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.

CALGARY— As Nebraska considers the first attempt to divert the Keystone XL project, TransCanada Corp.is cautioning that any change to the pipeline’s route stands to delay its construction by as much as three years.

It’s the sternest warning yet from TransCanada, which has spent 38 months battling through a lengthy environmental review process on Keystone XL. The $7-billion pipeline would carry crude from the oil sands and northern United States to refineries on the Gulf Coast, and is a major plank in industry plans for expanding Canadian oil output. TransCanada has spent $1.9-billion to secure land and equipment for the project. It has readied itself to begin construction in the new year, in the belief that the State Department will grant its blessing in December.

But Nebraska, where the pipe would cross a delicate ecosystem called the Sand Hills, is contemplating new rules that could dramatically unsettle TransCanada’s plans.

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

The signs are there: the Keystone XL oil sands pipeline has festered into an uncomfortable election issue for the U.S. president, Barack Obama. The upshot for Canada: a decision on whether to grant a Presidential permit, promised by year end, could once again be delayed.

The reality is that anything short of a go-ahead in December for Keystone XL would plunge the oil sands sector into disarray until new solutions move forward. The worst-case scenario? Stranded oil sands — for years.

Keystone XL, with a capacity to carry up to 830,000 barrels a day from Alberta to Texas, was due for startup in early 2013. There is no backup on the same scale or timeline.

“Everybody in the industry is thinking about this,” said Bob Dunbar, president of Strategy West Inc., an oil sands consultancy based in Calgary.

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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 AND CALGARY— TransCanada Corp. faces new hurdles in its marathon race for approval of the $7-billion Keystone XL pipeline, including a congressional demand for an investigation into the U.S. state department’s permitting process.

The Calgary-based pipeline giant is hoping to get the final nod from the Obama administration by the end of next month, but opponents continue to throw up obstacles both in Washington and in Nebraska, where the pipeline would cross environmentally sensitive terrain.

In a letter to U.S. President Barack Obama released Wednesday, Senator Bernard Sanders urged that no decision on the pipeline be made until an independent investigation into conflict of interest allegations can be completed by the state department’s Office of the Inspector General.

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

Will Canada walk away from a $14-trillion resource? That’s the question John Felmy, chief economist at the American Petroleum Institute, is asking environmentalists who believe that blocking the Keystone pipeline would somehow cap Canada’s oil sands development.

“There is this argument that if somehow we can stop the pipelines coming to the U.S., we are going to stop oil sands development in Canada,” says Felmy, who works at the Washington-based trade association of American oil and natural gas producers.

“What are the oil sands worth? $14 trillion — at around $80 a barrel. Canada’s GDP is about $1.4 trillion – the notion that they wouldn’t develop a resource that is ten times their GDP! In all likelihood it is is going to be developed,” says Felmy, noting that if the oil sands don’t come to the U.S. they will generate even higher emissions as they will need to be shipped, probably to China, where they may be processed less efficiently.

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

In meetings with oil and gas executives and the media in Calgary last week, British Columbia Premier Christy Clark spoke about how energy development in her province fits well with her family-focused agenda.

Family agenda? The typical oil pitch – whether from a politician or an industry executive – tends to boast about the benefits to Canada of being an energy superpower, expands on the efforts to shrink the environmental footprint, warns about the need to diversify markets. It is loaded with jargon such as “environmental stewardship,” “supply mix” and “portfolio of opportunities.”

“Families are the most important structure in any healthy society” is the way the B.C. Premier chose to explain why she wants more energy projects in her province. “I recognize that for families to be able to do a good job, they need to have a job. All the wealth-creators I met here in Alberta are interested in creating wealth, but are also interested in creating jobs. When jobs are created, when economic activity is enabled, it’s good for families.”

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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— When Jennifer Keesmaat began thinking about how to transform the boomtown heart of the oil sands into a thriving centre, she grew slightly despondent.

“When we started in Fort McMurray, the very first thing we said is, ‘This is the twilight zone. No rules that apply anywhere else apply here,’ ” said Ms. Keesmaat, an urban planner with Toronto-based Dialog, which has been hired to help fix the city. But she returned from an initial visit to the area this spring questioning how to do it.

“I came back and held my head in my hands and thought, ‘Oh my, finally I’ve met my match. This nut is too big to crack.’ ”

But as Fort McMurray faces a future of explosive growth, it is nonetheless trying to do exactly that. It has employed a network of consultants, and petitioned its own people, in an attempt to figure out how to remake a modern-day hinterland gold rush town into an entertaining, vibrant city.

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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.

Nebraska’s governor has ordered a special session of the state legislature to examine potential new oil pipeline rules, a reversal of course that opens the possibility of substantial delays to the controversial Keystone XL project.

Republican Governor Dave Heineman made a surprise announcement on Monday, calling the Nov. 1 sitting, which he said in a statement will “determine if siting legislation can be crafted and passed for pipeline routing in Nebraska.”

Such a rule would give the state the power to approve or deny the pipeline’s intended path. Draft siting legislation has been underway for many months, but needed a special legislative session to be enacted before construction begins on the pipeline.

There are questions about whether such a rule can withstand legal scrutiny. If passed, it will present the most formidable obstacle to the Keystone XL project to date. It could take several years for Keystone backer TransCanada Corp. (TRP-T43.65-0.30-0.68%) to gain approval for an amendment of the current route.

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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.

OTTAWA—The camera pans across bucolic images of the U.S. Great Plains — a rancher astride a horse as cattle graze in the background, grasslands, wheat fields, scenic landscapes.

“The bread basket of America. But today these lands are threatened by big oil and its plan to run a pipeline straight through this American heartland,” says the narrator. But not just any narrator.

The voice belongs to actor and director Robert Redford, who used a three-minute video this week to implore U.S. President Barack Obama to deny approval for the Keystone XL pipeline.

The pipeline, proposed by Canadian energy giant TransCanada Corp., would run 3,134 kilometres, from Alberta across six states, carrying half a million barrels of oilsands crude a day to Gulf Coast refineries in Texas.

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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.

OTTAWA – The Conservative government — along with TransCanada Pipelines and the Alberta oil sands — are at risk of being dragged somewhere they don’t want to be.

The politics surrounding the giant Keystone XL pipeline means Stephen Harper and his cabinet have become major players in an issue that is becoming increasingly emotional, an issue that is becoming a political dilemma for U.S. President Barack Obama.

Opponents of the pipeline are determined to make it an issue in the presidential election. Obama has promised a decision by year’s end on the $7 billion, 2,700-kilometre pipeline that would ship Canadian oil from Alberta to the Gulf of Mexico, traversing six U.S. states.

The Conservatives didn’t set out to become a player in the 2012 U.S. presidential election. They have been doing what governments are supposed to do.

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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— Away from the loud protests and clever signs that opponents have wielded against the Keystone XL pipeline, Canada’s government and industry are quietly fighting back.

Over the span of the past two years, they have spent millions on lobbyists and flown executives across the border in an increasingly urgent bid to press their case with U.S. politicians and officials. Their efforts have largely been carried out in private. Yet public records make clear the scale of their exertions, and the importance Canada’s energy companies, with support from the governments of Canada and Alberta, have placed on pushing the project through.

In the past two years, TransCanada Corp. (TRP-T43.050.882.09%), which is seeking to build the $7-billion pipeline, has spent over $1.5-million on U.S. federal lobbyists, and even more in individual states like Nebraska, where opposition has been the most vocal. That’s in addition to the money it has poured into advertising campaigns, which include a current print, TV and online effort in Washington, D.C., aimed at persuading decision makers that the pipeline will help “real Americans.”

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

Investments in oil patch raise many questions

While we sort out where we stand, Chinese money keeps buying up Canadian oil and gas reserves.

Sinopec’s $2.2-billion acquisition this week of shale gas producer Daylight Energy Ltd. is sure to be followed by more. Athabasca Oil Sands Corp.’ two major oil sands projects are in play because of put/call options with PetroChina that could increase the Chinese company’s ownership to 100% from 60%.

Birchcliff Energy Ltd., another unconventional gas producer, put itself on the block last week following unsolicited expressions of interest. Market speculation is bubbling about which company the Chinese will snap up next — from senior Talisman Energy Inc. to junior Celtic Exploration Ltd.

“In our view, [the Daylight Energy deal] is more than a simple one-time acquisition,” Stéfane Marion, chief economist and strategist at National Bank Financial Group, said in a note Tuesday. “It reflects the acceleration of a macro trend. If China is serious about letting its currency float in the next five years, there is no need for its government (and state owned enterprises) to own more than $3-trillion in foreign reserves. It makes more sense for China to start recycling its paper holdings into tangible assets.”

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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.

China’s new play for Canada’s oil and gas

CALGARY— Chinese energy giant Sinopec International Petroleum Exploration is testing the waters on a bold new energy strategy in Canada, as it moves to buy out an Alberta oil and gas company for $2.2-billion in cash.

Sinopec’s bid for Daylight Energy Ltd., whose large portfolio of Alberta and British Columbia land contains potentially significant quantities of natural gas, comes amid a new push by Asian firms to lock up Canadian energy that could soon be loaded onto tankers and shipped across the Pacific.

But the Daylight deal marks a departure from previous Chinese acquisitions, which have been carried out with a deliberately soft touch, fashioned to avoid a nationalistic backlash by buying only small portions of other companies, or scooping up troubled firms.

Now, however, Sinopec is cementing a new trend that has seen Asian entities seek greater control in their North American investments. In buying Daylight, Sinopec is assuming a newly confident stance in Canada, where it has operated since 2005.

“This is breaking new ground,” said Wenran Jiang, an expert on Asian energy investments in Canada who holds a research chair at the University of Alberta’s China Institute.

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