Category Archives: miscellaneous
August 8, 2017
After decades of being called “gold” while exploring and developing the world’s largest “diamond” deposit just east of Prince Albert, SK in Fort a la Corne, Shore Gold will become Shore Diamonds.
Management and the Board believe that the name Shore Gold Inc., while a connection to the history of the Corporation, no longer reflects the current focus of the business. Management and the Board of Shore Gold Inc. believe that rebranding will ensure that investors and stakeholders will better understand the Corporation’s core business. As a result, the Corporation is proposing to changes its name to Shore Diamond Corporation.
Also, given Shore’s recent agreement with Rio Tinto, it is worth noting that Shore’s Board of Directors is proposed to include Peter Ravenscroft. According to the Circular on page 8:
He previously was Head of Global Exploration for Cliffs Natural Resources Inc. as well as Managing Director, Technical Evaluation Group at Rio Tinto based in London, with global accountability for internal technical reviews of all major capital projects going before the Rio Tinto board. Also group accountability for the compliance of all Rio Tinto companies’ mineral resource and ore reserve reporting. Mr. Ravenscroft was with Rio Tinto for seventeen years, in a variety of roles in the UK, Australia and Canada, with particular involvement in diamond projects and operations. Before joining Rio Tinto, Mr. Ravenscroft was involved in the southern African mining industry, with De Beers, Anglo American and Gencor, and as a geostatistical consultant.
Mining industry can now predict opposition to projects before it’s too late
August 7, 2017
It’s sounds too good to be true, but a new company is proving miners they can foresee opposition or any other form of social conflict related to their projects, before they even attempt going through a licencing process.
Chalkstone, a UK-based company founded by Donald Bray, a political anthropologist and academic at the University of Cambridge, bases its success in a very unique method, applying what’s known as “granular social intelligence.”
“We take a systemic approach and mix methodologies, combining big data and quantitative analysis with ethnography, qualitative interviews and focus groups, all of which help us dig deep into particular issues and accurately define the social stance of a target group,” Bray explains on the phone from his home in Paris.
“We are not interested if the community is, in any way, being taken advantage of” — Donald Bray.
Before going further, he’s quick to note that the goal of his company is not just to help mining companies get what they want, but to assist them in building mutual trust with the groups living in the areas in which they operate.
“We are not interested if the community is, in any way, being taken advantage of,” he says. “Our due diligence runs in a number of different directions.”
The expert, with more than 15 years of experience working across the globe, particularly in conflict zones, is not saying mining companies are the “bad guys” in the story.
“It’s not that firms don’t care about CSR [corporate social responsibility] or don’t want to invest in it. The problem is that most tools currently available don’t really help them grasp the human aspect of their projects,” he says.
Donald Bray, Chalkstone founder.
Half of all risks faced by extractives companies are non-technical ones, which in turn account for nearly 75% of all projects delays. “For a mid to large sized mining company, the costs of these delays (socio-political and community risks) can add up to some $20 million a week,” says Bray. “This is huge and it deserves far more attention than mere box-ticking or forms of corporate philanthropy.”
Chalkstone already has a known success story under its belt. After an intensive study on a ruby mine and a copper deposit in Afghanistan, applying counter-insurgency tactics used by deployed troops, Bray was hired in 2015 by Gemfields (LON:GEM), the world’s largest emerald and ruby miner. At the time, the precious gems firm had committed to building an emerald mine in Colombia.
Part of Chalkstone’s work to help Gemfields enter the market was the creation of a communications platform based in text messaging, which allowed the mining company and local communities to talk freely to one another.
Named by the community as “Suna Verde” (meaning “Green Pathway” in the Muisca aboriginal language), the system kept locals updated on everything from job-training initiatives to when the “health brigade” (a team of doctors and nurses that travel around the countryside) would be in each village. Soon, says Bray, Suna Verde was rivalling the radio as the region’s main source of news and other information.
“The experience showed us that communities want jobs, roads, hospitals and clinics, schools, and any other benefit offered by mining companies, but they want to be actively involved in their decisions. They don’t want to be just beneficiaries of someone else’s goodwill,” says Bray. “This is one of the most important lessons I’ve learned and which is transferrable to almost any community in the world.”
During the first months of work for Gemfields in Colombia, Chalkstone warned the company there was opposition brewing for another international mining firm in the region. Only four months later, that miner was hit by protests and even armed attacks.
“When you invite thousands of voices into a conversation, you need to be prepared for dissenting opinions (…) By listening to all of them, you’re able to get in front of the risks. That’s what happened in Colombia… we were able to see things that you wouldn’t normally see and we told Gemfields about it.”
While Gemfields decided in May to leave Colombia and Sri Lanka to focus on its African projects, the fact the company didn’t face hostility from community members is a testament to Chalkstone’s work, says Bray.
The company, currently involved in mining and oil and gas projects in East Africa, as well as a new venture in Colombia, believes its novel approach could also be useful to investors.
“Given that nearly 66% of shareholder value in a junior miner is linked directly to socio-political and community risks, according to some calculations, investing in understanding the social environment in which a miner will operate shouldn’t be an afterthought or something people turn their minds to only when times get tough,” Bray warns. “Trust is valuable,” he concludes.
These are a few examples of conflicts an approach such as Chalkstone’s could have prevented:
BHP presses for cheaper power ahead of Olympic Dam mine expansion
August 4, 2017
(Image courtesy of BHP Billiton)
BHP Billiton is looking for ways to shore up power supply and bring down power costs at its Olympic Dam copper mine in Australia, as it plans to expand following a string of electrical outages, the mine’s head said on Friday.
The mine has been badly hit by an energy crisis in Australia stoked by the rapid rise of wind power and closure of coal-fired power plants. This has destabilised the national grid and soaring natural gas prices have driven up power tariffs.
A blackout last year forced Olympic Dam to shut for two weeks, costing the company $105 million. Over the past year, rising power bills have added around $30 million to its costs.
Olympic Dam President Jacqui McGill said security of supply, price and system reliability are all challenges for the mine.
“Cheaper power – that’s the key for me,” she said at an American Chamber of Commerce event in the South Australian capital of Adelaide. Power prices need to drop 25 percent to make Olympic Dam copper more competitive globally, she said.
While the state of South Australia has taken steps, such as lining up 129 megawatt hours of battery capacity from Tesla Inc , to help avert power outages from next summer, more needs to be done, McGill said.
Olympic Dam, South Australia’s biggest power user, draws about 125 MW alone, around 8 percent of the state’s demand.
“We’ve currently got a nationwide study underway to look at our options for power,” she said.
Batteries would not help much, she said. “When you draw the amount of power that we do, options like that don’t provide us with a lot of confidence.”
BHP will need more power and cheaper prices to justify going ahead with plans to expand output from 218,000 tonnes this year to 280,000 tonnes by 2022. It plans eventually to more than double output using low-cost heap leach technology that the company is trialling in Adelaide.
McGill said tests to smelt material produced from the heap leach process have been successful, with “significant progress” made toward producing uranium and copper cathode. The trial is due to be completed in the 2019 financial year.
Heap leaching involves stacking crushed ore over a pad, pouring on acid and water and blowing air up through the pad to leach out metals.
(Reporting by Sonali Paul; Editing by Tom Hogue)
Aug 4, 2017
If you go to https://www.gasbuddy.com/Charts you can create charts on average fuel prices by city, province, etc., over any duration you want.
Alberta introduced a carbon tax on January 1st, 2017.
If you look at the average Alberta vs. Saskatchewan fuel price for the past year, the Alberta price went above Saskatchewan for the first time in decades with the introduction of the tax.
Here is the past year’s chart:
Here is the past 8-years’ chart:
Further study reveals that Alberta went from being on average about 6-10 cents per litre cheaper than Saskatchewan, to 6-10 cents per litre more than Saskatchewan. So, about a 12-20 cent per litre change in fuel price.
The cost of producing a barrel of oil and gas varies widely across the world, setting up winners and losers as the price of crude fluctuates at historically low levels.
By WSJ News Graphics
Last updated April 15, 2016 at 2:30 p.m. ET
The world has changed for oil producers. When crude-oil prices were more than $100 a barrel just two years ago, the ensuing profits were huge, filling government coffers and swelling company earnings. Now prices barely cover the average cost to get the oil out of the ground in places like the U.K. Additional expenses, like taxes on profits, mean that the actual breakeven price for many projects is higher, and newer and more complex projects generally fall well above the average cash cost of production. Oil-producing nations from Saudi Arabia to Norway are reining in spending while big energy firms like Royal Dutch Shell PLC and Chevron Corp. have made deep spending cuts and laid off thousands of workers. Here’s a look at the average cost of producing one barrel of oil—42 gallons—in a dozen nations.
Capital spending: 64.6% of barrel cost
Much of Norway’s remaining resources lie in remote waters and are more difficult to extract or are further from existing infrastructure and markets, resulting in higher development and transportation costs. However, the region hasn’t been in production for as long as oil and gas fields in neighboring U.K. waters, so there are still substantial resources left to extract.
Capital spending: 45.2% of barrel cost
Nigeria is Africa’s largest oil producer, but frequent incidents of sabotage and oil theft have hindered the sector onshore. Many newer projects are focused offshore, where production is more secure but the capital investment required is higher. Earlier this year Royal Dutch Shell PLC said it would delay a decision to progress a deep water project.
Capital spending: 51.1% of barrel cost
The U.K. has some of the highest production costs in the world as the oil and gas is offshore in deep stormy waters. The region has been in production since the 1970s and remaining resources require more costly technology to extract, while aging infrastructure such as pipelines, production hubs and terminals require constant maintenance and upgrades.
Production costs: 43.4% of barrel cost
Most production growth in Canada comes from oil sands deposits in the remote boreal forests of northern Alberta, which have some of the industry’s highest capital costs and longest development timelines. Canada’s oil sands represent the third largest reserves in the world after Saudi Arabia and Venezuela, but its crude trades at a substantial discount to other North American grades due to its low quality and limited pipeline access to market. Canada also produces declining amounts of crude oil from conventional, shale and deepwater Atlantic wells.
Production costs: 34.9% of barrel cost
Twenty-five years ago Indonesia produced close to 2 million barrels of oil a day, but production has fallen and many of its aging fields require investment to enhance recovery. New opportunities are generally more technically challenging and costlier. Tough government policies have also discouraged investment, though more recently the government has sought to introduce more generous terms.
Production costs: 24.5% of barrel cost
Drilling in the U.S. Gulf of Mexico has migrated from shallower depths to deep water, sending production costs surging as companies plumb reservoirs thousands of feet below the water’s surface. Oil production in the region peaked in 2009 at 1.56 million barrels a day, before declining for several years. However, output surged last year to 1.54 million barrels a day as several long-awaited projects came online.
Administrative/transportation costs: 27.7% of barrel cost
Saudi Arabian crude is some of the cheapest in the world to extract because of its location near the surface of the desert and the size of the fields. That makes transporting those barrels an outsized piece of its costs, on a percentage basis, compared with countries where production costs are 10 to 20 times as high.
Administrative/transportation costs: 29.4% of barrel cost
Iran is trying to revive its oil industry after more than three years of sanctions crippled its ability to export, and the country has a big advantage over many of its peers: Its oil is very cheap to produce. The Islamic Republic’s output jumped 310,000 barrels a day in February compared with two months earlier after restarting exports to the European Union, according to the International Energy Agency.
Administrative/transportation costs: 23.4% of barrel cost
Extraction of oil in Iraq, the second largest producer in the Organization of the Petroleum Exporting Countries, is in theory also very cheap but there are political and security challenges that add to its transportation and administrative costs. The country is fighting a war with Islamic State on its western flank, and has lost some oil fields to the militant group. Iraq has still managed to ramp up production to record levels last year.
Cost of producing a barrel of oil
Source: Rystad Energy UCube
Gross taxes: 37.9% of barrel cost
Despite holding the world’s largest oil reserves with 298 billion barrels, Venezuela’s output has been declining in the past two years because of lower investment in its costly heavy crude reservoirs. The Latin American nation produced 2.37 million barrels a day in February, a drop of 90,000 barrels a day compared to its 2014 average, according to the International Energy Agency. Taxes in Venezuela remain among the highest in the world at 50% of profits for foreign companies, though they have fallen from 95% when oil prices were above $100 a barrel.
Gross taxes: 43.9% of barrel cost
Russian oil is among the cheapest in the world to pump thanks to plentiful onshore resources, cheap labor and a well-developed network of pipelines, processing plants and other infrastructure. But the government tax take is levied at the wellhead and on exports, pushing up the costs of producing a barrel.
Gross taxes: 19.0% of barrel cost
Brazil’s oil production fell in January by 180,000 barrels after investments in its costly deep offshore basin were hit by low oil prices and a corruption scandal. In January, the country’s state oil giant Petrobras cut its five-year investment plans through 2020 by $32 billion to $98.3 billion. The South American powerhouse has opted for a fiscal middle ground with a corporate income tax at 34% for producers, lower than Venezuela but higher than Colombia’s 25%.
Gross taxes: 27.5% of barrel cost
After years of declining output, the U.S. oil and gas industry was revived by the shale boom, which kicked off amid the Great Recession and gained steam after 2008. Advances in technology—notably, the combination of horizontal drilling and a technique known as hydraulic fracturing—allowed companies to tap vast amounts of oil and gas trapped in dense rock formations. Oil and gas taxes vary by state in the U.S., with many imposing a production or extraction tax, or otherwise using the market price of oil or gas to tax output on a specific well. Some levy impact fees or charge companies as they drill new wells.
Note: An earlier version of this graphic displayed incorrect labels for the cost to produce a barrel of oil when hovering over the bars on each chart. This version has been corrected. (April 15, 2016)
Source: Rystad Energy UCube
Rio Tinto’s first-half profit soars 93%, investors getting $3bn back
Shareholders will receive $2bn on the dividend side and $1bn of share buybacks.
Aug 2, 2017
The company’s iron ore business delivered 80% of the group’s underlying earnings. (Image of the Paraburdoo operation, in the Pilbara, courtesy of Rio Tinto)
Rio Tinto (ASX, LON:RIO), the world’s second largest miner, gave its shareholders an early Christmas present Wednesday as it declared its biggest interim dividend in the company’s 144-year history, thanks to climbing commodity prices that made first-half profit jump an impressive 93%.
The Anglo-Australian company also said it will increase its share buy-back program this year, as net profit for the first six months of the year came in at $4.14 billion, more than double the $2.13 billion it logged in 2016, yet slightly short of market expectations.
Rio will return a total of $3 billion to shareholders: $2 billion on the dividend side and $1 billion of share buybacks.
Further payouts could come “down the track” after Rio closes its $2.45 billion sale of Coal & Allied to Yancoal, expected to happen in the third quarter of 2017.
Chief executive Jean-Sebastien Jacques said the results unveiled today show the firm’s “very simple strategy” was working. “But we believe there is more we can do,” he noted, adding that further payouts could come “down the track” after Rio closes its $2.45 billion sale of Coal & Allied to Yancoal (ASX:YAL), estimated for the third quarter of 2017.
The London-based miner’s performance is a clear reflection of a reverse in the mining industry’s fortunes, as companies big and small are now benefiting from a recovery in prices of commodities including iron ore, which is Rio’s key commodity, as well as aluminum and even coal.
Should that rally fade, however, there’ll be no more cash flow from coal for Rio Tinto to fall back on, warned Wednesday Bloomberg analyst David Fickling. “And its copper-mine stakes — hit by strikes this year at Escondida in Chile and Grasberg in Indonesia, plus the vast cost of reaching full production at Oyu Tolgoi in Mongolia — aren’t producing enough earnings to make up the difference,” he wrote.
Fickling’s comments are based on the fact that the company’s shareholders receive dividends based on a policy set up in February 2016, which ensures between 40% and 60% of underlying earnings are paid out to investors as a dividend every six months. The old approach saw them receive guaranteed dividend payments, but Rio had to re-evaluate it to better reflect volatile commodity cycles, such as the one that took the whole industry down in 2015.
“These are strong results: operating cash flow was $6.3 billion and we met our $2 billion cash cost reduction target six months early,” said chief executive Jean-Sebastien Jacques.
The company’s iron ore division contributed 80% of Rio Tinto’s underlying earnings. The miner, the world’s second largest producer of the commodity, generated almost 130 million tonnes of the steelmaking ingredient during and received an average price of $67.80 a tonne in the period, 26% more than just a year ago.
Mining jobs in Canada to go begging: MiHR report
About half of the vacancies in key mining occupations likely to go unfilled in next 10 years
July 30, 2017
A torrent of retirements over the next 10 years is poised to wreak havoc on the mining labour market in Canada.
While the unemployment rate in mining, quarrying and oil and gas has improved in 2017 from the summer of 2016 – from 10% to 7% – the next decade is going to be challenging for the industry as it seeks to replace older workers who are turning in their coveralls and enjoying their golden years. So says a new report from the Mining Industry Human Resources Council (MiHR), which projects 87,830 workers will need to be hired over the next decade under a baseline scenario. If mining expands, the need for miners and associated professions climbs to 130,410, and under a contraction, shrinks to 43,200.
“One of the most significant challenges facing Canada’s mining industry is establishing a sustainable supply of labour that is able to withstand the economic volatility that characterizes the sector,” notes the report. The report suggests that there will be a 47% gap (demand exceeds supply) for technical occupations, 56% for supervisors and foremen, 18% for skilled trades and 10% for production workers.
According to MiHR’s forecasts, the industry will need to hire roughly 18,210 people in these occupations from 2018 to 2027, but is only expected to secure 8,670 new entrants, leaving a total gap of 9,540 – meaning about half of all vacancies will go unfilled.
“This poses a significant risk to mining operations, given that a thin labour supply has the potential to derail projects, drive up the cost of finding workers and ultimately undermine an operation’s ability to run competitively,” reads an executive summary of the report.
That obviously calls for a new generation in mining, with key education programs needed to improve the labour supply.
“The incoming generation of new entrants are vitally important to the health of mining’s future labour supply, especially prospective students,” says the report.
It noted nearly half (47%) of hiring requirements will be met by retiring workers, which places a significant burden on employers.
“Each retiree takes with them a unique set of skills and knowledge, and those leaving with experience create a void that is difficult to fill,” says MiHR.
Factors exacerbating the tight mining labour market include:
- Age and retirement: Older workers have surged from 11 per cent in 2007 to 16 per cent in 2016, while younger workers have dropped from 13 per cent to 5 per cent over that same period.
- Lack of gender parity: While women represent nearly half of the Canadian labour force, they make up only about 19 per cent of the labour force in mining.
- Economic volatility: economic downturns and upswings result in widely fluctuating demand for labour and this instability can affect a mining employer’s ability to secure labour.
- Remoteness: Mining operations often exist in remote parts of the country with extremely low populations lacking skills. It is common for employers to source workers from other regions of Canada.
Supreme Court of Canada confirms First Nations have no veto power over resource projects
By Nelson Bennett, Business in Vancouver
July 28, 2017, 2:45 p.m.
Image: Kinder Morgan Canada
Just days after the new NDP government said it would work to implement a declaration that ostensibly gives First Nations in B.C. a veto over projects like the Trans Mountain pipeline expansion, the Supreme Court of Canada ruled no such veto exists.
“Overall, the decisions are positive for project development in Canada,” said Robin Junger, an expert in aboriginal law for McMillan LLP and former head of the B.C. Environmental Assessment Office.
On one hand, David Eby, the NDP’s new attorney general, confirmed last week what Junger has previously said to be the case – that his government doesn’t have the legal authority to deny permits for the pipeline expansion.
Those are statutory decisions made by civil servants, not political decisions to be made by cabinet ministers.
On the other hand, last week Premier John Horgan issued a mandate to Scott Fraser, minister of Indigenous Relations and Reconciliation, to work with First Nations “to establish a clear, cross-government vision of reconciliation to guide the adoption of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).”
That declaration has a clause that states that indigenous people have the right to “free prior and informed consent” on development projects within their asserted territory.
On the surface, that sounds like the NDP would be handing the Tsleil-Waututh of Burrard Inlet a veto, since they deny the federal government’s and Kinder Morgan Canada’s right to expand the pipeline in their territory – the Burrard Inlet in Burnaby.
But as the federal Liberals discovered when they too promised to implement UNDRIP, actually giving it legal force would require a constitutional amendment, which is why the federal Liberals abandoned it.
Two Supreme Court of Canada decisions issued on July 26 made it abundantly clear that, while the federal government has a duty to consult, that does not mean that First Nations can veto a project.
In one ruling, the Supreme Court of Canada ruled that regulators like the National Energy Board (NEB) can represent the federal Crown in executing the duty to consult First Nations, but that those consultations must be real, not lip-service.
In the Clyde River Inuit case, the Supreme Court ruled that the NEB has the authority to represent the Crown in executing its duty to consult, but that, in that particular case, it had failed to do so properly. The court ruled the NEB’s consultation failed to properly address the Clyde River Inuit’s concerns.
The other case, involving the Chippewas of the Thames First Nation decision, is particularly relevant to the Trans Mountain pipeline expansion. In that case, the court ruled that the consultation with the Chippewas had been adequate.
The Chippewas were objecting to a reversal and expansion of a pipeline owned by Enbridge. The Supreme Court ruled against the Chippewas in that case and in doing so affirmed that, provided consultations are adequate, First Nations don’t have the legal authority to stop developments in their territory.
“The duty to consult does not provide a ‘veto’ for indigenous peoples over Crown decision,” Blake, Cassels & Graydon LLP explains in a legal brief on the two cases.
So what does that mean for the NDP’s promise to implement UNDRIP? Junger said it is clear that it has no legal force.
“This is the law,” Junger said. “No elected person can change the law by statements.”
“Courts have interpreted Section 35 of our Constitution as saying there’s no veto. So I think don’t any government would have the power, even by legislation, to make that change. It would have to be a constitutional amendment. You can’t make it law by saying you endorse it.”
John Ivison: Shocks to Canada’s natural resource sector should be the real cover story
As the prime minister graces the cover of Rolling Stone, the real news this week is how two major natural resources projects have been scuttled by government and the courts
The National Post
July 26, 2017
6:39 PM EDT
Petronas considered building the Pacific Northwest LNG project on Lelu Island near Prince Rupert, B.C.Handout/Pacific Northwest LNG
The fawning front cover of the latest Rolling Stone, which features Justin Trudeau and wonders wistfully, “Why can’t he be our President?” also touts a headline promising to explain how the Trump administration is destroying the U.S. Environmental Protection Agency.
Many Canadians will rejoice at the contrast — and, it’s true, few would exchange Trudeau’s golden aura for Trump’s tangerine tincture.
But the idea that Trudeau is getting everything right — particularly when it comes to balancing environmental protection and growing the economy — is fallacious.
The government is touting the International Monetary Fund’s forecast that Canada will lead the G7 in growth this year. But there is a lag before government action affects the economy. The warning this week from the Chamber of Commerce that Canada’s climate-change plan and other measures are raising the cost of doing business in this country to breaking point is a canary in the coal mine, gasping from exposure to the toxic gases of too many taxes and too much regulation.
This has not been a good week for the reputation of this country’s natural resource sector. On Tuesday, the $36-billion Pacific NorthWest liquefied natural gas project was cancelled, ostensibly because of poor global prices but really because of the reduced attractiveness of the Canadian market for investment.
This was compounded Wednesday by a Supreme Court of Canada decision to block seismic testing in Nunavut because of opposition by local Inuit, who said they had not been consulted adequately before the National Energy Board gave oil companies permission to search for oil and gas in northern waters.
There was some good news for industry in a companion Supreme Court decision that suggested the courts do not equate the constitutional duty to consult with a veto over development.
The court looked at a claim by the Chippewas of the Thames First Nation in southwest Ontario, who claimed they had not been consulted adequately over the reversal of the Enbridge-owned Line 9 pipeline between Sarnia and Montreal.
The court judged that the Chippewas were informed the National Energy Board would hold hearings; were granted funding to participate; and subsequently filed evidence outlining their concerns about increased ruptures and spills.
The NEB approved the project, on the basis that the impact of the reversal of an existing pipeline would be minimal and mitigated by conditions imposed on Enbridge. The Supreme Court agreed.
While the Court ruled the Chippewas were consulted, it said the Inuit of Clyde River were not given adequate opportunity to participate in the NEB process into offshore seismic testing for oil and gas in Nunavut.
The Court said the Inuit had a constitutional right to harvest marine mammals like whales, seals and polar bears. It said it was undisputed that the testing could negatively affect hunting rights and that the proponent of the project did not make clear to the Inuit what the impact might be, nor give sufficient opportunity for participation in the process. Unlike in the Line 9 case, there were no oral hearings and no participant funding.
“These cases demonstrate that the duty to consult has meaningful content but that it is limited in scope. The duty to consult is rooted in the need to avoid the impairment of asserted or recognized rights that flow from the implementation of the specific project at issue; it is not about resolving broader claims that transcend the scope of the proposed project,” the court concluded.
The Supreme Court appears to have struck a legitimate balance between rights and development that benefits Canadians. Ottawa, on the other hand, is still searching for symmetry.
In its most recent survey the Canadian Association of Petroleum Producers forecast that oil and gas capital expenditure in Canada will fall to $44 billion this year, nearly half the $81 billion spent in 2014.
CAPP blamed the dramatic change, in part, on “continuing uncertainty” in Canada’s policies and regulations, which are seen as “increasingly more stringent and costly.”
While politicians blamed poor global LNG conditions for the Pacific NorthWest decision, similar projects have gone ahead in Australia and the U.S.
The situation is likely to be compounded by changes to federal environmental assessment legislation being contemplated by the Trudeau government. The aim is to “restore trust” in the assessment process, according to the government but industry fears reviews will become the venue to implement broader public policy — notably on Indigenous reconciliation and climate change.
The expert panel that submitted its recommendations to the government urged that assessments move beyond the “bio-physical environment” to encompass all impacts likely to result from a project, according to the “five pillars of sustainability” — environmental, social, economic, health and cultural impacts.
Chamber of Commerce president Perrin Beatty said the changes would make the system “unworkable” and end of investment in Canada’s natural resources sector.
Beatty is not some swivel-eyed loon, bent on rapacious exploitation of the environment. His organization has backed carbon pricing while calling for the government to countervail cost increases with relief elsewhere.
But the balance of environmental protection and economic growth that Trudeau trumpets has been weighed heavily in favour of the former.
In addition to new carbon taxes, businesses find themselves facing rising electricity costs, federal government fee increases, Canada Pension Plan hikes, richer minimum wages and higher Employment Insurance rates than would have been the case had the government not increased EI costs.
Such is the flighty nature of international capital, Beatty’s warning may have come too late — the Canadian system may already have been judged unworkable and investment in new major energy projects reallocated to other jurisdictions.
The experience of Pacific NorthWest suggests projects can be approved and built elsewhere in the world more quickly and cheaply, with far less uncertainty than in Canada.
The Liberal government is going to have to create a more focused, predictable regulatory regime or Canadians will face a future of lower living standards, higher taxes and bigger debt. Glossy profiles in the house organ of middle-aged Democrats are poor compensation for that.
Many of you are not aware of my second career path – artist management – which I have not done for 4 years. I was privileged to work with Kenny Shields and Streetheart; Kenny passed away recently – he will be missed as a great person, artist, friend, father and husband.
5-years ago today, this photo was taken at the Travelodge in Saskatoon. It was of a supper with the artists I was working with at the time; Kenny Shields/Streetheart, Jully Black, and Donny Parenteau. See also http://www.ericandersonmanagement.com