden this week.

As Canada, which has large untapped deposits under the Beaufort Sea, assumed its chairmanship on Wednesday, the group of the eight nations that surround the North Pole signed a pact on oil spill prevention in Kiruna, Sweden’s most northern city.

Coinciding with the meeting, the London-based International Association of Oil & Gas Producers (OGP), whose member companies produce more than half of the world’s oil, was eager to talk about industry efforts to improve handling of oil spills in Arctic environments, which it says have advanced significantly in recent years.

Non-governmental organizations such as the OGP and Greenpeace requested observer status at the council but their requests were denied. The OGP, which had hoped to use the platform to engage and collaborate with those with an interest in Arctic oil-spill response, said much progress was made in the past year as a result of the establishment of a joint industry program (JIP) focusing on key areas of research.

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

Despite growing public support for the project on both sides of the border, and a continued full court press from both Ottawa and Edmonton (Prime Minister Harper will be in New York this week, backed by a multi-million dollar U.S. advertising campaign), the administration of President Obama has leaked that it might take a little longer than anticipated – perhaps until 2014 — to make a decision on the Keystone XL pipeline.

According to an anonymous “official” quoted by Reuters, this delay is due to the administration’s desire to take the utmost pains in weighing all the evidence about Keystone’s impact. King Solomon would surely approve, if the reality weren’t that this decision has virtually zero to do with evidence or facts. Meanwhile facts always need perspective.

This week, an allegedly frightening climate milestone was passed. The amount of carbon dioxide in the atmosphere reached 400 parts per million. The breathless reporting of this figure reflects numerical mysticism, not science.

The 400 ppm figure is ritually compared with 290 ppm before the Industrial Revolution to indicate a significant increase. Now we know that, other things being equal, a doubling in atmospheric CO2 will cause a slight warming, but other things are never equal in the chaotic system of climate.

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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.

For four decades, U.S. foreign policy has been dictated by the country’s dependence on Middle Eastern oil. What Barack Obama has called an “addiction” to foreign crude is seen as having undermined the ability of the world’s most powerful nation to control its own destiny.

No wonder the suddenly plausible prospect of U.S. energy independence is generating such giddiness. Not only is the boom in domestic oil and gas production boosting an economy in dire need of jobs and investment, it is rekindling Americans’ confidence in their country’s future.

What is more appropriately defined as North American oil independence – since the United States will continue to depend on Canadian and Mexican crude for decades to come – is almost unanimously hailed as a positive development that will enhance American security.

What gets mentioned less are the downsides of energy independence. Rising U.S. and Canadian oil production could well destabilize petro-states in the Middle East, Russia, Africa and beyond, sparking regime changes unfavourable to U.S. interests and creating an even riskier world.

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