Category Archives: oil

BHP presents united front against activist Elliott at AGM

 

BHP presents united front against activist Elliott

Reuters Staff

OCTOBER 19, 2017 / 11:23 AM / UPDATED AN HOUR AGO

By Barbara Lewis and Zandi Shabalala

LONDON, Oct 19 (Reuters) – The new chairman of BHP , the world’s biggest miner, threw his weight behind his CEO on Thursday after attacks from activist investor Elliott Advisers prompted speculation that the end of Andrew Mackenzie’s tenure was imminent.

Pressure has mounted on BHP and its chief executive since Elliott went public in April with its criticisms of the miner’s strategy.

“Any suggestion there is a set timeline around Andrew’s tenure is simply false and without merit,” Chairman Ken MacKenzie told reporters after his first AGM since taking office at the start of September.

Asked by a shareholder whether it was Elliott or the BHP board that was running the company, the chairman replied that “MacKenzie and Mackenzie” were running BHP, though he did not specify the order of the pair who share the same names but with slightly different spelling.

At least five representatives from Elliott Advisors, which holds 5 percent of BHP, attended the London meeting but did not ask questions from the floor.

Elliott declined to comment on Thursday, though it has welcomed the new chairman’s appointment.

Chairman MacKenzie said he had met more than 100 shareholders across eight countries, which he said gave him confidence, though he added that there are areas where the company needs to sharpen its focus.

He reiterated that work is in progress to sell shale assets, which is one of Elliott’s main demands, and that further action would take place to refresh the board of directors.

SKILLS REVIEW

“We recognise that the board needs to continue to evolve to take into account the rapidly changing environment in which we operate. So we will undertake a review of the board’s skills and experience requirements during this financial year,” he said.

BHP’s London share price has risen nearly 7 percent since the start of the year, about half as much as that of its main rival Rio Tinto.

Both the chairman and the CEO said they were striving to maximise shareholder value and that meant that shale assets would be sold only at the right price.

“We will be both urgent and patient as we examine all the options,” CEO Mackenzie said. “We have to get the timing right to maximise shareholder value.”

BHP’s big rival Rio Tinto suffered a setback this week when the U.S. Securities and Exchange Commission (SEC) charged the company and two of its former executives with inflating the value of coal assets in Mozambique and concealing critical information. The company said it would defend itself vigorously against the allegations.

Chris LaFemina, a mining specialist at Jefferies bank, said he had preferred Rio over BHP for the past two years.

“While our preference has not changed, BHP’s competitive position has modestly improved,” he said in a note.

“New chairman Ken MacKenzie seems willing to push for significant strategic changes at BHP … after years of unacceptable underperformance of its share price versus Rio‘s.” (Editing by Elaine Hardcastle and David Goodman)

Husky gets approval from Saskatchewan to restart pipeline after oil spill

Husky gets approval from Saskatchewan to restart pipeline after oil spill

Husky spill clean up
Crews work to clean up an oil spill on the North Saskatchewan river near Maidstone, Sask., July 22, 2016.

JASON FRANSON/THE CANADIAN PRESS

REGINA

THE CANADIAN PRESS

OCTOBER 12, 2017

The Saskatchewan government has given Husky Energy the OK to restart a pipeline after a major oil spill along the North Saskatchewan River in July 2016.

The government says in an e-mail to media that testing, inspection and evaluation of the repairs to the line have been done.

The pipeline leaked 225,000 litres of heavy oil mixed with diluent onto a riverbank near Maidstone and about 40 per cent of the spill reached the river.

Husky’s own investigation concluded that the pipeline buckled because of ground movement.

The government says measures have been taken to mitigate the risk of a future failure at that spot, including thicker pipe on a sloped portion, ground movement monitors and gauges to measure strain along the replaced sections of pipe.

Saskatchewan’s Justice Ministry is still reviewing Husky’s response to alarms before the spill to decide whether charges should be laid.

 

 

 

TransCanada kills controversial Energy East Pipeline project

TransCanada kills controversial Energy East Pipeline project

neb energy east
TransCanada President and CEO Russ Girling announces the new Energy East Pipeline during a news conference in Calgary, in this August 1, 2013 file photo.

TODD KOROL/REUTERS

OCTOBER 5, 2017

TransCanada Corp. is killing its controversial Energy East pipeline project.

Also dead is its Eastern Mainline proposal, the company said Thursday.

“After careful review of changed circumstances, we will be informing the National Energy Board that we will no longer be proceeding with our Energy East and Eastern Mainline applications,” chief executive officer Russ Girling said in a statement.

“We appreciate and are thankful for the support of labour, business and manufacturing organizations, industry, our customers, Irving Oil, various governments, and the approximately 200 municipalities who passed resolutions in favour of the projects.”

TransCanada added it will focus on its $24-billion capital spending program, which should boost earnings and cash flow, and support dividend increases of 8 to 10 per cent a year through 2020.

It will take a hit in its fourth-quarter earnings.

“As a result of its decision not to proceed with the proposed projects, TransCanada is reviewing its approximate $1.3-billion carrying value, including allowance for funds used during construction (AFUDC) capitalized since inception and expects an estimated $1-billion after-tax non-cash charge will be recorded in the company’s fourth quarter results,” it said.

“TransCanada stopped capitalizing AFUDC on the project effective Aug. 23, 2017, as disclosed on Sept. 7, 2017. In light of the project’s inability to reach a regulatory decision, no recoveries of costs from third parties are expected.

Canada keen to see Trans Mountain pipeline built, get more oil to China – Federal Minister Carr

Canada keen to see Trans Mountain pipeline built, get more oil to China: Carr

By The Canadian Press

Oct. 3, 2017, 3:15 p.m.

Jim Carr

Jim Carr. Image: Government of Canada.

Canada will continue to produce oil and ship it across the country whether or not new pipelines are built, says the federal minister of natural resources.

Building pipelines just means it can be shipped more safely, Jim Carr says in a recent interview with The Canadian Press.

Next week, Carr will play host to a major conference in Winnipeg looking at how Canada can and will adjust to a low-carbon energy world.

However, he says, even as Canada adapts to that new world, oil resources will be extracted and will continue to be shipped.

Getting more oil to the West Coast so it can be loaded on tankers and sold to China will be better for the country and getting it there on pipelines rather than rail cars is better for everyone, he says.

The federal government’s approval of the Trans Mountain pipeline is under a legal microscope this week as Indigenous and environmental groups and British Columbia cities argue the process was incomplete and failed to take into account the impact the pipeline could have on everything from killer whales to waterways.

The $7.4 billion pipeline project is being built by Trans Mountain, a subsidiary of Kinder Morgan, to more than double the capacity of an existing line between Edmonton and Burnaby, B.C.

The federal Liberals gave the green light to the project last fall, after making changes to the review process that Carr said included more Indigenous engagement.

“We approved it because more than 15,000 jobs will be created,” Carr said. “We approved it because we don’t feel comfortable sending 99 per cent of our oil and gas exports to one country, the United States.”

Whether there was enough Indigenous engagement is one of the key questions that will be answered by a court case underway in B.C. this week.

Carr said the government remains keen to have the line built. He said the judge will decide whether it can proceed, but the government believed the project was in the national interest when it approved it last fall and still thinks so today.

“Nothing has changed that would alter our judgment on why it was approved,” Carr said.

Next week’s Generation Energy conference in Winnipeg is a key moment for Carr in his tenure as natural resources minister, as his mandate letter calls for the creation of a national energy strategy. That includes working on energy security and making it easier to produce and transmit cleaner energy across the country.

Carr said many key policies and solutions in Canada have come from similar conferences. He also said there is no battle between moving to a low-carbon economy and continuing to produce oil in Canada.

“There are examples around the world where the production and distribution of conventional sources go hand in hand with investment in renewable sources of energy and that’s happening more and more now in Canada,” he said.

 

 

 

Is the Canadian energy industry approaching a tipping point?

Is the Canadian energy industry approaching a tipping point?

By Ron Wallace

Oct. 2, 2017, 3:03 p.m.

http://www.jwnenergy.com/article/2017/10/canadian-energy-industry-approaching-tipping-point/

Kinder Morgan pipe

Can Canada afford to be unique among energy producing countries and not use, or export for its own benefit, its hydrocarbon resources? Such questions and challenges extend to the very heart of the Canadian national interest.

In announcing the final federal cabinet decision on the Northern Gateway Pipeline project—after years of consultations and hearings and hundreds of millions of dollars expended by the proponent and court rulings that effectively excoriated the federal government’s role in aboriginal consultations—Canada refused to permit a 1,200-kilometre pipeline.

The decision favoured environmentalists’ arguments to protect the westernmost reaches of the Great Bear Rain Forest and make permanent a tanker moratorium along the northern coastline of B.C. It also overruled the science, evaluations and conditions previously set by the joint National Energy Board (NEB)–Canadian Environmental Assessment Agency panel in approving the project.

The decision to reject Northern Gateway sent shock waves through industry and investor boardrooms while the parallel approvals of Enbridge’s Line 3 and Kinder Morgan’s Trans Mountain Expansion were, in turn, met with dismay by many environmental activists.

Such a convoluted decision process was the culmination of changes made by the previous Conservative government that gave the cabinet the final decision on major pipeline projects. Under this system created in 2012, the NEB recommends a course of action after its environmental and regulatory process, and the cabinet has full discretion to accept, reject or modify that recommendation. Inevitably, this process has led to the politicization of a quasi-judicial, fully integrated environmental and regulatory process designed to adjudicate the national energy applications. Accordingly, one would be right to question if this history, and the subsequent decisions made by successor cabinets, constitutes balanced decision making that reflects the national interest and provides clear rules for proponents and the public.

Canadian political attentions will now turn to Kinder Morgan’s $6.8-billion Trans Mountain Pipeline expansion. Current political leaders in BC after the narrowest of election victories have vowed to use “every tool available to stop” the project, starkly in the face of project approvals by the NEB and the Federal Cabinet.

These are not just political or regulatory issues; they extend into material questions of constitutional rights and the rule of law. The latest unique decision by the novice NEB Energy East panel to require a review of upstream greenhouse gas emissions associated with the project may yet lead to a fundamental re-examination of constitutional powers for resource development between provincial and federal governments.

It may also lead to further questions about the NEB’s mandate. In such circumstances, many would consider it unlikely there could be any regulatory certainty or even determinations of the national interest in a house so divided. The regulatory and political certainty required by international investors for major projects has been significantly eroded just when Canada’s energy industry is struggling to maintain its competitiveness in an era of reduced prices and limited exports.

Is it possible for Canada and its energy sector to become greener and more innovative while enduring lower profitability, restrictions to market access, significant capital flight and major project cancellations?

The regulatory authority of the NEB, previously affirmed by the Supreme Court, has been undermined to the extent that a host of jurisdictions, ranging from the federal government down through to municipalities, now presume, if not demand, a final say in Canadian energy development and transportation. The consequential erosion of the pre-eminence of the regulatory powers of the NEB is creating fundamental uncertainty and makes problematic any determinations that reflect the national interest. The federal government’s initial intentions to restore public confidence in the NEB by modernizing the regulator has increasingly been eclipsed by far more pressing concerns of the economy, the national interest and, perhaps, the ability of the Canadian energy sector to survive such disparate, concerted regulatory assaults from so many sectors.

The Supreme Court has been thrust into the mix as a direct result of a federal government that has consistently demurred from issuing clear rules for aboriginal consultation and accommodation. Worse, governments appear content to hide behind the skirts of the NEB when issues related to consultation are concerned.

While the Courts have been forced to balance individual and aboriginal rights in arbitrating contested developments, Ottawa appears unable, or at least unwilling, to address the uncertain regulatory environment that has arrived. Fortunately, the latest ruling by the Supreme Court suggests that it does not equate the constitutional duty to consult with a veto over development—a useful legal clarification, but it perhaps constitutes one in a long series of decisions that may be viewed by some as being too little and far too late.

The real casualties of this regulatory morass are investors, shareholders and Canadians.

Proponents have expended hundreds of millions of dollars in a complex Canadian political, legal and regulatory environment only to find that final decisions are made at the political level behind closed doors using rules and standards previously undisclosed. Such decisions made so late in the regulatory process fundamentally affect how investors view Canada and this directly influences future corporate investment decisions.

Previously, while corporations may have voiced concerns about the length of time of Canada’s regulatory approval processes, many were prepared to invest millions, if not billions, of dollars to complete balanced, fair regulatory processes. The development of the intense fractionation of Canada’s regulatory processes has been paralleled by a staggering flood of capital out of Canada’s resource development sector. Competing claims and demands from numerous levels of government, unresolved aboriginal claims and the outright hostility from well-organized opponents have undermined even the most determined efforts of applicants.

The subsequent collateral damage to Canada includes aboriginal communities who have negotiated benefits agreements in their favour. Can Canada truly afford such a callous disregard of the capital markets and ignore the realities of a highly competitive international natural resource marketplace?

There are other ironies. Proponents are subjected to gruelling regulatory and public examinations of their project proposals. By contrast, the political decisions and policies advanced by the cabinet are not subject to any substantive analysis of their regulatory impacts. Instead, single-issue determinations of policy are unveiled by governments with little or no apparent understanding of the social or economic consequences of the long-term impacts of these policies. The developing attitude appears to be that Canada is prepared to accept virtually any cost or penalty to save the globe. This is a remarkable situation whereby Canadians are increasingly subjected to the global aspirations and ideologies of the elected establishment, which may be far more attuned to the expectations of international agreements than to the immediate interests of its own citizens.

Recall that, historically, the energy sector has ranked first as a contributor to Canada’s overall positive trade balance. The energy industry is estimated annually to contribute $15 billion to government coffers. However, Canada has no choice but to export oil and gas to U.S. buyers at greatly diminished prices, handicapped by a captive-market discount that has been estimated to provide a daily subsidy of $US38 million to U.S. producers who are free to sell or export that same oil at international market prices. These forces explain the Canadian Association of Petroleum Producers’ recent forecasts that Canadian oil and gas capital expenditures will decrease to $44 billion in 2017—half the $81 billion expended in 2014.

These Canadian political and regulatory uncertainties arrive precisely when the U.S., rightly or wrongly, has set out to undertake significant rollbacks to the Obama administration’s legacy, including material changes to Environmental Protection Agency (EPA) regulations and the the Clean Power Plan, a withdrawal from the Paris Agreement, and a renegotiation of the North American Free Trade Agreement.

Canada’s largest single-energy market is increasingly becoming its biggest competitor as it implements measures to diminish federal regulatory authorities and restore sweeping powers to individual states. Such aggressive measures are evidence of a controversial determination by the U.S. to reduce regulatory and tax burdens just at a time when Canada appears headed in a significantly different direction. In short, the U.S. political and regulatory environment has swung wildly from the Obama era of heightened regulatory intervention to the Trump era of deregulation. At the same time, Canada has taken a markedly divergent path from the U.S., its largest single market and one that is changing dramatically.

Scott Pruitt, the EPA’s administrator, recently remarked “the regulatory assault [on the mining industry] is over.”

Irrespective of political or environmental views, especially in light of continuing Canadian regulatory commitments, clearly Canada and the U.S. have diverged in their approaches to the regulation of their resource industries—and in their respective competiveness in the global marketplace. The Canadian Chamber of Commerce recently warned that the federal climate change plan combined with regulatory measures for emissions and a minimum carbon price could seriously undermine Canada’s competitiveness.

In response, Catherine McKenna, the minister of environment and climate change, asserts that “the strongest economies of the next century will be those that nurture business transition and attract companies that want to invest in climate-committed jurisdictions.” She adds that she speaks with those “who don’t see this global shift as a competitiveness problem, but rather a cutting-edge responsibility.”

While many Canadians may prove willing to endure the 83 years until the next century to confirm McKenna’s highly ideological, largely unsupported assertions, it is doubtful that the energy industry or its investors will be so patient. Using as an example the massive energy policy interventions in Ontario, the real costs of such unilateral policy and regulatory commitments may increasingly be marked by few tangible environmental gains but be accompanied by material negative economic, financial and social consequences.

China constitutes another example of the global shift in energy policy. China aggressively stepped in to the void created by the U.S.’s withdrawal from the Paris Agreement and has trumpeted its determination to become a major exporter of solar panels and wind turbines with accompanying construction initiatives such as the Quaid-e-Azam Solar Park, one of the world’s largest, in Pakistan.

China, with much credulous international environmental acclaim, has been forced to halt the construction of 100 new in-country coal-fired power plants—driven not so much by international concerns for global warming but by national concerns over severely diminished air quality from local smog and pollution. It is less reported that China will be responsible for the construction of almost half of the new international coal generation coming online in the next decade.

The New York Times cites reports of 1,600 coal plants currently under construction or planned in 62 countries. This will result in a 43 per cent expansion in the global coal-fired power base. Developing countries are relentlessly being drawn into a cycle of coal-generation dependency. Chinese firms have plans to construct coal-fired power plants internationally with a capacity of 6,285 megawatts—almost 10 times the 660 megawatts planned within China. The China Development Bank and the Export-Import Bank of China have provided in excess of US$43 billion for overseas coal financing. This investment is paralleled by the National Power Corporation of India’s plans to build 38,000 megawatts of new coal capacity in Bangladesh and India.

Simple mathematics probably provides the best guide to understanding the political rhetoric and international posturing associated with the climate debate. With burgeoning international emissions that effectively defeat even the most stringent Canadian national efforts at emissions control, one could question if Canadians should be subjected to the monumental economic burdens resulting from a plethora of carbon-reduction strategies. The recently announced plans to implement a Canadian national carbon tax and to phase out coal-fired power is estimated to achieve respective 18-megatonne and five-megatonne reductions in emissions by 2030—figures that are dwarfed by the growth in international emissions. In sum, Canadian hydrocarbon production will quickly be filled by other international producers, as will any reductions in Canadian greenhouse gas emissions.

Canadians need to understand comprehensively just what is at stake. Decisions that will determine the future social and economic well-being of the country surely require a balanced, informed debate that builds a coherent national strategy for energy and natural resources. Regrettably, many are increasingly concerned that we eroding the rule of law and political unity within the Canadian federation to a degree that will make objective definitions of the national interest unattainable.

What is certain is that Canadians are faced with the immediate consequence of a significantly altered energy future with a rapidly diminished international investment capital base.

When a federation dissolves into narrow definitions of federal, provincial and local government interests the number of hands in the pot increases the complexity of issues for everyone. Such jurisdictional complexities also expand the amount of time needed to navigate all the interconnected issues through competing jurisdictions that increasingly include First Nations and local governments. The result is a complex, often contradictory and competing web of legislative and regulatory tools whose resolution should not be achieved by continuous references to federal courts. The urgent responsibility for resolving these challenges is with all Canadians, especially its leaders, who may soon be confronted with undesirable economic and social consequences of current actions and decisions.

 

 

 

Saudi oil filling Canada’s largest refinery in New Brunswick – what kind of a domestic energy policy is that?

Saudi oil filling a New Brunswick refinery – what kind of a domestic energy policy is that?

January 25, 20167:57 AM

Terry Etam

http://boereport.com/2016/01/25/saudi-oil-filling-a-new-brunswick-refinery-what-kind-of-an-energy-policy-is-that/

Irving Oil Refinery St John NB

The Irving Oil refinery in Saint John, New Brunswick

A Calgary based oil trader wishing to remain anonymous recently went on record to say that Irving Oil has “fixed the 299,235t Kamakshi Prem to ship crude on January 21 from Ras Tanura, Saudi Arabia to its 300,000 b/d refinery in St. John, NB in Canada.”

Yes you read that right, Canada’s largest refinery, the Irving Oil New Brunswick facility, imports oil from Saudi Arabia. If you study crude trading markets, that news won’t come as much of as surprise since waterborne crude can originate anywhere, but for most of us, it’s a bit of a disconcerting shock. Why does Canada import oil at all, and if we must why from Middle Eastern nations like Saudi Arabia?

Given that eastern Canada imports oil from abroad, it becomes obvious that Canada has a problem. One region of the country produces too much oil, while another imports it from distant and perhaps unreliable jurisdictions. The imbalance is bad news for Canada because locally produced oil is having trouble getting to market due to a lack of pipeline infrastructure, which hurts multiple stakeholders. One solution is Trans Canada’s Energy East pipeline. It would move up to 1.1 million barrels per day of crude from landlocked western regions to eastern Canadian refineries. This would benefit western Canadian producers, eastern refiners, the government – through higher royalties and taxes – and Canada as a whole. Yet the Energy East project is, like any pipeline big enough to make the news, having a lot of trouble getting off the ground.

Opposition to Energy East is an outstanding oddity in Canadian public discourse. The grounds upon which there is opposition are so flimsy as to be nearly surreal. And of course, the overarching objective of the pipeline’s opponents is not to prevent industrial catastrophe, but rather to put a stop to oil sands development (and beyond that, end fossil fuel usage). Keeping that context in mind helps us understand why such disinformation can exist in the first place.

It’s not useful to engage Energy East’s opponents on the terms they choose to debate. Those discussions always tend to lack intellectual substance and play only on our fears, no matter how speculative. The question of whether pipelines are a worthy mode of crude transportation is not worth debating. There are plenty of statistics showing how safe pipeline transportation is relative to other means. It is nonsensical to say that new pipeline construction should be halted because accidents will happen.  It is an insult to the people of Lac Megantic, QC to state, as was the recent case with several Montreal area mayors, that alternative oil transport systems (like crude by rail) are preferable. From an environmental perspective, perhaps a pipeline offloading oil in treacherous conditions in an incredibly sensitive ecosystem would be a concern. But to reverse an existing pipeline and build a new piece that ends at a refinery? Clearly a different situation (Energy East). Yet pipeline opponents make no distinction. Therefore, it is important to not pretend that that is a wise weighing of pros and cons. It is emotional fear-mongering with a different goal in mind.

That goal of course is to end the development of the oil sands. Up until now, development in the region has been comprehensively vilified. Take a look at this example, which claims that the ‘tar sands’ are one of the gravest threats to global warming. The author’s argument is derived from the fact that oil sands development requires more direct energy to extract than other sources of energy. This fact however quickly gets spun into ludicrous headline-grabbing statements about the inevitable catastrophe of developing the resource. For example, the article paints a grim picture of the consequences of “burning all the oil in the oil sands.”

It takes about 30 seconds to refute such nonsense. Oil sands production, even if optimistic projections were attained (but never will be due to the recent capping of oil sands emissions), could theoretically have reached 5 million barrels per day. In the first mentioned scenario, burning all 170 billion barrels of reserves, at 5 million barrels per day this would take…93 years. At today’s production rates you would need to double that time frame, meaning 186 years, give or take a year. To burn all 1.8 trillion barrels at 5 million barrels per day would take 980 years. An engineer in the article gravely points out that this would raise temperatures by 0.4 degrees Celsius. This chap unfortunately forgot to finalize the calculation, so I’ll do it for him – that’s .0004 degrees per year. To build enough solar panels to provide the energy equivalent of 1.8 trillion barrels of oil would have  large environmental impacts as well. But who wants to hear about that.

There are other non-market factors that should be considered as well. If we choose to import oil from Saudi Arabia, then before claiming that it’s cleaner than oil sands’ “dirty oil”, shouldn’t we estimate the total GHG impact of Saudi Arabian oil, which must include the military footprint of safeguarding that oil in the midst of a perpetual war zone? Could someone please show the calculation for how much GHG is emitted by a fighter jet launching air strikes at irritating neighbors, including the chaotic aftermath? What are the CO2 emissions of torched oil wells that will take months to put out? How much GHG is emitted by tanks blowing things up, or by aircraft carriers lurking around the Strait of Hormuz? Well maybe the last is an over-embellishment since aircraft carriers tend to be powered by nuclear energy. Score that one for the environment.

The only logical reason not to build the Energy East pipeline is that the market doesn’t want or need it. And there could possibly be grains of truth to this argument, because the world’s petroleum business generally works quite well when produced oil is freely mobile to go wherever needed. Therefore, Saudi crude making its way to New Brunswick may seem simply like an efficient market at work.

But there’s more to it than that.

Few energy markets are truly efficient, or work without intervention of some kind. Even in the US, crude oil exports were banned for 40 years for political reasons, with exports just resuming a few months ago. Most nations have some sort of energy policy that is driven by how much the country produces relative to how much it needs.

Except Canada. Canada produces far more than it needs. Total Canadian production is about 3.8 million barrels per day, while the country consumes about 2 million barrels per day. Western Canada produces most of the oil and gas (about 95 percent), while eastern Canada consumes most – Ontario and Quebec alone account for over half the nation’s total energy requirements. It is obvious that western Canada needs to move excess energy production, and that eastern Canada needs to import it. We could leave that to the free market to determine, which might mean all eastern Canadian oil would come from any exporting nation no matter how nefarious, or we could maximize the benefit to Canada. To do that requires thinking about how significant our energy resources truly are, to the whole country.

Western Canadian oil has an enormous economic impact on the nation. As Brett Wilson recently pointed out, we are a resource based nation, a function of our huge size, abundant resources, and relatively small population. These resources are important not just to Canadians but the whole world. In Canada, tax dollars from resource extraction goes a long way, including equalization between have and have-not provinces. It is in the nation’s best interests to maximize these resources. With western Canadian oil being landlocked, pipeline access to markets is in the best interests of all Canadians. Enabling Canadian resources to be utilized by other provinces is, from a national governing perspective, about the easiest decision a government should have to make.

TransCanada’s Energy East project would provide Canadian oil to Canadian refineries, and most of the pipeline is built already. All that is  needed are pieces at each end. The project is welcome to New Brunswick in particular, for whom the pipeline will provide economic benefits as well securing a Canadian supply for the Irving refinery. It would also ensure Canadian oil supplies to refineries along the way in eastern Canada, further lessening the need to access foreign oil. Yet despite all of these benefits, Montreal objects to Energy East, calling it dangerous, even as mob-built overpasses fall on their heads and oil sands money finds its way into their daycare centres.

At the end of the day, consuming oil creates pollution. But globally, that is what we do – all of us, even environmentalists – to the tune of 90+ million barrels per day. Oil is produced in various parts of the world, and consumed in others, necessitating massive transportation schemes. Most nations, almost all, act in their self-interest to ensure adequate supplies of reasonably priced energy from reliable sources. And with such prolonged opposition to the Energy East pipeline, Canada, it appears,  wishes to stand defiant of that club.

Regardless of free market oil pricing situations, it is nonsensical for Canada to be importing oil from unstable regions, when proper usage of Canada’s own resources would have multiple benefits to the country. There is no logical reason not to build the Energy East pipeline, and a lot of reasons in its favour.

Mr. Trudeau, you want infrastructure projects that will help the nation. Here is one that is half completed, won’t cost you a dime, is as safe as any other Canadian industrial project, and will benefit multiple diverse regions of the country. What more could you ask for? If you won’t help pay for it, then at least help clear the way.

 

 

 

Wall believes progress made on pipelines, but worried for Energy East

Varcoe: Wall believes progress made on pipelines, but worried for Energy East

CHRIS VARCOE, CALGARY HERALD

Published on: September 22, 2017 | Last Updated: September 22, 2017 8:03 AM MDT

wall ckom

After nearly 10 years at the helm, Premier Brad Wall announced Thursday that he is stepping down and retiring from politics at the Legislative Building in Regina. 

BANFF — As Brad Wall heads into the home stretch serving as Saskatchewan’s 14th premier, he continues to defend Canada’s energy sector, fight Ottawa’s plan for a national carbon price and speak out about the need for new oil pipelines.

Wall, who announced in August he will retire from the job early next year, will speak Friday about energy issues at the Global Business Forum.

Wall spoke Thursday to the Herald about his concerns that pipeline projects such as Energy East are in jeopardy, that the energy debate in the country has become more polarized, and why he feels the need to defend the sector.

Q: Has Canada made any progress on the pipeline front in the past year?

Wall: Some. I do think we’ve made some progress, to be sure. There will be a lot of people that will say, ‘Hey we’ve priced carbon provincially in some places and nationally and so this has finally got the social licence for whatever progress has been made.’

And I categorically disagree with that. For example, next door in British Columbia, we have (the) Trans Mountain (pipeline expansion) and I think there is still doubt that hangs over it because a provincial government has a number of different ways to kind of throw sand in the gears, if they want. So I worry a little bit about that.

Energy East is not in a good spot right now. And Keystone has gone ahead, but that doesn’t have anything to do with policies in our own country … So I’m still worried about this issue of moving energy across the country to tidewater.

Q: Do you believe the dialogue in the last 12 months has become any less polarized?

A: I don’t believe that it has become less polarized … The fact that we now have, in the last 18 months, added an overlay onto the already existing rigorous NEB process for pipelines approval — the overlay and the additional measure being upstream and downstream greenhouse gases — this is a real concern.

We don’t do that to any other industry that needs to move its product across the country. We don’t do that to the car business. And cars are very much a part of the whole greenhouse gas story, not just their usage by Canadian drivers, but how you make (them), the carbon footprint of making them in the first place. And I wouldn’t want to see that.

It might be more so (polarized) because of the policies of the (federal) government …

Q: In the last couple of weeks, we’ve seen TransCanada decide to suspend the regulatory process on Energy East while they determine their next steps. Are you worried Energy East may not be built given what has happened?

A: Yes, I am … The suspension is one (reason). The political timetables across the country … All of those things complicate the matter and I also think the new additions to the regulatory — to the measures that would need regulatory approval — don’t help either, in terms of my optimism for Energy East.

Q: Do you think Kinder Morgan’s Trans Mountain expansion project is going to get built?

A: Any pipeline that has already been approved, I think the chances of it are much greater. And credit the federal government for getting to that point. I maybe reject the rationale that if we only put a price on carbon, that’s why this has happened.

Otherwise, if that were to happen, you’d have more grassroots support in places like British Columbia who would see, ‘Well they priced carbon, so we should all get behind these federal approvals.’

Notwithstanding that, I think there’s greater reason for optimism about those projects certainly than Energy East right now.

Q: You’ve discounted the notion that putting a price on carbon (in Alberta) did help get the Kinder Morgan project approved. Why?

A: Honestly, I think it’s an artificial argument. We’re one country; it’s not like we’re trying to sell to another country who are demanding that we do this, we’re just trying to move it across the country.

And what materially has changed with a brand new tax in Alberta in terms of the environmental rigours we all want to apply to the sector? The environmental sustainability of the different measures within the energy (sector), nothing’s changed ….

I just think this is more about politics for the federal government who desperately want to show that carbon tax, even before it’s implemented, is doing good things …

Q: You’ve been adamant that you think your province can stop national carbon price from coming in and affecting Saskatchewan. What gives you that confidence that you have the legal ability to determine this?

A: We have a level of optimism around (it) — and I’m not going to get into the specifics of why because that will be our case that we make to the courts. But we do have level of optimism that we’ll be able to ensure that the federal government cannot impose a carbon tax.

I think you’ll see us move in the fall with some more specifics around our white paper when we talked about our plan for emissions reduction and hitting targets …

Q: You’re retiring soon. What happens to Brad Wall then?

A: I have no idea. You guys looking for anyone?

 

 

 

Trudeau’s sad legacy: $60-billion in energy infrastructure spending, scuttled on his watch

Trudeau’s sad legacy: Billions in energy infrastructure spending, scuttled on his watch

Claudia Cattaneo: The last time there was so much heavy handed, poorly thought out federal interference was during the failed NEP in the 1980s when Trudeau’s father was in charge

The Financial Post

Claudia Cattaneo

September 8, 2017
6:33 PM EDT

 Trudeau Saskatoon 20170901

Prime Minster Justin Trudeau THE CANADIAN PRESS/Liam Richards

The Northern Gateway pipeline ($7.9 billion), the Pacific Northwest LNG project ($36 billion), and now likely the Energy East pipeline ($15.7 billion) are three privately funded infrastructure projects that would have materially strengthened the economy for decades — and all were scuttled under Prime Minister Justin Trudeau’s watch in the past year.

It’s sad to say, but the last time there was so much heavy handed, poorly thought out federal interference into the energy sector was during the failed National Energy Program in the early 1980s, when Trudeau’s father Pierre was in charge.

The first two projects are gone for good, after frustrated proponents moved on to less-intrusive jurisdictions.

The Energy East project remains in play after proponent TransCanada Corp. said Thursday it would suspend its application for 30 days, however the company suggested it may not build it at all. It’s a reaction to the National Energy Board’s unprecedented decision to widen its study of the project to include the upstream and downstream greenhouse gas impacts of the whole oil industry.

“I believe this was the last straw that broke the camel’s back,” given the many changes already imposed on the project and the $1 billion spent to date, said retired TransCanada executive Dennis McConaghy.

On Friday, the NEB said it has suspended its review of the Energy East and Eastern Mainline projects for 30 days, following the company’s request. During this period, the regulator will not issue further decisions or take further process steps relating to the review of the projects, it said in a statement.

With the 30-day time out, TransCanada may be sending a signal to the federal government to get the NEB to reconsider, and/or to its shippers “that we are closing this thing down and KXL is the last thing out of town,” he said.

TransCanada is waiting for shippers on Keystone XL to recommit after the project was revived by U.S. President Donald Trump, and is also waiting for a route decision by the Nebraska Public Service Commission, the last hurdle before proceeding with construction.

The ball is now in Ottawa’s court to figure out whether the benefits of choking oil and gas development by limiting pipeline construction to meet the Paris agreement greenhouse gas reduction commitments are worth the costs, including continuing harm to the oil and gas sector from Alberta to New Brunswick and to Canada’s reputation as an investment destination.

The blowback Friday suggests many have had enough.

Trudeau should be particularly concerned that Alberta is breaking ranks on Energy East, after making the biggest sacrifice to support his climate change agenda, capping oilsands emissions, accelerating the phase out of coal, and imposing carbon taxes. Clearly, with 100,000 oil and gas workers out of work, Energy East was a step too far even for the left-leaning provincial government.

In a strongly worded statement, Alberta NDP Energy Minister Marg McCuaig-Boyd accused the NEB of “a historic overreach and has potential to impact the future of energy development across Canada.”

“Deciding the merits of a pipeline on downstream emissions is like judging transmission lines based on how its electricity will be used,” she said. “This is not an appropriate issue to include in the review. Additionally, Alberta’s Climate Leadership Plan should satisfy concerns about upstream emissions. Prime Minister Justin Trudeau directly cited this climate plan in his approval of two new pipelines last fall.”

Conservative MP Shannon Stubbs, who shadows natural resources minister Jim Carr, said the Energy East suspension is another hit for workers and their families who depend on energy jobs.

“Throughout the past year, investors have frozen or abandoned Canadian projects and taken all potential jobs with them,” she said. “Uncertainty has pushed capital to south of the border, with less red tape and lower costs. The Liberals’ risky policies are hindering Canadian energy. This is yet another example of how government can literally put oil and gas companies out of business. Minister Carr has commented on this situation, claiming this is a ‘private sector decision.’ But it is actually a direct outcome of Liberal decisions.”

Calgary senator Doug Black, who is also a senior energy lawyer, said the NEB “stumbled” on Energy East and allowed “regulatory creep.”

“I simply do not believe it’s realistic to assess in any meaningful fair way both the upstream and downstream greenhouse gas emissions,” he said. “I don’t know how you do it. I certainly don’t know how you do it fairly.”

Black said there is a real risk that TransCanada will drop the project because it can’t get it done under the NEB’s new rules.

Carr is expected to unveil his government’s final overhaul of the regulatory process, including reforms to the NEB and to environmental assessments, later this fall.

His spokesman, Alexandre Deslongchamps, said in a statement TransCanada’s decision is their own to make.

It’s true that Energy East was once offered an alternative to Keystone XL and that given the oilsands’ investment pullback — due in no small part to Trudeau’s policies — production may not reach the levels once expected.

Yet it’s also true that industry is pursuing many initiatives to reduce its carbon footprint and that the market, not politicians, should have final say on whether to support such a long-term project.

 

 

N.B., Sask. premiers, Alberta minister blast regulator’s handling of Energy East

N.B., Sask. premiers, Alberta minister blast regulator’s handling of Energy East

By The Canadian Press

Sept. 10, 2017, 5:52 p.m

http://www.jwnenergy.com/article/2017/9/nb-sask-premiers-alberta-minister-blast-regulators-handling-energy-east/

alberta energy minister

Alberta energy minister Marg McCuaig-Boyd. Image: Aaron Parker/JWN

 

CALGARY — Canadian politicians whose jurisdictions could benefit from a proposed multibillion-dollar oil pipeline are accusing the country’s energy regulator of creating uncertainty about the future of the proposed project.

TransCanada Corp. (TSX:TRP) put its application to build the $15.7-billion Energy East pipeline on hold last week after the National Energy Board said it would consider indirect greenhouse gas emissions in evaluating the 4,500-kilometre pipeline from Hardisty, Alta., to Saint John, N.B.

Alberta Energy Minister Margaret McCuaig-Boyd said having regulators consider so-called upstream and downstream emissions could cast a chill over the future of energy development.

“Deciding the merits of a pipeline on downstream emissions is like judging transmission lines based on how its electricity will be used,” she said in a statement Friday.

“This is not an appropriate issue to include in the review. We believe it would be a historic overreach and has potential to impact the future of energy development across Canada.”

New Brunswick Premier Brian Gallant said shifting regulatory parameters have created a “lack of clarity” and that the federal government should step in to get the review process back on track.

He noted that without the pipeline, crude is often shipped using less safe means, like over rail, and that much of Eastern Canada relies on imported foreign oil, often from countries with less stringent environmental oversight.

“This pipeline would allow us as a country to reduce our dependency on foreign oil,” Gallant said. “Many of the eastern refineries depend on oil coming from countries from around the world and that certainly is a potential risk in the future to our energy security.”

Saskatchewan Premier Brad Wall said in a written statement that Canada is beginning to move away from rational discourse on pipelines.

“Will the federal government apply the same greenhouse gas emissions test to every sector, including auto manufacturing? Or perhaps this is just about oil and gas?

“Whether people like the oil and gas industry or not, in a general sense, does not matter. Oil will continue to be necessary to our survival and way of life for decades, even as the world transitions to cleaner fuels.”

NEB spokeswoman Sarah Kiley said the board typically considers direct emissions from the construction and operation of a pipeline, such as from pump stations and marine terminal activities.

In this case, she said the board broadened the scope of its review of the Energy East and Eastern Mainline projects due to “increasing public interest” in greenhouse gas emissions and the federal government’s interest in assessing upstream emissions associated with major pipelines.

Kiley said upstream emissions include activities before the oil would reach the pipeline, such as emissions created in producing oil, whereas downstream emissions refer to activities once the oil has left the pipeline like the refining and combustion of the oil.

McCuaig-Boyd said Alberta’s climate plan, cited by Prime Minister Justin Trudeau in his approval of two new pipelines last fall, should satisfy concerns about upstream emissions.

Greenpeace Canada spokesman Keith Stewart said the province’s climate plan doesn’t eliminate the need for such an assessment.

“The oil market has changed since 2013 when Energy East was proposed and we need to recognize that the future is in wind and solar energy powering electric vehicles, not new pipelines or the tar sands mines required to fill them,” he said in an email.

Atlantica Centre for Energy president Colleen Mitchell said the new regulations are redundant, and she questioned whether utilities, rail lines or trucking companies will now be asked to consider the emissions of their cargo or how the electricity is used.

“It is beyond the scope of this or any pipeline project to measure that,” Mitchell said. “This puts a chink in the investment viability of projects in Canada.”

She added that the track record for resurrecting projects that are placed on hold is not promising.

TransCanada filed a letter to the NEB asking for a 30-day suspension for the project so it can study how the NEB’s decision on greenhouse gas emissions will affect “costs, schedules and viability.” The request was accepted in a decision late Friday.

The Calgary-based company is calling the changes to the regulatory process “significant,” and warns that the entire project and related Eastern Mainline pipeline project could be cancelled.

It indicated that it may need to record a writedown of its investment in the project, if it is discontinued.

The project’s cancellation would be a blow to New Brunswick, which expected billions in investment and hundreds of jobs as a result of the pipeline, which would end at Irving Oil’s Saint John refinery.

Saint John Mayor Don Darling said he was “very concerned” about the uncertainty surrounding the proposed pipeline.

“To have these storm clouds hovering over the project is very concerning,” he said. “We certainly would call on the NEB to bring clarity to the process and timelines.”

 

 

 

U.S. Shale vs Oilsands Production Costs – Getting Closer

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