Keystone XL: Stimulus for the Conservative party’s internal economy

By Aaron Wherry - Friday, March 15, 2013 at 12:47 PM - 0 Comments

Democrat minority leader Nancy Pelosi pronounced yesterday that “Canadians don’t want the pipeline in their own country” and John Baird is terribly concerned that Thomas Mulcair might be saying bad things about Canada in the presence of Americans.

An NDP source tells me Mr. Mulcair did not tell Ms. Pelosi that Canadians don’t want the pipeline.

Do Canadians want Keystone XL to go through? In November, Abacus found 53% in favour and 47% against. In January, Nanos found that 45.2% had a favourable impression, while 41.7% of respondents had an unfavourable impression.

Meanwhile, the Wall Street Journal reports that the Conservative party is seeking donations in response to the NDP’s stance on Keystone.

“Instead of supporting this pro-Canada project, NDP leader Thomas Mulcair traveled to Washington and did what the NDP always do when travelling abroad–attack Canadian jobs,” reads the letter, written by the Conservative Party’s director of fundraising. “Will you chip in $5 or whatever you can afford and stand against Mulcair’s NDP?,” the letter said.

And Bob Rae believes Keystone XL is in the national interest.

If you love Canada, do you also have to love Keystone XL?

By Aaron Wherry - Thursday, March 14, 2013 at 2:15 PM - 0 Comments

Thomas Mulcair has gone to Washington and criticized the Harper government’s environmental policies and questioned the benefits of the Keystone XL pipeline and this has upset Brad Wall, Ed Fast, Joe Oliver, James Moore and Michelle Rempel.

The “national interest,” of course, is in the eye of the beholder.

Premier Wall and the Harper government (and the Saskatchewan NDP) believe Canada would be better off with the Keystone XL pipeline. Thus, championing the pipeline is speaking in the national interest. The NDP’s position on Keystone XL, conversely, seems to be that the oil would be better put to use in Canada and that there need to be better policies governing the environmental impacts of the oil sands. Along those lines, Mr. Mulcair would probably argue that he is speaking in the national interest.

So is Keystone XL in the national interest? Shawn McCarthy looks at Mr. Mulcair’s logic on job creation. And Clare Demerse looks at the Harper government’s environmental record. President Obama, meanwhile, allegedly thinks “the Canadians” are going to get rich.

As for how an opposition leader should speak when abroad, that’s also a tricky matter. When Mr. Harper went to Washington in 2005, he criticized the Liberal government for not spending enough on defence, peacekeeping and foreign aid, spoke with the President about the possibility of missile defence and, at a news conference, suggested the Liberals were associating with groups that had terrorist affiliations. He probably could have claimed to have been speaking in the national interest in each case.

The NDP discovers the oil sands

By Nick Taylor-Vaisey - Friday, March 8, 2013 at 6:00 AM - 0 Comments

Todd Korol/Reuters

Thomas Mulcair is the leader of an NDP that is relentlessly defined by its critics as anti-oil. After all, not even a year has passed since Mulcair was lambasted for blaming the oil sands for inflicting “Dutch disease” on Canada by artificially inflating the loonie and harming the manufacturing sector. And at one point, NDP policy called for an all-out ban on new “tar sands” development. But when the NDP leader stepped up to a podium in Calgary’s Palliser hotel last month, before a chamber of commerce audience filled with oil executives, he had a very different message to deliver—the NDP, he declared, would be “a partner for the development of Canada’s energy resources.” While the controversial Northern Gateway pipeline to the West Coast was a “non-starter,” Mulcair said, he called his party “fierce advocates for economic development, as long as it’s sustainable development.”

News of Mulcair’s overtures to the oil patch didn’t exactly make headlines, but his talk was the latest salvo in a quiet, gradual shift in the NDP’s thinking about oil. NDP MPs have been visiting Alberta frequently—someone from the party is in Calgary or Fort McMurray once every couple of weeks, according to MP Peter Julian, the NDP’s energy and natural resources critic. In Ottawa, lobbyist registry records show Julian and Mulcair, along with environment critic Megan Leslie, have met regularly in recent months with representatives and lobbyists from Suncor, Enbridge, Encana and TransCanada.

At meetings of the House of Commons’ natural resources committee in January, Julian openly praised Suncor for embracing the kind of “value-added” development the NDP wants the rest of the industry to emulate. “Instead of shipping raw bitumen out of Canada and basically profiting American refineries, what [Suncor] has done is put in place the infrastructure, the upgraders and the refineries to ensure that the product that comes from Canada has maximum value added,” says Julian, who once worked as a labourer in a Burnaby, B.C., refinery.

Continue…

CNOOC in no hurry to ink more oilpatch deals after Nexen takeover closes

By The Canadian Press - Wednesday, February 27, 2013 at 9:28 PM - 0 Comments

CALGARY – The head of CNOOC Ltd. said the Chinese-state-owned firm is in no hurry to do any more big deals in the oilpatch since its $15.1 billion takeover of Nexen closed earlier this week.

“In the very short term, this is not my priority,” said chief executive Li Fanrong at Nexen’s Calgary headquarters Wednesday.

“My priority is to get this organization right and to better realize the full potential of Nexen’s resource.”

Through the deal, CNOOC will see a 20 per cent increase in its yearly production and a 30 per cent increase in its reserve base, said Li, who will chair Nexen’s new board.

Kevin Reinhart, who will remain in charge of Nexen’s operations, as well as $8 billion in CNOOC assets that will be managed out of the Calgary office says there is more than enough opportunity to grow what Nexen already has.

“And so the need to go outside and acquire for future growth has never been a big part of Nexen’s growth strategy and it doesn’t need to be,” he said. “We’ve got lots of internal organic opportunities around the world to pursue.”

Nexen operates in the North Sea, Alberta’s oilsands, northeastern B.C., the Gulf of Mexico and West Africa.

Both Li and Reinhart say it will be “business as usual” for Nexen’s 3,000 employees. There was a town hall meeting in Calgary earlier Wednesday to answer workers’ questions.

Reinhart said there was “abnormally low” turnover since the deal was first made public last July, as many of those employees had long-term incentive programs tied to the deal closing.

And Reinhart says he doesn’t foresee a mass exodus now that the transaction is done.

“People like working for Nexen. They’re proud of working for Nexen,” he said.

“And it’s a big reason why CNOOC is leaving the autonomy that we have, keeping the Nexen name, keeping the Nexen values.”

Reinhart added there’s virtually no overlap between CNOOC and Nexen, so employees aren’t anxious as to whether they will continue to have their jobs.

“Financially, they’re at least as well off staying here,and the opportunity here to work the same assets and work with the same team — why would you go and take the risk of starting employment elsewhere?”

CNOOC outlined a number of commitments when the takeover was announced, including keeping the head office in Calgary and listing its shares on the Toronto Stock Exchange.

Reinhart says negotiations with Ottawa in the following months dealt with the finer details of those commitments.

The CNOOC-Nexen deal touched off a great deal of controversy about what degree foreign state-owned control of Canadian resources is acceptable.

That the deal came from a Chinese company, in particular, raised concerns in some quarters about doing business with a non-democratic state.

But there was also acknowledgment that Canada does not have the capital necessary to develop its own resources alone, and that overseas investment is needed.

The Conservative government finally decided in December that the deal would be of “net benefit” to Canada under the Investment Canada Act, but that future deals of that type would be held to greater scrutiny.

Reinhart said he wasn’t perturbed the process took so long.

“These are big decisions. What’s important is you take the right time to make the right decision,” he said.

“And so the fact that it took as long as it did is totally irrelevant because we believe that both sides took the right time to get to the right answer.”

Ottawa has signalled that deals that give state-owned enterprises control over the oilsands would only be allowed in “exceptional circumstances” from now on, but that partnership deals would continue to bring capital into the sector.

About two weeks ago, Nexen received U.S. government approval. Reinhart declined to comment on those negotiations.

Thomas Mulcair and pipeline politics

By Aaron Wherry - Thursday, February 21, 2013 at 1:54 PM - 0 Comments

While in Calgary this week, Thomas Mulcair restated his objections to the Northern Gateway pipeline.

When asked to clarify his position regarding the Northern Gateway pipeline project, Mulcair launched. “I am adamantly opposed to Northern Gateway. Is there anything unclear in what I just said?” he asked. And he went on. “It is madness to think of bringing those supertankers into that pristine coast. It is a non-starter. It is the most abject misunderstanding of the importance of protecting the environment I have ever seen in Canada. The company that continues to propose that is the same company that was described by the highest level of the U.S. administration as the, quote, Keystone Kops.”

… The irony in all this is that Enbridge was one of the luncheon sponsors – and Mulcair was seated to the right of one of its government relations execs.

At last report, 75% of Albertans were in favour of the Northern Gateway pipeline (but only 35% of British Columbians felt likewise).

Mr. Mulcair does support sending oil east from Alberta, but one such proposal, from Enbridge, is a source of concern for environmentalists.

Why do the Conservatives oppose oil sands development?

By Aaron Wherry - Friday, February 1, 2013 at 12:56 PM - 0 Comments

Bloomberg looks at support within the oil industry for a carbon tax.

The contradiction of an industry seeking a new tax on itself has emerged in energy-rich Canada because producers are concerned the crude they process from tar-like sands will be barred from foreign markets for releasing more carbon in its production than competing fossil fuels.

Oil companies operating in Canada such as Exxon Mobil Corp. (XOM), Total SA (FP) of France and Canada’s Cenovus Energy Inc. (CVE) plan to convert billions of barrels of the sticky bitumen into diesel and gasoline. Under foreign and domestic pressure, they now see a greenhouse-gas levy helping to provide access to markets and more predictable costs for Canada’s biggest export industry, which shipped C$68 billion ($68 billion) of oil in 2011.

Hebron offshore oil project a much needed lift for Newfoundland offshore

By Sue Bailey - Friday, January 4, 2013 at 3:43 PM - 0 Comments

ST. JOHN’S, N.L. – Newfoundland and Labrador’s waning offshore oil industry received a much-needed boost Friday as a consortium of partners led by ExxonMobil Canada Properties announced it has approved the Hebron offshore oil project.

The partners will spend $14 billion to develop the oilfield, which is estimated to contain more than 700 million barrels.

ExxonMobil says it expects Hebron to begin producing oil before the end of 2017 and up to 3,500 people will be employed during its construction phase. The offshore platform is being designed to produce 150,000 barrels of oil per day. Continue…

Harper government approves CNOOC and Petronas deals

By Aaron Wherry - Friday, December 7, 2012 at 4:59 PM - 0 Comments

In this April 25, 2012 photo, Nexen chief executive Kevin Reinhart addresses the company's annual meeting in Calgary. (Jeff McIntosh/CP)

The Harper government has approved both CNOOC Limited’s $15.1-billion acquisition of Nexen Inc. and Petronas’ $5.2-billion acquisition of Progress Energy Resources Corp., while announcing new guidelines for foreign investment in Canada.

In separate statements released after North American markets closed on Friday, Industry Minister Christian Paradis said he was satisfied that the acquisitions by Malaysia’s Petronas and China’s CNOOC were likely to be of net benefit to Canada. Paradis said both companies had “made significant commitments to Canada in the areas of: governance, including commitments on transparency and disclosure; commercial orientation, including an adherence to Canadian laws and practices as well as free market principles” and “employment and capital investments, which demonstrate a long-term commitment to the development of the Canadian economy.” Initially, Malaysia’s Petronas $6-billion bid for Progress Energy was rejected by the federal government and the company later revised its proposal.

“Our statements today will not satisfy everybody,” Prime Minister Stephen Harper said shortly after the announcements were made. “Some believe you are either ‘for’ foreign investment under all circumstances, or that you must be ‘against’ foreign investment under any circumstance. Practical government rarely permits such simplicity.”

Prime Minister Stephen Harper delivers a statement regarding the federal government review of takeovers on Dec. 7, 2012. (Fred Chartrand/CP)

Under the new guidelines, the acquisition of oil sands companies by foreign state-owned enterprises will only be found to constitute a new benefit for Canada in “exceptional circumstances.” And, despite today’s decision on Nexen, the prime minister seemed eager to draw a line on such investments, saying these decisions marked “not the beginning of a trend, but rather the end of a trend.”

“To be blunt, Canadians have not spent years reducing the ownership of sectors of the economy by our own governments, only to see them bought and controlled by foreign governments instead. That was never the purpose of the Investment Canada Act. It is not an outcome that Canadians would ever support. It is not an outcome any responsible government of Canada could ever allow to happen,” the Prime Minister explained.

Beyond the oil sands, acquisitions by state-owned companies will be reviewed to consider the control or influence to be exerted on the Canadian business, the control or influence likely to be exerted on the larger industry and the control or influence likely to be exerted by the foreign government over the state-owned company.

“In light of growing trends, and following the decisions made today, the government of Canada has determined that foreign state control of oil sands development has reached the point at which further such foreign state control would not be of net benefit to Canada,” Harper said. “When we say that Canada is open for business, we do not mean that Canada is for sale to foreign governments.”

The Conservative government’s decisions drew mixed reviews.

David Detomasi, a professor of international business at Queen’s University, said the two deals forced Ottawa to clarify the Investment Canada Act’s “net benefit” test, which was used to quash the takeover of Potash Corp. of Saskatchewan two years ago. “I think the Harper government was caught a little bit flat-footed when these bids were made,” he says. “I think they realized that whatever precedent they set was going to be something they were going to have to live with. And that’s because there are likely other deals in the offing.”

Even so, it will be a tough balance for Ottawa to strike, according to Detomasi. Recovering crude from the oil sands is a massively capital-intensive business and there aren’t enough deep-pocketed Canadian companies capable of making the necessary investments. And many foreign companies—particularly those in China—are state-owned. “Unfortunately, they’re the ones with the cash.”

The opposition New Democrats declared themselves “profoundly disappointed” with the Nexen deal, suggesting that proper public consultation did not occur before the decision was made. “Canadians should be very apprehensive about the long-term economic and environmental consequences,” Peter Julian, the NDP’s natural resources critic, said in a release. “In the past, these kinds of takeovers have resulted in job losses. In October, the NDP called for the government to reject the CNOOC acquisition.

While saying that the Liberals welcome investment—”we do need investment in the oilsands and in other industries”—Liberal trade critic Wayne Easter also expressed concerns. “There’s still really no clarity. We still don’t know the details. We have no idea what those rules really are,” he said. “Are all state-owned enterprises being handled the same, whether it’s China or any other country? Should there be different criteria, given the strategic planning of some countries versus others? Is there reciprocity here? I’m led to believe there’s not. There should be reciprocity in terms of how Canadian investment in China is handled in a similar way to Chinese investment in Canada.”

Alberta Premier Alison Redford said her government was “pleased” with the Harper government’s decisions, but that Alberta would be seeking clarity on how “exceptional circumstances” will be defined.

Quebec and Alberta premiers agree to consider shipping oil to Eastern Canada

By The Canadian Press - Thursday, November 22, 2012 at 8:53 PM - 0 Comments

HALIFAX – The premiers of Alberta and Quebec have agreed to consider shipping oil to Eastern Canada after a similar proposal stoked tensions in the West.

Alison Redford and Pauline Marois left a meeting in a downtown Halifax hotel side-by-side late Thursday, announcing they will strike working groups to explore the possible economic benefits and environmental effects of the project.

“We have agreed that there is some very good opportunity for us to exchange technical information around economic development, the environment and the technical development of resources so that we can have an informed conversation,” Redford said.

“I think what is really important today is that we have acknowledged that there might be opportunity. We are not concluding what those will be, but we are sharing some very important information.”

Marois said she will travel to Alberta to discuss the development further, likely after Christmas.

“Before we go and decide on these issues, I think we have the necessity to split some information, some expertise, about economic, technical issues and environmental issues,” she said.

Their overtures come after Redford’s struggles with pursuing the development of a pipeline in British Columbia, where Premier Christy Clark has fiercely opposed the project unless her provinces reaps greater economic benefits.

For the Parti Quebecois government, whose raison d’etre is to remove Quebec from Canada, the West-East pipeline could be yet another example of how Marois appears to have shed the party’s more activist positions towards a more market-friendly stance.

The latest plan would reverse the flow of an existing pipeline to bring Alberta oil to customers in the eastern half of Canada, and could result in slightly lower gasoline prices in that region. The project is being reviewed by the National Energy Board.

The idea has sparked the interest of Premier Robert Ghiz.

“If we’re producing this oil to begin with, we should be using it in our own country if at all possible,” Ghiz said shortly after arriving in Halifax to meet with other premiers to discuss the economy.

“We just want to talk. We’re not saying we’re going to see this happen overnight.”

There are actually two current proposals to ship western crude eastward.

One by Enbridge Inc. (TSX:ENB) — the same company behind the controversial Northern Gateway pipeline connecting oilsands crude to Asia via the northern B.C. coast — involves expanding capacity on some pipes in the Great Lakes region and reversing the flow of another between Montreal and Sarnia, Ont.

Rival pipeline firm TransCanada Corp. (TSX:TRP) has a plan to convert some of its part-empty natural gas mainline to oil service, which it had deemed to be both technically and economically feasible.

TransCanada, which also aims to increase oilsands shipments to the U.S. through its contentious Keystone XL pipeline, intends to formally gauge customer interest in its eastbound pipeline proposal in the new year.

North American crude has been fetching a lower price than international varieties because it lacks adequate access to coastal waters. Burgeoning supplies from the oilsands and U.S. fields haven’t been able to find their way to the most lucrative markets.

Most refineries in the eastern part of the continent are configured to handle light, sweet crude imported from Saudi Arabia and other parts of the world, rather than the tarry, heavy stuff produced in the oilsands.

Some fear the prospect of oilsands crude — derided as “dirty oil” in some quarters — eventually filling those eastbound pipes.

“There are activists who are worried about dirty oil and not too many people wonder, ‘What oil are you using?’ Is the oil from Venezuela and Nigeria and Iraq cleaner than Alberta oil? Are they doing better in emissions?” said Bob Schulz, a professor at the University of Calgary’s Haskayne School of Business. “Probably not.”

Another observer said the environmental questions are legitimate — especially with respect to an older pipeline.

“We are seeing more accidents, more little leaks here and there, some big spills that are much more damaging and very, very expensive,” said Warren Mabee, of the Institute for Energy and Environmental Policy at Queen’s University. “So there’s an issue with using old pipes.”

He said he would expect that when companies seek to use old pipes, they would do a fair bit to reinvest and revitalize the infrastructure.

Quebec wants to do its own review of proposed Enbridge pipeline project

By The Canadian Press - Wednesday, November 14, 2012 at 8:04 PM - 0 Comments

QUEBEC – Quebec’s new government wants to conduct its own review of a proposed oil pipeline project in addition to the federal one.

Alexandre Cloutier, the Parti Quebecois minister for Canadian intergovernmental affairs and minister responsible for “sovereigntist governance,” says Quebec wants to ensure the suggested Enbridge pipeline follows its laws and regulations.

The pipeline would reverse the flow of a link already in operation between Montreal and North Westover, Ont. Instead of transporting imported oil into the country, the flow would be reversed to send domestic oil from Western Canada to consumers in Central Canada.

“There will be consultations in Quebec,” Cloutier said Wednesday. “The people who are directly involved will be consulted. We will make sure that the environmental regulations and Quebec laws are applied.”

The project is being reviewed by the National Energy Board.

In the longer term, Cloutier said the Harper government’s plans to decrease the federal role in environmental assessments, outlined in the last budget, could create a void that Quebec might fill.

“The federal government, when it decides to pull out, leaves a vacant space that the Quebec government can decide to take or not, depending on financial and regulatory implications and even in terms of providing public service,” Cloutier explained.

“However, it is our wish, our DNA, that every field of jurisdiction be occupied by Quebec.”

Environment Minister Daniel Breton, who has concerns about oil spills, said Quebec wants more information on the Enbridge project before deciding to approve it.

“We are in charge of our territory, we must have our say,” he said. “It’s as simple as that.”

Breton said he wants Quebec to participate in hearings by the National Energy Board on the matter. Breton criticized the previous provincial Liberal government for not being more involved in the file, saying they dismissed it because it wasn’t their jurisdiction.

“We’re going to deal with it because it’s a question of protecting the environment on our territory.”

Breton said no decision has been made on which provincial agency will be responsible for the consulation but Natural Resources Minister Martine Ouellet said Quebec will pay close attention to the deliberations of the National Energy Board.

“We will have to analyze the impact of the project,” she said. “We do not have all the information we need to look at the economic impact, the environmental impacts.”

Interim Liberal Leader Jean-Marc Fournier said he’s fine with the idea of more environmental monitoring. But he said he hopes the PQ government hasn’t already decided against the project.

‘It could be a win-win-win situation’

By Aaron Wherry - Wednesday, November 14, 2012 at 4:20 PM - 0 Comments

Thomas Mulcair makes his pitch for resource development.

Mulcair told reporters the increasing supply of oil in the U.S., combined with soft demand, is already having an impact on the Canadian energy industry. He said while Eastern consumers pay higher prices for oil, producers in Western Canada are hit by the price differential — the discounted price they must accept for their crude as a result of surging production and jam-packed pipeline capacity in the U.S.

“It’s in the interests of everyone to try to get the best possible price for our natural resources, to add the jobs here,” Mulcair said at an NDP rally at a nightclub on 17th Avenue S.W. He said focusing on shipping oil from Western Canada to central and eastern provinces, and processing it domestically, could be a solution and a nation-building project on par with railroad construction in the 1800s. “It could be a win-win-win situation.”

The IEA report is here.

Brian Mulroney says Canada needs foreign investment for future growth

By The Canadian Press - Tuesday, October 23, 2012 at 10:02 PM - 0 Comments

CALGARY – Canada — and especially the West — can’t function without foreign investment, former prime minister Brian Mulroney said Tuesday as observers were still digesting Ottawa’s surprise rejection of a Malaysian company’s takeover of Calgary-based Progress Energy Resources.

“The oil and gas industry requires massive foreign investment to develop the oilsands and other major projects,” Mulroney told reporters before delivering a speech in Calgary.

“So obviously I’m very much in favour of foreign investment because it also gives the opportunity to Canadians to invest elsewhere around the world, which Canadians do in huge degrees and vast sums. So you need that freedom of movement.”

While in office, Mulroney scrapped the Foreign Investment Review Agency in 1985 and brought in the Investment Canada Act — the legislation under which Malaysian state-owned Petronas was rebuffed and China National Offshore Oil Co’s controversial $15.1-billion takeover of Calgary-based Nexen Inc. (TSX:NXY) is currently being weighed.

“The government appears to be looking for a little running room so as to bring in a new piece of legislation that would cover the new circumstances that have developed in the last 25 years in respect of foreign investment,” he said.

“So I think that given those realities, the government is proceeding with deliberate speed and care and concern and I’m sure we’ll have answers to these matters in the near future.”

Prime Minister Stephen Harper promised on Monday to issue new guidelines “soon” on foreign takeovers amid growing unease following his government’s rejection of the Progress (TSX:PRQ) deal.

Meanwhile, Mulroney didn’t say which candidate he favours to win the U.S. election next month, but said the odds are good for TransCanada’s contentious Keystone XL pipeline to connect oilsands crude to U.S. markets.

“I think if (Republican contender Mitt) Romney is elected, it’s approved right away and if Mr. Obama is returned, it will be approved in the fullness of time,” he said. “This is a no brainer. This is a no brainer, and it has to be approved. and I think it will be.”

The NDP and Nexen

By Aaron Wherry - Thursday, October 4, 2012 at 11:37 AM - 0 Comments

Barring further information, the NDP is apparently compelled to oppose the CNOOC takeover of Nexen. Here was Thomas Mulcair’s assessment on Tuesday.

What we’ve been saying from the start is that we should have public consultations.  That’s our position.  That’s allowed under the Act and we should consult with Canadians.  This is fundamental. This is about whether or not Canadians are going to control their own natural resources. The government says it’s going to have new criteria for looking at investments from other countries.  They added a couple of things today.  They’re starting to talk about security issues.  They’re starting to talk about control over our natural resources when it’s a takeover by a foreign government through a state-owned enterprise of a foreign government.  So we think that those things should have been on the table since the beginning.  They’ve been talking for years about updating those criteria. They’ve never done it.  So that’s the conversation we want to have with Canadians.  We think that those are valid issues. 

If you listened to Don Davies’ question today, he went a little bit further with regard to the fact that there’s protection for Chinese investing in Canada but there’s not reciprocity. Canadian investors would never be allowed to buy the raw natural resources of China.  So there’s something terribly wrong with a government that keeps signing these deals where we pass for chumps, where they get something that we don’t get. 

Stephen Gordon considers Pat Martin’s suggestion of “economic treason.”

‘Take it from me’

By Aaron Wherry - Friday, September 28, 2012 at 10:04 AM - 0 Comments

Jim Prentice raises concerns about pipeline development on the West Coast.

The Calgary native told his hometown audience that Ottawa’s neglect of the aboriginal relations could doom proposed oil pipelines, including Enbridge Inc.’s Northern Gateway project and Kinder Morgan Inc.’s TransMountain pipeline expansion.

“The obligation to consult with and accommodate first nations … these are responsibilities of the federal government,” said Mr. Prentice, who held posts as minister of Indian affairs, industry, and environment before leaving government in 2010. “And take it from me as a former minister and former co-chair of the Indian Claims Commission of Canada, there will be no way forward on West Coast access without the central participation of the first nations of British Columbia.”

How do you solve a problem like China?

By Aaron Wherry - Monday, September 17, 2012 at 11:30 AM - 0 Comments

The cabinet is apparently divided over how to deal with China.

CNOOC Ltd.’s groundbreaking $15.1-billion deal for Calgary’s Nexen has revealed a continuing fault line in the Conservative caucus, pitting the more ideologically driven members who distrust the undemocratic regime in Beijing against their colleagues who want to expand trade and investment ties with the fast-growing Asian powerhouse.

The split has even surfaced in cabinet, according to several sources close to the government. Finance Minister Jim Flaherty, who has made it a personal priority to build commercial relations with China, has spoken in favour of judging the CNOOC deal on its merits rather than allowing broader political differences to derail it. Immigration Minister Jason Kenney – with his anti-communist roots and promotion for religious freedom – voiced his concerns that China is not a trustworthy economic partner.

Is Nathan Cullen out of order?

By Aaron Wherry - Wednesday, August 29, 2012 at 4:44 PM - 0 Comments

The Justice Department doesn’t think Nathan Cullen’s request to address the joint review panel considering the Northern Gateway pipeline is in order.

Here is Mr. Cullen’s letter outlining his request. Here is the letter from the Justice Department outlining its objections. And here is Mr. Cullen’s response to the Justice Department’s objections. And here is the website for the Northern Gateway review panel.

Update 6:27pm. Joe Oliver’s office passes along a statement from the Natural Resources Minister.

“The Joint Review Panel independently makes all decisions respecting its proceedings. Our officials will answer any questions that the independent panel deems relevant. Nathan Cullen is seeking to politicize the work of the panel instead of waiting to hear the independent experts report.”

Captain Canada v. Northern Gateway

By Aaron Wherry - Tuesday, August 28, 2012 at 3:51 PM - 0 Comments

Former NHL star Scott Niedermayer, captain of Canada’s 2010 Olympic hockey team, reiterates his objections to the Northern Gateway pipeline.

With your voice behind us, WWF and the Coastal First Nations have sounded powerful messages about the unacceptable risk this project poses to the Great Bear, our Canadian treasure.  We’ve urged provincial and federal decision-makers to understand what is really at stake here. We’ve helped voice the concerns of communities, leaders, artists and studentsfrom across the country.  And we’ve spoken out for whales, bears, and other animals that cannot do so on their own…

And today, right now, we need your voice more than ever. August 31^st is the deadline for public comment to the Joint Review Panel .  This body is charged with assessing whether the Northern Gateway project is in Canada’s best interest.Please take a few moments to register your comments online right now.

Science and oil

By Aaron Wherry - Monday, August 27, 2012 at 1:31 PM - 0 Comments

Federal scientists have concerns about the expansion of the Jackpine oil sands mine.

In their final submissions to the Canadian Environmental Assessment Agency, several federal departments say they still have questions about Shell’s plans. They include how growth in the industry has outpaced the company’s assessment of cumulative effects, how changing flow in the Athabasca River will affect contaminant levels and how well Shell is able to control effluent from artificial lakes that will be used to store tailings …

Shell has failed to look at the overall picture of how total development has already affected wildlife habitat, let alone the impacts of further expansions, says Environment Canada. Its document goes on to say that where those impacts are measured, Shell’s assessment minimizes them. For example, Shell says the amount of high-quality caribou habitat destroyed is of “low magnitude,” even though the company acknowledges the amount of those losses total about 40 per cent. “It is unclear how Shell Canada defines a 40 per cent loss … as a low-magnitude effect,” Environment Canada says.

And a scientist with the Department of Fisheries, whose job might be eliminated, is concerned about Northern Gateway and Enbridge’s planning for a potential spill.

Enbridge Inc.’s response plan for a potential spill of Northern Gateway oil into the pristine waters off British Columbia doesn’t take into account the unique oil mixture the pipeline would actually carry, documents show … Kenneth Lee submitted a research proposal last December saying the matter requires further study because Enbridge’s plan had “strong limitations due to inaccurate inputs.” ”The Northern Gateway pipeline proposal lacks key information on the chemical composition of the reference oils used in the hypothetical spill models,” wrote Lee, head of DFO’s Centre for Offshore Oil Gas and Energy Research, or COOGER.

Bitumen and/or bust

By Aaron Wherry - Monday, August 20, 2012 at 10:00 AM - 0 Comments

Esquire dispatches John Richardson to report on Fort McMurray, the oil sands and the Keystone XL pipeline.

So what does the damn stuff look like? I’ll show you, Tom says. In a long rectangular building with lots of tubes, he opens a faucet at a station and fills a paper cup with pure bitumen. Thick as melted chocolate, it smells like tar. ”That’s our product,” he says. To the touch, it’s lighter than it looks. Mix it with liquid natural gas and it flows. This is what goes into the pipeline under the name “dilbit,” short for diluted bitumen. ”That’s what it looks like,” he says. “That’s what all the fuss is about.”

Awe seems the appropriate response. This greasy black gunk with the protean powers of money itself, able to metamorphose into everything from my iPhone to the fancy petroleum-based REI jacket I am wearing, a staggering combination of chemistry and human ingenuity. And yet, according to one credible and centrist study, if Canada caps the oil sands at 1.6 million barrels a day, the world has only a 50 percent chance of keeping CO₂ in the atmosphere below 450 parts per million — the target most scientists think will keep the earth from warming more than a few degrees in this century. Current approved flow is already 1.6 million barrels a day. Projects in construction bump that to 2.3 million. Projects announced or in application send it to more than 5 million barrels a day. So the bottom line is: If the production of oil sands keeps on growing at the rate it is now growing, the temperature of the world could go up 11 degrees by the end of the century. You look down at the cup, a sludge the color of hot chocolate. Is this the way the world ends?

The Northern Gateway chronicles

By Aaron Wherry - Monday, August 20, 2012 at 8:00 AM - 0 Comments

So the Prime Minister publicly deferred to science, but the Department of Fisheries might not be able to provide proper scrutiny of Northern Gateway’s impact.

The marine contaminant group that would have been involved in a spill in B.C. has been disbanded and the fisheries and environmental legislation gutted, said Otto Langer, a retired fisheries department scientist. “[Harper] says the science will make the decision. Well he’s basically disembowelled the science,” said Langer. “It’s a cruel hoax that they’re pulling over on the public.”

Former federal Liberal fisheries minister David Anderson agrees. Given the Dec. 31, 2013, deadline set by the federal government, Anderson said scientists in the Fisheries Department simply don’t have time to complete any substantial scientific study of the project. “You can’t do these studies on the spur of the moment. It takes time to do them,” Anderson said. “And the federal Fisheries have just been subjected to the most remarkable cuts, so you’re in the throes of reorganization and reassessment and re-assigning people, and on top of it you throw them a major, major request for resources and work. It can’t be done.”

Meanwhile, David Black’s suggestion that a refinery might be the answer was met with questions, concerns and criticism, but Thomas Mulcair seems to see promise in refining our own oil.

In a radio interview Saturday, Mulcair suggested that efforts to add new refining jobs in Canada would become a “win-win” situation for the oilsands industry and the rest of the country. “But I think that overall, the idea of adding the value in Canada, developing, upgrading, processing, refining, our own natural resources is a good one,” Mulcair told the CBC’s weekly politics show, The House. “That’s what we should be working on together.”

Conservative strategist Rod Love says Enbridge should suspend its application. And the United Church joins other religious groups in opposing the project.

‘We will never stop striving for 100 percent’

By Aaron Wherry - Friday, August 3, 2012 at 5:54 PM - 0 Comments

Enbridge says it can meet British Columbia’s demands and, with concerns being raised in the United States, releases a statement about its safety record.

“Over the last decade we’ve transported almost 12 billion barrels of crude oil with a safe delivery record better than 99.999 percent,” Al Monaco, Enbridge’s president, said in a statement. “That’s good, but for us, it’s not good enough. We will never stop striving for 100 percent.”

In a rarely used amendment to a Corrective Action Order issued on Wednesday, PHMSA said it has concerns about what it called “a pattern of failures” on Enbridge’s system over the past several years and demanded the company present a comprehensive plan, overseen by an independent third party, to improve its operations. Enbridge handed in the plan yesterday but said PHMSA has yet to offer a response.

Meanwhile, the Harper government has set a December 31, 2013 deadline for the joint review of the Northern Gateway pipeline. NDP MP Denise Savoie has posted her submission to the joint review here (pdf).

‘They’re looking to shift the blame to Enbridge’

By Aaron Wherry - Friday, August 3, 2012 at 1:58 PM - 0 Comments

Tim Harper, Reuters and the Globe pick up on James Moore’s comments about Enbridge and the Northern Gateway pipeline.

“This project will not survive scrutiny unless Enbridge takes far more seriously their obligation to engage the public,” he told a radio show Wednesday. Mr. Moore did not agree to an interview on Thursday.

The federal government staunchly supports Northern Gateway, and the opposition New Democratic Party said Mr. Moore’s comments may have been designed to keep B.C. voters happy. ”It’s damage control,” said NDP MP Peter Julian, who is the party’s natural resources critic and represents the B.C. riding of Burnaby-New Westminster. ”The Conservatives have been pushing this for months, and now that opinion has turned against it in B.C., they’re looking to shift the blame to Enbridge.”

Northern Gateway in the pages of the Rolling Stone

By Aaron Wherry - Friday, August 3, 2012 at 11:15 AM - 0 Comments

Rolling Stone takes note of the pipeline debate in Canada.

Harper also went after those who oppose the pipeline. Days before Obama’s decision on Keystone, Harper’s minister for natural resources was denouncing “environmental and other radical groups” who “hijack” regulatory bodies and “use funding from foreign special interest groups to undermine Canada’s national economic interest.” Just to make sure environmentalists got the message, Harper issued a budget that gutted protections for endangered species and pushed through new laws requiring nonprofit groups to “provide more information on their political activities, including the extent to which these are funded by foreign sources.”

In reality, it’s not environmental groups that are funded by foreigners – it’s the companies eager to exploit the tar sands. Many of Canada’s biggest energy companies – firms that are headquartered in Canada and trade on Canadian stock exchanges – are in fact largely owned by foreign interests, including Suncor (57 percent), Canadian Oil Sands (57 percent) and Husky Energy (91 percent). All told, some 70 percent of all tar-sands production in Alberta is owned by non-Canadian shareholders.

Isn’t it good, Norwegian oil policy?

By Aaron Wherry - Friday, August 3, 2012 at 10:00 AM - 0 Comments

Thomas Mulcair invoked Norway in May and Christy Clark praised Norway’s approach to pipeline safety last month. Now, the Tyee has dispatched Mitchell Anderson to study the country’s oil policy.

Could the Norwegian model work here? Would industry and investment flee Canada if we were to demand greater oversight and resource rents? This view seems a common refrain from many pundits and politicians, and was a central issue in the last Alberta election. Yet capital flight has never been a problem in Norway. More foreign petroleum companies than ever are lining up to invest billions, while submitting to levels of government oversight and taxation unheard of in Canada.

In fact these conditions seem attractive to investors since from the point of view of the Norwegian population, the development their oil industry has been a consensual act. This national buy-in by the taxpayers of Norway builds investor certainty, in contrast to the unpredictable pitched battles ongoing here in Canada.