Wednesday, April 12, 2006

Drinking the kool-aid

It's no secret that I've worked in a variety of political environments over the years. And like every other field of human endeavor, there are certain expressions and terms used by veterans of those situations that have special meanings.

When I talk to other people who have worked in those places, we can fall into a kind of verbal shorthand. So, if you overhear us, you might hear us talking about somebody "drinking the kool-aid".

No, we do not mean they have downed a glass of ice-cold inexpensive non-carbonated soft drink that comes in powder form.

What we mean is somebody who has adopted a particular point of view, or supports a person, completely and utterly. They have lost all perspective on the world and their judgment has become both predictable and unreliable. More generally, the term means adopting a religion with suicidal zeal and comes from the 1978 Peoples Temple cult suicide tragedy in Guyana where almost a thousand people died. Many were urged to drink cyanide-laced kool-aid at the behest of their leader, a lunatic named Jim Jones.

I'm not talking about anything quite that dramatic here. But you know the kind I'm talking about. You find that mindset in extreme political partisans or people who have jobs with those weird cult-like organizations like Amway or IBM.

Well, it happens regularly with people who work in or near political offices - both staff and media.

Let me give you an example of what I mean: back in the mid-90's, I had occasion to meet a friend of mine who was working for Brian Tobin. Tobin had just taken office and was still pretty new and untried as Premier. I won't mention my friend's name here but suffice it to say that he was a bright guy who was well educated both here and abroad. While he was still relatively young at the time, he had built up enough experience to get some sense of the world. He was a sharp and clear thinker and definitely not the sort of guy (you would think) who would lose himself in blind, mindless uncritical enthusiasm for some idea, thing or person.

Yet that day he looked me in the eye and told me with a totally straight face that, once Tobin got the hang of the job, there was no doubt in his mind that history would recognize Tobin as the greatest premier this province ever had.

I chuckled - who wouldn't??

Then I realized that he was dead serious and a shiver went up my spine.

My friend had drank the kool-aid.

I was always paranoid about this kind of thing happening to me because I never wanted to lose my ability to maintain a reasonable and objective point of view. If that happened then it would affect my ability to make decisions and provide sound advice to those who relied on me for that.

In hindsight, I can't say that I never let the kool-aid touch my lips but I did try the best I could. I depended on good friends to keep me grounded in the real world.

But I knew lots of people in my position who never cared and were perfectly satisfied to be happy warriors in the cause of 'The Boss'. I'm not sure why some people fall into that hole while others don't but I know they do - nobody's perfect and everybody's human.

In those kinds of jobs, it's all too easy to lose your mental footing. Political history is full of wayward aides and other staff who made horrible mistakes, offered terrible advice or said ridiculous things in the quest for their boss' favor.

Right now I can think of several local politicians whose worst tendencies are reinforced, instead of discouraged, by the advice provided by their staff. Look in the local paper and you can probably guess who they are: they shoot from the hip, make hasty decisions that lead to dead-ends and they spend more time backtracking than going forward.

Part of the problem is their own lack of internal good judgment or political compass. The other thing that leads them astray is uncritical flattery and the monotone point of view they receive that tells them everyday that what they do, whatever they do, is always the right thing to do. After a while they believe it.

That's why it's important to speak truth to power, regardless of cost

And don't think for a moment that there isn't enough kool-aid to go around. A morning, afternoon or evening of talk radio can cure you of that thought. And I don't just mean the callers, either. Listen to the news and read the local papers and you can pick out the stories where the journalists too have partaken in the sugary drink, at least for that day. Nobody is immune all the time.

Don't drink the kool-aid.

Seal Hunt Protesters II

This Penn & Teller video is worth viewing to understand some of the operations of PETA. It also includes some info on their links with Sea shepherd Society, among others.

If you are of a delicate disposition and harsh language offends you, close this page now. Otherwise, turn up your speakers and enjoy. And be dismayed.

Synoposis of Hugo Chavez

This from the April 2006 issue of National Geographic, the 2nd last paragraph of an article entitled "Venezuela According to Chavez".

Oil money and heavy public spending explain what is happening in Venezuela, of course, but in the end only Chavez can account for Chavez. The sheer force of his personality and overwhelming strength of his self-satisfaction, his utter lack of inhibitions, his inflamed nationalism, his obsessive need to cast himself as a hero of the people, forever vanquishing the "demonios" (demons) that conspire against him and the Venezuelan nation, are a hypnotic and unique combination.

Maybe not so unique after all.

Tuesday, April 11, 2006

BetterManageOurResources - enough already!

How many times in the course of the day do you hear that that the province would be oh-so better off if we could just learn to BetterManageOurResources?

Sometimes it's said about the province having to BetterManageOurResources. Often this mantra is uttered in the context of the feds who have failed to BetterManageOurResources - ie the cod they let go to foreigners, greedy fish companies or hungry aliens.

In either case, the solution is plain - we need to BetterManageOurResources. And if we only our governments did more to BetterManageOurResources, then life would be sweet for all.

Forestry resources, fishery resources, mineral resources, built heritage resources, financial resources, tourism resources, human resources, cultural resources, historical resources - you name it and we have the resource for it. All we have to do is just BetterManageOurResources.

What a vacuous and meaningless contribution to the public debate. It amazes me that we swallow this empty statement as if it actually meant something.

It's the kind of pablum issued all the time by the government of the day. Every government of the last 20 years is guilty of it for sure. And every department of this particular government says it all the time.

Then it's repeated over and over again all the time on the talk radio shows as the solution to all our problems. Echoed back to government, they pick it back up and the cycle continues.

Even the media and local commentators has been sucked into this when they should really know better.

I'm waiting for someone to say how we need to BetterManageOurResources - that's when the fights will start because that's when choices will have to be made.

And that's why nobody wants to go there.

Jack Harris - Good Bye and Good Night

Like many of us of a certain age, I had the period in my life where the ideas of democratic socialism had a certain appeal. And why wouldn't they? They expressed some of the highest ideals of human generosity, belief of control over our destiny and the sense that all people deserve basic fairness. And further, it seemed that all those things were within the grasp of government to deliver.

But then as Aristide Briand said, "The man who is not a socialist at twenty has no heart, but if he is still a socialist at forty he has no head."

Jack Harris, I'm sorry to say, never found his head. Nor did he ever find his calling as the leader of a provincial political party. When you look as his record as a political leader and contributor to provincial public affairs, the best one can say is that he always demonstrated potential.

The problem was that he generally managed to perform way below his perceived potential. On occasion he surprised us all with occasional flashes of true political competence worthy of his inflated reputation. More often he just disappointed us all.

Let me give you just two examples:

I have to be a Party Leader too?

I've worked within partisan organizations and I’ve worked for, and observed close up, several party leaders wildly differing in their personalities and ways of approaching their job. From that direct experience and reading just some of the many thousands of words written on the subject, it turns out that there are very basic principles that all party leaders must live by.

First and foremost is the idea that the Leader is the leader in all and every respect. That does not mean that they have to do everything but it does mean that, ultimately, they are responsible for all aspects of partisan operations. That means policy, fundraising, organization. Being a Leader means taking on that mantle of responsibility and discharging it in a responsible and effective way for the good of the party and the province.

So imagine my surprise one morning, not long before the last provincial election, listening to an interview with NDP Party Leader Jack Harris. He was being interviewed about the state of his party’s readiness generally. Specifically he was asked why his party could not ensure a full slate of district candidates.

His response? He made it explicitly clear that he was not responsible for the party organization and churlishly noted that he was merely the party's political leader. (They ended up with only 34 candidates for 48 seats contested.)

Another highlight of that election was his regular failure to get off the Avalon Peninsula to support other candidates in their campaigns as well as passing on Leader's debates in other parts of the province.

Clearly Mr. Harris missed the day at the office when it was announced that the buck stops at the Leader's desk.

In that election the NDP went on to retain their two seats - one more than they deserved to win.

(I should mention that Randy Collins, Jack’s benchmate, has done yeoman’s service inside the House and outside, for his party and his district. And it’s pretty clear Jack has had nothing to do with either.)

Policy wonk gone wonky

Of course there are the Harris apologists who say that his true strength was never organizational - it was policy.

Then it's too bad that his infrequent public policy pronouncements demonstrated the same conservation of energy as his organizational efforts.

Most recently, upon the Premier’s announcement of the collapse of the Hebron negotiations, Jack reflexively offered his support and that of his party. He stated that if the Hebron partners were willing to offer $8-10 billion in royalties alone over the life of the project, then what were they holding back? Hold out, he said, and things will get better.

In his hasty effort to back his former law partner (who controls appointments to the provincial bench but no matter) Harris took no time to consider the effects of this ill-considered rejection of a perfectly respectable offshore petroleum project development deal.

Those effects include the very real impacts on the provincial royalty revenues in the coming years which provide support for his cherished social programs. Never mind the direct impacts of reduced economic activity on the people who live in the heart of St. John's and right in his very own district.

I hope he goes door-to-door in the next campaign in support of his successor so he can hear first-hand the effects of this decision. Somehow I doubt he’ll make the time.

And anyways: why should any of those deleterious practical impacts get in the way of the People Owning the Means of Production?

In the end, it was that kind of facile, glib, ill-considered and expedient public policy statement that put the NDP where it is today - a distant third, moving fast out of political irrelevance and marching headlong into total obscurity (more on that another time).

Better luck next time

I feel bad for many of the dedicated supporters of the NDP because they have been snookered by a peculiar cult of personality that said that the party must support the aspirations of the Leader while receiving little in return. The NDP, in the latter years, became the Party to Support Jack above all else just as surely as the Liberal party became the vehicle to support Smallwood.

The difference was that Jack just wasn’t very good at it.

Jack Harris has been the face of the NDP in this province for more than a decade. After a brief term in Ottawa as the second elected NDP MP from this province, he rode that lucky political accident (against political opponents like Tom Hickey and Steve Neary, almost any new face would have succeeded) straight into the House of Assembly.

That was a good place to start 15 years ago but the party results since demonstrated a total inability to grow beyond that. What should have been a floor evolved into a ceiling.

He maintained that seat through multiple elections by ensuring that every NDP resource across the St. John’s region was dedicated to keeping him there. Even then he was never secure; he had some close calls most notably when Pete Soucy came withing 175 votes of unseating him.

His brand of superficial Hush Puppy/Volvo/Fabian socialism, while inoffensive and innocuous, never took hold and so he and his party treaded water year after year.

The potential never became real.

If you dedicate yourself to being a party leader then you have to dedicate yourself to putting yourself and your party into a position to take power. A party should never settle for less and the province deserves at least that from it’s party leaders.

Otherwise you really should find a more satisfying hobby for yourself.

Looks like he finally found one.

Thursday, April 06, 2006

Our newest charity case

I'd like to want to feel like shedding a few crocodile tears over the demise of The Independent.

But I can't.

I liked the paper when it first came out. I've been an admirer of Greg Locke and his work for a long time and I looked forward to seeing his stamp on things. The original Independent was slightly edgy and fearless in taking a point of view that we badly needed locally. It even took on international issues in a local context and without losing the fact that this province is part of a larger world.

It expressed local pride without smug self-satisfied superiority, an overwhelming sense of bleeding victimhood or that local brand of annoying paranoia that says the world (feds, oil or fish companies, other provinces, historical forces - take your pick) are out to get us and keep us down.

But thanks to the editorial crew and owner that followed - Cleary, Dobbin et al - the Independent took on all those ideological millstones and proudly hung them around their collective necks.

I know I will be swimming against the current when I say that their infamous series on our role in Confederation featuring the in-depth analysis and careful research of Dr. S. Kelland-Dyer was a low point in media contributions to NL public discourse. That series was held out as an objective and respectable research-based product of investigative journalism when it manifestly was not.

In the end, it was the kind of shoddily-constructed misleading political polemic you would find in a third-rate university student newspaper hijacked by a crew of over-zealous freshman idealists out to change the world at any cost and facts be damned. It was thin on sober thought and fat on the purple articulation of long-standing grievance dressed up as analysis.

I feel sympathy for those dedicated journalists and talented photographers who lost their regular paycheck and outlet for their craft because of the closure (and you know who you are). But you will land on your feet because you have something to offer the market and the news reading audience of the province.

Maybe a bad newspaper is better than no newspaper at all. Maybe people will put up with a bad paper in the hopes that it will become better and more interesting to them over time. But clearly the reading market of the province did not think so. After all, "ran out of time" is simply short-hand code for "we couldn't get enough readers to attract advertising at the rates we need to break even".

Clearly their strategic decision to pander to the peculiar market segment they chose was a wrong one. To survive and eventually prosper they had to attract a readership who were interested in more than a political point of view repeatedly outlined in a style of vitriol and bile.

The people of the province want to read about things that are interesting and important to the main part of them and not just to the chronically disaffected.

It's too bad we don’t have more variety in the print media market. And not because the Telegram is a bad paper because it's not. Just in the last year the Telegram has broken more stories and has put more effort and resources into investigations into the provincial government (see fight over Access to Information Act and the buried polling surveys) and into City Hall (salary increases) than you would expect from them if you believed the Independent's claim that we are ill-served by a comfortable monopoly over hard local print news.

Was it the existence of the Independent which precipitated that? Maybe. In that case I hope another paper rises up to fill the role of foil to the Tely.

But that alone does not justify the Independent’s existence. How can a paper build credibility by uncritically accepting every historical complaint or unverifyable grievance as the fact of the week? How do you become truly independent when you regularly turn over the editorial page to government proxies and apologists?

In the end, the Independent was never independent at all. It was just a servile journal to a passing political affectation.

You had the chance to inform us and you blew it.

Wednesday, April 05, 2006

ooops .. email fixed

Sorry. The contact email I set was wrong; it's fixed now.

Once in a row: Newfoundland and Labrador’s offshore oil generic royalty regime

Here is the second of the 3 articles recently published in the petroleum supplement in last month's Atlantic Business Magazine.

It's pretty self-explanatory on generic royalty regimes. In the days to follow I'll post the article from an extensive interview with Ed Byrne, provincial minister of Natural Resources.


Fact vs. Fiction
Does Newfoundland and Labrador's generic royalty regime really work?

Once in a row: Newfoundland and Labrador’s generic royalty regime for offshore oil

As negotiations between the government of Newfoundland and Labrador and the Hebron-Ben Nevis project consortium led by Chevron move forward, a major discussion point is the scope of local benefits to the province. That includes the level of resource rent the province will receive in the form of direct oil royalties.

But doesn’t the province already have in place a generic royalty regime that is supposed to apply to all offshore projects developed since Terra Nova? The answer to that question is yes and no.

When the first projects were developed (Hibernia and Terra Nova), the issues of local benefits and provincial share of revenues were the subject of long and protracted negotiations. In the end, each project was developed under different a royalty regime and different industrial benefit model. In the case of Hibernia, the province opted for more jobs up front, combined with infrastructure development (specifically, the Bull Arm construction site) and a lower total royalty income over the life of the project. For Terra Nova the province chose faster access to royalties, placing less emphasis on local industrial benefits.

But in 1996 Newfoundland and Labrador’s Energy Minister of the day, Dr. Rex Gibbons, introduced a generic royalty regime to bring clarity to the process. The generic regime was intended to ensure a fair return for the province, and at the same time to provide the fiscal and regulatory predictability that would reduce investment risk and promote exploration and development of even the smaller, more marginal fields. With a generic royalty regime, future projects could be developed with a clear understanding of the provincial claim on revenues, leaving only the local benefits package open for negotiation.

But this regime covers oil projects only. The government of Newfoundland and Labrador has repeatedly promised to develop a royalty regime for natural gas - most recently, as part of the current process to develop a provincial energy plan. Industry has cited the lack of a regime as an impediment to gas development. The issue has now come to a head with Polaris Resources Ltd. and Paramount Resources Ltd. launching legal action to prevent CNLOPB from stripping them of their offshore licences for failing to fulfill exploration commitments: Polaris and Paramount argue that without the long-promised gas regime, it has been impossible to determine project economics and raise exploration funds. This matter will be heard in the Supreme Court of Newfoundland and Labrador on March 2, 2006; it is the first time in the history of Newfoundland's offshore industry that any company has mounted such a legal challenge.

Dr. Gibbons says today that the intent was that "the generic system would apply to all future oil and gas development, notwithstanding any oil quality. At the time we evaluated every royalty system in the world, I think. We had a consulting group go out and look at the various royalty systems all around the globe, and then we eventually came up with what we considered to be an appropriate system for this province.

"It gave certainty to the industry and certainty to government, that this is the system under which we are going to look at all developments in the future."

Indications of success came quickly, as Husky Energy made specific reference in its 2001 Development Plan Application for White Rose to the calculation of royalties to be paid under the new generic regime.

That might have been the end of the issue - but then came along Hebron Ben-Nevis. Unlike the other fields developed offshore Newfoundland so far, Hebron oil is mostly heavy crude (18-21̊, compared to Hibernia’s 29̊). Heavy oil is more costly to extract and, compared to the light, sweet crude typically found in Grand Banks reserves and sells at a 15-20 per cent discount in the international market. Compounding the issue is Hebron’s problematic reservoir structure, where the lower-quality oil is easiest to extract while the better oil is located in more fractured formations.

All this makes Hebron Ben-Nevis a higher-risk, more marginal field than the others, and so the pressure is on from the developers - and the local supply and service industry who depend on new developments for ongoing business opportunity - to exempt it from the generic royalty regime.

In June 2003 then-Premier Roger Grimes first floated the idea of modifying the regime for Hebron, with the province taking less money either at the beginning or overall, in order to help get the project moving along. He stated at the time, "If part of finding a way to make that happen is a change or alteration of the regime to make it attractive enough to do without giving up the interest of the province, then you can rest assured that we will enter into those discussions."

The Progressive Conservative opposition, now government, has been consistent in refusing that option. Since taking office, their language has hardened further. If there was to be any change to the regime, Premier Williams made it abundantly clear last April, he wanted to increase, not decrease, the provincial share of benefit. Since then, he has continued to demand richer royalties, in addition to demanding an equity stake for the province.

What is the point of a generic royalty regime, if successive governments want to change the royalty share and royalties become a negotiating point for every new development under consideration?

Dr. Gibbons notes that the current generic royalty regime should not be considered writ in stone, "Would there ever be some tinkering with the systems over time? Absolutely. Any system that’s put in place, you might make minor adjustments over time to make sure you consider things that might have been overlooked or circumstances that might not have existed over time. So a generic royalty system can be modified.

"There might be circumstances come up relative to a particular field, where we say that it [the generic royalty regime] doesn’t quite fit with this one. Maybe we really need to give some thought to whether or not there should be some modification. But I’m still inclined towards keeping, where you can, a generic system and a system that applies to everything."

Certainly, other jurisdictions have established royalty systems - but they tend to distinguish between different levels of risk, oil qualities and project types rather than be generic. In the world of oil, one size rarely fits all. Alberta, for example, in 1996 instituted a royalty regime specifically designed for oil sands production.

As for the application of the generic royalty regime to Hebron Ben-Nevis, the government of Newfoundland and Labrador and the Chevron-led consortium are deep in talks, with both sides inclined, at this point, to say as little as possible. As Chevron point man Mark MacLeod says, "It would be inappropriate for me to discuss this issue while we are in negotiations on fiscal arrangements."

With only White Rose producing under Newfoundland and Labrador’s generic royalty regime, and serious consideration being given to changing it (in some way) for Hebron-Ben Nevis, it seems that the province’s firm and stable royalty environment is more elastic than it originally appeared. This is not necessarily a bad thing. Perhaps introducing a little flexibility is just what the region requires to stimulate upstream activity. One thing is certain: the generic royalty regime for offshore oil is serving as a benchmark in negotiations between the government of Newfoundland and Labrador and project proponents, rather than the last word. The last word for Hebron appears to be coming in April 2006.

Tuesday, April 04, 2006

Atlantic Canada petroleum industry overview

In last month's Atlantic Business Magazine, I had 3 articles published in their regular petroleum supplement. As it turns out, while there's limited space in a monthly magazine, cyberspace is unlimited. In the interests in adding some information to this Hebron debate, I'm going to post my original articles as originally submitted. Some of these were edited for space for publication but here's the unexpurgated version.

Today is the article providing an overview of the Atlantic Canadian petroleum industry. In the days to follow is an article on generic royalty regimes followed the transcript by an extensive interview with Ed Byrne, provincial minister of Natural Resources.


Perfect Storm
New discoveries, global energy deficit and fortuitous location combine to fuel exploration and development of the Atlantic petroleum patch.

Seismic then drilling then Oil and gas exploration is the necessary precursor to the discovery of exploitable fields, development of petroleum projects and, ultimately, commercial production. If there’s no exploration today, then there will be no oil or gas coming on stream tomorrow.

Predominantly an offshore play with some onshore prospects, the Atlantic Canadian oil patch has overcome early challenges (notably, a harsh, ice-infested environment and dearth of petroleum infrastructure), evolved beyond the frontier stage and emerged as a solid producing region. Hibernia, once considered the poster-project for high cost- high risk development, now provides a stable and lucrative production stream. The subsequent projects - Sable, Terra Nova and White Rose - have further proved the region’s worth and driven development of on-the-ground capability and infrastructure that bespeak a healthy, growing oil and gas industry. Atlantic Canada’s journey to petroleum prosperity is well underway.

So, what steps are planned in the near future? What exploration and development is on the Atlantic horizon?

Newfoundland and Labrador

This province has developed the largest petroleum sector overall and has over $800M on the books in exploration commitments out to the year 2011. This year looks like another active exploration season, centered on three prospects. The goal is to break a 20 year dry spell of new offshore commercial discoveries.

Two years ago a consortium of oil companies bid a record $670 million to explore the Orphan Basin. Colder, deeper and further from land than the Grand Banks, this area could contain the region’s largest discovery yet. In July 2006 the Erik Raude will drill one well, leave for other commitments and then return in early 2007 to drill two more. The project is a collaboration between Grand Banks veterans Chevron (holding a 50 per cent share) and Exxon Mobil with its Canadian subsidiary Imperial Oil (holding 25 per cent each).

In the Jean D’Arc Basin, the jack-up rig Rowan Gorilla VI will stay the summer to drill four delineation wells in the White Rose feild.

Meanwhile, Conoco Phillips, with a commitment of $180 million in the Larentian Sub-Basin, has completed seismic work and is looking for a rig to start test drilling in the area.

With promising results from a delineation well drilled on the southern portion of the Hibernia field ("Hibernia South"), project lead Exxon Mobil is exploring options for producing the extension’s additional 200 to 300 million barrels.

But the biggest development news of the year is the project that might not happen - the development of Hebron-Ben Nevis, which is still under active negotiation between the development consortium led by Chevron and the government of Newfoundland and Labrador.

In April 2005 Premier Danny Williams put the consortium on notice that the province would aggressively negotiate for local benefits, musing aloud about a second refinery for the province. Last October he suggested that Newfoundland Hydro, the crown corporation electrical generation and distribution utility, might be interested in taking an equity stake in any new oil projects. With $2 billion in the bank (fruits of the federal-provincial Atlantic Accord renegotiation), he can afford to buy a seat at the project table.

Currently, the Hebron partners are ExxonMobil Canada Properties (with a 37.9 per cent interest), Petro-Canada (23.9 per cent) and Norsk Hydro Canada Oil and Gas Inc. (10.2 per cent). Chevron holds the other 28 per cent.

Williams has made clear his preference to leave the oil in the ground rather than risk Hebron becoming yet another "provincial government give-away". He has offered the consortium the option of fulfilling any two of three provincial demands: richer royalties than outlined in the generic regime, a provincial equity stake in the project or a new oil refinery for the province. Since the February 9th announcement by Newfoundland and Labrador Refining Corporation that they are commissioning a feasibility study for a 300,000 bopd refinery in Placentia Bay (three times the capacity of Come by Chance), the premier seems to have relented on the refinery demand while reiterating his other two.

One way or another talks will be ending soon. On February 3, 2006 Williams revealed that both sides have agreed to wrap up discussions by early April, a deadline set in mid-January by mutual agreement.

Nova Scotia

Although the Nova Scotia offshore sector has almost a billion dollars of exploration commitments spread over 27 licenses, little actual drilling or seismic activity is expected for 2006.
Canadian Superior Oil has expressed interest in seismic and drilling work at its Marauder and Marconi fields, as well as drilling at its Mariner prospect. BEPCo. Canada has set up shop in Halifax and is looking at exploration drilling in the third or fourth quarter of 2006, subject to regulatory approval. BEPCo has additional plans for one to three deepwater wells between 2006 and 2007 and, subject to drilling success, one to three appraisal wells may be drilled between 2008 and 2009.

While no new developments are in the works, existing developments are being improved to extend their productive life. This year, Exxon-Mobil plans to extend the life of the Sable gas project by installing a 7,000-tonne compression deck – a giant pump required to push the natural gas to shore. Built overseas, the compression deck will be installed with local support and the use of the Saipem 7000, the world’s biggest offshore crane.

Despite disappointing results from recent delineation drilling, EnCana remains interested in its Deep Panuke prospect, which is thought to contain close to a trillion cubic feet of natural gas. The company is in dialogue with the government of Nova Scotia, discussing a fiscal regime for the project.

Additionally, Nova Scotia boasts the region’s first foray into unconventional supply: in January 2006, Contact Exploration and Stealth Ventures commenced drilling operations in Springhill, with a horizontal well to test productivity of natural gas from the historical coal beds of Cumberland County.

New Brunswick

New Brunswick has a long history of crude oil and natural gas production. Annual oil production varied from 5,000-30,000 barrels from 1911 to 1988. Natural gas production averaged about 650 million cubic feet annually from 1912 to 1946. From 1953 to 1991 it maintained a fairly steady rate of about 100 million cubic feet per year.

Unlike the other Atlantic provinces, the New Brunswick oil patch is all on dry land. There are two notable projects.

Corridor Inc. of Halifax is drilling its fourteenth well at McCully Field in southern New Brunswick, delineating a field now thought to hold some 1 trillion cubic feet of natural gas. The company believes it has sufficient proven reserves to justify construction of a field gathering system, gas plant and 48-kilometre pipeline to connect with markets in New Brunswick and New England through Maritimes and Northeast Pipeline. If the development receives investor and regulatory approval, work expenditures are anticipated to be C$30 to 40 million.

Approximately 10 miles south of Moncton, New Brunswick, the Stoney Creek project is in close proximity to the largest consumption market in North America, with existing pipeline and refinery infrastructure in place. One of Canada’s oldest producing fields, Stoney Creek has already yielded 800,000 bbl of oil and 28.7 billion cubic feet of gas from 1909 to 1991. To date, less than five per cent of the original oil in place has been recovered.

Contact Exploration of Calgary is preparing to recover as much as it can of the remaining 95 per cent oil in place, as well as some incremental gas reserves to be accessed through horizontal drilling. Financing is in place, the first horizontal well location has been selected, and permitting is in progress. Drilling is expected to commence by the end of February.

Prince Edward Island

PEI holds the distinction of being home to Canada’s first-ever offshore oil well, drilled in 1943. Since then, many holes have been run but none have resulted in a producing field. Although an exploratory natural gas well has not been drilled since 2003, there continues to be interest and activity to secure prospective drilling targets. Four Canadian petroleum companies hold the twelve current exploration licences; to date, eighteen exploratory wells have been drilled.


With oil at US$65 a barrel and climbing, analysts anticipate long-term price buoyancy. Some say that oil prices have nowhere to go but up. There will be volatility, certainly, and periodic fluctuations due to transient political or economic factors. The trend, however, suggests that Atlantic Canada is well-positioned for renewed exploration and development interest: the economics of oil production in challenging regions are becoming increasingly attractive and the region offers some certainty in the context of a global production environment troubled by political instability.

Rising oil prices have created a spike in exploration worldwide, resulting in a global increase in the demand for drill rigs. Competition for rigs is vigorous, and even major oil players are scrambling to line up the equipment they need, at the time they need, for this drilling season.

In the immediate term, each drill rig active offshore means more employment and business opportunities in the local supply and service sector, and in the longer term, the promise of new major finds and perhaps additional developments. As long as the industry continues to take these initial steps, Atlantic Canada’s journey to petroleum prosperity will continue.

Monday, April 03, 2006

NL Seal Hunt: Isolated outpost in the eco-wars

This has been submitted to the Telegram for publication
It’s easy to see ourselves as a persecuted people during the annual March protest of the seal hunt. In fact, the battle waged by Paul Watson of the Sea Shepherd Society against the Newfoundland and Labrador seal hunt is only one minor outpost in a larger global battlefield. For them, the seal hunt is just the local stop on the global save-the-earth tour.

When we ask why Watson et al choose to pick on us and not other apparent animal injustices like pate de foie gras, veal farms or abattoirs, we miss the point that they already do exactly that. They fight their eco-war on many fronts, under many names and in many places.

Watson is part of a international network of eco-warriors dedicated to the cause of protecting the earth from the effects of the human footprint. His fellow travelers include PETA who believe animals should not be used under any circumstances, the Animal Liberation Front who rescue animals from "abuse" and cause financial loss to animal exploiters, (usually through the destruction of property) and the Earth Liberation Front which commits economic sabotage to stop the exploitation of the natural environment.

These groups and others lie and break the law to "protect the environment". They ram ships, set bombs, criminally harass researchers, trash research facilities, spike trees to injure or kill wood harvesters, and generally do anything they feel is justified.

Human injury is not a deterrent. Death is mere collateral damage in their campaign to save the earth and the animals that live on it - injury or death is the medium for their message. These proud eco-warriors are ideological eco-terrorists who cannot be convinced of the error of their cause or the means they choose to wage their fight.

These groups do not act in insolation from each other. They are closely related and share information, resources and personnel.

Today, traditional environmental associations like the Sierra Club and the US Humane Society have been infiltrated and taken over by this loose association of full-time, fanatical and dedicated extreme activists. Their strategic goal is to extend their reach by increasing the resources available to them to increase the impact of their point of view.

In the end it’s irrelevant whether we use rifles or clubs to kill white coats or bluebacks or fully grown seals in order to continue our traditional way of life or preserve important cod stocks. When we take umbrage at being called cruel and ruthless and object to McCartney misstatements, we fight the wrong fight because we miss the big picture.

This fight is not personal. In believing it is, we engage the protesters in ways most advantageous to them. When the Premier and local populist personalities react by blindly advocating boycotts against Costco for daring to drop seal products from their shelves, that only reinforces the misconception that this is a fight that centers on us versus them. The $100,000 allocated in the provincial budget for a pro-seal campaign will yield many times that amount in donations for the anti-sealers. It will only put us further behind if used to simply defend the hunt rather than attack the protesters.

These blindly ideological eco-terrorists should be made to answer for the damage they continue to cause around the world. Paul Watson and his partners in crime need to be exposed for what they are.