Premier Williams Letter to the Globe and Mail

The following letter was sent to the Globe and Mail by Premier Danny Williams and published in yesterday's paper. Just in case anyone missed it I thought I'd re-publish it here.

Myles

Newfoundland won't be held ransom by big oil companies
DANNY WILLIAMS

Newfoundland and Labrador's economy is growing stronger every day. In the 2005-2006 fiscal year, for the first time in our province's history, we recorded a budget surplus. Our economic turnaround is based on successfully diversifying our economy into several non-traditional industries, including advanced marine and ocean technologies, mining, agrifoods and tourism, to name just a few. And our government is committed to ensuring that we develop a broad economic base that reaps long-terms benefits, with a view to sustaining generations of Newfoundlanders and Labradorians to come.

Our oil and gas industry continues to be an important part of our economy. We currently have three producing oil fields, and the Hebron-Ben Nevis project is the next field on the horizon. Unfortunately, this week talks broke down between our government and the four partners - Exxon Mobil, Chevron, Petro-Canada and Norsk Hydro. It was most unfortunate; however, from our province's perspective, it is not the end of our industry, nor should it be taken as a sign that our government is not investor- or business-friendly. Indeed, nothing could be further from the truth.

Our government is, however, mandated by the people to ensure that we receive improved benefits from our oil and gas resources. In fact, our election policy platform from 2003 clearly states that we will be seeking greater benefits and equity in future projects. To understand our government's perspective, we must consider the vast sums of money that international oil and gas companies are making around the world. For example, the four partners in this potential development earned approximately $54-billion in profits in 2005 alone, with total revenues of more than $592-billion.

All our province is requesting is a small stake in our own resources. We have been in negotiations in good faith for several months now, and this issue has always been on the table. As we move the oil and gas industry forward, we feel it is important for Newfoundland and Labrador to have a stake in its own future and a fair equity stake. This is not unreasonable, and indeed, we feel that having a stake would be something the oil industry should welcome. It means that we share the risks and the rewards. These resources are finite and we, as a province, must be able to achieve greater prosperity for our people. This will help to create new opportunities, and ultimately help us to realize our goal of being self-sufficient and a net contributor to this great federation.

We are not anti-business, and we are not playing "hard ball" with big oil companies just for the sake of doing so. We are simply standing up as a people and asking for a piece of the action. And let's be frank -- the action is substantial.

Companies talk about wanting stable and predictable parameters when negotiating development agreements. I agree, that to an extent, stability is important. But times have changed since many of these fields were discovered. The Hebron field, for example, was discovered more than 25 years ago. And yet, it sits still. Undeveloped. The price of oil today -- and forecasts for the future - make this an attractive and lucrative project.

The demand from companies for a half-a-billion dollars in tax incentives is something our government is simply not willing to contemplate. How can we ask our citizens to continue to bear the burden of high oil prices, and turn to companies making billions of dollars, and give them tax incentives and breaks on fuel prices? It is frankly offensive and something our government will not consider.

Newfoundland and Labrador has been a very good partner for the oil and gas industry. In turn, the oil and gas companies have, for the most part, been good corporate citizens. But as prices continue to rise, and companies continue to take home exorbitant profits, it is reasonable and fair to expect increasing returns for the province.

We want to move forward with this industry in Newfoundland and Labrador in partnership with industry. We are not, however, interested in being held ransom by companies who are unwilling to negotiate fair and reasonable terms.

I would say to those companies that are not interested, to simply move on. Go elsewhere to make your money and leave the development to those companies who are interested in actually moving the industry in our province forward.

We welcome and encourage development in Newfoundland and Labrador. But not at any cost. We may be small in numbers. But we are strong in our determination and in the conviction of our principles. We will turn down what some perceive to be a good deal, rather than do a deal that is bad for the province. The oil is not going anywhere. And neither are we.

Danny Williams is Premier of Newfoundland and Labrador.

Comments, T-Shirts and Fine Dining

Last evening I was sitting down to a big piece of seal flipper pie and (just to tick off as many people as possible) a nice bowl of rabbit soup, when I began thinking long and hard about the Web Talk site. My first thought, and one I’ve expressed before, was that the greatest value of this site is not my commentaries themselves, but the dialogue that results from them. In a nutshell, the site’s success lies squarely at the feet of Web Talk’s readers and contributors.

In this light, I would like to thank all of you for stopping in and reading the commentaries, especially those (on either side of any issue) who have entered the debate and made your views known. My only wish is that more of you out there took the time to share your thoughts.

Although the comments area is very active, my site statistics tell me that on average less than 5% of those visiting actually respond on a topic. Don’t get me wrong, I appreciate the fact that the other 95% are taking the time to stop by, but I ask that when you read something that strikes a chord with you please don’t be shy about getting your two cents in.

Another thought that came to me, while cutting my second piece of pie, was the content contained in the commentaries over last few months. There have been occasions in the past when I have re- published the articles of other writers (with their permission of course). Lately however most of the content has been mine alone. As much as I love hearing myself talk I would also like to hear what you folks have to say.

Some of the people who provide comments at Web Talk have very interesting perspectives on the Newfoundland and Labrador experience, however their ideas are often lost among the sea of comments we receive. There is no shortage of topics to discuss in this province and because your ideas are so important I would like to extend an open offer to all of you.

If you would like to write a commentary, or have an idea that you would like to see discussed on Web Talk, simply contact me directly at higginsmyles@yahoo.cawith the details. Over the next week or so I’ll read your emails and anyone who has an article published, or who provides a topic that forms the basis of a commentary, will receive a FREE Web Talk (pro-sealing) T-Shirt. It’s as simple as that.

Come of folks, this is your site as well as mine.

Before I close I just wanted to bring up a couple of “housekeeping” items.

First, as I said I appreciate all the comments the site receives but unfortunately I am unable to respond directly to as many of them as I’d like. This fact is one unfortunate side effect of the success the site is seeing. Each comment posted comes directly to my inbox however sometimes the volume is such that I can only find the time to review a small number of them before moving on. Again, I apologize for not responding to each of you personally but I’m sure from what I read that both sides of every issue are being addressed.

Secondly, the first supply of seal flippers arrived in St. John’s yesterday morning. For those interested, they are now available for sale downtown on Harbour drive. By the way, there is a great recipe available in our Fishing and Sealing Links that tastes fantastic. Bon Appetite.

Thirdly, if the Costco demonstration goes ahead on Saturday morning (and I believe it will), I hope those people who are in the area will find some time to stop by. If you do, don’t forget to say hello and take a look at our Web Talk (pro-sealing) T-Shirts at the same time. I will have a few shirts available for sale (at cost) if you are interested. The idea is to spread the word, not make money. I wouldn’t want to be accused by anybody, as I have been in the past, of having financial motives for my support of the harvest.

Finally, on a sad note, it was recently announced that the Independent, a local weekly paper, is closing its doors for good. The paper, known for its strong pro-Provincial stand, will be sorely missed by many. Every time we lose a powerful voice like the Independent it is a loss that we all share together. I have had a few opportunities to converse with some of the staff at the Independent in the past, including Managing Editor Ryan Cleary, who's feelings of love for this Province is unquestionable. I wish all of the staff members the best and I hope they find a new and even more powerful voice very soon.

That’s all for now, keep on spreading the word and I hope to see as many of you as possible on Saturday!

Oil Companies and WIlliams Get Tough on Hebron Development

Monday, Chevron Canada, on behalf of itself and its project partners, announced that talks had broken off with the Province of Newfoundland and Labrador regarding development of the Hebron Ben-Nevis oil field off the Province’s coast.

Several companies partnered to develop the potential mega-project including Chevron (28%), ExxonMobil Canada (37.9%), Petro-Canada (23.9%)and Norsk Hydro Canada Oil & Gas Inc. (10.2%)

The companies have been in negotiations with the Province for nearly a year regarding improvements to oil and gas royalties, Provincial involvement in the project and the potential for secondary processing in Newfoundland and Labrador. Premier Williams was quoted several weeks ago saying that he would require movement in at least 2 of the 3 areas in order to allow this project to proceed. According to a Chevron press release the decision to cancel negotiations was made because “significant and fundamental gaps remain on fiscal terms and benefits that would enable the project to proceed in a viable manner.”

Premier Danny Williams, who currently enjoys an unheard of 70% popularity rating in the Province, due in part to his tough “no giveaway” stance on resource development, responded to the announcement by saying that he believed Exxon was holding out and if they wanted to move on he was prepared to take them out of the equation.

On the street in St. John’s today many people are saying that Premier Williams is doing the right thing and he seems to be receiving a great deal of support for holding his ground.

Many in the Province have a long memory for past giveaways such as the Upper Churchill River hydro project, the tying up of Provincial timber rights and a less than stellar Atlantic Accord agreement with Ottawa that saw nearly all benefits from offshore oil leave the Province. Voters also recall the tough battle Premier Williams waged with Paul Martin over that Accord, the benefits of which were clearly seen in the Provincial budget released just last week.

Premier Williams is known as a tough negotiator and many see Hebron Ben-Nevis as a stepping stone to future developments. Much of the talk around water coolers today is in direct support of Williams holding firm. It’s believed that if the Province buckles on these negotiations then it will lose credibility and its ability to play tough on future projects. As one fellow said on the subject today:

“To hell with them, the oil companies are just trying to play hard ball. We own the oil and right now that oil is worth over $65 a barrel. If they want to leave it in the ground they can go for it. At least that way it’ll still be there for my children and grandchildren. I doubt very much though if those guys are really willing to leave that much money in the ground for too long.”

It seems a lot of others in the Province share this sentiment and are squarely behind Premier Williams, meaning this could be a long stand-off, but one most believe will be well worth it in the long run.