Oil and Gas Sector-Politics and Image – Page 117

Canada’s resource sector braces for slowdown – by Pav Jordan and Shawn McCarthy (Globe and Mail – October 11, 2012)

October 11, 2012

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.

Toronto, Ottawa — Canada’s resource-fueled economy faces the threat of a swooning commodities market at a crucial point in the economic recovery.

From Europe to the United States and especially in China, the outlook for commodities is diminishing heading into 2013, with the impact already being felt abroad.

Evidence is mounting that Canada, where commodities drive about 20 per cent of the gross domestic product, will not be spared some hardship. Canada is a major producer of potash, coal, iron ore, nickel, copper, gold, zinc and uranium, among other base and precious metals that have been hit especially hard as a decade-old commodities market starts to lose steam.

Resource companies account for about half the weight of the Toronto Stock Exchange, and some are feeling the pinch in profits.

On Wednesday the Organization of Petroleum Exporting Countries and the U.S. Energy Information Administration both shaved their forecasts for crude-oil consumption in 2012 and 2013, citing ongoing weakness in the global economy and hitting a key economic driver for Canada.

The oil patch opens an eastern front – by Shawn McCarthy (Globe and Mail – October 11, 2012)

October 11, 2012

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 – The battle over Alberta’s oil sands is spreading east as governments in Quebec and the eastern U.S. are confronted with aggressive moves by western crude producers to access new markets.

The oil industry’s critics in Quebec and Maine are gearing up for a fight over existing plans and potential projects that would reverse the flow of oil in a cross-border pipeline network in order to carry crude from Alberta and North Dakota to refineries in Quebec and perhaps as far as the U.S. East Coast.

The latest flashpoint is in Maine, where activists held a news conference on Wednesday to denounce an allegedly secret plan by Portland Pipe Line Corp. to open a new route to carry western crude by way of Ontario and Quebec through northern New England to the Atlantic coast.

That prospect highlights the mismatch between abundant, low-cost western crude and the reliance of eastern refineries on premium-priced offshore imports. As the oil industry looks to spread eastward, governments in Quebec and New England will be thrust into the centre of oil politics and environmental concerns.

The female pipeline perspective! Wait, what? – by Marni Soupcoff (National Post – October 10, 2012)

October 10, 2012

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

What has been missing in the debate about energy and pipeline development in the West? A female perspective, apparently. At least, that’s the purported rationale for a trip along the proposed Northern Gateway Pipeline route that is being led by Jody Williams. Williams, a Nobel Peace Prize winner for her work on banning landmines, and a delegation of other prominent women, including Canadian singer-songwriter Sarah Harmer, will participate in a week of meetings to — well, to do what, exactly?

The trip is being organized by Nobel Women’s Initiative, a group the Canadian Press describes as “an Ottawa-based organization of women who have won the Nobel Peace Prize and advocate women’s rights.” One of the weird things about that (and there are many) is that only 15 women have won the Nobel Peace Prize. Ever. So, you’d think they’d be able to do whatever they need to do — including advocating women’s rights and giving thumbs downs to pipelines — without a formal group. There are 15 of you, ladies. Just get on a conference call and work it out. You don’t need a website and a newsletter.

Anyway, where was I? Oh, right. The pipeline trip. So, here’s the other weird thing. The Executive Director of Nobel Women’s Initiative, Liz Bernstein, says that the group has not prejudged the pipeline issue and will be open to thoughts on all sides of the debate. “I’m sure we’ll hear all kinds of perspectives,” she told CP. “And so we’ll be listening to all of them before forming any of our recommendation at the end of our visit.”

Former B.C. energy minister doubts Enbridge’s ability to get Northern Gateway pipeline built – by Peter O’Neil (Vancouver Sun – October 9, 2012)

October 10, 2012

http://www.vancouversun.com/index.html

OTTAWA — One of Canada’s most outspoken champions of the oil and gas industry has doubts whether Enbridge will ever build a pipeline to the B.C. coast — even if the $6-billion project gets federal approval.

Former B.C. energy minister Richard Neufeld, now a Conservative senator, said he strongly supports the construction of pipelines to the B.C. coast so Canada can ship Alberta’s diluted bitumen crude to booming Asian markets.

But he said Enbridge has so badly mismanaged the $6-billion project that he questions whether the Calgary company has the public credibility to proceed with the megaproject even if the National Energy Board approves the application next year.

“I don’t know whether Enbridge has actually screwed up bad enough that even if it was okayed, whether let’s say the NEB says, ‘Hey, this plan looks good, we can go ahead,’ that Enbridge would be able to actually build that pipeline,” he told The Vancouver Sun.

“I just think Enbridge has left such a sour taste in most peoples’ mouths.” Neufeld also said he supports B.C. Premier Christy Clark’s demand to get a bigger share of cash for B.C. from the project before approving it.

Why Northern Gateway shouldn’t go near Great Bear Rainforest – by John Honderich (Toronto Star – October 7, 2012)

October 10, 2012

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.

BELLA BELLA, B.C.—Sometimes in life you have to witness a place firsthand to really get it. See it. Experience it. Sense it.

I had watched a video of the channels and byways in western British Columbia that supertankers will ply if the controversial Northern Gateway Pipeline is approved. But I decided I wanted to see them up close, then form my own opinion.

So I paid to join a five-day sailing trip through the Great Bear Rainforest region organized by the World Wildlife Federation. To say this region showcases some of the most spectacular scenery that Canada has to offer barely captures it. But more on this later.

I should make it clear, right off the top, that I understand fully Alberta’s desire to sell its oil abroad. It’s the “how” and “where” we must get right. My journey turned out to be one of both discovery and surprise, a once-in-a-lifetime experience.

We began at Kitimat, the endpoint of the proposed bitumen pipeline. Within minutes of our Gitga’at guide Marven Robinson showing us the likely marine terminal site, three orcas splashed by. Then a pod of seven humpbacks. The oh-so-familiar juxtaposition of trade pitted against the environment was set early, a theme that would haunt throughout.

Study finds little environmental impact from oil sands – by Nathan Vanderklippe (Globe and Mail – October 9, 2012)

October 9, 2012

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.

CALGARY — In 2010, a single oil-sands operation run by Suncor Energy released into the atmosphere 28,940 tonnes of volatile organic compounds, 22,210 tonnes of sulphur dioxide and 14,011 tonnes of particulate matter.

With those three types of substances combined, Suncor emitted into the air pollutants equivalent in weight to nearly 4,800 city buses – and the company operates just one of several mines sprawling across the landscape north of Fort McMurray, Alta.

Yet when scientists drilled into lake bottoms 200 kilometres from those oil-sands mines, they discovered something surprising: At that distance, levels of those pollutants were negligible. In fact, the lake sediments, whose layers opened a window onto hundreds of years of air and water quality, showed that in many ways those lakes are cleaner today than they were decades, and even centuries, ago.

“It’s still, by and large, a natural landscape,” said Roland Hall, a University of Waterloo professor of biology and one of the lead researchers on the new study. Communities downstream of the oil sands, such as Fort Chipewyan, have long pointed the finger at oil-sands operations for sullying water, fish and people with toxins.

More of the same for Venezuela oil after Chavez clinches re-election – by Daniel Wallis and Marianna Parraga (National Post – October 9, 2012)

October 9, 2012

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

Reuters – CARACAS – President Hugo Chavez’s re-election on Sunday means Venezuela’s state oil company PDVSA will remain highly politicized and will continue its discount supply deals with his socialist allies.

Chavez, 58, won a new six-year term with more than 54% of the vote against opposition rival Henrique Capriles, a young state governor who sought to end his 14-year, self-styled revolution.

Critics say Chavez has hobbled PDVSA with the weight of his government’s financial demands — it helps pays for everything from sports teams to health clinics and home building – meaning it has neglected to invest enough in the oil business.

The industry brings in more than 95% of the OPEC nation’s hard currency revenue. PDVSA produces almost 3 million barrels per day (bpd) and boasts the biggest crude reserves in the world.

But the company, which has more than 100,000 employees, has repeatedly failed to hit its own production targets and has suffered a string of sometimes-deadly accidents in recent years. Following Chavez’s comfortable victory, his government will seek to push forward a raft of ambitious joint ventures with foreign partners in the huge Orinoco extra-heavy crude belt – one of the planet’s biggest, mostly untouched oil reserves.

Canada, Russia will share Arctic riches, scientist predicts – by Matthew Fisher (Postmedia News – October 9, 2012)

October 9, 2012

http://o.canada.com/

ST. PETERSBURG – The scientist responsible for preparing Russia’s claim to seabed rights at the top of the world says Canada and his country are both poised to reap staggering economic benefits when a deal on who owns title to what in the northern ocean is finally struck.

“Canada has a wonderful shelf and basin, so of course Canada can get very rich from this,” said Victor Posyolov, deputy director of Russia’s Institute of World Ocean Geology and the head of its Arctic research program.

Poring over maps tracking the evidence that he is amassing for Russia’s claim, Posyolov estimated that his country, with the longest Arctic coastline, would gain rights to about 1.2 million square kilometres of seabed. He reckoned Canada would get about 800,000 square kilometres of sub-surface territory. That would be about twice as much seabed as the other claimants, Denmark and the United States, are likely to get.

“The biggest shelves and basins are in Canadian waters and it will benefit the most. The U.S. and Denmark have modest sectors,” Posyolov said in a room dominated by a circumpolar map that Canada and Russia jointly produced in 1992.

The 9 Habits of Highly Effective Resource Economies: Lessons for Canada – by Madelaine Drohan (Canadian International Council Policy Report – October 5, 2012)

October 9, 2012

Madelaine Drohan is the Canada correspondent for The Economist and contributes regularly to its sister company, the Economist Intelligence Unit. For the last 35 years, she has covered business and politics in Canada, Europe, Africa and Asia. She has written in the past for The Financial Times (UK), appeared as a commentator on BBC Radio (UK), ABC Radio (Australia) and CBC Radio, and worked in Canada for The Globe and Mail, The Financial Post, Maclean’s, and The Canadian Press.

For the entire report click here: The 9 Habits of Highly Effective Resource Economies: Lessons for Canada

Executive Summary

Hewers of wood and drawers of water have had a bad image since Joshua cursed the Gibeonites and condemned them to those labours. Some of that biblical taint lingers in Canada. Fur, fish, wood, and minerals may have shaped this country, but for much of the 20th century, natural resources were largely regarded as part of the old economy, best left behind as Canada raced toward a glittery high-tech future.

That future did not arrive. Instead, the global commodity boom that began in 2003, fuelled by industrialization and urbanization in emerging economies, made the resource sectors important again.

Last year, the top Canadian merchandise export to every one of its major trading partners was a natural resource. This unexpected revival of the resource economy is one reason governments in Canada have come late to the realization that they must be more deliberate and united in their approach to resource development if they are to spread the wealth, not just over regions but also over generations.

Resources: The flashpoint of 2015’s election – by John Ibbitson (Globe and Mail – October 8, 2012)

October 9, 2012

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.

The federal election of 1988 was so important that both sides agreed the very future of the country was at stake. The federal election of 2015 could be of similar nature. Then, the issue was trade. This time it could be resources.

The government and the opposition are dividing, with increasing bitterness, over whether and how Canada should exploit its resource wealth – especially petroleum. The question encompasses jobs, the environment, international relations, and regional growth and decline.

“The real issue is the vision of the future economically and environmentally,” NDP natural resources critic Peter Julian said in an interview. “These are the kinds of issues that will be front and centre in the next campaign.”

Twenty-five years ago last Thursday, as many have noted, Canada and the United States signed a free-trade agreement. But the country was bitterly divided over that issue, as well, ultimately forcing Brian Mulroney’s Progressive Conservative government to call – and win – an election.

A nine-step plan to fix Canada’s resource economy – by Barrie McKenna (Globe and Mail – October 6, 2012)

October 9, 2012

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 — Canada will never be a true resource superpower until it shuns “rip-and-ship” extraction, embraces sustainability and shares the wealth with future generations.

Those are among the key conclusions of a provocative new report by the Canadian International Council, entitled “Nine Habits of Highly Effective Resource Economies.” Canada has won the “geological lottery,” with vast stores of resources that the world craves, but it risks squandering that inheritance because it lacks a clear national plan to exploit them wisely, the CIC says.

The foreign affairs think tank points to Norway, Sweden, Finland and Australia as the best examples of countries successfully leveraging their resources for maximum economic and social benefit.

“Other resource producers do a better job of collaborating, of finding a balance between environmental protection and the economy, of adding, building, or extracting value from their resources, of saving for future generations, and of being strategic about resource development,” according to the report, written by Madelaine Drohan, The Economist’s Canadian correspondent and former Globe and Mail reporter. “There are smaller countries with fewer resources than Canada that punch far above their weight on the global stage.”

China’s Nexen bid calls for a public debate – Toronto Star Editorial (October 7, 2012)

October 9, 2012

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.

Just how much of Canada’s vast oil and gas wealth is Prime Minister Stephen Harper’s Conservative government prepared to put in the hands of China’s state-owned firms or other foreign actors? It’s a question that has been raised not only in Parliament, but also in the Alberta premier’s office and in corporate suites across the country, amid growing concern over China’s bid to buy Nexen Inc., a firm with interests in the western oilsands.

China’s ambassador, Zhang Junsai, makes a spirited case that “Chinese investments should be encouraged” to put Canada-China trade on a sounder footing and to help raise the $200 billion needed to develop the oilsands in the coming decades. Moreover, the Chinese National Offshore Oil Corp.’s proposed $15.1-billion buyout is a friendly one, laced with promises to make Calgary the head office for all of the firm’s operations, to list shares on the Toronto Stock Exchange and to keep the current management and workforce.

Still, many Canadians worry about the implications of this deal. Harper himself acknowledges that the bid “raises a range of difficult policy questions, difficult forward-looking issues.”

Meanwhile, Alberta Premier Alison Redford, while supportive, wants Ottawa to insist that CNOOC guarantee that Canadians will hold half of Nexen’s board and management positions, according to media reports.

You heard it here: Northern Gateway’s dead – by Jeffrey Simpson (Globe and Mail – October 5, 2012)

October 6, 2012

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.

The Northern Gateway pipeline that Enbridge proposes to build from Alberta’s bitumen oil to the Pacific coast of British Columbia is, for all intents and purposes, dead.

Yes, regulatory hearings before the National Energy Board will continue until the NEB approves the project. And yes, Enbridge will keep pushing for it. And yes, the Harper government, which is so publicly committed to the project, will continue to extol its virtues as part of the need to get Canadian resources to Asia.

But the project is dead. It has too many obstacles now, and there’ll be more in the future.

To survive, the Gateway pipeline would have to push past the growing opposition of British Columbians in general, the opposition of the current Liberal provincial government and the NDP government likely to replace it next year, the unanimous opposition of environmentalists, considerable opposition from at least some of the aboriginal groups along the route and, if all this were not enough, the likelihood of prolonged court battles.

Letting China Inc into the oil patch could scuttle Keystone XL – by Diane Francis (National Post – October 6, 2012)

October 6, 2012

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

If the CNOOC/Nexen takeover approval is given before the Keystone pipeline is approved, a new set of questions for the Americans will be opened up. So will any trade deal, now in Parliament, that gives China similar privileges as Americans get.

Letting China Inc. have special access could give President Obama a reason not to approve Keystone, and could also give Romney, if he wins, a reason to give approval, as he has pledged to do on Day One.

I raise the issue of Keystone XL, not because the Americans have a right to tell us what to do, but because they always do what is in their national interest. So does China and it has obviously targeted the oil sands with a view toward diverting its oil to China. That is the endgame, make no mistake about it. This is not about Nexen, or offering opportunities to Canadians to do business in China.

The proposed bilateral Foreign Investment Promotion and Protection Agreement with China would give its entities the same recourse and dispute settlement mechanism (called Chapter 11 in NAFTA) as Americans have through NAFTA. They can claim discrimination if denied investments or immigration requests.

Chinese wall needed – by Michael Bloom and Glen Hodgson (National Post – October 5, 2012)

October 6, 2012

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

Separate Nexen management after takeover

Michael Bloom is vice-president and Glen Hodgson is senior vice-president and chief economist at the Conference Board of Canada.

China National Offshore Oil Corp.’s proposal to acquire Nexen for $15-billion should be approved — with specific conditions attached that address the underlying concerns of citizens and business leaders. The minister of industry should require CNOOC to assume a set of “undertakings,” so that Nexen looks and acts like other Canadian companies operating on normal commercial principles. In addition, the minister should commit to modernizing the Investment Canada Act in the near future.

By creating the right policy framework around the Nexen deal, Canada would finally clarify for investors at home and around the globe what they can expect when making a major capital investment in the Canadian economy.

Canada has had a long history of large foreign corporate takeovers — including acquisitions by European state-owned enterprises (SOEs) — that government approved. However, BHP Billiton’s bid for Potash Corp. of Saskatchewan Inc. was arguably the most significant challenge to Canada’s investment review policy since the inception of the Investment Canada Act in 1985.