Quebec and Ottawa Near Agreement on Oil Well Straddling NL Border

With a Quebec MP, Christian Paradis, in the role of Federal Natural Resources Minister, it'll be interesting to see the outcome of negotiations between Ottawa and Quebec over the Old Harry oil deposit straddling the Newfoundland and Labrador boundary.

The Canadian Press is reporting that a deal is near but what will this deal mean for the people of Newfoundland and and Labrador?

From the Canadian Press:
Federal government says Old Harry negotiations with Quebec going well

QUEBEC - Federal Natural Resources Minister Christian Paradis says talks with Quebec over a disputed underwater energy deposit in the Gulf of St. Lawrence are progressing.

Paradis says he is hopeful negotiations with his provincial counterpart over the Old Harry reservoir will be completed shortly.

Quebec has tried to secure exclusive rights to the reservoir in the past, but the energy deposit straddles the border of Quebec and Newfoundland and Labrador.

The dispute between the two provinces centres around ownership of the seabed and the territorial divide between Quebec and Newfoundland.

Paradis says negotiations are complex, but that it's important to reach a deal soon because Newfoundland already has an agreement in place with Ottawa.

The reservoir could represent billions of dollars in revenue for the two provinces and has a potential output of two billion barrels of oil and 5,000 billion cubic feet of natural gas.

A company has already started exploring the reservoir thanks to a permit from Newfoundland.

Content Provided By Canadian Press.

Double, Double - Oil and Trouble

The new president of ExxonMobil Canada has announced that the oil giant will be moving its headquarters from Halifax to St. John’s.

While ExxonMobil has maintained its head offices in Halifax for some time, with major production and exploration activity on the East Coast clearly centered on Newfoundland and Labrador the incoming president, Meg O'Neill, has decided to move their base of operations to the St. John's area.

This move is expected to bring with it an increased need for high end office space as well as new employment to the region.
Local industry leaders are applauding the decision and say they look forward to working closely with the new president.

Newfoundland and Labrador Ocean Industries Association (NOIA) chair Jack Lawlor says it’s very good news, “...a great business decision for Exxon.”

Meanwhile, also on the oil front, but on a less positive note, as previously mentioned here on Web Talk, a border dispute between Quebec and Newfoundland and Labrador is once again heating up.

This dispute isn’t about the border between Quebec and Labrador, a provincial boundary never accepted by Quebec in spite of its legal standing. This time the boundary is on the sea.
At the center of the dispute is “Old Harry” a potential oil field in the Gulf of St. Lawrence named after the nearest settlement, the village of Old Harry, 80 kilometers southwest on Quebec's Iles-de-la-Madeleine.

The stakes in this dispute, as they could prove to be for the land based boundary, are huge.
Old Harry is a 29 kilometer long field of undersea hydrocarbons, estimated to hold as much as two billion barrels of oil or five trillion cubic feet of natural gas. Only further exploration drilling will determine whether it the field contains gas, oil or both.

According to earlier exploration results, Old Harry could have twice the potential of the Hibernia oilfield or three times the potential of Nova Scotia's Sable Island gas reserves.

Drilling at Old Harry has been stalled for some time because it is not clear where the undersea border lies between the two provinces and because Quebec, unlike Nova Scotia and Newfoundland and Labrador, does not have an agreement with the federal government, which claims ownership of all undersea gas and oil deposits, even inside provincial boundaries.

Newfoundland and Labrador recently fired a shot across Quebec's bow in a letter from Natural Resources Minister Kathy Dunderdale in response to Nathalie Normandeau, her Quebec counterpart.

Normandeau had asked Dunderdale what measures were planned in light of the April 20 Deepwater Horizon disaster in the Gulf of Mexico.

Dunderdale replied that Newfoundland and Labrador had adopted "new oversight measures," had no plans for a moratorium on offshore drilling. Ms. Dunderdale also
noted Normandeau's reference to a " 'cross-border geological structure,' and making the assumption that Ms. Normandeau was referring to the Old Harry prospect.

In her letter Minister Dunderdale stated, "Please be advised that, apart from the line established pursuant to the 2002 award of the arbitration tribunal concerning the delimitation of portions of the offshore areas between Newfoundland and Labrador and Nova Scotia, the government of Newfoundland and Labrador has never agreed to a line demarcating the boundary of its offshore area in the Gulf of St. Lawrence”.

"I hope this response addresses your concerns."

Ken Morrissey, Minister Dunderdale's press secretary, explained that in Newfoundland and Labrador’s view, "There isn't any existing border now."

Quebec disagrees, sticking to the "Stanfield line," agreed to in 1964 by the four Atlantic premiers, led by then Nova Scotia premier Robert Stanfield, but with Newfoundland premier Joey Smallwood also signing on to the line, which would give most of Old Harry to Quebec.

The 2002 ruling Dunderdale refers to was to delineate the offshore boundary between Newfoundland and Nova Scotia on the Atlantic side, not the Gulf.
But Gerard LaForest, a retired Supreme Court of Canada justice from New Brunswick, who led the 2002 tribunal, ruled the 1964 line was not valid because the provinces did not submit it to the federal government, as required in the constitution.

Normandeau, in Sacramento, Calif., to promote Quebec's hydroelectrical potential, told The Gazette Quebec is sticking to the 1964 line.

"Newfoundland has been telling us for years that they don't recognize the 1964 line," the Quebec minister said, adding that her priority is an agreement with the federal government similar to the 1985 Atlantic Accord, which allowed Newfoundland to develop its offshore potential.

And she wants that agreement with Ottawa to "recognize Quebec's full jurisdiction in theGulf of St. Lawrence."

"The federal government is telling us to go negotiate with Newfoundland and we'll see after," Normandeau said.

"We say no, no no, no. Why would we negotiate with Newfoundland if we think there is no problem with the 1964 boundary?”

"There has never been any question of negotiating with Newfoundland."

Normandeau is counting on Christian Paradis, a Quebecer and the federal natural resources minister, to be in her corner on the talks.

"We want to ensure that we get our fair share in our negotiations with Ottawa," she said.

Meanwhile, time is running out for Corridor Resources, the leaseholder on the field.

The company has had a licence from Quebec to drill in its portion of Old Harry since 1996. Corridor also has drilling rights in Newfoundland that expire in 2013. Faced with that deadline and the lack of an agreement between Quebec and Ottawa, Corridor is planning to drill on the Newfoundland side in 2012.

With excerpts from the Montreal Gazette and VOCM news

Newfoundland and Labrador Takes 10% Stake in Offshore Expansion

"That amount ($10 billion) is actually double the royalties collected by the province from all three projects to date, since 1997," - Premier Danny Williams

Speaking at the Newfoundland and Labrador Offshore Oil and Gas Industries Association Conference in St. John’s on Tuesday Premier Danny Williams announced a long awaited tentative deal with a consortium of industry partners for expansion of the Hibernia South offshore project.

An agreement on the expansion was put on hold by the Province months ago when the government introduced its new energy plan. At the time government requests for clarification on some aspects of the expansion and the lack of an agreed upon royalty regime or equity position for the Province delayed the project.

On Tuesday Premier Williams announced to a packed house at the NOIA conference that a tentative agreement has now been reached that will see the province take a 10% equity stake. Depending on the future price of oil, the equity position, combined with provincial taxes and an enhanced royalty regime is expected to put $10 billion dollars into provincial coffers over the life of the project.

The royalty regime for the extension can top out at 50% once payout is complete and if specific oil pricing conditions are achieved. The final contract is yet to be completed so precise details of what those conditions are or what the province’s 10% equity stake will cost have not been released, though some estimates have put the cost at about $30 million.

The Hibernia South extension is estimated to contain more than 230 million barrels of oil and based on past estimates from within the oil and gas industry in the region those estimates are likely on the conservative side.

According to Premier Williams, "Hibernia South will increase and sustain production from the Hibernia field, preserving employment, while providing a significantly greater royalty return for the province than any previous project."

The Demise of Newfoundland & Labrador - Manufactured Right Here

What do hand soap and bathroom tissue have in common?

Both can be found in the bathroom. They are both considered basic necessities and, as far as I can tell, every scrap of either one used in Newfoundland and Labrador is imported from someplace else.

Why is that?

I mention those two products simply as an example but the same holds true for much of what we consume in Newfoundland and Labrador. For centuries our people have been contented to import almost all of the basic necessities of life while exporting our valuable raw materials elsewhere.

Will this outdated and short sighted practice ever end?

I recently read an article out of Memorial University that was written nearly a decade ago. One passage noted, “Newfoundland continues to import many of the products its people consume while exporting primarily raw materials, a trade imbalance which has served to exacerbate the island's economic troubles.”

I couldn’t have put it better myself.

Before Confederation our biggest trade imbalance was with the United States, afterward it was (and is) with Canada. Only the players have changed, the game remains the same and it’s a one sided game that’s not in our favor.

The reality of 1949 is that many of those who voted for Confederation did so because they hoped for lower prices on imporated products. Very little consideration was given to producing many of those products, and related jobs, right here.

For as long as anyone alive today can recall Newfoundland and Labrador depended primarily on two major exports, fish and forest products. Today Newfoundland and Labrador’s economy isn’t as dependent on the fishery or the forest as it once was but the numbers show that little has changed with the overall picture of where we once were and where we are now.

In 1948 fish and fish products accounted for 40% of Newfoundland and Labrador’s exports, pulp and paper products 32% for a combined total of 72%.

These days (as of 2007 anyway) energy exports accounted for (wait for it) 72% of the Province’s exports.

We’ve traded fish and forests for oil and gas all the while continuing to import the vast majority of our manufactured goods.

Either way you slice it the Province still exports its resources instead of creating value added products for the local and export markets.

It seems we’d rather ship off our raw materials instead of creating a genuinely diversified economy through manufacturing right here.

Even after centuries of economic turmoil we've yet to learn the lesson that ending our narrow minded practice of exporting all raw materials and instead increasing our manufacturing capability will help us become a more economically stable place to live.

Increased manufacturing and local purchasing would eventually improve our export values, decreasing our import costs and create much needed employment. Something that might be quite helpful in an area accustomed to double digit unemployment.

The fishing and pulp & paper industry are now mere shadows of what they once were in Newfoundland and Labrador. Eventually the same will happen to the oil, gas and mining industries.

Unlike Fish and forests (both currently mismanaged) oil and minerals are non-renewable. Once they’re gone they’re gone. When that happens, as it surely must, gone as well is the last of the work in Newfoundland and Labrador. Gone as well are the exports and the Province’s revenues. Newfoundland and Labrador will cease to exist in any relevent way.

Why, after 500 years have we not learned from our past?

Why do we continue to depend on others to manufacture the goods we depend upon instead of supporting, encouraging and facilitating the development of local goods through our purchasing power and with provincial incentives?

Until the public demands more locally produced products at their favorite stores nothing will ever change.

Make no mistake, the Wallmart’s and Sobey’s of the world don’t give a damn about where they buy their products as long as their customers keep coming back. They also don't care who they sell them to and won’t hesitate to pull up stakes and move elsewhere when the resources and money run out.

The way I look at it, a simple bar of soap may not be as glamorous or as lucrative as high seas oil development but after a hard days work on the rigs I defy anyone to tell me it isn’t worth producing.

Let’s Be Honest for Once

George Washington is remembered to have said, “I cannot tell a lie.” Since then no politician has been able to make the same claim without being guilty of telling one.

These days truth itself should be placed on an endangered species list.

It’s gotten to the point where the truth is coming under a constant attack from all sides.

Today its truth, not lies, that have become something to be avoided at all costs and it’s no longer just politicians who have a monopoly on the practice, we’ve all gotten into the act.

With that in mind Web Talk is proud, well at least mildly pleased, to present a hastily compiled:

Top 10 list of (politically incorrect) Comments You Won’t Find in the National Papers

Or

10 Rants For the Price of One

10 – I feel for Ontarians who are losing their jobs. Being from Newfoundland and Labrador I can sympathize with their plight and wish them the best. Having said that, I wouldn’t be human if some small part of me, deep in the back of my mind, didn’t feel like shouting the following from the roof tops:

“If Ontarians are really suffering from rising unemployment why don’t they stop their incessant whining about wanting more EI and do what they’ve been telling Newfoundlanders and Labradorians to do for decades, suck it up and move someplace where they can find a job. The rest of us can’t be expected to keep Ontarians living in a place where there’s no work so pack up and move on. By the way Ontario, your unemployment rate is still only about half of what it is in Newfoundland and Labrador so slag off.”

But I won’t say it. I really do care about the individuals being hurt in this recession, including in Ontario and I hope they work their way through this.

9 – North Atlantic Harp seals are not endangered. North Atlantic Harp seals are highly efficient and effective carnivores with big sharp ugly teeth. They are not cuddly little “ice bunnies”.

Activists say seals are not hunted for food so they shouldn’t be hunted at all. In reality it was anti-sealing activists who lobbied to destroy a once profitable market for seal meat and are now using the lack of one as an excuse to ban the hunt.

The seal herd is thriving, the meat tastes great (yes it’s still eaten across Newfoundland and Labrador) and the furs are warmer, softer and more beautiful than anything else you’ll ever wear.

Thanks to their screwed up view of the world animal rights activists will cause far more damage to the seals, the fish stocks those seals depend upon and the entire ecosystem in the region than the annual seal hunt ever did.

By the way, for anyone interested I’ve got a great seal flipper pie recipe I can send you, just let me know and I’ll get it right out to you.

8 – Yes the Alberta oil sands are without any shadow of a doubt a messy and destructive environmental catastrophe.

They are destroying the air, land and water, but droning on and on in a vain attempt to force oil companies into cutting emissions in an effort to meet Kyoto targets is the environmental equivalent of the misguided anti-sealing movement.

Those companies cannot and will not meet those targets without running themselves out of business and that isn’t going to happen. It would take a shutdown or at least a major scale down of most oil sands activity in order to meet those targets and simply put, neither Canada nor the U.S. can afford to do that no matter what it might mean for the environment.

Enough is enough. It’s time to tell the Kyoto zealots to go to hell (as should have been done with the seal protestors), find a sensible way to manage the problem, cut the grandstanding on all sides of the political arena and reach a compromise on this issue that will do the least harm to everyone and everything involved. If not then forget about it and move on.

7 – The future of Canada means absolutely nothing to Stephen Harper who is a right wing, egomaniacal, hillbilly, educated beyond his intelligence level. He is a man who would gladly sell his soul and those of his children, if he hasn’t done so already, for the one thing he craves above all else, absolute power and control.

Canada’s future also means nothing to Michael Ignatieff, who is a thinly veiled American decked out in Canadian clothing. A man who wants nothing more than to add the title “Canadian Prime Minister” to his scholarly C.V. so he can demand more for his book sales in the future.

Jack Layton, well, enough said about Jack. No point in kicking a dead horse, especially with so many animal rights activists around these days. It’s getting so you can’t swing a dead cat (or a live one) without hitting one of them.

6 – Stephen Harper claims to be defending Canada’s territory, as well as Newfoundland and Labrador interests, by not accepting a French claim for extended offshore territory. His position is pure and unadulterated crap.

All St. Pierre – Miquelon is looking for is a means to survive its economic challenges by extending its existing 200 mile corridor (away from Canada) to the edge of the Continental Shelf. This is no more or less than Canada itself plans to do under the U.N. Law of the Sea.

The small French islands should have a right to an extension of that little strip of territory and France is correct to demand it. Otherwise the islands will effectively be trapped inside Canadian waters with no free access to the open ocean once Canada makes its claim to an extended economic zone.

No matter what the Prime Minister says, this has nothing to do with protecting Canadian sovereignty or NL’s interests. It has everything to do with lucrative oil potential in the region.

5 – The Quebecois culture is no more distinct than that of Newfoundlanders & Labradorians. Period.

4 – Contrary to popular belief, Quebec is not benefiting from a one sided contract to purchase Churchill Falls power.

Neither Quebec nor Newfoundland and Labrador ever actually signed a legal contract.

Quebec committed fraud by using insider information and blackmail to get the signatures it wanted. Quebec has committed a criminal act and has been stealing billions of dollars from the people of Newfoundland and Labrador for decades. What’s more they’ve been doing it with the tacit acceptance of successive Federal and Newfoundland & Labrador governments, both of which refuse to take any decisive or clear action.

Personally I’d love to see the Province throw the damn switch at the generating station and turn off the lights right across the so called “Quebec Nation”.

3 – Canada is not a Country. It’s a group of individual provinces financially controlled, oppressed and blackmailed into subservience by a corrupt central regime.

Thanks to the lopsided political power wielded by Ontario and Quebec, Canada is nothing more than an excuse for ensuring the advancement of those two jurisdictions (upper and lower Canada) regardless of what that might mean for the rest of the population.

Calling Canada a real Country is an insult to honesty and intelligence on an epic scale.

2 – Brian Mulroney is corrupt and he is without a doubt guilty of all sorts of immoral if not illegal acts. Everybody knows it but nobody really gives a crap so let’s enjoy the death of his legacy, not to mention his squirming on the hot seat, and then move on.

1 - We are told that we have freedom of speech but that’s one of the most widely accepted lies out there.

Show me someone who has expressed their frustration at the political system by simply “saying” they would “like to see” something blown up and I’ll show you a person either under federal surveillance or actually in custody.

In fact, even this article has been self edited. Just try making a public statement about Brian Mulroney, as I did in the previous section, without qualifying it with a phrase like “if not illegal acts” and see how quickly you end up being sued.

Even if you forget the legal or civil methods of stifling our freedom of speech, the docile acceptance of so called political correctness we all subscribe to has done more to quiet the masses than any law ever could. Everyone is so afraid of being ostracized by their friends, neighbors and co-workers for being politically incorrect that nobody really says what’s on their mind anymore.

This top-ten list may not be as funny as some others but the truth seldom is.

In an effort to help fight censorship and political correctness Web Talk will, on occasion, tackle this subject just as it has today. Feel free to add your two cents but please remember, as much as it sucks, for our own protection even Web Talk must adhere to the same anti-free speech edicts as everyone else, so act accordingly (but don’t hesitate to push the envelope).

Canada-France Dispute Leaves Two Cultures Caught in the Middle

In a letter sent to Premier Danny Williams this week, Prime Minister Stephen Harper said Canada does not recognize France’s claim to a larger area of seabed around St. Pierre-Miquelon.

Harper informed the Premier that he has conveyed his position to French President Sarkozy, saying the maritime boundary between Canada and the French territory was settled in June 1992 after a decision by the International Court of Arbitration.

The reason for Mr. Harper’s letter is a French claim to the United Nations seeking an expanded economic zone that would allow them greater access to offshore resources.

Xavier Bowring, a member of a citizens group in St. Pierre says they are seeking a “new economic arrangement with Canada. We don’t want a war with Canada. We only want discussions, so we can have a piece of the resource — a piece of the pie.”

Like Newfoundland and Labrador itself the tiny French islands, with just 6000 residents, was hard hit by the 1992 cod moratorium but while their economy continues to flounder and die, the local residents — many of whom come from mixed St-Pierre-Newfoundland families — have watched Newfoundland and Labrador’s economy grow through offshore oil revenue.

St. Pierre-Miquelon’s offshore rights are confined to a small slice of territory just 2.5 miles wide and 200 long —— known locally as “the baguette.” An area that allows for very limited access to potential resources.

Islanders want either an enlarged French economic zone in which to exploit petroleum resources, or at least the right to share with Canada revenues from undersea natural gas finds that span across the tiny strip of seabed they have been allotted.

“Six thousand people cannot hurt the economy of Canada.”

“We don’t need much to live here and be in good economic health. We only want co-management of the resources around us — not simply those inside that ridiculous little baguette. Otherwise we won’t have a future here. This is our last chance.”

While some people in Newfoundland and Labrador may choose to view Stephen Harper’s letter to Premier Williams is a long overdue show of support for Newfoundland and Labrador my perspective on the subject is a different one completely.

The Harper government, in fact the Canadian government itself regardless of party stripe, could care less for the people of Newfoundland and Labrador. It’s the resources, not the people, that matter. It’s always been that way and it always will.

Make no mistake. The government of Canada isn’t taking a stand with France because they want to protect potential resource developments for the good of Newfoundland and Labrador but because of the benefits Canada itself reaps from those resources.

Newfoundland and Labrador, unfortunately in the view of some federal MPs, just happens to be in the area from which those petro-dollars flow.

I believe most Newfoundlanders and Labradorians can fully understand and empathize with the plight the residents St. Pierre-Miquelon are facing. After all, the tiny area is a small island community (two islands actually), that have been largely dependent on the Atlantic cod fishery for centuries and are controlled by a Country that only recognizes them as an afterthought, if at all. This situation is nothing new to Newfoundlanders and Labradorians to be sure.

For a myriad of reasons it’s actually too bad the seabed itself and the resources within them are controlled in Ottawa rather than in St. John’s. The St. Pierre-Miquelon situation simply being another one of those reasons.

This is not to say that the Provincial government would or should be willing to cede rights to those resources any more than Ottawa would but at least with Newfoundland and Labrador leading the discussion there might be more room for open dialogue and perhaps even a livable compromise between the two closely linked peoples who know and understand each other far, far better than Ottawa understands either of them, even the ones within its own borders.

Final Agreement on 2 New NL Oil Projects Near

At the annual meeting of the Newfoundland and Labrador Oil Industries Association (NOIA) on Tuesday Premier Danny Williams told those in attendance that he's hopeful a deal for development of the Hibernia South oil field will be reached by the end of the year and he that expects to see a final contract on the larger Hebron oil development within a matter of weeks.

"We are moving closer, day by day, to signing that deal," Williams said.

"Both sides are working vigorously to conclude what has been an intense yet productive — and I mean very productive — negotiating process".

"I am fully confident that we will have positive news on that front in the very near future."

The Hebron oil development was a point of major disputes between industry partners and the Newfoundland and Labrador government just over a year ago when Williams informed the partners that his government wanted an equity stake and a richer royalty regime. After months of silence the oil companies returned to the table and, after agreeing to many of William's terms, last August a memorandum of understanding was signed. According to Williams, the final step in the process, before the project begins is now in the offing.

There had been rumors circulating for several days that the Premier would announce a final deal on the Hebron project during his address today but the Premier down played those rumors late last week by saying that he had indeed been shooting for this date but had no intention of rushing the details of the contract in order to accomodate it.

Both Hibernia South, estimated to contain 223 million barrels of oil and the Hebron field, estimated at around 750 million barrels, are long awaited developments that, when combined with the existing operations at the main Hibernia platform, White Rose and Terra Nova are expected to provide a major boost to Newfoundland and Labrador's already growing economy.

After Premier Williams' speech Glenn Scott, president of ExxonMobil Canada, a partner in both the Hebron and Hibernia projects, said, "I think we're all aligned and, you know, with everyone aligned and working as hard as they can, I think it's going to move quite quickly".