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.

TORONTO and OTTAWA — British Columbia Premier Christy Clark is warning that the environmental risks associated with a plan to sell Canadian oil to Asia through the Northern Gateway pipeline outweigh the economic benefits, leaving her at odds with the federal and Alberta governments.

Ms. Clark conveyed her concerns about the project during a series of high-level meetings, beginning with a telephone call to Prime Minister Stephen Harper on Thursday. She met face-to-face the same day with Saskatchewan Premier Brad Wall in Saskatoon and Alberta Premier Alison Redford in Edmonton.

Ms. Clark gave them a heads-up on changes her government is seeking, before Canada’s 13 provincial and territorial leaders meet this week in Halifax, where the pipeline project will be on the agenda, her press secretary, Michael Morton, told The Globe and Mail.

Until now, Ms. Clark has not taken a stand on the project. The proposed $5.5-billion pipeline plays a key role in Mr. Harper’s ambition to feed Canadian resources to customers in Asia. Mr. Harper has said it is vital for Canada to reassess its reliance on U.S. markets for energy, and look to Asia. Almost all of Canada’s oil exports go to the United States.

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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.

CALGARY – Nexen Inc. has agreed to a $15.1-billion (U.S.) takeover by Chinese oil producer CNOOC Ltd., marking the most important acquisition to date by an Asian firm in Canada.

The all-cash deal is worth $27.50 per Nexen share, a 66-per-cent premium to the 20-day volume-weighted average for the company, which has not seen its shares reach that level since before the financial crisis. Nexen closed at $17.06 Friday.

Nexen is Canada’s 12th-largest energy company, producing 213,000 barrels of oil equivalent per day. But the company has struggled in recent years as its corporate pillars each faced problems. Its North Sea production was hit by a new U.K. tax scheme. Its Gulf of Mexico drilling was hurt by the BP oil spill. Its West African offshore production was hit by a costly drill well. It was forced to abandon a major project in Yemen after a production sharing contract expired there. Its oil sands ambitions were hampered by problems at Long Lake, where problems with underground geology have so far kept it far from reaching its planned output.

Long Lake, however, served as a springboard to the corporate takeover. Last November, CNOOC completed a $2.1-billion buyout of OPTI Canada Inc., which held a 35-per-cent stake in the project, which is still operating at less than half its design capacity years after it began operation.

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

CALGARY —  The quick rise of tight oil in the United States and Canada is dominating oil patch chatter as players take stock of what it could all mean — are we on the verge of a global energy revolution, or on a trend that is encouraging, but unlikely to meet lofty expectations?  Tight oil is unconventional oil resources extracted by horizontal drilling and fracking technologies.
 
With production in the United States gushing out of the Bakken and lots of potential in the Eagle Ford and 20 other plays, Canada barely getting warmed up, and other countries looking to copy the North American experience, optimists envisage the biggest game changer for the energy sector in decades.

By offering North America a shot at energy independence, there’s talk of vast political implications, including a new U.S. foreign policy free of Middle East strings and less urgency to find/subsidize alternative fuels. Some argue the growing importance of tight oil could even shine a new light on Canada’s oil sands in the eyes of Americans because they make energy independence achievable.
 
Robin West, chairman and chief executive officer of PFC Energy, a global consulting firm that specializes in oil and gas, has gone as far as branding the shift as the energy equivalent of the fall of the Berlin Wall.

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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

It made for a dramatic photo op when federal Environment Minister Peter Kent and his counterpart in Alberta, Diana McQueen, swooped in via helicopter this week to check out some of the new oil sands monitoring sites in northern Alberta. The new stations are the result of a joint federal-provincial plan announced in February to sharply beef up the scientific study of the cumulative effects of oil sands development on water, air, land and biodiversity.
 
The two levels of government deserve praise for moving ahead with a system that will examine many more sites, more frequently, and look for a much broader number of contaminants than ever before. Compared to the inconsistent and haphazard testing in the past, the new program is a huge improvement.

Still, there is more to be done, and the expansion of monitoring needs to be sped up. Already the program is long overdue. Despite years of claims by industry that the oil sands were being developed in a sustainable manner, report after report noted that there was little scientific evidence to support this and insisted that far more data needed to be gathered.

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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 – The Bank of Canada is adding the downward drift in prices for oil and other commodities to its catalogue of threats to economic growth.

In a one-page statement on his latest interest-rate decision Tuesday, Governor Mark Carney mentioned oil or commodity prices four times. To many economists and analysts, this was a clear hint of growing concern as oil prices, while still historically high, inch downward to $80 (U.S.) a barrel – considered an unofficial breaking point at which investment in energy projects could stall, putting jobs at risk.

Mr. Carney, who left his main interest rate at 1 per cent Tuesday and will release a full quarterly forecast on Wednesday, noted that the “sizable reduction” in commodity prices owing to slower global growth is keeping inflation in check and could mean cheaper gasoline well into next year. However, he also cut his 2012 and 2013 projections for the economy, in part because the consumption and business investment he is counting on to drive growth will be held back by “the effects of lower commodity prices on Canadian incomes and wealth.”

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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.

Gillian Steward is a former managing editor of the Calgary Herald. Her column appears every other week. gsteward@telus.net

NDP Leader Tom Mulcair strode into the heart of Calgary last week wearing full cowboy regalia — white hat, blue and white plaid shirt (with just a hint of orange), a huge bronze belt buckle (under a bit of a paunch), jeans and black boots.
 
With his beard he looked more like a grizzled range rider than Stephen Harper ever will. The Quebec MP was even pronounced the best-dressed politician at the Stampede by a keen observer of cowboy fashion.
 
“He seems to have nailed it with a good western outfit and he looks like he belongs, looks like he’s stepping into the role,” said Brian Guichon, owner of Riley & McCormick Western Stores. Guichon named Harper the runner-up for his outfit, which was topped by a black hat. Mayor Naheed Nenshi garnered third place. During his short visit Mulcair showed that he had much more going for him than an acute fashion sense.

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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.

Oil’s retreat from the $110-a-barrel (U.S.) mark this year may have helped fend off a deeper global economic slump, but for Canada the benefits of lower energy prices come with a serious cost.

The drop in the cost of crude to about $87 currently has made it cheaper for companies to run their plants and has saved drivers some money at the pumps.

But Canada’s manufacturing sector continues to struggle with a high dollar and lower-cost Asian rivals, and the oil-price pullback highlights how dependent the country’s economy has become on the energy sector for growth.

Few countries feel the rise and fall of oil prices more than Canada, and a healthy oil industry is crucial to ensure the country’s modest growth outlook doesn’t turn into something worse. Consider that oil and gas exports and investment in machinery and infrastructure in the oil sands accounted for fully one-third of Canada’s economic growth in 2010 and 2011.

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

OTTAWA – Enbridge Inc. made a mounting public relations disaster worse this week by not immediately accepting blame in its official statement issued after an outspoken U.S. regulator compared one of Canada’s energy giants to the “Keystone Kops” due to Enbridge’s bungled response to a massive pipeline spill in Michigan, experts say.

National Transportation Safety Board chairwoman Debbie Hersman’s scathing assessment of Enbridge’s 2010 spill response has also raised questions over whether Prime Minister Stephen Harper needs to distance his government from Enbridge’s proposed $5.5-billion oil sands pipeline megaproject from Alberta to the B.C. coast.

Enbridge’s Pat Daniel, voted the 2011 Canadian chief executive of the year by the consulting firm Caldwell Partners, said in his initial formal response that company personnel “were trying to do the right thing” but encountered “a series of unfortunate events and circumstances [that] resulted in an outcome no one wanted.”

There was no apology or acknowledgement of wrongdoing in the release, though a company official said Mr. Daniel – who was not made available for an interview with Postmedia News – apologized when speaking to reporters in Washington, D.C., after the NTSB event.

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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.

Someone needs to save Canada’s two largest pipeline operators from themselves. Enbridge Inc. and TransCanada Corp., both based in Canada’s greatest city, as Stephen Harper recently labelled his adopted Calgary hometown, have been doing giant work giving this country a black eye.

And they may have driven a stake through their plans for two pipeline megaprojects – combined cost, $13-billion-plus. One of them is to span the length of the U.S. to deliver Athabasca crude to refineries on the Texas Gulf Coast (TransCanada’s Keystone XL). The other is to navigate the mountain ranges of B.C. and Alberta to convey Athabasca crude to Asian markets (Enbridge’s Northern Gateway) as an alternative to a U.S. market that now takes practically all of Canada’s oil exports.
 
Even before this week’s report by the U.S. National Transportation Safety Board (NTSB) excoriating Enbridge over its reckless disregard and ineptitude with its massive leak in Michigan in 2010, controversy had dogged these two planned projects since their inception.

Then came Tuesday’s widely reported NTSB findings on the rupture of an Enbridge pipeline that spilled about three million litres of oil in one of the most heavily populated U.S. states, in the Kalamazoo River some 70 km. west of Detroit.

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

With NDP leader Thomas Mulcair seizing on the oil spill in Michigan to demand that the Northern Gateway oil sands pipeline be spiked, Enbridge Inc.’s incoming CEO promised to do a lot better in the future and to deliver a world class project for British Columbia. It’s the right type of message from Al Monaco, who replaces the retiring Pat Daniel this year and will have to stickhandle the project.
 
It’s one that has turned into a political flashpoint that seems to be propelling the opposition, anti-pipeline NDP into power in B.C. and has handed Mr. Mulcair another divisive platform to fend off the energy superpower ambitions of Conservative Prime Minister Stephen Harper.
 
But the message needs to come with results for the Calgary-based company. Public trust in its pipelines has been depleted by its handling of the proposed $5.5-billion project across northern B.C. as well as its response to a major spill from its Line 6B in Michigan two years ago.

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

CALGARY — How does Enbridge Inc. maintain trust in its oil pipelines — existing and proposed — in the face of its embarrassing handling of a major oil spill in Michigan two years ago?
 
While the pipeline giant patted itself on the back for its response, the U.S. National Transportation Safety Board (NTSB) came to a much different conclusion on Tuesday.
 
Its extensive investigation into the spill from Line 6B — the largest and costliest in the U.S. onshore — put the blame squarely on the Canadian company for the disaster, citing a failure to fix known and growing cracks in the 50-year-old pipeline due to corrosion, inadequate training of personnel, deficient integrity-management procedures, and an oil spill response plan that wasn’t good enough for a major incident.

Investigators, who provided a rare picture of the organization’s behavior, found lack of communication between different parts of the company, employees who were reluctant to report errors out of fear of getting fired, first respondents who failed to respond, and a lack of learning from previous incidents.

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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.

WASHINGTON — A “tragic and needless” 2010 pipeline rupture in Michigan became exponentially worse after an astonishing 17-hour delay to stop the flow of oil, raising concerns about proposed pipelines from Keystone XL to the Northern Gateway.

Canada’s Enbridge Inc. was in the hot seat Tuesday as regulators in Washington delivered a withering broadside, warning that disasters like the oil spill in the Kalamazoo River will continue until the pipeline industry pursues safety “with the same vigour as they pursue profits.”

Environmental groups on both sides of the border seized upon the findings, calling the report a watershed moment in their efforts to limit wholesale expansion of Alberta oilsands. Likening the Calgary company’s management of the disaster to the “Keystone Cops,” National Transportation Safety Board Chairman Debbie Hersman said Enbridge failed to adequately address well-known corrosion problems as far back as 2005.

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