Tag Archives: Oil and gas

Canada Oil And Gas Industry: Shrinking Profits May Be A Sign Of Things To Come

July 28, 2012Energy and Resources, Oil&GasOil and gasCommon Sense Canadian

Read this article by Daniel Tencer in Huffington Post about the effect of declining energy prices on Canada’s oil and gas industry. Excerpt: “‘If oil prices get to a point where they are going to deter investment in the [energy] sector, the negatives outweigh the benefits,’ TD Bank economist Diana Petramala told the Globe.

“That scenario — unthinkable just a few years ago — may be exactly what Canada’s natural resource sector may be facing. And it’s not just a temporary blip in prices Canada is facing — it may be a permanent and revolutionary shift in energy extraction that makes Canada’s oil sands far less desirable than they seemed until now.”

Cross-Border Deals with Alberta Undermine Clark’s Tougher Stance on Enbridge

July 26, 2012Canada, Energy and Resources, Oil&Gas, Pipelines and Supertankers, Politics, Western CanadaBC Oil Pipelines and Supertankers, Christy Clark, Enbridge, Oil and gas, PoliticsKevin Logan

Christy Clark claims she will stop the proposed Enbridge Northern Gateway Pipeline, despite existing agreements of her government’s own making, exposing British Columbia to millions in penalties.

“Well it stops right here then,” blares the unelected Premier’s quote in Tuesday’s Globe and Mail under the provocative headline “Premiers quarrel over resource revenue threatens to scuttle pipeline.”

Christy goes into more detail in the Vancouver Sun: “If Alberta doesn’t decide they want to sit down and engage, the project stops. It’s as simple as that,’ she goes on when asked what she can do about it. Clark said the province needs to issue about 60 permits for it to go ahead, and BC Hydro needs to provide power.”

Clark and her minions see the writing on the wall and its not good – they have decided to start standing up to Albertans and showing them who’s boss. That’s the ticket – British Columbians will love that, or at least that is what her most recent communications adviser must believe.

Clark, renowned “communicator” after her politically strategic stint in radio, has failed to connect with British Columbians and just last month she traded in Harper’s communications hacks for Gordon Campbell’s old spin doctor. That was her third shuffle in communications staff during her short reign. She is desperate and this new positioning on Enbridge reflects it.

She is so desperate it seems she is taking late night calls from Mike Klassan, co-founder of the City Caucus website, who foreshadowed precisely what we are seeing Clark do today when he wrote this advice way back in May:

As her government enters the final year of its mandate, Christy Clark must take bold steps on the energy file. The kind of deal that most British Columbians wish for is within her grasp, if she so chooses.

Clark must invite Prime Minister Stephen Harper, Alberta Premier Alison Redford, Saskatchewan Premier Brad Wall and representatives of Canada’s petroleum industry sector to tour Burrard Inlet to see first-hand what is at stake for B.C. There could be no better backdrop than our pristine coastline for this conversation.

In order to stabilize the access to markets, British Columbia must be an equal partner. Premier Clark should therefore propose a Western Petroleum Export Accord that sees a fair share of oil industry profits invested in B.C.

Make no mistake, Monday’s media charade and subsequent political positioning was not a result of anything new as Environment Minister Terry Lake claimed, nor is it due to the “Keystone Kops” stunning incompetence, resulting in a half a billion more dollars in new safety cash from Enbridge. It is, rather, pure politics and the right has been working overtime for many months trying to pull their electoral fortunes out of the fire.

The oil and gas agenda under the BC Liberals has been a stealth agenda, and they are so far out ahead of the public dialogue and processes that convincing British Columbians they somehow have a say or any influence is a real challenge, even for Christy. Her claims in light of Alberta’s refusal to negotiate are hollow and risky. Here are just three of many reasons why:

1) TILMA / NWPTA

The original TILMA (Trade, Investment and Labour Mobility Agreement) deal between BC and Alberta was eagerly ushered in by the BC Liberals, who even invoked closure to end debate and railroad it through, despite cries of protest from all corners. The agreement dictates that any impediments at any level of government that works to restrict the free flow of trade deals will result in serious penalties. Clark cannot suggest she was not aware of this because since she started steering the Liberal’s sinking ship she has appointed 5 people to TILMA boards who would mete out such penalties.

TILMA was the predecessor to the NWPTA (New West Partnership Trade Agreement), which was also boosted by the Liberals as imperative to the development of Western Canada into an economic powerhouse. And that does not mean we needed agreements to get Alberta beef flowing – it was all about oil and gas. Christy suggests her government can halt the project by restricting power and permits, which would result in penalties as high as 5 million dollars as outlined in this agreement

Moreover under Chrisy’s leadership, the New West Partnership Agreement resulted in a bricks-and-mortar office in Shanghai, strange because it’s not called the New West and East Asia Agreement, but that is what Clark turned it into. This NWPTA Shanghai office is supposed to be up and running this year. Seems a bit odd to stop projects this far evolved with so much already invested and with risk of such stiff penalties while alienating her new friends in Shanghai. Redford gently reminded Christy of this fact when she stated publicly, “We’ve worked very hard through our New West Partnership to ensure free trade across the BC/Alberta/Saskatchewan borders and the shared economic rewards have been great for our citizens. Leadership is not about dividing Canadians and pitting one province against another—leadership is about working together.”

2) Equivalency Agreement

Just as the ink was dry on the NWPTA, ensuring Alberta no impediment in trade deals that required access and right-of-way through British Columbia, another agreement was immediately pursued by the BC Liberals, the details of which I have previously written about in these pages. This deal forfeits British Columbia’s capacity to influence and/or assess the Enbridge pipeline project specifically, along with three other major projects. I guess the NWPTA was not enough to provide certainty to oilmen, therefore another agreement was required that clearly spelled out that BC has no say in these infrastructure projects.

The deal was done in stealth fashion while the Liberals were receiving awards and recognition from prominent enviro’ish activists for their “clean energy” agenda, and while the Premier was secretly arranging another off-the-record meeting after having been tapped by the Bilderberg group to attend their stealthy confab. And just like we never heard anything about sending our premier off to meet with the richest most powerful people on earth, we did not hear anything about his party’s agenda to usher in the oil and gas era at the expense of our environment, economy and sovereignty.

3) Jurisdictional wrangling

When it comes to these “heavy oil pipelines”, the jurisdictional wrangling has been treated like a hot potato during a game of musical chairs. And when the music stops Clark will be left standing with a spud in her hand. It’s a bit confusing to say the least. Which of course is by design. This is what Trillions of dollars – with a “T” – does to grownups. Obfuscation is the order of the day. Regardless of who anybody thinks is ultimately responsible, the facts are the two agreements above tie the hands of British Columbians and Chisty is simply orchestrating a media charade designed to make her appear as if she has some backbone and is taking on the world’s most powerful forces on behalf of British Columbians. Which of course is pure poppycock. It’s all politics – an illusion – designed to forward the aggressive oily agenda and somehow salvage Christy’s quickly crashing political career.

So thorough was the work of this Liberal government ensuring the legal and administrative stage was set for the oil and gas agenda, upon becoming leader of the opposition, Adrian Dix ( a renowned policy wonk and one of the sharpest minds in the pointy buildings) was unable to get his head around how the work could be undone. Dix was forced to appoint a team of lawyers to gain insight into how we might actually regain any ability whatsoever to make decisions about what happens on our land and with our coast or how we might wrestle back a modicum of control over our future.

The key to avoiding penalties under the TILMA/NWPA is to revoke the Equivalency Agreement. I have written about here and here and others such as Robyn Allan have brought to the Premier’s attention. I suspect the legal team will have more to say about that, but for now it is simply stunning that Clark would threaten Alberta and these economic development projects while leaving BC exposed to such stiff penalties, all simply to salvage her political career.

Keystone Kops

July 24, 2012Energy and Resources, Oil&Gas, Pipelines and SupertankersBC Oil Pipelines and Supertankers, Enbridge, Oil and gasRay Grigg

A “Keystone Kops” fiasco is the expression used by Debbie Hersman, Chairperson of the US National Transportation Safety Board (NTSB), to describe “Enbridge’s poor handling” of their huge oil spill in Michigan’s Kalamazoo River on July 10, 2010. Indeed, the whole matter would have been a comedy of errors had the spill been something innocuous. It wasn’t. It was more than 3 million litres of “dilbit”, a thick goo from Alberta’s tar sands diluted with solvent to make it fluid enough to move through pipelines.

Enbridge handled the spill like true comedians, a routine they had apparently been perfecting since 2004. In that year, they detected corrosion in the pipe that eventually burst but “took advantage” of lax regulations and failed to do repairs. In 2005, they identified 1.3 metres of cracking in the same area but again neglected repairs — when profit is more important than safety, why repair what isn’t yet broken?
When the pipe did rupture on July 10th, a full 17 hours and 19 minutes lapsed before they shut off the oil. This time delay represented three shifts of employees, none of whom seemed to pay attention to the alarms — unbelievably, they pumped additional oil into the pipeline twice to compensate for the drop in pressure. Even then, it took someone from a natural gas company to advise them they had oil gushing into the Kalamazoo River.

The senior vice president of operations at Enbridge, Leon Zupan, testified to the NTSB, “[W]e had people that were really trying hard to do what they thought was the right thing, but they needed more technical support, they needed more management support, they needed more technical training, and they needed to be clear about what our expectations were in terms of following procedure…. [I]t’s clear to us we could have done more to train and support those people.” Obviously, no one had a clue about what they were doing. Enbridge’s clean-up costs on the Kalamazoo River are currently at more than $800 million.
And this is the company that wants to build the 1,172 km Northern Gateway pipeline from Alberta to BC’s coast, through some of the most remote, wild and difficult terrain on the planet.

Enbridge’s competence in promoting oil pipelines, however, may far exceed their ability to prevent spills. Their warm and reassuring advertisements are peppering the media with images of pristine scenes of wilderness just waiting to be made useful by corporate kindness. “Where energy meets nature” is one comforting theme. For anyone worried about the effect a pipeline might have on nature, Enbridge makes the lavish promise that, “We will plant a tree for every tree we remove.” And for anyone dubious about such lofty intentions, Enbridge is quick to remind the doubtful reader that, “It’s a bold promise,” they boast, “but one that will play an integral role for our company into the future.” And if that doesn’t convert the cynic, be assured that, “It’s commitments like this that will help ensure that future generations continue to enjoy our natural spaces.”

But Robyn Allan, a noted Canadian economist, in her analysis of Enbridge’s Northern Gateway project, has some insights that deserve serious consideration. The environmental damage from inevitable spills is self-evident. The damning report by the NTSB on Michigan’s Kalamazoo River spill highlights Enbridge’s systemic ineptitude and cavalier attitude about safety. And, in an earlier analysis, Allan concluded that the Northern Gateway project will shift Western Canada’s oil pricing structure from the lower West Texas Intermediate to the higher world market Brent structure, adding $2-3 to the cost of each barrel of oil. But Allan recently identified a less obvious example of corporate cunning.

The Northern Gateway project, she contends, is designed as a separate corporate entity to be entirely independent of Enbridge. As such, Enbridge would not be responsible for any environmental damage accruing from a Northern Gateway pipeline spill. Unlike the Kalamazoo spill, in which the wealthy corporate body of Enbridge must assume liability for the damage, the cost of the damage from a Northern Gateway spill would be limited by the assets of only that single legal entity. It has no value beyond itself. If Northern Gateway causes a spill and is shut down because of safety concerns, its value disappears, and its ability to make restitution evaporates like the solvent in the oily goop that would be despoiling BC’s wilderness.

If Allan’s analysis of this corporate structure is correct, then Enbridge is a bit smarter than the “Keystone Kops” and BC has yet another reason to doubt the wisdom of allowing the construction of the Northern Gateway pipeline.

Vaughn Palmer on Christy Clark’s Secret Discussions with Alberta Premier on Enbridge

July 23, 2012Canada, Energy and Resources, Oil&Gas, Pipelines and Supertankers, Politics, Tar Sands, Western CanadaAlberta Tar Sands, BC Oil Pipelines and Supertankers, Enbridge, Oil and gas, PoliticsCommon Sense Canadian

Read this column from Vaughn Palmer, suggesting the revelation of a secret visit BC Premier Christy Clark paid to her Alberta counterpart Alison Redford on the Enbridge pipeline reinforces her reputation for indecisiveness. Clark’s “fence-sitting” on the proposed Enbridge pipeline has been “incredibly frustrating”, says Redford. (July 20, 2012)

VICTORIA – For a premier who promised that openness would be one of the watchwords of her administration, Christy Clark cannot have been happy with the front-page story in the Edmonton Journal Friday.

“Why the need for secrecy?” asked the headline atop a piece by columnist Graham Thomson on Clark’s unannounced visit to Alberta Premier Alison Redford to discuss the running controversy over the proposed Enbridge Northern Gateway oil pipeline.

The details were embarrassing enough. Clark’s office asking Redford to keep the visit secret. The B.C. premier ducking in and out of a side door to avoid the cameras. The bait-and-switch ruse with two SUVs to throw reporters off the track.

But while Clark was avoiding the media Thursday, Redford volunteered an account of the meeting that was far from flattering to her visitor from B.C. The Alberta premier professed a reluctance to put words into Clark’s mouth even as she proceeded to do just that.

“She feels right now … a fair amount of pressure to be making comment with respect to this,” said Redford, referencing the pipeline. “A lot of what I think she wanted to chat about today was her ongoing concern as the premier of B.C. with respect to what’s going on with Enbridge and what her thinking is about that. She wants to make sure that she’s holding them to some pretty strict environmental standards.”

Not content to provide a summary of her B.C. counterpart’s concerns — consultations with first nations and making sure there were stringent protocols to deal with spills — Redford then proceeded to offer some “if I were in her shoes” advice.

“I would be trying to set in place a set of conditions that from my perspective would allow the project to go ahead but that would work with industry, not just Enbridge but other companies that are looking at pipelines in B.C., to try to come up with a framework that makes sense to let that investment come into the province. And I think she’s sorting that out.”

Redford framed her disappointment with Clark — “it’s incredibly frustrating to me” — as having arisen out of the B.C. government’s continued fence-sitting on the pipeline. But I have to think those frustrations were also conditioned by Clark’s recent critical comments about Enbridge.

For Clark is sounding increasingly hostile to the proposal, a point that she reinforced in an interview this week with Jason Fekete of Postmedia News: “Based on what we know now, I don’t think British Columbians think the balance of risks and benefits is an acceptable one.”

Read column: http://www.vancouversun.com/news/Palmer+Premier+secret+visit+reinforces+reputation+being+indecisive/6967687/story.html

CTV Video: Harper’s Environment Minister Says Support for Enbridge Unchanged in Wake of Scathing US Report

July 23, 2012Canada, Energy and Resources, Oil&Gas, Pipelines and Supertankers, Politics, Western CanadaBC Oil Pipelines and Supertankers, Enbridge, Oil and gas, Politics, Stephen HarperCommon Sense Canadian

Check out this video news story from CTV on the Harper Government’s decision to ignore the damning report out of the US on Enbridge’s poor pipeline safety record. Environment Minister Peter Kent maintains his government’s support for the Enbridge Northern Gateway Pipeline is unchanged as the company is roundly criticized for is disastrous spill into the Kalamazoo River in 2012 – even though he acknowledges he hasn’t read the report in question. (July 18)

VANCOUVER — A scathing report out of the United States that criticized just about every aspect of Enbridge Inc.’s response to a pipeline spill in Michigan won’t change the Canadian government’s support for the company’s proposed Northern Gateway project, the federal environment minister said.

A report by U.S. investigators released last week concluded Enbridge (TSX:ENB) bungled its response when millions of litres of oil began to pour in and around the Kalamazoo River in July 2010, comparing the company’s handling of the spill to the “Keystone Kops.”

The report has provided fuel for critics of Enbridge’s proposed Northern Gateway project, which would carry crude oil along 1,170 kilometres of pipeline from Alberta to British Columbia’s coast. Even B.C.’s premier has demanded answers.

But the report won’t change the opinion of the federal Conservative government, which has hailed the Northern Gateway pipeline as important for the country, said Environment Minister Peter Kent.

“Pipelines are still, by far, the safest way to transport petrochemicals in any form,” Kent said in an interview Wednesday.

Kent said he had yet to read the U.S. National Transportation Safety Board report.

Watch video: http://bc.ctvnews.ca/scathing-u-s-report-won-t-affect-pipeline-position-kent-1.884499

Rafe: Clark has BC Behaving Like a Prostitute on Enbridge, Only Dickering Over Price

July 22, 2012Canada, Energy and Resources, Oil&Gas, Pipelines and Supertankers, Politics, Western CanadaBC Oil Pipelines and Supertankers, Christy Clark, Enbridge, Oil and gas, Politics, rafe mairRafe Mair

I wonder how many of you have come away from making a speech – perhaps the toast to the bride, being presented an award or perhaps just an after dinner speech and said to yourself, “damn … I should have said etc., etc.? I must admit that I’ve often felt that way and, even worse, I suppose, I’ve said to myself, what an idiot I was to say that!

In my recent blog on The Common Sense Canadian, I wrote about Premier Clark’s slow turnaround on the Enbridge pipeline case and in a moment I’ll tell you what I should have added.

The inadequacies of Clark’s leadership are exposed once more; she cannot bring herself to talk about the tanker traffic in the Inside Passage from Kitimat – or the close to 400 tankers a year through Vancouver harbour and the Salish Sea through the Straits of Juan de Fuca that would result from the proposed Kinder Morgan pipeline expansion. Clearly the tanker issue must be dealt with at the same time as Enbridge since, as the song says, “You can’t have one without the other.”

Clearly, Premier Clark just doesn’t have the courage to have a position on the issue as a whole.

It is not as if this was a complex issue. We know by Enbridge’s own admission that we will have spills from pipelines and common sense and statistics tell us that there will be tanker spills.

In the face of these certainties, Premier Clark is talking about insufficient financial benefits, on the assumption that money will compensate us for huge, ongoing tragedies over the 1,100 km of the pipeline and tanker spills – in short, our very soul is at stake and Clark is talking money.

Here comes the line I should have used…Premier Clark reminds me of the story where a man asks a lady if she will go to bed with him for $100,000 and she hems and haws, speaks of her needy children and, with apparent reluctance agrees.

The man then asks, “Will you then go to bed with me for $100?”

The lady is outraged and asks, “What do you think I am, a common prostitute?”

“We’ve already established that, ma’am,” says the man. “Now we’re dickering over the price.”

Thus the missing line: Premier Clark has declared British Columbia to be a common prostitute and is now ready to dicker.

Rafe Responds to Liberals’ Shifting Position on Enbridge: Clark Still Missing the Mark

July 21, 2012Canada, Energy and Resources, Oil&Gas, Pipelines and Supertankers, Politics, Western CanadaBC Oil Pipelines and Supertankers, Christy Clark, Enbridge, Oil and gas, Politics, rafe mairRafe Mair

I would be delighted to report that Premier Clark’s recent musings about the proposed Enbridge pipeline were a positive step but unfortunately must report that she misses the point – badly.

Her position evidently is that BC is not benefiting sufficiently from the pipeline.

The first and fatal flaw is that she doesn’t include tanker traffic, for if Enbridge goes through it must be accompanied by tanker traffic or the whole exercise is pointless.

The second and also fatal flaw is that the Premier puts the argument in monetary terms. Enbridge itself admits that it will have leaks in the same way an airplane company will have crashes. This is the critical point, for to say we’re not getting enough money from Enbridge says that we’re OK with a spill here and there as long as we’re adequately compensated. This will result in Enbridge, the government of Alberta and Ottawa coming up with a compensation package suitable to the Clark government.

Let’s remember three things: there will be spills, they will be in places no clean-up crew can reach, and there is no way bitumen, freed from the condensate which allows it to be piped, can be cleaned up anyway.

Never mind the terrible response by Enbridge to its Kalamazoo spill – the message there is that clean-up, even in a readily accessible location, can never happen. To that gloomy fact, add the admission by Enbridge and remember that there will be many spills over the years and, because cleanup is impossible, we will have more and more of our wilderness destroyed. We’ll be looking at Enbridge, a serial polluter, with the only questions being when and how bad.

I, for one, care about our land and the ecologies it supports, such that to me money doesn’t even enter the discussion.

What Premier Clark is doing is looking for a price for our wilderness and I say that this is irrelevant – no price is enough.

NHL Hall of Famer Mike Richter Speaks Out Against Enbridge

July 19, 2012Energy and Resources, Oil&Gas, Pipelines and SupertankersBC Oil Pipelines and Supertankers, Enbridge, Oil and gas, VideoCommon Sense Canadian

Check out this new 3 min video from Pacific Wild and Damien Gillis, featuring NHL Hall of Fame goaltender Mike Richter sharing his once-in-a-lifetime experience in Canada’s Great Bear Rainforest – threatened by the proposed Enbridge Northern Gateway Pipeline and supertankers. The video is the first in a new series titled, “Voices for an Oil-Free Coast”

NDP Leader Mulcair Sounding Like Progressive Conservatives on Oil Policy

July 19, 2012Canada, Energy and Resources, Oil&Gas, Politics, Tar SandsAlberta Tar Sands, Oil and gas, Politics, Thomas MulcairCommon Sense Canadian

Read this editorial by Don Braid in the Calgary Herald remarking on the similarities between Federal NDP and Official Opposition Leader Thomas Mulcair’s position Canadian oil policy and more traditional Progressive Conservatives like former Alberta Premier Peter Lougheed. (July 13, 2012)

CALGARY — Watching NDP Leader Thomas Mulcair at work here in Stampede city, you might expect a few similar politicians to spring to mind. (Maybe Lenin? Strictly for the beard, of course, not the ideology.)

The ones who occur to me most readily, though, are Alberta conservatives, because they’ve often sounded so much like the federal NDP leader when he talks about the energy industry.

Peter Lougheed, for instance.

Only last fall the revered ex-premier came out against the Keystone XL Pipeline, saying it would ship jobs out of Alberta.

“We should be refining the bitumen in Alberta and we should make it public policy in the province,” Lougheed said. “That would be a better thing to do than merely send the raw bitumen down the pipeline and they refine it in Texas. That means thousands of new jobs in Texas.”

Mulcair made much the same pitch Thursday, but for the whole country, not just Alberta.

He said he wants more refineries built to create jobs. He favours reversing pipelines to ship oil eastward. He opposed closing a Shell refinery in Montreal because he wants western oil refined there.

Lougheed would surely blow his venerated stack if I push this parallel too far; and to be sure, there are differences.

Lougheed always opposed Ottawa’s efforts to force Alberta to “ship jobs down the pipeline to Sarnia.”

In the days before free trade, the debate over jobs and oil revenues was purely internal. That has faded with new markets and the immense revenues they generate.

But today Thomas Mulcair and Peter Lougheed clearly agree on the folly of sending vast quantities of oil abroad.

Next, Mulcair sounded very much like former Premier Ed Stelmach.

One of Ed’s favourite lines was: “I’ve always said shipping raw bitumen out of our province is comparable to selling the topsoil on a farm.”

Stelmach created the Bitumen Royalty in Kind program, which allows energy companies to pay their royalties to government in black goo rather than cash. Ultimately, the government’s bitumen is used as feedstock to supply new upgraders on favourable terms.

It was a good idea that has not yet been a grand success.

‘Some Risks Are Not Worth Taking’ – Campaign Launched to Take on Kinder Morgan

July 18, 2012Energy and Resources, Oil&Gas, Pipelines and SupertankersBC Oil Pipelines and Supertankers, KinderMorgan, Oil and gas, VideoDamien Gillis

The first in a series of new public service announcement videos (see below) from Tanker Free BC – a Vancouver-based organization taking on US energy giant Kinder Morgan’s proposal to twin the Trans Mountain Pipeline to Burnaby – is being launched today. The one-minute video, titled “Some Risks Are Not Worth Taking”, was produced through the volunteer contributions of a group of communications and film industry professionals opposed the plan to bring 400 supertankers a year filled with Tar Sands bitumen to South Coast waters.

I was privileged to be a part of the production, as one of the video’s producers and a board member of Tanker Free BC.

The campaign to draw attention to tanker traffic in Vancouver has recently heated up with the release of the “Oil Spills and Vancouver’s Stanley Park” report by the Wilderness Committee and Tanker Free BC at the first in a series of local town hall meetings. This video launch complements the growing buzz surrounding this important issue.

The video asks viewers to consider the risks posed by the almost one million barrels of tar sands crude oil that would be passing Vancouver’s beaches daily if Kinder Morgan’s expansion plans are approved. Tanker Free BC Campaign Director Sven Biggs said “people all around the inlet are not only standing up to say, no, I’m not okay with that, they are ready to do something about it.”

I look forward to working with this group on future projects for Tanker Free BC; we are already working on the follow-up to this first project as we work to raise awareness about this vital issue.