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Oil and Gas Sector-Politics and Image

Want richer First Nations? Say ‘yes’ to pipelines – by Mark Milke and Lennie Kaplan (Financial Post – July 2, 2020)

https://business.financialpost.com/

Mark Milke is executive director of research and Lennie Kaplan chief research analyst at the Canadian Energy Centre, an Alberta government corporation funded in part by taxes paid by industry on carbon emissions.

According to the 2016 census, 380,000 Indigenous Canadians live on reserve, many of them far from the economic opportunities that cities provide.

Given concerns about economic conditions on many reserves, one of this era‘s most pressing policy problems is how to provide economic opportunity to First Nations far from urban centres.

One answer: Allow the natural resource economy on or near First Nations to flourish. A perfect example is underway in British Columbia, with the construction of the Coastal GasLink pipeline.

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More than ever, Canada needs a national infrastructure corridor – by Ted Morton (Calgary Herald – June 27, 2020)

https://calgaryherald.com/

“But today that prosperity is at risk. Five years of anti-energy,
anti-western and anti-growth policies from the Trudeau Liberals
have decimated Alberta’s economy.”

This month marks the 90th anniversary of the Natural Resources Transfer Agreement, the constitutional reform that created the economic foundation for the dynamic and prosperous Alberta of the past six decades.

Alberta and Saskatchewan achieved provincial status in 1905, but NOT on equal terms. Ownership of Crown (public) lands and natural resources were not granted to the two new provinces.

This was a radical departure from the practice in the rest of Canada, under which all other provinces did control their own natural resources. We were officially second-class provinces.

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‘An absolute boom’ for Alberta: Is plastic fantastic again in the age of coronavirus? – by Geoffrey Morgan (Financial Post – May 13, 2020)

https://business.financialpost.com/

CALGARY — Fears of coronavirus contagion and depressed commodity prices have gutted much of Alberta’s economy but there is one sector experiencing a surge: the province’s petrochemical sector, which produces a range of plastic inputs used in medical devices and packaging of everyday goods.

“Demand so far has been steady. While we have seen some cancelled orders, we are experiencing increased demand for many grades of polyethylene to meet the needs of essential businesses, especially food packaging, e-commerce and medical packaging,” NOVA Chemicals Corp.’s senior vice-president John Thayer said in an emailed statement to the Financial Post.

Thayer said the Calgary-based company, which is owned by UAE’s sovereign wealth fund Mubadala Investment Company, is operating its facilities in Canada at full capacity.

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The post-pandemic fallout threatens to reverse a decade of energy security gains – by Peter Tertzakian (Financial Post – May 20, 2020)

https://business.financialpost.com/

On Monday U.S. President Trump tweeted that “OIL (ENERGY) IS BACK!!!!” He’s right: oil is no longer being given away for free. Benchmark prices have clawed their way above US$30-a-barrel for the first time since early April. But few would be convinced that THE NORTH AMERICAN OIL INDUSTRY IS BACK!!!!

The devastating effects of the pandemic — forced production shut-ins could put Canada and the United States on a regressive path toward dependency on “foreign oil,” a historically disparaging term.

Let’s flip the calendar back to 2008 or so. The United States had sent about 150,000 troops to Iraq, where the post-Saddam-Hussein war was still raging. America was “addicted to oil” as President George W. Bush had proclaimed. At the high point of U.S. dependency, in 2008, about two-thirds of that addiction was fed by imported oil. Excessive dependency on foreign oil was also costly.

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OPINION: The Wet’suwet’en deal could be a recipe for disaster – by Gary Mason (Globe and Mail – May 27, 2020)

https://www.theglobeandmail.com/

When we last left the great pipeline dispute involving the Wet’suwet’en Nation, governments in Ottawa and B.C. were trying to bring calm to an ugly feud that had ignited railway blockades across the country.

Then the COVID-19 pandemic struck, and the imbroglio suddenly seemed like a far less urgent priority.

As it turns out, however, the disagreement that began when a small group of Wet’suwet’en hereditary chiefs and their supporters obstructed construction of the Coastal GasLink pipeline in northern B.C. was not being entirely ignored. On the contrary, an extraordinary deal was being worked out between the two levels of government and a handful of Wet’suwet’en hereditary chiefs that has the capacity to fundamentally alter politics in this country forever.

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Alberta gears up for another legal battle over Keystone XL after Biden vows to pull permissions – by Geoffrey Morgan (Financial Post – May 20, 2020)

https://business.financialpost.com/

CALGARY — Alberta Premier Jason Kenney said he is prepared to go to court anf file a free-trade lawsuit alongside TC Energy Corp. if Joe Biden becomes president and follows through with his promise to pull permits on the Keystone XL pipeline.

Construction work on the US$14.4-billion Keystone XL pipeline began in April but fresh opposition from the U.S. Democratic presidential nominee could scuttle the long-delayed pipeline once again.

Biden’s election campaign signalled over the weekend that, if the former U.S. vice-president takes the White House this November, he would withdraw presidential permits for the Alberta to U.S. Gulf Coast pipeline Keystone XL.

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‘A complete disaster’: Investors take aim at Teck CEO Don Lindsay after commodity cycle misses – by Gabriel Friedman (Financial Post – May 20, 2020)

https://business.financialpost.com/

Days after Teck Resources Ltd. publicly pulled the plug in February on Frontier, a proposed $20.5-billion mine in the oilsands, one of the company’s largest investors started a campaign to oust the company’s chief executive, Don Lindsay.

Bob Bishop, founder of Impala Asset Management, a Florida-based resource focused hedge fund, which has been a shareholder since 2016, wrote a letter in late February to the board; and then a few days later, just before coronavirus halted all air travel, he flew to Toronto to deliver his message in person to the company’s chair Sheila Murray: It’s time for Lindsay to go.

For Bishop, whose firm owned 1.9 per cent of Teck’s Class B shares at year end, oil was proving to be another mistake in a long line of miscalculations: Teck invested $1.1 billion in Frontier, one of the largest greenfield oil projects ever imagined in Canada, before it abruptly withdrew from the permitting process.

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OPINION: Pretending oil is dead makes bad climate policy – by Campbell Clark (Globe and Mail – May 19, 2020)

https://www.theglobeandmail.com/

The problem with Elizabeth May’s warning that “oil is dead” is not just that she’s wrong. It is that she ignored the lesson that the coronavirus crisis offered about oil, and reducing greenhouse-gas emissions.

There was a strange triumphalism in Ms. May’s obituary for the Canadian oil industry, when she said “the idea that we’ve got this product that everyone wants is delusional.”

That sparked angry reaction from the oil patch, but it is climate-change activists who should tell Ms. May she got it wrong.

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Canadian oil still has a future, even if Elizabeth May can’t see it – by Max Fawcett (National Post – May 12, 2020)

https://nationalpost.com/

There may not be a French translation for the word “chutzpah,” but that doesn’t mean that Bloc Québécois Leader Yves-François Blanchet can’t summon it.

Case in point: his recent suggestion that the federal government shouldn’t prop up oil and gas businesses “that will not be self-sufficient in any time in the future.”

You could almost hear Albertans choking on their indignation when he said that, given Quebec’s storied history of propping up businesses whose own lack of self-sufficiency is a matter of public record.

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Liberals best to ignore certain politicians who wish Canadian oil were ‘dead’ – by John Ivison (National Post – May 8, 2020)

https://nationalpost.com/

Elizabeth May has provoked outrage by claiming “oil is dead.” It is not entirely clear why. It’s like the Pope proclaiming the Bible as the fount of spirituality.

May is the country’s environmental conscience — the demise of fossil fuels is an article of faith for her. But she is guilty of wishful thinking. The Canadian oil industry is not dead yet — in fact, it may be getting better.

In an article in Policy Magazine, May claimed Canadian oil is a “product lacking investors.” Yet, at the annual general meeting of Barclays PLC in London on Thursday, shareholders of the giant European bank voted down a proposal by Share Action, an activist group that promotes “responsible” investing, to quit the Canadian oilpatch.

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Global energy demand sinks through the floor as the world stays home – by Emma Graney (Globe and Mail – April 30, 2020)

https://www.theglobeandmail.com/

Global demand for energy wiped out by the COVID-19 pandemic is “without precedent,” with March oil consumption alone plummeting by a record 10.8 million barrels a day, according to an International Energy Agency analysis of the past 100 days of the pandemic.

Total energy demand declined by 3.8 per cent in the first quarter of 2020, and IEA director Fatih Birol expects oil to take “months, maybe years” to return to prepandemic levels.

While the world will “still need oil in years to come,” Dr. Birol told The Globe and Mail from Paris on Wednesday that the extreme economic and demand shock caused by the pandemic will likely plunge consumption of crude this year to 2012 levels.

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First Nations need to play a role in post-COVID revcovery – by Sharleen Gale (Policy Options – April 29, 2020)

Policy Options – Institute for Research on Public Policy

Sharleen Gale is chief of the Fort Nelson First Nation and chair of the First Nations Major Projects Coalition.

To rebuild the economy after COVID we need to push ahead with major projects like expanding the electricity power grid in partnership with First Nations.

The COVID-19 crisis has upended the daily routines of Canadians and devastated the economy. As public health officials work to contain the virus, many of us have turned our thoughts to where the bottom lies and what a recovery will look like.

Some people have estimated that unemployment levels at the peak of the crisis may reach as high as 25 percent. Most Canadians can’t even fathom that, having heard about it only from grandparents or great-grandparents who lived through the Great Depression.

But for First Nations people living on reserve, unemployment on this scale is a fact of life. And we feel its devastating consequences every day: stress, depression, addictions, family violence and chronic illness.

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OPINION: Saudi Arabia’s decision to trigger an oil price war has backfired badly – by Eric Reguly (Globe and Mail – April 22, 2020)

https://www.theglobeandmail.com/

Saudi Arabia’s Crown Prince Mohammed bin Salman is learning the hard way that barrels of oil with nowhere to go are worth approximately zero. Saudi barrels aren’t worth nothing – yet – but they’re getting close.

On Tuesday, the day after U.S. oil prices actually went negative, Brent crude, the international benchmark, fell 25 per cent to US$19 a barrel. A year ago, it was trading at US$70.

In early March, MBS, as the crown prince is known, apparently thought he had figured it all out. He wanted OPEC, which is led by Saudi Arabia, and Russia, an OPEC ally, to cut production to support prices, which were sagging as the novel coronavirus was bursting out of China. Russia said nyet.

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Oil prices plunge well below zero for first time in history as billions stay home due to coronavirus – by Emma Graney (Globe and Mail – April 21, 2020)

https://www.theglobeandmail.com/

The market price for West Texas Intermediate crude oil plunged deep into negative pricing for the first time in history on Monday, closing at minus US$37.63 as the fallout from the spread of the coronavirus leaves the world with more oil than it needs and nowhere to keep it.

The destruction of global demand and a supply glut has crude sloshing toward the tops of North American storage tanks. Monday’s turmoil put the market in an extraordinary position in which desperate investors who agreed in futures contracts months ago to pay a set price for crude in May so they could resell it at a profit, would now have to pay buyers to take it off their hands or find a place to store it. West Texas Intermediate is the benchmark for North American oil prices.

Worldwide fuel consumption has fallen by a third as billions of people around the world stay home. Although the Organization of the Petroleum Exporting Countries (OPEC) and allies agreed last week to a 9.7 million barrel a day (b/d) production cut, it won’t take effect until May – too late to prevent a massive storage glut.

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U.S. shale giant’s bankruptcy a warning to Canada’s oil patch – by Emma Graney and Jeffrey Jones (Globe and Mail – April 2, 2020)

https://www.theglobeandmail.com/

A major U.S. shale producer filed for bankruptcy Wednesday, the largest casualty yet of a global oil price crash.

It is unlikely the insolvency will set off a domino effect into the closely integrated Canadian sector, but it has put the northern patch on notice to tighten operations and finances as much as possible, analysts say.

Whiting Petroleum Corp., once the largest oil producer in North Dakota’s Bakken region, has filed for bankruptcy amid the coronavirus pandemic and an oil price war between Russia and Saudi Arabia that is hammering the price of crude. The downturn has forced oil and gas producers across North America to restructure their debt.

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