04 April 2006

Why Danny wanted Andy...at the offshore board

Since Danny Williams first confirmed that he thought Andy Wells would be the perfect chairman for the federal-provincial board that regulates the offshore industry anyone with half a clue about the board and the industry has been trying to come up with a plausible reason to a simple question:


Turns out that we got it right from the start. Last July, when the story broke one of the scenarios offered up as a possible explanation was that Wells appointment would be part of a plan to push around the oil companies.
1. Wells, who knows little about oil and gas regulation but much about kicking up a stink, would be well positioned to bugger around with the forthcoming Hebron proposal. Wells would be a tag team with the Premier to try and push Chevron around a bit and since both men are of similar minds, there'd be less bickering between the two of them than between them and the oil companies.
There were a bunch of other posts - here, here, here, here and here - all of which pointed out Wells' consummate unsuitability for the position by any ordinary measure. In the meantime, the selection process set out in the Atlantic Accord (1985) turned up a proper candidate. Word on the street has it locally that the matter has gone all the way to the current Prime Minister who has blessed the results of the committee chaired by Newfoundland businessman Harry Steele.

Tapped for the job is Max Ruelokke, a former provincial public servant with the private sector oil and gas experience needed in the regulatory authority.

Anyway, since the Hebron deal collapsed yesterday, Williams has been threatening to legislate ExxonMobil out of the oil patch for refusing to go along with what Danny wanted. Williams' former law partner, outgoing New Democratic Party leader Jack Harris is sounding like the deputy premier lately than anything else. Harris told the local CBC radio drive show this afternoon that Williams was dead on in his overall approach to Hebron and pointed to several sections of the Atlantic Accord implementation acts under which the companies could be forced to develop Hebron.

Flip over to the federal implementation act and you can find section 79, among others which give the Canada-Newfoundland and Labrador Offshore Petroleum Board the power to order a company to produce oil within three years or surrender its license. The same ability is contained in section 78 of the provincial implementation act.

Lawyers and purists will point out the serious practical problems with trying to use these powers when there is no security of supply problem or in a period other than an evident national emergency. There would even be difficulties in having Wells as chairman trying to get the board to issue such an order without the - unlikely - concurrence of the Government of Canada.

None of that is the point. With Andy as chair of the offshore board, the past two days would have seen him filling every available television screen backing Danny with Well's own form of bluster to match Harris' more polished support. Wells' frothing about the evil foreigners pillaging our resources would take some of the political heat from the Premier.

But while negotiations were underway, the Premier could be quietly threatening the oil companies with unleashing Wells if they didn't co-operate. Perhaps Wells himself would be talking up his potential exercise of the offshore board's extra-ordinary powers. Count the number of times today Jack Harris mentioned Hugo Chavez favourably in the same breath as Danny Williams and you get the idea of what might be in some people's minds.

As strange as it might seem to have a Conservative premier and a New Democratic Party leader on the same wavelength, one need only look at Williams populist performance and many of his policies to understand that Williams is not a Conservative in the sense most people would use the term.

Williams is philosophically a Peckfordite, albeit a more refined one. Williams' policy manual reads in many parts like the brian Peckford offshore policy. The demand for an equity position is taken straight from policy in vogue during the 1970s when even ostensibly Conservative governments around the globe supported state ownership of large sections of the economy. In 1980, the Peckford administration passed legislation creating a state-owned energy corporation which would own, by law, 40% of any significant discovery. Williams' policy goals may seem smaller but they are fundamentally aimed at the same objective. No surprise that Peckford's former energy advisor thinks Danny Williams is on the right track.

Putting Andy Wells in charge of the board regulating the province's offshore resources fits with the pattern. It took a while to see what the objective was in pushing Wells for a position he was demonstrably unqualified to win on his own.

In the midst of the Hebron mess, Danny Williams objectives become clearer.