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Thursday, April 06, 2006

Globe and Mail Misses the Point Once Again.

St. John's, Newfoundland and Labrador

I really have to laugh at the commentators who churn out their usual drivel over at Canada’s supposed national newspaper, the Globe and Mail. Have these guys ever taken a trip any more than a few hundred yards from Bay Street?

The latest “we know best” articles come from columnists Jeffrey Simpson and Deborah Yedlin and talk about the breakdown of oil development talks in Newfoundland and Labrador. I don't mind anyone having a point of view, but those two commentaries are nothing more than thinly veiled attempts to plead the case of U.S. oil interests while insulting the intelligence of the people in Newfoundland and Labrador, including their Premier.

The Globe and Mail perspective is that oil reserves off the coast of Newfoundland (existing and yet to be discovered) are a mere pittance to the oil giants and as such Premier Williams should be careful how he treats them. Perhaps the existing hundreds of millions of available reserves and potential for billions more aren’t the biggest plays on the planet right now, but with world oil demands skyrocketing and oil at over $65 dollars a barrel they're nothing to sneeze at either. I wonder if the great minds at the Globe even considered the value to companies like Exxon of being able to access such supplies in a stable geo-political environment like Canada, rather than some terrorist hotbed? Likely they didn’t but that fact alone is worth a lot.

They question why Mr. Williams would want a 5% stake in the project (actually it was 4.9 but who’s counting). According to Jeffrey Simpson a stake that small wouldn’t provide the Province with a controlling interest or any real power. He’s right of course but nobody ever said the Province wanted that. What it does want though, and something the 4.9% would help provide, is a revenue stake that could potentially see millions extra enter Provincial coffers. Who wouldn’t want that?

Simpson in his wisdom goes on to say, and I quote:

“Mr. Williams also wanted a refinery built in Newfoundland, but Hebron would not have produced enough itself to warrant a refinery. With so much capacity elsewhere in North America, it would have been a stretch to build another refinery in a continent where there haven't been new refineries for a long time.”

Partly correct again Mr. Simpson. The other side of that coin is what many analysts are blaming for the astronomically high oil prices we are experiencing. Yes, there hasn’t been a refinery built for quite some time and that has led to a very limited refining capacity. Add to this the proximity of Newfoundland to European markets and the fact that it isn't prone to sort of natural catastrophe's we see on the Gulf Coast and there is a case to be made for construction. Just in case you missed basic math in school here’s a little algebra equation for you:

Low refining capacity in hig risk areas + High volume of demand for petroleum = X (where X is a dollar value).

The biggest laugh in all of this came in Deborah Yedlin’s article when she almost religously invoked the name of Stephen Harper no less than 8 times and almost dropped to her knees praying that he would talk some sense into Danny Williams while in the Province this week. In her plea Yedlin says:

"This week's federal Throne Speech made reference to the U.S. being Canada's "best friend" and largest trading partner. If this is truly how Mr. Harper and the Conservative government view Canada's relationship with the U.S., it follows that Mr. Harper can't be too happy about Mr. Williams' posturing this week on Hebron, which is being developed by a consortium that includes two U.S. oil giants.”

I have to wonder, is Ms. Yedlin working for a U.S. national paper or a Canadian pseudo-national paper. She really should make up her mind.

Ms. Yedlin then said, “If Mr. Williams had taken the time to speak to a few of the energy executives that were in attendance at the weekend's convention (referring to the PC convention in Alberta), he would have found out that there is a constructive way of getting an equity interest in a project, whether it's being acquired by a private company or a government.” Which she followed by condescendingly outlining her recommendations for a negotiating stance the Premier should adopt.

My only comment on such a poor attempt at coercion is that I doubt anyone actually believes Premier Williams passed up an opportunity to speak with energy executives at that meeting. I doubt too that he failed to speak with the head of Newfoundland and Labrador Hydro during negotiations on the oil field in question. By the way, for your enlightenment Ms Yedlin, NL Hydro has a Provincial mandate to build NL’s oil and gas industries. It is headed up by a former Petro Canada executive, Ed Martin, who is likely much more experience in the industry than you are.

In the case of both articles it was clear that the mandate of the paper was to promote oil industry interests and belittle provincial ones. Each commentary ended with a sort of “doomsday” scenario where the Province pushed the “poor” oil companies way too far and were thus left with nothing.

Here’s a reality check for the columnists and editors alike at the Globe and Mail, or as it’s known in Atlantic Canada, the “Mop and Pail”. The oil companies may indeed go away but the people of Newfoundland and Labrador aren’t going anywhere, even if you want us too. We’ve had lean times and we’ve had good times but one thing we never plan to have again are times of giveaway.

To the paper's credit one article did mention the fact that Premier Williams enjoys the support of between 70% and 80% of the population in the Province. What they neglected to mention was that there is a valid reason for that level of support. When it comes to trading away our future for a few quick bucks we all agree, that era is over, and as long as Mr. Williams acts with that reality in mind his popularity will continue.

If the oil sits in the ground for another hundred years our children’s grandchildren will reap the benefits. The only real question is if the oil executives would rather pay the ask at today’s $65 oil or if they’d rather pay the ask a hundred years from now. You do the math.

16 comments:

NL-ExPatriate said...

It isn't the end all be all that they would have us believe. IMHO there is enough activity going on out there right now anyway. Not that I would be oppposed to developing the Hebron if we got what we asked for which in this case doesn't seem to be an exorbidant amount 4.9%.
Mr Williams even gave them the option of two out of three asks to choose from
a provincial equity stake in the oilfield,
a better royalty regime and
a petrochemical processing plant in the province.
http://www.thepacket.ca/index.cfm?iid=1114&sid=7585

Boycott ESSO AKA EXXON/Mobile

Gonna have to sign onto that GM site uggh.

Glenn in GP said...

I will boycott the Esso and Petro-Canada here in Grande Prairie, even though the aeroplan miles I accumulate help subsidize the family summer vacation back to NL. I will also be getting in touch with the local radio station here who are extremely pro-NL, probably 5000 NL's here in GP alone.

Also would like to mention that the President, or dictator, of Venezuela has taken over two oil fields from foreign investors. Maybe Exxon Mobil may reconsider now. Don't forget the Talisman Energy fiasco in the Sudan/Nigeria a few years ago. Oil companies want stability more than anything, uncertainty leads to fluctuations both upwards and downwards.

Even here in Alberta there is a push to get even more royalty money from the oil and gas companies, especially when gas today is 103.9 a litre at the pump. Keep up the good fight and don't be wavered by the opinions of the grope and flail.

Glenn

Patriot said...

Apparently the 4.9 wasn't the back breaker for this deal. It was the fact that the oil giants wanted a $500 million dollar tax break. Can you imagine? Here they are making double digit billions in profit, NL only wants a small slice (probably no more than 2 billion over the life of project including royalties and hte 4.9% stake) and these guys in essence want about 25% of that back up front.

Nice guys huh? I guess to the Mop and Pail crowd in Ottawa that sounds like a great deal.

Patriot said...

Just a note:

As a comment to the letter by Danny Williams I noted that I planned to publish one more article on sealing tomorrow (I also apologized to many of our regular readers for putting so much emphasis on that one subject lately). I've since re-thought it and decided that I've done enough on this site with regard to sealing lately and since the battle is obviously turning in our favour I won't be publishing that piece here.

If anyone wishes to read the article they will most likely find it on the Canada Free Press site either tomorrow or over the weekend. I will let those good folks handle that particular article and once again start focusing on other issues.

Thanks again for the patience and keep the comments coming.

no longer proud said...

Keep in mind that many in Ontario despise NL and would love to see us fail with our offshore oil industry, thus making it easier for the feds to rape our resources for their benefit. Think about this... Ontario is desperate for new hydroelectric power, the Lower Churchill is just waiting to be developed, if NL makes big $$$ on oil we can develop the LC ourselves leaving Ontario at our mercy... It's to their benefit that we not do well with the offshore.

To quote my mother from yesterday; "Ontario is like a goddamn tumor sucking the life out of the rest of the country... Cut off the blood supply and let it die."

God bless Mom. :)

Anonymous said...

If the oil sits in the ground for another hundred years, the oil age will have passed it by and it won't be worth a tenth as much as it is now.

NL-ExPatriate said...

UR full of crap Annoy-nomous!
I thought of that as well but gas isn't the only thing that is made from OIL every thing is made from oil and gas byproducts nowwa days. Plastic, rubber, Heather Mills boots LOL.
And I don't see tractor trailers and airplanes running on anything other than petroleum based fuels anytime in the near future.
British Colombia will be the richest province in Canada when and if they ever allow the development of their offshore oil and gas.

HarbourPilot said...

Something the G + M wimps didn't consider (as far as the refinery is concerned) is the SECURITY aspect ...

Our friends in the U.S. are very 'Homeland Security' anxious right now. One fundamental of military deployment is that you don't bunch all your assets in one spot.

Dispersement is one way of reducing the risk for refineries, considered as potential terrorist targets.

And by the way, Patriot : kiss your Mom for me (re: her Ontario tumour wisecrack!)

Anonymous said...

Now Gerry Reid is trying a fear mongering tactic on our own people. I heard him saying that he was worried that the oil companies might pull up stakes on the existing oil projects over Hebron talks.

Does this guy have a brain or not?

Anyone who believes the oil companies will sacrifice their investments in Hibernia and other projects plus the money they are making there, just to show some spite must be a lunatic.

I can't believe an elected MHA is using this type of bullshit scare tactic just to score political points.

Kilbride said...

Good comments Anon
One more reason never to even think about electing a provincial Liberal government. Their short sightedness is blinding.

FedUpBC said...

The oil isn't yours. Its ours. It doesn't belong to Newfoundland. It belongs to Canada.

Why we've given negotiating power to this corrupt socialite pseudo-politician is beyond me.

It's time for Harper to do what's best for all of us, bend Williams over his knee and spank his useless Newfie ass, then cut the deal and get the rigs out there.

I don't deserve to pay higher prices at the pump just because a provincial whore elected by morons decides to the Rock's Charlemagne.

no longer proud said...

Maybe if we'd been treated as equal since '49 we'd be more inclined to call it 'Canada's oil' as opposed to 'NL's oil', but over the past 57 years doing what's been 'best for Canada' usually translated as 'worst for NL', so you'll pardon me when I say... UP YOURS!


Here's to hoping Harper's policy of decreasing Ottawa's role in provincial affairs leads to increased regionalism and interprovincial hostilities and the eventual dissolution of this piss-poor excuse of a country called Canada... CHEERS!

FedUpBC said...

When you joined the federation, you entered into a marriage. That marriage means that what's yours is ours and what's ours is yours.

And you think you haven't been treated equal? We're paying welfare to half your god damn province. We subsidize and underwrite every half assed makework program any body can think of to try and get something out of you. You're right, this isn't a marriage. Its an adoption, we're the parents and the child we brought home turned out to be a crack-baby.

You want to say up ours? Fine. Let's see Harper follow through on his decentralization by cutting useless Newfies off from the welfare teet you've been sucking on since you joined up.

I don't care what the deal is - just make the deal, rig the oil and bring this to a close before we all start driving those crappy little hybrids.

no longer proud said...

Yes, god bless you f*cking mainlanders for 'taking us in'... Why don't you go bitch to Alberta for a cut of their oil and give us a chance to get on our feet economically??? Oh, yeah... 'Cuz if it wasn't for keeping NL in a comprimised position all these years, you wouldn't have been able to exploit OUR resources for YOUR benefit and have a steady supply of 'white niggers' (pardon the term, but it fits the situation) to do the jobs that you people 'up along' don't want to do.

If it hadn't been for the fact that England sold us out to pay off their war-debt to Canada after WWII we'd all be better off. Unfortunately, Canada was aware of more of our resources than just the fishery when nobody else was, and in true Canadian bastard fashion, kept their mouths shut so that they'd be the ones to benefit from them. I'm sure if England had been aware of the iron ore deposits in Labrador, potential hydro power on the Churchill river, and the offshore oil reserves, etc, they'd have never let us go.

But whatever the alternate outcome may have been, the fact remains that Canada screwed NL for their benefit, and after 57 years we've had enough. You don't like it that we're finally demanding our rightful share of the pie? Too damned bad! F*ck you and your kind... If bloodshed is necessary to get out of this shithole, I'll gladly meet you on the frontline.

Don't f*ck with the troops, shithead.

Anonymous said...

From the VOCM website:

"Premier Danny Williams is planning to turn the heat up on Prime Minister Harper tomorrow to give the province the legal tools to expropriate oil fields that remains undeveloped for too long, including Exxon Mobil's take in the Hebron. Williams wants to implement a so-called ``fallow field'' law by the end of the year, but it needs to be done in conjunction with Ottawa. Williams says under the legislation, the province could force the sale of oil fields that have been sitting dormant for more than 20 years..."

Anonymous said...

Boycott Exxon.
Boycott Costco.

Must be the Newfoundland way.

Spare me.