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.

Tzeporah Berman is the author of This Crazy Time: Living Our Environmental Challenge.

“Mommy, did you hear the news? They fixed the oil sands.” My nine-year-old son explained to me over dinner the other day what he’d seen on TV: “There are nice people who have fixed it and they’ve figured everything out so that all the nature is fine because after they get the oil they pat dirt back on and plant flowers and trees. Even the butterflies have come back.”

In the past year, the oil sands industry has spent hundreds of millions of dollars on advertising to convince Canadians that the world’s single largest industrial development and the fastest growing source of Canada’s global warming pollution is being “fixed.” This advertising blitz has been reinforced by our federal government’s taxpayer-funded advertising campaign and, recently, by former Suncor CEO Rick George’s highly publicized book tour.

We all want to believe it’s possible to just “fix it.” Unfortunately, slick ads claiming a cure for the environment offer nothing but a false sense of security for Canadians. In reality, little has changed on the ground.

We keep hearing that the damaged land is being reclaimed, that we’re going to make a lake district out of toxic sludge pits known as tailings ponds. A wetland-dominated forest out of old mines.

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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.

If you’re a true-blue free-market conservative, this moment could not have been better engineered to make your head explode.

At some point before Dec. 10, Prime Minister Stephen Harper and his cabinet will have to choose between less-free markets or more government involvement in the economy. Mr. Harper will have to decide whether Ottawa will accept or reject two foreign purchases of Canadian petroleum companies, Nexen Inc. and Progress Energy Resources Corp.

This will be a test of the long-accepted principle, articulated by Brian Mulroney in 1985 and broadly accepted by all Canadian governments since, that “Canada is open for business” and welcomes foreign investment.

In the three decades since, Industry Canada has received 1,664 applications for foreign takeovers of Canadian companies, leading to a foreign-ownership stake of $915-billion. So far, it has formally rejected only one.

What complicates things is that the buyers in the Nexen and Progress Energy cases are state-owned corporations: China’s giant oil company CNOOC, and Malaysia’s Petronas.

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

CALGARY — With new options firming up to pipe Western Canadian oil to Eastern Canada, and a decision in the United States on the Keystone XL pipeline months away, Ottawa appears to be dialing down its support for the controversial Northern Gateway pipeline through northern British Columbia.

In a discussion Friday with energy industry leaders in Calgary, Joe Oliver, Canada’s Minister of Natural Resources, said Ottawa is still very keen to develop new markets for Canada’s oil, but is also keeping an eye on public opinion.

“If we don’t get people on side, we don’t get the social licence — politics often follows opinion — and so we could well get a positive regulatory conclusion from the joint panel that is looking at the Northern Gateway, but if the population is not on side, there is a big problem,” he said at the Canada Energy Summit hosted by the Economic Club of Canada.

“We understand there are huge challenges there, and looking at that and how we can deal with it and looking at all the alternatives at the same time.” It’s a new tone for the minister, who during a visit to Alberta last summer said: “Gateway, in our opinion, is in the national interest.”

Mr. Oliver said he supports the eastern option because refineries can purchase crude at lower prices than they are paying now to foreign producers, there is opportunity to create jobs, and even reduce the price of fuel.

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TORONTO – An attempt by Ecuadorian villagers to have a Canadian court enforce a $19-billion judgment awarded in their country against multinational oil giant Chevron Corp. got off to a rocky start Thursday, with an Ontario judge openly skeptical about the proposition.

Ontario Superior Court Justice David Brown made no bones about his feelings as a lawyer for Chevron attempted to argue the villagers had no cause against subsidiary, Chevron Canada.

For one thing, Brown noted, an Ontario court should not even think about weighing in unless there had been a final judgment in the South American country and no one had persuaded him there was one.

“This is basic stuff, folks,” he said. “Why should an Ontario court stick its nose into a lawsuit where there is no final judgment?” Chevron Corp. lawyer Alan Mark, who had a rough time getting to his substantive submissions, conceded there was an appeal pending in Ecuador’s constitutional court.

That prompted Brown to retort, “I need to have evidence. I need to have argument. You can’t keep me in the dark on this.”

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

For U.S. foundations, this is about fossil fuels

Vivian Krause is a Vancouver researcher and writer. On Twitter she’s @FairQuestions.

Heads up, Canada! Our one and only big energy customer, the United States, isn’t going to need Canadian oil any more. That’s the implication of the International Energy Agency’s latest predictions. The U.S. will be the world’s largest oil producer by 2020 and the largest oil exporter by 2030. Some say this could happen a lot sooner.

At the same time that the U.S. is fast becoming an energy exporter, American charitable foundations are restricting Canadian fossil fuel development with conservation initiatives that put huge areas of land off-limits to natural resources development. Whether it is their intention or not, large conservation areas are de facto trade barriers that would restrict Canada’s marine access to global energy markets — on all three coasts — and maintain the U.S. monopoly on Canadian exports, keeping Canada over a barrel and on the sidelines of the global energy market.

The downside of the U.S. monopoly on Canadian exports is huge. Joe Oliver, Minister of Natural Resources told the B.C. Business Council in a speech Tuesday that the Canadian economy loses out on $18-billion annually – $50-million every day – because Canadian oil is sold into the U.S. market below market value.

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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.

Tim Armstrong is a lawyer whose assignments in the Ontario government included deputy minister of industry and trade and agent general for the Asia-Pacific region, headquartered in Tokyo, 1986-1990, with regional responsibilities for Japan, Korea and China.

If there was ever doubt, it now is clear that the takeover by the Chinese National Overseas Oil Corp. (CNOOC) of Nexen will be determined by the federal government with no public or parliamentary input. Ottawa remains unresponsive, in spite of the countless relevant questions that have been publicly raised.

The Investment Canada Act preserves confidentiality for any aspect of an acquisition application that contains privileged financial, commercial, scientific or technical information. But there are a host of unanswered factual issues that have nothing to do with any of these privileged categories.

It’s difficult to ignore the paradox that our federal governments have moved for some years to privatize virtually all market-oriented enterprises previously under federal ownership, and that we are now open to permitting foreign state-owned enterprises to acquire full control of companies like Nexen.

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

Plans are under way to build oil pipelines south, west and east, but even if they are successful they’re not going to alleviate today’s problem: Many of Canada’s oil pipelines are full and it’s only a matter of time before they choke off oil growth.

Already, analysts are warning the next steps will be production shut-ins and the rationalization of oil sands projects so only the less expensive go ahead.

Coping strategies are expected to come into focus as producers announce their investment plans for 2013 over the next few days and weeks, starting with Canadian Oil Sands Ltd. on Thursday. Pipeline capacity has been getting tighter because of surging production from Alberta’s oil sands and from tight oil fields across North America.

Space will be substantially smaller than demand in December, when Enbridge Inc. will “apportion” space on a number of its key pipelines – Line 5, Line 14, Line 6B, Line 6A/62, Line 4/67, Line 4. Kinder Morgan Inc. is apportioning space so that only 30% of producers’ hoped-for volume gets into its regularly oversubscribed TransMountain pipeline in December.

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

Al Monaco puts a brave face on the prospects of Enbridge’s Northern Gateway pipeline becoming a reality.

“We’re in the middle of the regulatory process, so I don’t want to presume anything. But we’re optimistic and committed to it,” the company’s new chief executive said over breakfast in Ottawa Wednesday.

Yet he remarked on more than one occasion, “it’s not just about Gateway,” as if he’s resigned to the idea Enbridge’s plan to build a pipeline to connect Canada’s supply of heavy crude to demand in Asia is doomed to failure, thanks to the opposition.

Enbridge’s strategy is to diversify Canada’s markets, so it is no longer a price taker — a captive supplier selling heavy crude to the U.S. market at a discount that costs the country $60-million a day.

The average discount in the first three quarters of this year was $27 a barrel, which was a major contributor to Canada’s increased deficit. Mr. Monaco, who was in town to talk to politicians in all parties, was more keen to emphasize Enbridge’s other market access initiatives.

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

 Brian Lee Crowley is the managing director of the Macdonald-Laurier Institute, an independent non-partisan public-policy think-tank in Ottawa.

If China is angered by a no on Nexen, it will only hurt itself

In determining whether Ottawa should allow Chinese state-owned enterprise (SOE) CNOOC Ltd. to buy Canadian energy firm Nexen Inc., much hangs on one question: Is Canada in a position of weakness or strength vis-à-vis China?

This matters because so much hinges on whether Canada will be benefited or harmed by the fallout from the decision, especially should Ottawa turn down the proposed acquisition.

Proponents of the deal make two separate cases why we not only should but indeed must approve CNOOC’s bid. They argue, first, that Canada needs access to the Chinese market for our oil and gas. Second they claim that Canada needs access to Chinese capital to develop our natural resources. They then go on to argue that if we fail to get either form of access the national prosperity being generated by the West’s oil-fuelled boom is endangered.

If they are correct about the consequences of not gaining access to Chinese consumers and capital, then their case in favour of the CNOOC deal is powerfully strengthened.

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

Global demand for crude is growing so strongly that the world needs “every single drop of Canadian oil,” the International Energy Agency’s chief economist said on Monday, playing down fears that growing U.S. production could hit Canadian exports.

Fatih Birol said that even if U.S. output rises as much as the agency expects, the country would still need to import four million barrels a day and that Canada is an obvious supplier.

In its annual forecast this month, the IEA said the United States could come close to energy self-sufficiency by 2035, largely because of the boom in development of unconventional light oil resources.

Canada is the single largest supplier of energy to the United States, sending around 2 million barrels a day to its southern neighbor.

Much of the Canadian crude comes from Alberta’s oil-rich tar sands, where operating costs are higher than in regular fields, and the IEA’s forecast prompted fears that the biggest export market for the oil sands could shrink.  But Birol, asked about potential risks for the oil sands if U.S. output rose, said he did not see any.

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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.

Justin Trudeau, stinging from his first major blunder in his bid to lead the federal Liberal Party, was forced to apologize for comments in which he criticized the dominance of Alberta politicians in Canada and touted the virtues of past prime ministers from Quebec.

“I am sorry I said what I did,” he told reporters Friday in Vancouver during a hastily called news conference at the end of a three-day trip to British Columbia. He added that it was “wrong to use a shorthand of Alberta when I was really talking about Mr. Harper’s government.”

Asked whether Canada would be better off with a prime minister from Quebec, Mr. Trudeau replied, “I think Canada is better off with a prime minister who chooses to pull people together and not play up insecurities and divisions and regional resentments any chance they can get.”

Mr. Trudeau also said his 2010 comments were focused on telling Quebeckers how important it was to stop voting for the Bloc Québécois and instead to start engaging with the “national discourse” in Canada and voting for a national party.

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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.

An unlikely alliance between between the premiers of Quebec and Alberta to start talks on moving oil east is prompting discussion about whether it will lay the groundwork for a national energy strategy between provinces.

Meeting for the first time this week in Halifax at the premiers’ summit, Pauline Marois and Alison Redford agreed to form a joint working group to explore the idea of moving Alberta’s oil east to Quebec.

Although, Ms. Marois made it clear this was strictly a deal between her province and Alberta, other premiers, like Manitoba’s Greg Selinger, are viewing it differently.

“It’s part of a national strategy,” Mr. Selinger told The Globe and Mail as the meeting wrapped up Friday. “I think we have greater energy security in Canada by having a pipeline in Canada that goes to the east coast.”

New Brunswick’s David Alward has been meeting for several months with Ms. Redford about the idea of bringing Alberta’s heavy oil to the Irving refinery in Saint John.

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