22 October 2009

Big Oil’s New L’il Buddies and helicopter safety

While the offshore helicopter safety inquiry has given some people a platform for their false statements about search and rescue again, let’s try a scenario that is based on facts and reasonable suppositions. 

Let’s suppose, for example, that after the whole thing is over, former Supreme Court Judge Robert Wells makes some recommendations that – in the opinion of the offshore oil companies – would adversely affect the projects. 

Let’s take the Hebron project as a typical one.

Adverse affect might be cost in this case. 

For example, let’s suppose that Wells decides that – despite the very best and most intense lobbying by everyone from Jack Harris to lawyer Randall Earle – the cost burden for providing search and rescue for the offshore in St. John’s should still be borne by the oil companies.

Let’s suppose that Big Oil’s L’il Buddies fail miserably in their efforts to shift the cost to taxpayers.  Let’s imagine that – contrary to the campaign being waged -  Wells requires that the companies continue to provide SAR support for their own employees and their own helicopters. 

And let’s imagine Wells decides to up the ante arguing that they should do it 24/7.

All of that is either established fact (there is such a campaign underway, even if it is hodge-podge and disorganized) or is a likely outcome of the inquiry.

And further, let’s suppose the oil companies find that – for a whole bunch of arguable reasons – that cost is just too much to bear. 

Maybe oil prices have dropped down again to levels far below the current US$80 a barrel.  And hey, it’s not like oil prices will go up and up and up forever.

So there’s our scenario.

What does the provincial government do?

Well, the provincial cabinet would likely find themselves bound by section 5.1 of the Hebron financial agreements:

The Province shall, on the request of the Proponents…support the efforts of the Proponents in responding to any future legislative and regulatory changes that may be proposed by Canada or a municipal government in the Province that might adversely affect any Development Project, provided such action does not negatively impact the Province or require the Province to take any legislative or regulatory action respecting municipalities.

And before you start arguing that opposing the SAR regulation “negatively impact the Province”, you are really not reading carefully enough.  When the word “province” is written with a capital “P” it means the Government of the place.

So since the provincial government as such would not be negatively affected, they wouldn’t have the one and only ground that applies on which they could slip out from under their legally binding obligation to back Big Oil.

Of course, the provincial government is also really an oil company these days.  Therefore it would liable for the cost of providing those helicopters for SAR.  It  would be in the provincial government’s interest to work with the other oil companies against the Wells safety recommendation anyway. 

If money is really tight - after all  - and these extra costs threaten the Lower Churchill project too, there might be lots of reasons for the provincial government/oil company to fight such a recommendation.

This inquiry might turn out to be very interesting after all. 


And we can expect the lobbying effort that benefits Big Oil – Jack Harris is a witness in the schedule, for example – to intensify over the next few weeks.