Oil and Gas Sector-Politics and Image

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

STAVANGER, Norway — Some Albertans may fancy themselves to be the blue-eyed Arabs of the north. If Norwegians were not so modest about their place in the world that boast would make the five million citizens of this overwhelmingly blue-eyed nation laugh.

A digital counter at the Norwegian Petroleum Museum tells the happy story: It turns over so quickly counting petro-kroners from the North Sea that all but the biggest numbers on the screen are a constant blur.

At a time when most of Norway’s European cousins confront grave economic problems and Canadians are fearful of being sucked into the continent’s financial quicksand, this Scandinavian nation remains an oasis of stability and calm. The reason, plainly, is that it has more than 3.5-trillion kroner ($600 billion U.S.) in the bank and counting.

Norway’s Government Pension Fund is only 20 years old but is more than 30 times the size of Alberta’s Heritage Investment Fund, which former premier Peter Lougheed started for “a rainy day” back in 1975. It is also bigger than Saudi Arabia’s and a close second in size to the one run by one of the sheikdoms of the United Arab Emirates.

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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 — They are the little brothers and sisters of the pipeline world. Some are barely large enough to jam a hand into, but they do the dirtiest work in the energy business, ferrying great volumes of raw oil and gas from wells to processing plants.

And though they are small, they often carry large risk, an issue of mounting concern in Alberta, a province that has seen a series of spills train a global spotlight on pipeline safety.

These smaller pipes can often be overlooked, next to the big ones that garner attention when they rupture into the Kalamazoo River – an accident that cost Enbridge Inc. a historic $3.7-million (U.S.) fine this week, on top of $725-million in cleanup costs – or at an Alberta pumping station where the company recently had another large spill.

But in Alberta, the pipe is almost all small. Some 327,000 kilometres of pipe that is eight inches and smaller in diameter spread across the province like a network of veins. It is roughly 90 per cent of all pipe in the province, a vast web of steel that is uniquely vulnerable to problems, and uniquely difficult to both oversee and maintain.

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

CALGARY — Plans for a new industry to sell Canadian natural gas to Asia moved a lot closer to take off with two big moves by Petronas, the Malaysian national oil company.
 
The Kuala Lumpur-based giant offered Thursday to take over Calgary-based natural gas producer Progress Energy Resources Corp. for $5.5-billion, or $20.45 a share in cash — a 77% premium over Wednesday’s closing price. The deal builds on last year’s $1.07-billion joint venture between the two companies to develop Progress’s Montney shale assets in British Columbia.
 
Petronas also said it plans to build a liquefied natural gas (LNG) plant on Lelu Island near Prince Rupert, on the northern British Columbia coast, to ship 7.4 million tonnes a year from two trains, with the first cargo bound for Asia in 2018.

With Petronas’s advance, there are now three major LNG projects moving head in the B.C. coast, representing a solid platform for the emerging industry and providing a new market for depressed Western Canadian gas. Asia’s gas prices are much higher because they are linked to oil prices and there is demand to absorb huge supplies from shale fields such as the Horn River and the Montney.

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

The global economy may throw a few curve balls, just as it did in the 1980s
 
I suggested recently in this space that the Canadian petroleum industry is more politicized than at any time since the 1980 National Energy Program, although the politics are different. Then it was the fight between Pierre Trudeau’s Ottawa and Peter Lougheed’s Alberta over sharply higher prices. Now, it is the Harper government’s energy-superpower visions versus a transnational environmental movement that wants to block pipelines and kill the “dirty” oil sands.
 
In one respect, however, there is a considerable similarity between the Harper Conservatives and their dirigiste counterparts of 30 years ago: Both projected a boom in oil sands production. How great a danger is there that Mr. Harper’s aspirations may be undone — as were 1980s projections — by a market downturn?
 
Oil from the oil sands, whether mined or produced underground by heat injection, is, due to its elaborate production process, expensive oil. With current world prices flagging, Canadian oil subject to further discounts due to pipeline constraints, and considerable global economic uncertainty, might Mr. Harper’s strategy come undone?

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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, Calgary – Encana Corp. has launched an internal investigation after the State of Michigan said it is examining allegations that the company worked with rival Chesapeake Energy Corp. to avoid competing in state land auctions for shale gas.

Michigan’s Department of Natural Resources said it is working with the Attorney-General’s Office to review a series of e-mails, published by the Reuters news agency, that purport to show executives from the two companies discussing joint approaches to bidding.

“Our department is committed to ensuring the integrity of its auctioning process and to receiving fair market value for resources on public land,” Ed Golder, a spokesman for the Department of Natural Resources, said Monday. An official from the U.S. Justice Department declined to comment on whether its antitrust division is looking into the matter.

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

CALGARY – For the past seven years, the mining community of Baia Mare in Romania’s northern interior has eagerly stepped up to alleviate Alberta’s labour shortages. For Joe Giusti, founder and CEO of one of Western Canada’s largest construction companies, it was a long way to travel to search for workers.
 
It was hard, too, once he found them. His firm, Giusti Group, had to teach recruits basic English so they would understand safety regulations. They had to meet rigid immigration requirements for temporary foreign workers. They had to be moved to an unfamiliar work environment, and sent back home just as they were getting used to their new jobs and way of life.

Yet Mr. Giusti was so encouraged by the enthusiasm shown by hundreds of young people who answered his calls for carpenters, cement finishers and general labourers, and by their performance in Alberta, he led recruitment missions there several times. Meanwhile, he was pleased to notice how the local community’s economy flourished from a steady influx of Alberta oil cash, as people dressed better, bought new furniture and renovated houses.
 
“When I went to Romania the first time, it brought me back to the 1960s in Italy,” said the builder, who since moving to Western Canada four decades ago from Treviso, near Venice, completed more than 50,000 multi-family units and took on some of the West’s biggest industrial projects, even as he fine-tuned a passion for oil painting using Titian’s colour techniques.

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

CALGARY — As oil prices continue to teeter, slumping Wednesday to their lowest level since October, provincial governments that have traditionally padded their budgets with resource royalties are facing the unpleasant prospect of ever-more glaring deficits in the coming months.
 
Saskatchewan is already creating contingency plans in case crude prices fall, as Newfoundland and Labrador premier Kathy Dunderdale warned voters that the province could be facing hard times if the price per barrel continues to dip. Alberta insists it’s too early in the fiscal year to panic, however its budget may be in for a rethink by the end of the first quarter.

Global Brent crude prices closed at US$92.57 per barrel on Wednesday, well below Newfoundland’s forecast of about US$124 per barrel. Both Saskatchewan and Alberta base their forecasts on the cheaper West Texas Intermediate benchmark, which closed at US$81.45 per barrel — again at a steep discount to the values predicted by budgetary bean counters.

Jurisdictions that rely on volatile commodity royalties often overshoot estimates, making it easier to justify more ambitious spending. Projections that look fine on paper during optimistic budget planning meetings, however, can end up in disastrous budgets if prices collapse. In 2008, the Alberta government’s $8.5-billion surplus projection shriveled to a nearly $1-billion deficit when recession hit and energy prices collapsed.

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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.

As crews work to mop up more than a million litres of oil that has spilled in Alberta in a month, Premier Alison Redford is steering the province toward a safety review of its 377,000 kilometres of pipeline.

Ms. Redford has charged her ministers of energy and environment to investigate whether a larger provincial response to the spills is merited. The leaks have come at an alarming pace in recent months, while the government is attempting to persuade its neighbours across Canada and the United States to accept pipelines carrying Alberta crude.

The Premier’s statement on Wednesday, two days after 230,000 litres leaked from an Enbridge pipeline system, that she is “certainly not opposed to the idea” of a more comprehensive review, is her strongest support yet for the notion.

Ms. Redford has long defended Alberta’s pipelines. The province is looking for new markets – the U.S. Gulf Coast, Asia, California, Ontario and Atlantic Canada – to sell the dramatic growth in the output of its oil sands. But wherever it has sought to place new steel into the ground, it has run up against concerns about safety from first nations in B.C., ranchers in Nebraska and farmers in Ontario.

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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.

The last spike of the Canadian Pacific Railway was driven in 1885. This was a remarkable accomplishment pitting the indomitable will of our early railroad pioneers against the rugged Canadian terrain. In a country where gravitational forces often move north and south, this ribbon of steel has helped knit the country together both symbolically and economically.

It is time for another bold project, national in scope: A pipeline network extending from coast to coast. This essential infrastructure project would be good for all regions of Canada. It would be an extraordinary catalyst for economic growth. It would be a powerful symbol of Canadian unity.

Much has been made recently about who wins and who loses from Western oil sands. This is the wrong way to look at it. We should turn this challenge into a nation-building exercise rather than encourage a corrosive debate pitting one region against another.

Although the ripple effect of oil-sands development across this country is well documented, a national pipeline, subject to a thorough environmental and regulatory review, would put the issue beyond dispute.

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

Harper right to streamline ­pipeline regulations
 
Although this week’s amendment-packed “slumber party” to hold up passage of omnibus Bill C-38 focused on Stephen Harper’s alleged contempt for Parliament, perhaps the most contentious element of a contentious bill related to the streamlining of environmental regulation for new resource infrastructure, in particular pipelines.
 
This reflects the fact that the petroleum industry is more politicized now than at any time since the 1980 National Energy Program. Then, the issue was a fight between Pierre Trudeau’s Ottawa and Peter Lougheed’s Alberta over the spoils of higher oil and gas prices.

Now, it is a struggle between the Harper government’s aspirations to facilitate and enhance Canada’s status as a petroleum superpower, and an environmental movement that wants to kill the fossil-fuel industry. Meanwhile, old-style interprovincial jealousies have also been stoked by NDP leader Thomas Mulcair’s invoking “Dutch disease:” the suggestion that an oil-boosted Canadian dollar is costing manufacturing jobs.

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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.

A monster British Columbia well just south of the 60th parallel is pumping a tremendous volume of natural gas from a globally significant new play that stands to dramatically boost Canada’s gas resources.

Until Thursday, it was a secret, drilled in 2009 and kept under wraps while Houston-based Apache Corp. snapped up more potentially prolific land around it. Revealing results from the well, Apache called it “the most prolific shale gas resource test in the world.”

And the Liard Basin where the well is situated, about 150 kilometres northwest of Fort Nelson, B.C., stands to be the “best unconventional gas reservoir in North America,” the company said. Initial results show it contains enough gas to match Canada’s entire current output for nearly a decade.

That’s based in part on that single well from 2009, which produced 21 million cubic feet per day during its first month, after being “fracked” – a technique used to free shale gas – six times. In other shale gas reservoirs, companies use 18 fracks – and more – to cause even more gas to flow.

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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.

Something good is happening in the United States. All of a sudden, energy is getting much cheaper and cleaner. Dirty old coal-fired plants are shutting down because they no longer make economic sense. In fact, the U.S. appears to be the only major emitter that’s actually reducing emissions.

Since 2006, U.S. emissions have fallen by 7.7 per cent, according to the International Energy Agency – despite the absence of a global carbon treaty, or stiff new regulations, or a cap-and-trade regime. To be sure, the recession helped. But even when the economy comes back, greenhouse-gas emissions are set to fall even more.

You’d think that environmental groups would rejoice at this great news. Instead, they’ve gone to war. The main reason for the fall in greenhouse gasses is a new technology known as hydraulic fracturing (or fracking), which they claim is a menace to the planet. Fracking promises to unlock vast new reserves of shale gas, which emits roughly half as much CO2 as coal, and 30 per cent less than conventional oil. But environmentalists warn that fracking will poison the water, pollute the air and trigger earthquakes that will bring doom and destruction raining down on us all.

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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.

It’s hard to say at this point just how many times the world has ended. We’ve killed it off so often, it’s hard to keep up. Certainly, we have been predicting its demise since we’ve been around.
 
Depending on whom you believe, it’s apocalypse now, then or tomorrow. These days, the doomsayers tend to be environmentalists as well as religious cranks. Although one can dismiss the latter, not so the former.
 
The truth is that to deny global warming in 2012 no longer makes sense. The evidence is everywhere around us, like it or not. The effects are already catastrophic. But does that mean the end of life as we know it?
 
“We’re destroying the planet,” declared journalist, author and Greenpeace co-founder Rex Weyler. In Toronto to address the 13th annual Ideacity conference, he painted a bleak picture of the Earth’s condition. Running through a checklist, he made it clear we’re in bad shape.

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