Oil prices still on the decline

With some renewed strength in the American dollar, coupled with decreased demand, the price of crude oil for September delivery closed the week at US$111.

“The dollar is on fire again so that's causing people to re-evaluate everything,” said Phil Flynn, oil analyst at Alaron Trading Corp. in Chicago. “It means oil prices could fall dramatically. We could see prices get to double digits if this continues.”

An OPEC forecast of lower demand also put downward pressure on prices.

Newfoundland and Labrador finance department officials may not be sweating yet, but if the trend continues to the end of the year, their forecast average price of $87 might not hold up. 

Even if the provincial government skates through the current fiscal year, it may have to restrain spending over the next couple of years or - a more likely scenario - boost borrowing to fuel the spending spree.

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Some in-out scheme highlights

While the conventional media have been fixated on the Connie's deliberate effort to undermine parliamentary committees by co-ordinating a refusal by witnesses to testify,  some details of the in-out scheme were entered by witnesses who did show up.

Here's one excerpt from the testimony of a former provincial cabinet minister.  Two other witnesses, from the campaign in random-Burin-St. Georges gave similar evidence:  money sent down from Ottawa on condition it be sent back a couple of days later. No sign that any national advertising ever appeared using the taglines of the local candidates.

Hon. Charles Hubbard: Where was the money spent?

Mr. Joe Goudie (Conservative candidate in Labrador; former provincial cabinet minister): We have no idea.

Again, I remind you and the honourable committee that I, personally, was not aware of this until after the campaign was completed and really, in any detail, not until the news report came out in April. The money was not spent by us.

    Mrs. Singleton [campaign manager]and Mr. Barnes were both.... More specifically, Mr. Barnes, my official agent, was directed by a gentleman, Mr. Hudson of the Conservative Party of Canada, to, once funds had been transferred to our account.... It was explained that 60% of that amount could then be claimed on our election return, which seemed unusual but nevertheless they were following directions, and that the amount of money transferred to our account would then have to be returned to the Conservative Party of Canada as soon as possible.

Hon. Charles Hubbard: To clarify, if you gave somebody $10,000 and wanted it back.... They could claim that $10,000 in the expense, which they didn't spend. Do you mean to tell me you'd get $6,000 back from the Government of Canada as a result?

Mr. Joe Goudie: As I understand it, that was the implication of the explanation. Yes.

Hon. Charles Hubbard: Where would that $6,000 eventually wind up?

Mr. Joe Goudie: In the campaign account, as far as I know. I know nothing other than that.

Hon. Charles Hubbard: It almost sounds, Mr. Goudie, like a very fast way of making money.

Mr. Joe Goudie: It sounds that way.

No wonder someone wanted to shift the media coverage to something other than testimony.

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Big changes coming at Grand Falls paper mill

Changing global economic circumstances for the paper industry have been pressing on the industry in Newfoundland and Labrador for years.

The future of the AbitibiBowater mill at Grand Falls-Windsor, established in 1905, may be known as early as next week, according to CBC News.  This follows an extensive review within the newly merged paper company of all its assets.

There are a few things to bear in mind:

1. If the AbitibiBowater announcement comes next week either right before or right after the Hebron announcement it will likely be swamped by Hebron.  Stephenville wasn't a political crisis in the province because it happened out of easy camera range of the St. John's-based local media.  The story just won't register, especially if Hebron is a bright shiny object waved around to distract attention.
2. "AbitibiBowater manager Brad Pelley said that inside a year, the company has to turn the mill into an operation that's not losing money."  Now there's a quote that doesn't even come close to telling the story.  Despite whatever changes have been made at the GFW mill, surely to mercy, the mill is suddenly in better financial shape because of the heavy provincial government subsidies that flowed in the wake of the Stephenville closure.  Like $30 million of flow over two years to Corner Brook and GFW.
3. Will the provincial government be as combative and feisty about downsizing or machine closings at GFW as it has been in the past?  Here's another policy carryover from the Grimes crowd to Williams' crew: threaten legal action (like stripping all the company's timber licenses) if one of the two machines at GFW is closed, regardless of the economic costs. 

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Serious lobster conservation projects in New Brunswick

Homarus Inc is just one example of what the Maritime Fishermen's Union is doing to improve lobster stocks in the waters around New Brunswick.

It's a non-profit collabrative effort of government, fishermen and the private sector aimed at several objectives:

1. Increase scientific knowledge surrounding lobster biology and habitat;
2. Provide an educational tool for raising awareness amongst stakeholders concerning the need for sustaining the resource, protecting the habitat and rehabilitating lobster stocks; and,
3. Introduce practical and effective approaches to enhancing lobster habitat and lobster stocks in our coastal waters.

A stand-alone corporation devoted to a single ocesan species with enormous economic value: now there's a direction the FFAW should be taking rather than clawing a paltry ten grand from the provincial government in order to have local lobster fishermen keep records of their catches.

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And then there's the scandal at Tammany on Gower

This Telegram editorial should be enough to cause someone to intervene here - someone wake DaveDenine - or for the voters to turf out the entire crowd at City hall next time around.

Every one of them, including the newest of the noobs is implicated in the highly questionable act of firing the internal auditor.

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So where's the in-out scam in the local headlines?

Odd, dontcha think, that the local media haven't done much with the Conservative party in-out advertising scheme during the last election?

This is a very large story with a large number of local players. For instance,

Cynthia Downey, who ran in Newfoundland, said her campaign could have made much better use of the $7,700 transferred by the party in and out of her account.

Logic would suggest the story would get some play in some of the local media, but so far it's meritted hardly a whisper.

For some unknown reason, the story has been bumped, sometimes in favour of bumpf.

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Gas went up?

How much more evidence do we need that the petroleum products pricing office is a massive scam that must be ended?

Gasoline prices in Newfoundland and Labrador went up on Thursday.

Now gasoline sells as a commodity separately from crude, but still, there's something slightly perverse about a jump in retail prices at a time when prices for both commodities are declining across North America both on current sales and on futures.  At best, in the short term, prices are staying level, but except in very rare circumstances are they increasing in major centres.

Sure there was a jump yesterday, but the public utilities board's gas fixing scheme isn't sensitive enough to pick up a change a day before it's regular price adjustment.  Beyond that the futrues price for gasoline is about one dollar a gallon below current retail prices, even after the eight cent jump.

On top of that analysts don't expect that jump to last with the cotinued drop in American demand.

So what gives?

Essentially you have an entrenched bureaucracy which, if it does nothing else, will work hard to justify its existence. Take a look at the scheme's website and you won't see a definition of a positive public policy enefit there anywhere:  the board exists to enforce the Act that created it.  That's it.  Justifying that existence is pretty easy, but the justification only makes sense in the world of bureaucracy;  heck there's probably a buggy whip safety agency out there somewhere still enforcing its legislation.

Meanwhile, over on the political side, there isn't a single politican on the ogvernment benches will to tackle the issue.  The issue isn't important enough to merit attention by the Premier's office since, for the most part consumers haven't kicked up a fuss yet.

If it isn't being talked up on the voice of the cabinet minister, cabinet's can't hear it.

Maybe that's the key:  If people realised that the provincial government sets gasoline prices in Newfoundland and Labrador, then maybe they'd start pressing the provincial government to scrap the gasoline pricing fixing scheme.

If they started making that cry on the Great Oracle of the Valley, then just maybe there'd be some action.

Don't count on it though.  There are too many established political interests behind this scam to let it go that easily.

If publicly outcry was enough, the provincial government still wouldn't be pursuing its illegal policy on the Memorial University president, enabled by the board of regents.

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Hunter-gatherers association reinvents lobster pot with prov gov cash

On the face of it, this looks like a great project: a bunch of provincial government cash to pay a bunch of lobster fishermen to track their catches.

"This project is an example of harvesters taking a direct role in the stewardship of the fishery and having input into the management of the resource," said the Honourable Trevor Taylor, acting Minister of Fisheries and Aquaculture. "As such, our government is pleased to approve funding for this initiative. This is important work because it is the most extensive attempt to date to profile lobster stocks."

Ummm.

Not exactly.

The fishermen involved in this provincial government project can't make any decisions about the lobster fishery.  They can't have any meaningful input on quotas, season or anything else.

That's because all they are going to do is write down in a notebook how many lobsters they landed (excluding the unofficial ones to be sold under the table later on), how big they were and so on.

Now while there is lots of talk about this whole thing being scientific, note that it is being run by the Fish, Food and Allied Workers Union.  That's right, the union which represents the people who will be getting the cash for making notes in a book.

There's no mention of Memorial University, the Marine Institute or any other crowd of scientists.

There's just the people who catch lobsters and their union.

Now for an example of fishermen having real control over their livelihood, take a look at the Eastport Marine Protected Area, now expanded to five sites along the northeast coast.

As for science, the whole approach in these lobster management areas is based on science.  It has been since they were established.

If the provincial fisheries department and the hunter-gatherers union really wanted to get interested in fisheries management, conservation and a scientifically based approach, they'd be working with the federal fisheries crowd. 

This provincial initiative doesn't look like anything significant.  It looks more like make-work in another guise or a political statement. 

After all, it's only $10,000.

The Newfoundland and Labrador Legacy Nature Trust already administered over half a million in federal cash on one study four years ago.

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The changes at Humber Valley

1.  Layoff of 40 staff, as Newfound NV looks to stick to its core business lines.

2.  A brief profile of the new boss at Newfound NV.

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Some Harper observations

1.  Anyone else notice that the not-campaigning Stephen Harper spent all his time in Fabian Manning's Avalon riding?  Seems a bit odd since there are supposedly two Connie incumbents seeking re-election.  H Harper never did anything with St. John's South-Mount Pearl except pass through it.

2. Harper's comments at the Renews-Cappahayden come home year celebrations were remarkably unremarkable.  Like incredibly flat, boring, generic. Still, he got a loud and enthusiastic welcome.  That night be worrying some people in the province who still believe the Anybody But Conservative thing had a meaning left in it [Hint: it doesn't.  Williams will personally stay out of the federal election, restricting himself to making comments favouring the Dippers.  The rest of the local Tories will work for the Connies - as they did in the last election -  if they feel so inclined.]

3. But the unremarkable remarks warranted a news release. Of course there's no chance these guys are worried there'll be an election.

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'The national interest" and marketing imperatives: a jarring symmetry of excuses

Submitted for your consideration:

“I think the viewers should be able to understand that, in the national interest, for the perception of the country, this was an extremely important and serious matter,” Chen Qigang, the ceremony's chief music director, said in an interview with a Beijing radio station.

compared with:

“But we also believe strongly in ensuring strong and visionary leadership for the people’s university. I cannot stress enough the importance of Memorial University to the educational, social and economic future of Newfoundland and Labrador. Just as the Board of Regents has an obligation and a duty to find the appropriate candidate, so does the government as mandated by the Memorial University Act. We take this obligation seriously."

and...

During a scrum on the search for a new MUN president last week, Danny Williams told  reporters that the province puts $300 million into MUN and that he's asked past presidents "to get more involved with government to promote the interests of the province."

Apparently, coupled with marketing considerations, the national interest can justify fakery and a bunch of other things too.

The Chinese just have more practice at rationalising these things in fewer words.

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Memorial University crisis: it just keeps getting worse

Danny Williams, former Rhodent, should have known that academics are not ones to take his usual blather as if it were gospel.

No surprise therefore, that Memorial University professors are turning the Premier's lack of logic against him in the Memorial University crisis.

And just to really make it bad, they even point to academic freedom:

"If, in some way, we're supposed to be doing specific, applied bits of research, you know, for the province rather than following our interests then there are questions of ... academic freedom looming," says [politicial scientist Steve] Wolinetz.

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Nothing says federal election, the Harper version

When the Connie head honcho comes to town bearing public cash, you know there's an election on the horizon.

Related: Clyde Jackman may want the feds to dump $3.0 million into the Cupids celebration, but the people from Cupids are likely wondering why Jackman and his cabinet colleagues have been so stingy on the provincial contribution.

The provincial government contribution to this monumental event is a paltry $2.0 million.

Given that the feds like to fund these things on a 50/50 basis, Jackman knows up front that the feds will only match the provincial cash. If he's got a beef, then he should take it up with himself.

Update: Harper dropped $3.14 million on the Cupids celebration. That's $1.14 million more than the provincial government committed - but only contingent on federal cash coming..

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Some political creativity

An Obama mash-up [tip of the straw sun hat to John Gushue]:

 

And then there's a Tony Blair one done before Blair resigned:

Bring in the Auditor General

While the crowd at Tammany on Gower are fighting over the recent firing of an internal auditor, they are missing a fairly obvious solution to the problem of ensuring that the City's books are well-watched:  let John Noseworthy have a look at them.

The City of St. John's has been run for far too long as a closed shop without much in the way of public oversight or scrutiny.  The current council - every single one of them - has yet to demonstrate the slightest concern for transparency and accountability particularly when it comes to the way city council spends public money. 

Sure there has been plenty of talk, especially from Ron Ellsworth.  But Ellsworth's already shown himself to be good at talk, but not much when it comes to the action of disclosure.  Heck, when confronted with a simple question about a political poll he'd commissioned, Ellsworth couldn't figure out whether to fib or fess up.  So he did both, first fibbing and then confessing he was behind it.

Talk is cheap. 

If Ellsworth and his cronies at ToG want to earn public confidence, they'd start by letting John Noseworthy audit the city books. 

At the same time, since they've made such a public spectacle of the internal auditor, it is incumbent on city officials to disclose the details of what went on. They will howl at the prospect and try and find every legal means to keep the whole mess under wraps, but the whole episode stinks to high heavens.

A little sunlight will help disinfect the place.

Something says, though, the council and senior officials will be doing everything possible to put up blinds, all the while talking a good game about the benefits of solar energy.

It's what city council does.

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Come by Chance expansion in works

It is far easier to expand an existing refinery than to try a greenfield project.

That's something Bond Papers has contended since NLRC first floated its plan for a 300,000 barrel per day project that is now in bankruptcy protection, without having turned sod one.

Meanwhile, Harvest Energy is looking at a $2.0 billion expansion of its existing Come By Chance refinery that would take production from 115K bpd to 190K bpd.

Harvest Energy is now looking for a partner in the project. 

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The Great Government Consumer Rip-Off

The 2003 general election did not herald a new approach, a new era in public policy or much "new" of any other sort except elites.

That's a point your humble e-scribbler has made several times and it bears repeating. In many respects, the Progressive Conservatives under Danny Williams have continued policies from Roger Grime's Liberals often times without any changes at all, let alone even cosmetic ones.

One of the most obvious examples of the continuation of Grimes policy is the consumer rip-off otherwise known as petroleum products pricing.

Regular readers will be familiar with the view around these parts of the provincially-run price-fixing scheme that masquerades as some sort of consumer protection.

It doesn't protect consumers from anything at all, since by interfering in the marketplace, the price fixing scheme serves only to slow the benefit to consumers of falling gasoline prices.

Like right now.

On Tuesday, crude oil hit US$112, its lowest close in three months.

Consumers are not paying the same price per litre for gasoline that they were three months ago.

In fact, oil dropped dramatically just last week, but the petroleum office did not lower prices a single penny. gasoline sits, on average about 12 cents per litre higher in Newfoundland than across Ontario, but if you look at the localised breakdowns the price gap is disgustingly wide.  In glorious Kingston, Ontario, where your humble e-scribbler is currently enjoying the rain, gasoline is retailing for $1.17 per litre.

The situation is not far off what obtained three years ago but even then it was fairly obvious that the marketplace was delivering price breaks to consumers that the government-orchestrated scam could not.  heck, at a time when prices were dropping across North America only a few weeks ago, Newfoundlanders and Labradorians enjoyed a price increase, courtesy of the government folly.

Now when this whole fraud was foisted on the public, the politicians could be forgiven if they were simply suckered into it as a vote ploy.  Some of them might have even been fooled into believing the silly arguments used to justify it that somehow consumers would be protected from the "evil" oil companies if the provincial government established maximum prices for (some) petroleum products,

There isn't really the same excuse any more and there certainly hasn't been since 2003.  After only a couple of years of operation, the folly of government-organized oil price fixing was evident, at least to consumers.

The argument for government price-fixing is even harder to swallow now that the provincial government has joined the ranks of the oil companies. 

Consider if you will, that simple point when (if?) the Hebron deal gets signed.  Sitting at the table will be major oil companies who produce crude oil and who retail gasoline across North America. The petroleum pricing scheme was supposed to protect consumers from their supposed "gouging".

Sitting right next to them will be a new oil producer who, at least in this province, not only produces crude oil but who also legally fixes the retail price for gasoline products.  We just don't know where the government share of the crude will be refined and sold, but what's to stop it from coming back to this province or - if the provincial government gets involved further with NLRC - never leaves it?

It's a sweet set up.

But not for consumers.

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When the last seam is welded...

Passing environmental approvals is one thing, but as the NLRC refinery project showed, there's a lot more to building a greenfield project than some might have you believe.

Let's just wait until the last seam is welded before we get too excited about a liquid natural gas project that - as of right now - exists only on paper.

NLRC passed the federal environmental milestone on April 30 2008 and was under bankruptcy protection less than two months later.

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Oil prices continue fall

Crude oil hit US$114 a barrel Monday on the New York Mercantile Exchange down from the record high of $147 set only a month ago.

The Monday price was the lowest closing price for crude since May 1. It continued the fall in price from last week.

The folly of budgeting based on volatile energy prices would seem obvious. Crude oil prices have dropped 22% in four weeks.

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New headquarters and military info system for CF by 2014

The Canadian Forces will have a new operational headquarters complete with an integrated information management system by 2014, according to a story by David Pugliese in the Monday Ottawa Citizen.

The computer network to be acquired will "fuse" intelligence data and information into a package easily accessible by commanders in Ottawa, across the country and overseas.

That project, known as the joint information and intelligence fusion capability, will merge large amounts of information, including video, photographs, map displays and other data as it is transmitted from various sources.

In some cases, officers would be able to watch live imagery from robot aerial drones flying on missions in Afghanistan.

Estimated combined cost of the projects are upwards of $150 million.

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