The thing runs 1300 pages and contains 80 recommendations, according to early media reports.
Just on that basis alone it appears to be well worth the wait.
-srbp-
04 June 2007
Wow! Green delivers whopper.
Forget anything said or heard before at Bond Papers on Chief Justice Derek Green's report on legislative indemnities.
The thing runs 1300 pages and contains 80 recommendations, according to early media reports.
Just on that basis alone it appears to be well worth the wait.
The thing runs 1300 pages and contains 80 recommendations, according to early media reports.
Just on that basis alone it appears to be well worth the wait.
03 June 2007
New Hydro Corp; same problem
While legislation creating a new Crown-owned energy corporation and a new version of Newfoundland and Labrador Hydro were announced last week with the words that "energy investments in non-regulated activities will not affect electricity rates", a closer look at the legislation shows the problem will still exist.
Bond Papers noted last May that changes made to existing legislation at that time created the potential that residents of the province would pay for government's energy policy through electricity rates.
Specifically, Bond Papers pointed out the interaction of two specific changes. First, changes to the Hydro Corporation Act not only allowed Hydro to invest in oil and gas projects but also provided that Hydro may undertake any other activity approved by cabinet. Second, a change to section 24 of the Electrical Power Control Act exempted Hydro from the restriction that, as a utility company, it could only be involved in electricity generation and power delivery.
The new Hydro-electric Corporation Act includes the same fundamental problem. While the oil and gas portions of the existing statute are removed, section 5(2) establishes that
Given that the provincial government is now creating a new energy corporation to take on the non-regulated activities of its energy program, there is no apparent reason to give Hydro the power to engage in any activities other than electricity generation and distribution.
Two new bills in front of the House of Assembly re-organize the Hydro corporation and create a new energy corporation. However, the fundamental problem identified by Bond Papers last May - namely non-electricity investments affecting electricity rates still remains. The current administration may not intend to implement changes to the Electrical Power Control Act enacted last year. However, leaving the legal authority to do so on the statute books may create an unnecessary temptation on some future date.
Bond Papers noted last May that changes made to existing legislation at that time created the potential that residents of the province would pay for government's energy policy through electricity rates.
Specifically, Bond Papers pointed out the interaction of two specific changes. First, changes to the Hydro Corporation Act not only allowed Hydro to invest in oil and gas projects but also provided that Hydro may undertake any other activity approved by cabinet. Second, a change to section 24 of the Electrical Power Control Act exempted Hydro from the restriction that, as a utility company, it could only be involved in electricity generation and power delivery.
The new Hydro-electric Corporation Act includes the same fundamental problem. While the oil and gas portions of the existing statute are removed, section 5(2) establishes that
Notwithstanding subsection (1), the corporation may engage in those other activities that the Lieutenant-Governor in Council may approve.There are no changes to the Electrical Power Control Act. While the 2006 amendment that exempts Hydro from that section of the Act is not in force, it would merely a simple administrative procedure for the section to take effect.
Given that the provincial government is now creating a new energy corporation to take on the non-regulated activities of its energy program, there is no apparent reason to give Hydro the power to engage in any activities other than electricity generation and distribution.
Two new bills in front of the House of Assembly re-organize the Hydro corporation and create a new energy corporation. However, the fundamental problem identified by Bond Papers last May - namely non-electricity investments affecting electricity rates still remains. The current administration may not intend to implement changes to the Electrical Power Control Act enacted last year. However, leaving the legal authority to do so on the statute books may create an unnecessary temptation on some future date.
-srbp-
Being Cassandra
Professor Michael Enachescu has taken some considerable umbrage at the post "Pollyanna Dunderdale 2", specifically for the remarks that began the commentary. At his request, his first reaction is contained in a comment at the end of that post.
Fair enough.
At the outset, let's make it clear that the comments were not meant in anyway to question Professor Enachescu's competence as a geoscientist or his knowledge of the oil and gas industry locally or globally.
Rather, the CBC story linked in the original post and the interview [ram file] connected to it seemed to be exceedingly optimistic in dealing with the prospect of exploration returning to Labrador because four parcels offshore Labrador had been offered for bids in the most recent land sale by the offshore regulatory board.
In the interview Professor Enachescu said that we "have to be very cautious" in projecting what will occur offshore Labrador since exploration must come first. That's considerably different than the implication of the comment used by CBC in the online story. Professor Enachescu did not take issue with the quote so let's work on the basis that the comment was accurately quoted.
On the point about exploration and development, Professor Enachescu is absolutely correct: exploration will determine what if any resources are available. That knowledge must come before any development.
In the interview, he also described the potential of the parcels up for bids containing at least as much in the way of natural gas, natural gas liquids and oil as the existing significant discoveries at North Bjarni, Bjarni and Gudrid.
If that turns out to be the case, there would be a total of around eight trillion cubic feet of natural gas in the area.
Put another way, the natural gas available for development in the area would be about double the amount of gas in the Snohvit field currently being developed in the Barents Sea. Ted Howell noted Snohvit as an example of an offshore gas field located well offshore in a harsh environment. Mr. Howell pointed out that a number of factors have changed to attract the first interest in exploring offshore Labrador in two decades.
That is not really the issue, however.
Rather, the point of the two posts on the land parcels was that other factors may well see the four parcels going without bids.
The most significant factor would be the provincial royalty and benefits regime. The gas royalty regime - the one directly relevant to the Labrador parcels - has yet to be revealed. One of the reasons bids will close on those parcels in August 2008 may well be to give time for companies to assess the impact of that regime.
If the regime increases the costs of development beyond the point at which companies are willing to invest, then the parcels will lay fallow. Alternately, if the regime is one thing but the provincial government reserves the right to add costs, then the parcels may sit fallow because the financial environment is too uncertain in comparison to other places. Exploration investment in those cases will go elsewhere.
Companies may still take up the parcels. As noted in the earlier post, they may decide that the potential resources in the parcel would justify the risk and whatever royalty and benefits regime the province imposes. Companies may also decide that no matter what the royalty regime occurs, the long lead times involved - nine years to complete exploration and whatever time after that to develop any significant discovery found - may well give further opportunity to change the provincial royalty regime.
Look ahead to 2020. The existing offshore oil fields will be drawing down. The provincial government will be faxing increased costs owing to the impact of demographics. In the absence of any significant new offshore development, the financial pressures on a provincial government a decade and more hence may well cause that future government to amend whatever royalty regime is announced this year.
Exploration indeed must precede development. But, if we look at the issues potentially affecting private sector interest in the fields, it is much too early to determine whether we will even get to exploration in the first place.
The other possible interest in those fields, as noted in the earlier post, may be from the province's new energy corporation. That's the second possible reason for the long time bids will be open. As we learned last week, the province's new energy corporation will be running by early in the New Year. Exploration costs are well within the financial means of the energy corporation and the long lead time on this bid process would allow the new energy corporation seven months to sort out any interest it has in acquiring exploration rights.
Once again, though, there are simply too many unknowns to project with any accuracy what will happen with those parcels. We may have a better idea the closer we get to August and of course we will know with certainty on August 2.
In any event, and as much as we might wish it were otherwise, it is far too soon to be discussing the return of oil and gas exploration to the Labrador shelf. It is tempting to be optimistic - particularly in the wake of Hebron and Hibernia South - but experience with the local offshore over 25 years ( and including those two spectacular setbacks) should give us all an abundance of prudence and caution when it comes to projecting what will occur.
Fair enough.
At the outset, let's make it clear that the comments were not meant in anyway to question Professor Enachescu's competence as a geoscientist or his knowledge of the oil and gas industry locally or globally.
Rather, the CBC story linked in the original post and the interview [ram file] connected to it seemed to be exceedingly optimistic in dealing with the prospect of exploration returning to Labrador because four parcels offshore Labrador had been offered for bids in the most recent land sale by the offshore regulatory board.
In the interview Professor Enachescu said that we "have to be very cautious" in projecting what will occur offshore Labrador since exploration must come first. That's considerably different than the implication of the comment used by CBC in the online story. Professor Enachescu did not take issue with the quote so let's work on the basis that the comment was accurately quoted.
On the point about exploration and development, Professor Enachescu is absolutely correct: exploration will determine what if any resources are available. That knowledge must come before any development.
In the interview, he also described the potential of the parcels up for bids containing at least as much in the way of natural gas, natural gas liquids and oil as the existing significant discoveries at North Bjarni, Bjarni and Gudrid.
If that turns out to be the case, there would be a total of around eight trillion cubic feet of natural gas in the area.
Put another way, the natural gas available for development in the area would be about double the amount of gas in the Snohvit field currently being developed in the Barents Sea. Ted Howell noted Snohvit as an example of an offshore gas field located well offshore in a harsh environment. Mr. Howell pointed out that a number of factors have changed to attract the first interest in exploring offshore Labrador in two decades.
That is not really the issue, however.
Rather, the point of the two posts on the land parcels was that other factors may well see the four parcels going without bids.
The most significant factor would be the provincial royalty and benefits regime. The gas royalty regime - the one directly relevant to the Labrador parcels - has yet to be revealed. One of the reasons bids will close on those parcels in August 2008 may well be to give time for companies to assess the impact of that regime.
If the regime increases the costs of development beyond the point at which companies are willing to invest, then the parcels will lay fallow. Alternately, if the regime is one thing but the provincial government reserves the right to add costs, then the parcels may sit fallow because the financial environment is too uncertain in comparison to other places. Exploration investment in those cases will go elsewhere.
Companies may still take up the parcels. As noted in the earlier post, they may decide that the potential resources in the parcel would justify the risk and whatever royalty and benefits regime the province imposes. Companies may also decide that no matter what the royalty regime occurs, the long lead times involved - nine years to complete exploration and whatever time after that to develop any significant discovery found - may well give further opportunity to change the provincial royalty regime.
Look ahead to 2020. The existing offshore oil fields will be drawing down. The provincial government will be faxing increased costs owing to the impact of demographics. In the absence of any significant new offshore development, the financial pressures on a provincial government a decade and more hence may well cause that future government to amend whatever royalty regime is announced this year.
Exploration indeed must precede development. But, if we look at the issues potentially affecting private sector interest in the fields, it is much too early to determine whether we will even get to exploration in the first place.
The other possible interest in those fields, as noted in the earlier post, may be from the province's new energy corporation. That's the second possible reason for the long time bids will be open. As we learned last week, the province's new energy corporation will be running by early in the New Year. Exploration costs are well within the financial means of the energy corporation and the long lead time on this bid process would allow the new energy corporation seven months to sort out any interest it has in acquiring exploration rights.
Once again, though, there are simply too many unknowns to project with any accuracy what will happen with those parcels. We may have a better idea the closer we get to August and of course we will know with certainty on August 2.
In any event, and as much as we might wish it were otherwise, it is far too soon to be discussing the return of oil and gas exploration to the Labrador shelf. It is tempting to be optimistic - particularly in the wake of Hebron and Hibernia South - but experience with the local offshore over 25 years ( and including those two spectacular setbacks) should give us all an abundance of prudence and caution when it comes to projecting what will occur.
-srbp-
Your drain on bugs
For the third time in the past four weeks police have uncovered marijuana grow-ops and their associated production labs.
The second one turned up because it exploded.
The latest was discovered by police attended at the scene of a domestic disturbance.
If it wasn't so serious an issue, it would be comical.
The second one turned up because it exploded.
The latest was discovered by police attended at the scene of a domestic disturbance.
If it wasn't so serious an issue, it would be comical.
-srbp-
Quote of the week: Loyola Hearn
At the tail end of an interview with The Independent:
"I will not get down into the gutter, but it is getting to the point where if people push too far, they can expect a slash," he says. "I get sick and tired sometimes of listening to people who are doing a lot of damage to our province by inactivity, by constantly blaming others for what's not happening, who are doing nothing themselves except ridiculing and burning bridges.
The people in our province better wise up. We have tremendous opportunities, the best people in the world, we have greater resources, and we are letting some people, for personal reasons, try to build a little kingdom in our province."
-srbp-
02 June 2007
Premiers push back on senate reform
Ontario and Quebec are entering the debate on senate reform, saying the Prime Minister must obtain the consent of the provinces to reform the institution.
Canadian Press' Joan Bryden discusses the issue in French, in an article carried in la presse on Friday. Quebec - referred to by Bryden as one of the two most important provinces in Canada - wants the federal senate reform measures halted:
Canadian Press' Joan Bryden discusses the issue in French, in an article carried in la presse on Friday. Quebec - referred to by Bryden as one of the two most important provinces in Canada - wants the federal senate reform measures halted:
"Le gouvernement du Québec ne s'oppose pas à une modernisation du Sénat", a écrit la province dans un mémoire soumis au Comité permanent des affaires juridiques et constitutionnelles du Sénat.It appears that the Government of Newfoundland and Labrador has taken a similar position. In a May 9 session of the Senate committee on legal and constitutional affairs, senators make references to a letter or letters received by the committee from Premier Danny Williams:
"Mais si nous cherchons à modifier les caractéristiques essentielles de cette institution, la seule avenue possible est de lancer un processus constitutionnel coordonné au niveau fédéral-provincial qui réunit les joueurs constitutionnels, incluant le Québec", a-t-elle ajouté.
Senator Milne: We will send a letter to the premiers of the provinces inviting their input on this matter, giving them a cut-off date so we can receive the reply before May 31. In a package along with this letter with suggested wording, we will send along copies of Premier Graham's letter and the legal opinion. We received letters from Premier Danny Williams, and the testimony of four different provinces and the report of the special committee. They have all the information with a request to reply before May 31.
...
Senator Hays: For the rest, Premier Williams wrote saying he was not going to appear, that anything involving the Senate should involve the provinces. It was not an opinion; it was just a letter saying that....
...
Senator Bryden: Premier Williams was pretty clear in his letter. He made a statement that nothing that would affect provinces should be determined without the provinces' participation. He went on, in either that letter or another, to say do not forget that the Council of the Federation has passed a resolution "... that no changes would be made in federal assets, including the Senate, without the agreement of the provinces."
...
-srbp-
NL behind NS in space race
With 120 hectares of Crown land to build on, an American company has put Nova Scotia decisively ahead of Newfoundland and Labrador in the race for space.
When will people be organizing protests about this great slight to the people of Newfoundland and Labrador?
This sort of venture could have put Newfoundland and Labrador on the leading edge of the 21st century's great challenge.
Surely, this is proof that Confederation was a giant conspiracy to oppress the poor, downtrodden people of a poor downtrodden land.
Nova Scotians are already looking down their noses at us as they take away some of the greatest assets of the province in an unprecedented give-away of our resources. Next thing, they'll be looking down on us from outer space.
And while we are at, the Government of Newfoundland and Labrador should be lobbying for federal funding to build a museum to this affront to intelligence.
When will people be organizing protests about this great slight to the people of Newfoundland and Labrador?
This sort of venture could have put Newfoundland and Labrador on the leading edge of the 21st century's great challenge.
Surely, this is proof that Confederation was a giant conspiracy to oppress the poor, downtrodden people of a poor downtrodden land.
Nova Scotians are already looking down their noses at us as they take away some of the greatest assets of the province in an unprecedented give-away of our resources. Next thing, they'll be looking down on us from outer space.
And while we are at, the Government of Newfoundland and Labrador should be lobbying for federal funding to build a museum to this affront to intelligence.
-srbp-
MHA/MNA/MLA pay
Here's are two pay reviews completed for provincial legislatures in the past year:
1. British Columbia: Tabled on April 30, 2007. Appointed on January 30, 2007.
2. Saskatchewan: Report filed in June 2006. Appointed February 2006.
Chief Justice Derek Green's terms of reference weren't significantly different from those of any indemnity review appointed by any legislature in the country over the past umpteen decades.
The bit about financial administration in the House of Assembly was essentially spent before he got to it since the legislature's management committee, likely with heavy input from the Executive, hired all manner of staff and added all sorts of procedures. That should have made Green's job easier, rather than more difficult.
Green's terms of reference were also carefully constructed in such a way so that while it appeared he had the powers of a public inquiry, he actually didn't. That's not what the official news releases said, but then again claims in a government news release don't always match reality. That meant that essentially Green wasn't able to delve into questions his jurist-mind might have wanted answered - like who was responsible for the fiasco in the first place - but then again his terms of reference didn't allow him to go there anyway.
All that was left was a simple pay review of the type done countless times in the past, within 90 days.
Of course no one has ever explained why that review was ordered by the Crown, and not by the members of the legislature themselves. Perhaps it had something to do with the provisions of the legislation that would have given a commissioner appointed that way with all the powers of a public inquiry.
This is no reflection on Chief Justice Green.
Far from it.
The outcome of his report, the terms of reference, the manner in which he was appointed and now the inordinate delays in producing what ought to have been a simple result, appear to be related to unanswered questions about the constitutionally dubious origin of the whole appointment in the first place.
Let's not even get into the sometimes ham-fisted attempts at managing the fall-out from the fiasco itself.
Sometime soon we may know what Chief Justice Green has reported, but it is highly unlikely we will ever find out what caused one of the darkest stains in the history of our provincial legislature.
1. British Columbia: Tabled on April 30, 2007. Appointed on January 30, 2007.
2. Saskatchewan: Report filed in June 2006. Appointed February 2006.
Chief Justice Derek Green's terms of reference weren't significantly different from those of any indemnity review appointed by any legislature in the country over the past umpteen decades.
The bit about financial administration in the House of Assembly was essentially spent before he got to it since the legislature's management committee, likely with heavy input from the Executive, hired all manner of staff and added all sorts of procedures. That should have made Green's job easier, rather than more difficult.
Green's terms of reference were also carefully constructed in such a way so that while it appeared he had the powers of a public inquiry, he actually didn't. That's not what the official news releases said, but then again claims in a government news release don't always match reality. That meant that essentially Green wasn't able to delve into questions his jurist-mind might have wanted answered - like who was responsible for the fiasco in the first place - but then again his terms of reference didn't allow him to go there anyway.
All that was left was a simple pay review of the type done countless times in the past, within 90 days.
Of course no one has ever explained why that review was ordered by the Crown, and not by the members of the legislature themselves. Perhaps it had something to do with the provisions of the legislation that would have given a commissioner appointed that way with all the powers of a public inquiry.
This is no reflection on Chief Justice Green.
Far from it.
The outcome of his report, the terms of reference, the manner in which he was appointed and now the inordinate delays in producing what ought to have been a simple result, appear to be related to unanswered questions about the constitutionally dubious origin of the whole appointment in the first place.
Let's not even get into the sometimes ham-fisted attempts at managing the fall-out from the fiasco itself.
Sometime soon we may know what Chief Justice Green has reported, but it is highly unlikely we will ever find out what caused one of the darkest stains in the history of our provincial legislature.
-srbp-
01 June 2007
The longest quick report in history
The delays have been longer than the report is likely to be but Chief Justice Derek Green finally has his work finished.
What work you ask?
Well, the relatively simple job of reporting on what members of the provincial legislature should be paid, based on practices in other places.
Saskatchewan finished a review - almost identical in scope - just before Green was appointed.
So, according to the news release, the Premier gets it on Friday. He's already been briefed at least once on its contents, hasn't he?
When will the rest of us see it?
Ooooooh. Oooooooh
Maybe it will be like the energy plan.
Often promised. Not yet delivered.
What work you ask?
Well, the relatively simple job of reporting on what members of the provincial legislature should be paid, based on practices in other places.
Saskatchewan finished a review - almost identical in scope - just before Green was appointed.
So, according to the news release, the Premier gets it on Friday. He's already been briefed at least once on its contents, hasn't he?
When will the rest of us see it?
Ooooooh. Oooooooh
Maybe it will be like the energy plan.
Often promised. Not yet delivered.
-srbp-
FPI: One Nova Scotian's View
Jim Meek's column in the Chronicle Herald:
Demone says that consolidation is coming – belatedly – to the fishing industry. FPI’s assets should put the Nova Scotia company in a position where it is among the winners – or consolidators – in this transition.Does anybody else finding it passing strange that Danny Williams has blessed the break-up of a major local fish company and is planning to sell off the most lucrative marketing assets to a Nova Scotia company?
It doesn’t hurt, either, that High Liner’s major shareholders include Nova Scotians with long-held stakes in the company. These are not quick-flip artists.
As for Henry Demone, he seems to have done the impossible in this FPI deal – convince Danny Williams that it’s OK to sell Newfoundland fishing assets to a Nova Scotia company.
We’re talking high-level diplomacy here. I may even have to rethink the Attila thing.
-srbp-
31 May 2007
Investing non-renewable revenues
A retired St. John's financial consultant is recommending the provincial government follow the example of other jurisdictions, including Alaska and Norway, and invest revenues from oil and gas development in Newfoundland and Labrador.
Bastedo figures Newfoundlanders and Labradorians would receive dividends between Cdn$3,000 and $3,300 once its own fund is worth $25 billion-$30 billion.The Norwegian fund, which is invested only in international markets, reported first quarter earnings of over US$300 billion in 2007.
Established in 1976, the Alaska fund receives at least 25 per cent of the state's oil royalties and other income, such as mineral lease payments.
Six years later, the fund started paying dividend cheques to native Alaskans and those who had lived in the state for more than 21 years. Those dividends are based on a formula and the amount varies annually.
The lowest payments were US$331 in 1984, while the highest was US$1,964 in 2000.
-srbp-
Public hearings on Bloom Lake, Fermont, June 19
The Quebec Bureau d'audience publique sur l'environment (BAPE) will hold a public information session 19 June 2007 in the Fermont Curling Club beginning at 7:30 PM.
The purpose of the session is to provide the public with information on Consolidated Thompson's proposed Bloom Lake mine.
According to the BAPE news release, the Bloom lake project will involve annual production of 7,000,000 tons of iron ore, with the ore being moved by train to Wabush. From there, the ore will be moved to Sept Iles for shipment to market. The $400 million project is expected to ship its first ore by the fourth quarter of 2008.
The purpose of the session is to provide the public with information on Consolidated Thompson's proposed Bloom Lake mine.
According to the BAPE news release, the Bloom lake project will involve annual production of 7,000,000 tons of iron ore, with the ore being moved by train to Wabush. From there, the ore will be moved to Sept Iles for shipment to market. The $400 million project is expected to ship its first ore by the fourth quarter of 2008.
-srbp-
Fortis to build new Belize hydro project
From the company's news release on Wednesday:
BECOL, an indirect wholly owned subsidiary of Fortis Inc. (TSX:FTS), announced today that the Company has received all major approvals for construction of a US$52.5 million 18-megawatt ("MW") hydroelectric generating facility at Vaca on the Macal River in Belize. BECOL has signed a 50-year agreement with Belize Electricity Limited for the sale of the energy generated by the Vaca facility, commencing late in 2009.
"The Vaca facility represents the final phase of a three-phase development on the Macal River to maximize its hydroelectric potential," explains Stan Marshall, President and Chief Executive Officer, Fortis Inc. "The existing upstream Chalillo and Mollejon hydroelectric facilities have benefited the customers of Belize Electricity and the country of Belize by helping to stabilize electricity rates and by increasing reliability of energy supply," he says.
-srbp-
30 May 2007
Province to create new energy corporation
While the provincial government changed the Hydro Corporation Act only last year in order to create a new energy corporation, two new bills were read for the first time on Tuesday which will create:
- a new Hydro Corporation; and,
- a new energy corporation.
We'll know what it's about after a media briefing on Thursday.
Until then, we can only scratch our heads in bewilderment.
- a new Hydro Corporation; and,
- a new energy corporation.
We'll know what it's about after a media briefing on Thursday.
Until then, we can only scratch our heads in bewilderment.
-srbp-
Pollyanna Dunderdale Part 2: The Labrador Land Plots
Michael Enachescu, an earth sciences professor at Memorial University in St. John's, said natural gas is the target for the current round of exploration, although oil reserves may also be located.If natural resources minister Kathy Dunderdale was being giddily optimistic about this year's offshore land offer, then Michael Enachescu (quoted by CBC in the paragraphs cited above) likely needs to be placed in restraints and heavily sedated.
"[The] call for bids means that practically next year we'll have the return of oil and gas companies to Labrador for exploration, but drilling might not happen before the end of the decade," Enachescu said.
At this point, land parcels have been offered for sale (opened for exploration bids) and at this point, four of those parcels are around or adjacent to two existing significant gas discoveries.
The first thing to bear in mind is that the Labrador gas is well offshore and sits in an environment subject to icebergs and other forms of sea ice that thus far deterred development. Technological issues coupled with natural gas prices haven't made these Labrador gas fields prime candidates for development
The second thing to bear in mind is that exploration activity anywhere offshore Newfoundland and Labrador is heavily dependent on the financial issues. The province has been struggling to issue a natural gas royalty regime since 1997 and even the current administration has repeatedly slipped back the release date of the final version of it.
If the regime looks like what has been reported - complete with a 10% equity position and other royalty add-ons - it may well be that Newfoundland and Labrador will price itself out of the international competition for exploration dollars.
And that's where people need to recall the third point: on more than a few occasions in the past, companies have expressed interest in offshore parcels only to leave them sitting on the table when bids close.Had Enachescu conducted even the simple comparison illustrated at right, he'd have noticed the historic tendency for more parcels to be offered than are taken up.
Had he factored in the financials, he'd have been even less optimistic. (Of course if Enachescu had looked at the closing date for bids - August 1, 2008 - he'd know it would be impossible to meet his time lines for exploration, but that's really a side issue.)
And, with a fairly simple analysis, there's just no way based on that information that he'd credibly claim that we are about to see exploration for natural gas "practically next year" offshore Labrador.
Incidentally, the land parcels as well as the existing significant discoveries can be seen more easily in the map provided by the Canada-Newfoundland and Labrador Offshore Petroleum Board.
The most he could say is that there has been some interest expressed. By the time bids close, we may see some interest turn into exploration commitments. Even then, successful bidders have nine years to complete their exploration. Add it all up and you may well see very little if any activity on the Labrador shelf for upwards of a decade.
About the only way we might see something earlier is if one or both of two possibilities turns up.
First, we might see action on the Labrador parcels if the gas royalty regime turns out to be less scary that it might first appear. Companies may just gamble that even if it called for a Chavez-like equity stake, the odds of those rules still being in force over a decade from now are slim and none.
Second, and perhaps more likely, the province's Hydro Corporation might wind up being the successful bidder. There have been rumblings for some time that Hydro wants to develop what has been euphemistically called low-hanging development fruit. Hydro is fronting a study of development options for the Labrador fields, a study being funded by the Atlantic Canada Opportunities Agency (ACOA). The cost of the exploration parcels would be well within Hydro's retained earnings and the company would have a decade to arrange exploration.
None of that means that exploration will return to the Labrador shelf "practically" next year. In fact, when the bids on the Labrador parcels close - almost 18 months from now - the parcels may wind up laying fallow simply because the financial situation doesn't support exploration.
If Hydro gets involved, that will be as much a political decision as a solid corporate one based on a thorough cost-benefit analysis. in fact, given the experience on the Lower Churchill it would easy to conclude the decision will be made entirely on a political basis, the financials be damned.
Now matter how you slice it, both energy minister Dunderdale and earth sciences prof Michael Enachescu are being wildly optimistic.
They are alone though. People in the oil and gas business in this province have simply slowed down. They are taking a wait-and-see attitude to everything.
After the Hebron fiasco and the Hibernia South, they've taken the practical approach of planning for the worst and hoping for the best.
-srbp-
BP to ink exploration deal with Libya
British Petroleum will announce a US$900 million exploration deal with the Government of Libya, according to The Australian.
The OPEC member is the African continent's second largest oil producer, at 1.7 million barrels per day. It also has natural gas reserves estimated at 1314 billion cubic metres.
The Financial Times reported in January 2006 that BP had entered negotiations over a multi-billion dollar gas exploration and development agreement in Libya. It said discussions involved a liquefied natural gas project that could supply the North American or European markets.
-srbp-
Promise made? Promise knee-capped
From Saskatchewan comes a simple statement of the case against the federal Conservatives and their verbal dancing over language, promises and caps on offshore offsets:
During the House of Commons finance committee session Monday, here's what the Calgary backbench MP said to Calvert: "There was no mention of an (equalization) cap when this was discussed in (Conservative) election rhetoric, but there was no mention that there would not be a cap, either." This isn't quite the case. In fact, the Conservatives were absolutely clear -- at least with one part of the country -- that there would be no equalization caps.That last sentence just about says it all.
"The Conservative Party of Canada believes that offshore oil and gas revenue are the key to real economic growth in Atlantic Canada," then-federal opposition leader Stephen Harper said in a mailout directly to Atlantic voters, ironically headlined with the Gaelic proverb "There is no greater fraud than a promise not kept." "That's why we would leave you with 100 per cent of your oil and gas revenues.
"No small print. No excuses. No caps." The problem with Ablonczy's remark is you simply can't promise voters in one part of the country "no small print, no excuses, no caps" and then tell the Saskatchewan premier "there was no mention that there would not be a cap, either." That would be a lie.
-srbp-
29 May 2007
Connies dump another election commitment
The Harper administration will be locating 6200 federal jobs in Quebec, a move that will involve relocating about 4000 existing employees and adding another 2200, according to CBC Ottawa.
Now the whole issue of federal presence was a partisan crock wrapped up with all the nonsense of looking at public spending as a matter of pure pork. That's been the Bond position, whether it's been about federal jobs or provincial government jobs. It's just laughable to see all the posturing that went on during the last election from federal Conservative politicians, backed by their provincial friends only to see the issue all but vanish from their collective minds. Sure it gets a mention once in a while but it hardly gets the shrill attention it used to get, that is before the federal administration changed hands.
Face it. There was as much commitment to the federal jobs thing as there was to custodial management or Loyola Hearn's call in 2004 for the federal government to hand over its Hibernia shares to the provincial government. Nothing stopped Hearn from pushing that and then running twice for a party that specifically rejected the idea.
Newfoundland and Labrador's federal cabinet representative Loyola Hearn made quite an issue of saving a single position originally to be relocated from St. John's to Montreal. In a news release issued at the time, Hearn was obviously proud of 14 new positions shifted to Newfoundland and Labrador and about the relocation of public weather forecasting to Gander from Dartmouth. Hearn, of course, did not note that marine and aviation forecasting remained in Montreal. Weather forecasting was moved from Gander to the two other locations in a move widely criticised in Newfoundland and Labrador.
Of course, none of that addresses Hearn's comments just before he was appointed to cabinet. CTV quotes Hearn as saying something about the need for increased federal presence in the province to promote growth of the local oil and gas industry:
The whole move to abandon the federal presence issue just fulfils the point noted in this Bond Papers post from February 2006. Then treasury board president John Baird vowed at the time to stop any plans to relocate federal jobs outside the National Capital Region. Bond wasn't alone.
Infrastructure Minister Lawrence Cannon noted that the cost of office space in Gatineau is 20 to 30 per cent lower than in downtown Ottawa.Of course that policy on how to distribute workers within the National Capital Region doesn't square very well with the Conservative campaign commitment, as contained in Stephen Harper's letter to Danny Williams during the last federal election campaign:
"So we're doing this for the Canadian taxpayer as well as, of course … respecting the long-standing policy that's been in place [since] back in 1994," he said.
That policy sets as a goal a ratio of 75:25 between federal office space in Ottawa and Gatineau. Right now, the ratio is 77:23, the government says.
There is an over-concentration of certain federal government services in some areas of the country and an effort must be made to ensure that there is a fair distribution of the federal government presence across the country.It will be interesting to see how local Conservatives react to this news. Federal presence was a major issue for the Conservative team, including provincial Progressive Conservatives. An incomplete assessment by the Harris Centre at Memorial University was used by both candidates, the provincial government and Conservative supporters at the time, like members of St. John's city council as a political issue during and after the election.
Now the whole issue of federal presence was a partisan crock wrapped up with all the nonsense of looking at public spending as a matter of pure pork. That's been the Bond position, whether it's been about federal jobs or provincial government jobs. It's just laughable to see all the posturing that went on during the last election from federal Conservative politicians, backed by their provincial friends only to see the issue all but vanish from their collective minds. Sure it gets a mention once in a while but it hardly gets the shrill attention it used to get, that is before the federal administration changed hands.
Face it. There was as much commitment to the federal jobs thing as there was to custodial management or Loyola Hearn's call in 2004 for the federal government to hand over its Hibernia shares to the provincial government. Nothing stopped Hearn from pushing that and then running twice for a party that specifically rejected the idea.
Newfoundland and Labrador's federal cabinet representative Loyola Hearn made quite an issue of saving a single position originally to be relocated from St. John's to Montreal. In a news release issued at the time, Hearn was obviously proud of 14 new positions shifted to Newfoundland and Labrador and about the relocation of public weather forecasting to Gander from Dartmouth. Hearn, of course, did not note that marine and aviation forecasting remained in Montreal. Weather forecasting was moved from Gander to the two other locations in a move widely criticised in Newfoundland and Labrador.
"Despite commentary in the media last week, this position will continue to reside in St.John's. I would encourage everyone to gather the facts first, before jumping to conclusions."Hearn subsequently announced the relocation of Coast Guard jobs from Dartmouth to Newfoundland, but thus far promises to locate hundreds of military personnel remain unfulfilled.
"People who know me know that federal presence in our province has always been a key issue for me. Whenever it makes sense to have federal jobs in different parts of the country, I will push for that."
"Since we've taken power, we've put 14 new Fishery Officers on Newfoundland and Labrador waters, we've reinstated the Gander weather office, and we've protected this position."
"Newfoundlanders and Labradorians should be encouraged by this trend during our first eight months in office."
Of course, none of that addresses Hearn's comments just before he was appointed to cabinet. CTV quotes Hearn as saying something about the need for increased federal presence in the province to promote growth of the local oil and gas industry:
"Newfoundland and Labrador requires a federal presence capable of promoting the province as a fantastic place to do business and to address the industry's requests to streamline regulations," Hearn says in a written statement on his website.While there's no indication about the departments receiving the 2200 new employees, if any of them are employed by Natural Resources, it looks like the Newfoundlanders and Labradorians will be dealing with thousands of what Hearn once thought of as "faceless bureaucrats" thousands of kilometres from where the work gets done.
"We need someone in the province, not a faceless bureaucrat thousands of kilometres away, that industry can approach to deal with the day-to-day issues stemming from all the significant oil patch business being generated."
The whole move to abandon the federal presence issue just fulfils the point noted in this Bond Papers post from February 2006. Then treasury board president John Baird vowed at the time to stop any plans to relocate federal jobs outside the National Capital Region. Bond wasn't alone.
-srbp-
Separated at birth: the reader input version
There's Normand Lester and Robin Philpott.
Ya got yer Leandre Bergeron, your Pierre Bourgeault, and the other sovereignists.
Who would be the Newfoundland and Labrador equivalents?
Any suggestions, serious or otherwise are welcome.
Ya got yer Leandre Bergeron, your Pierre Bourgeault, and the other sovereignists.
Who would be the Newfoundland and Labrador equivalents?
Any suggestions, serious or otherwise are welcome.
-srbp-
Anti-federalist witch hunt comes up short
The results of a detailed investigation into alleged irregularities has turned up about $500, 000 in spending that was not reported by the "No" campaign during the 1995 referendum in Quebec.
The official news releases from the Quebec chief electoral officer can be found here and here, and the entire report can be found here.
The secrets of Option Canada "alleged that Option Canada received $5.2 million from Heritage Canada to promote linguistic duality, but the money was used to pad the No committee finances instead." The book was authored by Normand Lester and Robin Philpot. Philpot, a Parti Quebecois candidate in the 2007 is the author of a controversial book on Rwanda.
The official news releases from the Quebec chief electoral officer can be found here and here, and the entire report can be found here.
The secrets of Option Canada "alleged that Option Canada received $5.2 million from Heritage Canada to promote linguistic duality, but the money was used to pad the No committee finances instead." The book was authored by Normand Lester and Robin Philpot. Philpot, a Parti Quebecois candidate in the 2007 is the author of a controversial book on Rwanda.
-srbp-
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