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.