Archive | Oil and Gas Sector-Politics and Image

OPINION: The Wet’suwet’en deal could be a recipe for disaster – by Gary Mason (Globe and Mail – May 27, 2020)

When we last left the great pipeline dispute involving the Wet’suwet’en Nation, governments in Ottawa and B.C. were trying to bring calm to an ugly feud that had ignited railway blockades across the country.

Then the COVID-19 pandemic struck, and the imbroglio suddenly seemed like a far less urgent priority.

As it turns out, however, the disagreement that began when a small group of Wet’suwet’en hereditary chiefs and their supporters obstructed construction of the Coastal GasLink pipeline in northern B.C. was not being entirely ignored. On the contrary, an extraordinary deal was being worked out between the two levels of government and a handful of Wet’suwet’en hereditary chiefs that has the capacity to fundamentally alter politics in this country forever. Continue Reading →

Alberta gears up for another legal battle over Keystone XL after Biden vows to pull permissions – by Geoffrey Morgan (Financial Post – May 20, 2020)

CALGARY — Alberta Premier Jason Kenney said he is prepared to go to court anf file a free-trade lawsuit alongside TC Energy Corp. if Joe Biden becomes president and follows through with his promise to pull permits on the Keystone XL pipeline.

Construction work on the US$14.4-billion Keystone XL pipeline began in April but fresh opposition from the U.S. Democratic presidential nominee could scuttle the long-delayed pipeline once again.

Biden’s election campaign signalled over the weekend that, if the former U.S. vice-president takes the White House this November, he would withdraw presidential permits for the Alberta to U.S. Gulf Coast pipeline Keystone XL. Continue Reading →

‘A complete disaster’: Investors take aim at Teck CEO Don Lindsay after commodity cycle misses – by Gabriel Friedman (Financial Post – May 20, 2020)

Days after Teck Resources Ltd. publicly pulled the plug in February on Frontier, a proposed $20.5-billion mine in the oilsands, one of the company’s largest investors started a campaign to oust the company’s chief executive, Don Lindsay.

Bob Bishop, founder of Impala Asset Management, a Florida-based resource focused hedge fund, which has been a shareholder since 2016, wrote a letter in late February to the board; and then a few days later, just before coronavirus halted all air travel, he flew to Toronto to deliver his message in person to the company’s chair Sheila Murray: It’s time for Lindsay to go.

For Bishop, whose firm owned 1.9 per cent of Teck’s Class B shares at year end, oil was proving to be another mistake in a long line of miscalculations: Teck invested $1.1 billion in Frontier, one of the largest greenfield oil projects ever imagined in Canada, before it abruptly withdrew from the permitting process. Continue Reading →

OPINION: Pretending oil is dead makes bad climate policy – by Campbell Clark (Globe and Mail – May 19, 2020)

The problem with Elizabeth May’s warning that “oil is dead” is not just that she’s wrong. It is that she ignored the lesson that the coronavirus crisis offered about oil, and reducing greenhouse-gas emissions.

There was a strange triumphalism in Ms. May’s obituary for the Canadian oil industry, when she said “the idea that we’ve got this product that everyone wants is delusional.”

That sparked angry reaction from the oil patch, but it is climate-change activists who should tell Ms. May she got it wrong. Continue Reading →

Canadian oil still has a future, even if Elizabeth May can’t see it – by Max Fawcett (National Post – May 12, 2020)

There may not be a French translation for the word “chutzpah,” but that doesn’t mean that Bloc Québécois Leader Yves-François Blanchet can’t summon it.

Case in point: his recent suggestion that the federal government shouldn’t prop up oil and gas businesses “that will not be self-sufficient in any time in the future.”

You could almost hear Albertans choking on their indignation when he said that, given Quebec’s storied history of propping up businesses whose own lack of self-sufficiency is a matter of public record. Continue Reading →

Liberals best to ignore certain politicians who wish Canadian oil were ‘dead’ – by John Ivison (National Post – May 8, 2020)

Elizabeth May has provoked outrage by claiming “oil is dead.” It is not entirely clear why. It’s like the Pope proclaiming the Bible as the fount of spirituality.

May is the country’s environmental conscience — the demise of fossil fuels is an article of faith for her. But she is guilty of wishful thinking. The Canadian oil industry is not dead yet — in fact, it may be getting better.

In an article in Policy Magazine, May claimed Canadian oil is a “product lacking investors.” Yet, at the annual general meeting of Barclays PLC in London on Thursday, shareholders of the giant European bank voted down a proposal by Share Action, an activist group that promotes “responsible” investing, to quit the Canadian oilpatch. Continue Reading →

Global energy demand sinks through the floor as the world stays home – by Emma Graney (Globe and Mail – April 30, 2020)

Global demand for energy wiped out by the COVID-19 pandemic is “without precedent,” with March oil consumption alone plummeting by a record 10.8 million barrels a day, according to an International Energy Agency analysis of the past 100 days of the pandemic.

Total energy demand declined by 3.8 per cent in the first quarter of 2020, and IEA director Fatih Birol expects oil to take “months, maybe years” to return to prepandemic levels.

While the world will “still need oil in years to come,” Dr. Birol told The Globe and Mail from Paris on Wednesday that the extreme economic and demand shock caused by the pandemic will likely plunge consumption of crude this year to 2012 levels. Continue Reading →

First Nations need to play a role in post-COVID revcovery – by Sharleen Gale (Policy Options – April 29, 2020)

Policy Options – Institute for Research on Public Policy

Sharleen Gale is chief of the Fort Nelson First Nation and chair of the First Nations Major Projects Coalition.

To rebuild the economy after COVID we need to push ahead with major projects like expanding the electricity power grid in partnership with First Nations.

The COVID-19 crisis has upended the daily routines of Canadians and devastated the economy. As public health officials work to contain the virus, many of us have turned our thoughts to where the bottom lies and what a recovery will look like.

Some people have estimated that unemployment levels at the peak of the crisis may reach as high as 25 percent. Most Canadians can’t even fathom that, having heard about it only from grandparents or great-grandparents who lived through the Great Depression.

But for First Nations people living on reserve, unemployment on this scale is a fact of life. And we feel its devastating consequences every day: stress, depression, addictions, family violence and chronic illness. Continue Reading →

OPINION: Saudi Arabia’s decision to trigger an oil price war has backfired badly – by Eric Reguly (Globe and Mail – April 22, 2020)

Saudi Arabia’s Crown Prince Mohammed bin Salman is learning the hard way that barrels of oil with nowhere to go are worth approximately zero. Saudi barrels aren’t worth nothing – yet – but they’re getting close.

On Tuesday, the day after U.S. oil prices actually went negative, Brent crude, the international benchmark, fell 25 per cent to US$19 a barrel. A year ago, it was trading at US$70.

In early March, MBS, as the crown prince is known, apparently thought he had figured it all out. He wanted OPEC, which is led by Saudi Arabia, and Russia, an OPEC ally, to cut production to support prices, which were sagging as the novel coronavirus was bursting out of China. Russia said nyet. Continue Reading →

Oil prices plunge well below zero for first time in history as billions stay home due to coronavirus – by Emma Graney (Globe and Mail – April 21, 2020)

The market price for West Texas Intermediate crude oil plunged deep into negative pricing for the first time in history on Monday, closing at minus US$37.63 as the fallout from the spread of the coronavirus leaves the world with more oil than it needs and nowhere to keep it.

The destruction of global demand and a supply glut has crude sloshing toward the tops of North American storage tanks. Monday’s turmoil put the market in an extraordinary position in which desperate investors who agreed in futures contracts months ago to pay a set price for crude in May so they could resell it at a profit, would now have to pay buyers to take it off their hands or find a place to store it. West Texas Intermediate is the benchmark for North American oil prices.

Worldwide fuel consumption has fallen by a third as billions of people around the world stay home. Although the Organization of the Petroleum Exporting Countries (OPEC) and allies agreed last week to a 9.7 million barrel a day (b/d) production cut, it won’t take effect until May – too late to prevent a massive storage glut. Continue Reading →

U.S. shale giant’s bankruptcy a warning to Canada’s oil patch – by Emma Graney and Jeffrey Jones (Globe and Mail – April 2, 2020)

A major U.S. shale producer filed for bankruptcy Wednesday, the largest casualty yet of a global oil price crash.

It is unlikely the insolvency will set off a domino effect into the closely integrated Canadian sector, but it has put the northern patch on notice to tighten operations and finances as much as possible, analysts say.

Whiting Petroleum Corp., once the largest oil producer in North Dakota’s Bakken region, has filed for bankruptcy amid the coronavirus pandemic and an oil price war between Russia and Saudi Arabia that is hammering the price of crude. The downturn has forced oil and gas producers across North America to restructure their debt. Continue Reading →

The U.S. shale revolution is over. Russia and Saudi Arabia are thrilled – by Eric Reguly (Globe and Mail – April 1, 2020)

For more than a decade, the American shale oil industry played a high-stakes game of chicken with Saudi Arabia and Russia – and kept on winning. In March, its luck ran out, big time, and the good ol’ boys in Texas are already pleading for mercy as oil prices plunge at unprecedented speed.

Any sense that the shale companies can tough it out as they did during the last great oil price downturn, in 2014 and 2015, is vanishing, even if a few stalwart optimists believe a rebound is inevitable, because the best cure for low prices is low prices.

They are right. But when? The V-shaped recovery seen in the previous price collapse could prove elusive as COVID-19 acts like an indiscriminate economic wrecking ball. Continue Reading →

‘Critical for our economic future’: Keystone XL surprise go-ahead to energize struggling oilpatch – by Geoffrey Morgan (Financial Post – April 1, 2020)

CALGARY – TC Energy Corp.’s decision to proceed with the long-delayed Keystone XL pipeline with the help of the Alberta government would allow the oilpatch to hit the ground running when prices recover.

“This is absolutely critical for our economic future now more than ever,” Alberta Premier Jason Kenney said in an interview with the Financial Post.

On Tuesday, TC Energy, formerly known as TransCanada Corp., said it has decided to build the controversial pipeline with a US$1.1-billion “strategic investment” from the Alberta government. Continue Reading →

The crisis facing Canada’s oilpatch isn’t just the industry’s problem, it’s everybody’s problem – by Peter Tertzakian (Financial Post – March 27, 2020)

Sudden shocks to a system are never good. Things break under stress, sometimes permanently, sometimes with unforeseen consequences.

In the oil world, things could start breaking in a matter of weeks. Here in Canada the situation is likely to be acute, because of our concentrated exposure to one customer, the United States.

Oil markets worldwide are under extreme stress. First, there’s the price war waged by The Organization of the Petroleum Exporting Countries — a deluge of barrels thrown into markets opportunistically during the COVID-19 pandemic. Continue Reading →

Canadian heavy oil cheaper than a pint of beer as North American demand for fuel plummets – by Geoffrey Morgan (Financial Post – March 27, 2020)

CALGARY – As commuters stay home and lockdown orders spread across the U.S., the price of Canadian heavy oil has collapsed. Western Canadian Select heavy oil price benchmark fell 30.5 per cent on Thursday to US$6.45 per barrel, which analysts joke is less than a pint of beer. U.S. crude prices fell 7.7 per cent to US$22.60 per barrel.

“Prices are so low that there’s no point in transporting if you don’t have to. If you can move it into storage, you will,” said Stephanie Kainz, senior associate at RS Energy Group, a division of Austin, Tex.-based Enverus.

However, Canadian producers that are able to move their barrels directly to the U.S. Gulf Coast refineries through existing pipelines have been able to enjoy higher prices, of close to US$16 per barrel, as American refineries still want Canadian heavy oil, despite dwindling demand for fuel. Continue Reading →