Is that a change in the wind?

Up till now Premier Williams has insisted that the province has not shifted it's "position" on Hebron. In fact, Williams says the province has stood fast and hasn't shifted at all.

But over the last few days, the language has subtly changed. Today, CTV and VOCM both report his new language as Williams saying that he hasn't budged from its "basic principles.''

Before, Williams says he wasn't going to shift from his "position". Now he's working to preserve his "basic principles".

On the face of it, a "position" is more fixed than "basic principles".

On the other hand, this might be reading more into hastily edited news stories and snap political reactions than is prudent.

Miscellaneous Friday notes

Two posts on other blogs worth looking at . . .

Thoughts From the Western Edge has this look at Quebec's spending power given the recent House of Commons formal recognition of Quebec as a nation inside of Canada.

And you thought it was just a symbolic resolution with no force or meaning? Or did the resolution rock your nationalist world? As far as Robert is concerned, constitutionally this "recognition":

... is really theatre for the Quebec audience only as the various parties try to position themselves on the Plains of Abraham to best re-enact the version where Wolfe if killed and Montcalm triumphs. Quebeckers recognize this for what it is and given their increasingly sophisticated view of the world will watch the politicians go through their paces on this issue but judge them on things like the economy, labour peace and public services.

In the meantime and on a lighter note, (serious business) looks into the future and sees the Williams government treating offshore oil development as a serious public policy issue and not, as some have charged, as a tool to be used towards the end of political hegemony.

From the sublime to the ridiculous, OffalNews brings it all to you.

Hebron talks on?

This from the CP wire service:

Formal talks to develop Hebron offshore oil project back on, N.L. gov't says

ST. JOHN'S, N.L. (CP) - The Newfoundland and Labrador government says formal negotiations to develop the stalled Hebron offshore oil project have resumed.

A spokeswoman for Premier Danny Williams says formal discussions to proceed with the multibillion-dollar oilfield are back on, but declined to elaborate further.

Two months ago, Williams announced that exploratory talks between the provincial government and Hebron's partners, including Petro-Canada (TSX:PCA), were ongoing, marking a significant change in tone for the premier.

Negotiations broke down last year after Williams insisted on a 4.9 per cent equity stake in the proposed offshore oilfield.

Chevron Canada Ltd., the operator of the Hebron offshore oil platform, disbanded its project team in April 2006 after the province and an oil consortium couldn't reach an agreement on financial terms and benefits.

Experts have estimated that Hebron could produce more revenue for the province than all of its three other current offshore projects combined.

According to some reports, he even dashed out of the Premier's conference to go negotiate directly. And with the election just two months away, juts in the nick of time, I'd say.

But in time for what? Another negotiation collapse followed by an election centered around another jihad against "big oil" and seeking a popular mandate to negotiate? Or will there be a deal completed in the heat of a pre-election urgency so government can point to a concrete and significant economic achievement?

Stay tuned.

Simpson on Dannyism

There's no doubt that the a huge proportion of the province seek solace in blind political trust. After all, look how well we did under that psychological regime the last time.

When it comes to minding business, the future of the province is the business of every person who has something to contribute.

In this column published today in the Globe and Mail, Simpson demonstrates to his employer the value of putting him on the road.

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Newfoundland goes for the 'trust me' approach
JEFFREY SIMPSON, June 23, 2007

ST. JOHN'S -- 'Trust my judgment," said Newfoundland Premier Danny Williams this week. Apparently, an overwhelming majority of Newfoundlanders do.

With an election this October - fixed dates are now the law - Mr. Williams' party might capture close to every seat in the 48-member House of Assembly.

Not since the heyday of premier Joey Smallwood, who won six crushing victories after Newfoundland joined Confederation in 1949, has any political figure so dominated the province's politics.

Just as in Mr. Smallwood's day, when the premier demanded and received absolute loyalty, no one dares cross Mr. Williams publicly. In a small province with big ears, even private criticism gets back to the Premier. Since the government is involved in just about everything in Newfoundland, fear of Mr. Williams's legendary capacity for retribution has a lot of people careful of what they say.

Mr. Williams's modus operandi is simple: You're with me or you're not. Black or white; friend or foe. Adversaries abound, and they must be brought to heel or, as he said this week, "told to mind their own business."

The mentality both reflects and accentuates part of Newfoundland's political culture, in which the province is seen to have been held down by outside forces that prevented it from achieving its full potential.

The list of outside forces is long: fish merchants in Britain and St. John's, the perfidious British government that manipulated Newfoundland into Canada, Quebec (for the iniquitous Upper Churchill Falls hydro development), Central Canada, foreign fishing fleets, business interests (especially oil companies) and always, always the federal government.

A standard in Mr. Williams's many public utterances explains best his popularity, "We are fed up with giveaways and bad deals." To Newfoundlanders, their history has been potted with "giveaways and bad deals" in which other interests always did them in. How else to explain the gap between Newfoundland's relatively poor economic position and what its citizens have always believed should have been a brighter future?

There is plenty of myth and romanticism in this interpretation, but there is truth, too.

The Upper Churchill Falls project turned out disastrously for Newfoundland. True, Quebec took a risk at a time when energy prices were low, but when prices jumped, Quebec grabbed all the additional money in a 65-year deal and refused to reconsider.

Every drop of water that spins the turbines in Labrador reminds Newfoundlanders of their loss. They remember, too, that Ottawa refused to pressure Quebec to allow Newfoundland's hydro to pass through the province.

That one deal gone horribly wrong still colours public policy in Newfoundland. The memory and the reality of that deal make it harder for the province to do any deal, since the fear of a repeat remains so prevalent. That's why Mr. Williams's assurance, as a successful businessman, that he will never allow a "giveaway or a bad deal" allows Newfoundlanders to "trust" him almost to the point of messianic fervour.

There was also the collapse of the cod fishery, which is blamed exclusively on foreign overfishing and federal mismanagement.

Whatever the tangled interpretation of the cod fishery's collapse, and the history is tangled, it has come down today in the minds of most Newfoundlanders, and in Mr. Williams's litany, as Ottawa's fault, pure and simple.

When Mr. Williams steamrollered former prime minister Paul Martin to secure a new equalization deal, Newfoundlanders cheered him on. Today, opinion is as close to being unanimous as you will find in a democracy that Prime Minister Stephen Harper "screwed" (that is the frequently used word) Newfoundland, and that his Conservative MPs "betrayed" the province by putting a cap on equalization payments and reneging on a commitment not to include non-renewable resources in the equalization formula.

The oil companies, too, figured in Mr. Williams's pantheon of forces keeping Newfoundland from its potential. He thinks they got too sweet a deal in the first three projects, and he wants a much better one for the province in any future development.

That's why he made new demands on the consortium that was ready to proceed with the next project, Hebron - demands the consortium refused. He wants Newfoundland to have an equity stake in new projects as a window for the province on the industry and as a potentially lucrative investment. It's a bold, defensible approach used extensively around the world (Norway, for example), although not elsewhere in North America, Britain or Australia.

Thus far, Mr. Williams has little concrete to show for his approach. The province still lacks a natural gas regime, and a long-promised energy policy paper remains unpublished (although promised before the election). Drilling activity remains feeble.

Relations with Ottawa are in a deep freeze. Even civil servants aren't talking. Other provincial governments, too, have been put off by his style and conduct. The Lower Churchill hydro project remains a dream, although a lot of work is going into studying options, including ones that would completely cut out transmitting power through Quebec, a sort of psychological payback for that "giveaway" of the Upper Churchill.

The "trust me" approach hasn't produced much yet, except a knockout against Mr. Martin. But it has produced a profound political response in Newfoundland, of a kind not seen since Joey ruled the province.

Simpson on oil

Jeffrey Simpson, a mainland Globe and Mail columnist some local nationalists love to hate, has been in the province this week. Not only did he speak to the NOIA conference, he's been publishing columns centered on NL provincial issues.

This is one from today.

(Graphics from Wade Locke's presentation to the Harris Institute.)

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The Rock's very own cliffhanger: offshore oil
JEFFREY SIMPSON, June 22, 2007

ST. JOHN'S -- Down the road, past the rhetorical fog that envelops relations between Newfoundland and the federal government, lies the cliff.

The cliff is known to those who follow public issues closely. It scares them, because the fall-off is sharp, and the landing will be hard. The cliff ought to be the consuming public policy issue in Newfoundland. It is not, alas.

Right now, three offshore oil projects (Hibernia, White Rose and Terra Nova) are operating, pouring money into government coffers. Offshore royalties jumped more than $600-million to almost $1-billion for Newfoundland this year. (Ottawa is doing splendidly, too.)

Production and revenues from these three will continue at high levels for another three to five years. Then comes the cliff: a sharp decline in both production and revenues.

Hibernia South might extend production near Hibernia, but it's only perhaps a third the size of Hibernia. White Rose, smallest of the three, will tease out some additional oil. But that's it for the existing three.


There is a fourth project, Hebron, smaller than Hibernia, larger than the other two, located in deep water, with high costs. Hebron was set to move along until, in April last year, the consortium walked away following fruitless negotiations with Premier Danny Williams's government over new demands for equity and royalties. Mr. Williams said this week "discussions" have resumed that he hoped would lead to negotiations.

Most of the Hebron team packed up. Even if a new deal were negotiated, it would take at least a year to reassemble a team. Seven to 10 years later, maybe, oil might flow.

In the meantime, Newfoundland would have arrived at the cliff, the years when production and offshore revenues plunged. A fast restart for Hebron would push back that day of reckoning, but only for five to seven years, because nothing else is in the offshore pipeline.

No commercially recoverable oil has been discovered off Newfoundland for two decades. What's being pumped now was found from 1979 to 1984. A big and very expensive ($225-million or so) drilling project came up empty earlier this year in the Orphan Basin, 325 kilometres offshore. Expensive misses like that one do not encourage fast repeats.

When the going was better, and oil was being discovered in the late 1970s and early 80s, six to 17 drilling projects occurred each year. Since 1988, the it's fallen to zero to three. The competition for drilling rigs worldwide is ferocious. The cost per day has skyrocketed.

Newfoundland's provable offshore deposits are hugely important to the province, but small in the global scheme of things. The world uses about 85 million barrels of oil per day. Newfoundland's total reserves, as known today, would satisfy 20 to 25 days supply; Hebron only perhaps seven days.

The cost of offshore discovery and extraction in Newfoundland is high, which might explain why nothing is in the pipeline after Hebron, discovered in 1980. Natural gas might help, but the province still doesn't have a generic regime for gas. As for the "energy plan" that was promised about three years ago, Newfoundlanders are still waiting.

The cliff is ominous, whether the province confronts it in four, seven or 10 years, because offshore oil is the province's best hope for fiscal stability. With a declining population, personal income tax and sales tax revenues will not grow.

Even if Newfoundland gets its way with Ottawa over equalization and the Atlantic Accord - a highly unlikely possibility given the friction between the two governments - the additional money would be smaller than oil royalties.

Newfoundland's budget last year was $5.3-billion. Royalties and taxes from the offshore brought in about $1-billion. That money allowed the provincial government to cut personal income taxes, raise spending and pay down debt.

It was a wonderful budget in an election year. There could be more like it. But not as many as Newfoundland needs, because the offshore is the only major source of new revenue on the horizon, and it's going to start falling.

Mining is doing well, and the province will get money from those projects. As for developing the Lower Churchill Falls hydro potential, that's at least a decade away. In the meantime, there's the cliff.

What a change(?)

In light of the news from the last few days, this Financial Post story from just a week ago shows either how much things have changed in 7 days or how oversold the Premier's claim of Hebron talks actually is:

"There are no negotiations taking place between the Hebron co-venturers and the Newfoundland government," he (Chevron spokesman Dave Pommer) said. "We still remain open to the possibility that the project could proceed at some future date."

And on it goes.

Premier Williams' speech to NOIA

Fresh from the NOIA website is this transcript of the message delivered by Premier Danny Williams to the annual conference of the Newfoundland Ocean Industry Association (NOIA).

It was received without no interruptions, with polite applause at the end and without the standing ovation which has become de rigeur at his speeches. Response afterwards was cautious and guarded; they have heard this before.

Many participants, while encouraged, felt that the Premier had merely pointed out the birds in the bushes without coming close to putting one in the hand. Notably, the operator representatives downplayed the significance of the discussions. But compared to previous times when the Premier claimed that talks were happening, this time the operators didn't flatly deny the existence of discussions. That's progress of a kind.

With an election 4 months away and only a few potholes in his political landscape (Hebron, relations with NOIA, Stephenville, health care scandals, House of Assembly scandals) this speech was a good effort in pouring gravel.

You've read the news coverage here, here and here and even heard fragments here, now read the speech for yourself.

And to see what Williams is responding to, see Lunn's proposed speech here.

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Thank you, Roy, and good morning to our local residents and companies and a heartfelt welcome to our visitors and friends and our business partners from outside the province. Welcome to the place where the sun rises first in North America - but notice I said rises, not necessarily shines - where the continent starts its day, to this great land of opportunity with a variety of the greatest natural resource assets in the entire country.

Even Hugo Chavez can't match that.

I want to thank NOIA for inviting me to share our government's approach to the development of our energy resources. The last time I actually spoke here, that speech was instrumental in us actually getting the Atlantic Accord because it was shortly after the address I gave that Paul Martin then made his promise a couple of days later in Newfoundland and Labrador, and then subsequently delivered on that promise the following year.

I know there are some people in this room who have not been overly enthusiastic with some of our government's policies towards the oil and gas industry in Newfoundland and Labrador. I can say that, while I do appreciate your perspectives and I do acknowledge your concerns, I fully stand behind our policies towards natural resource development in our province.

As you all know, leadership requires some tough decision-making at times and oftentimes those tough decisions may create short-term challenges. But I firmly believe that long-term vision and strategic planning will be the driving force behind the ultimate success of our province.

Our government has accomplished a great deal in our almost four years in office and while I won't bore you and go through that list this morning, I would encourage you to reflect upon some of our successes.

One of our foremost achievements is the fiscal turn-around that we have achieved through fiscal discipline, financial restraint in the early days of our government and tough negotiations with the federal government. We were determined, and we succeeded, in persuading the federal government, under then Prime Minister Paul Martin that it should live up to its commitments under the Atlantic Accord.

The result of that success is, quite frankly, astounding and has made a world of difference for our province. The 2005 Atlantic Accord agreement was a significant turning point in our history.

Unfortunately for the people of Newfoundland and Labrador, this is now under threat from Stephen Harper, but believe me I'm still working on that front.

I certainly hope that no one in this room is fooled by our federal MPs insisting that no promise was broken; those same MPs who insist that we are actually better off under the new budget. It's so preposterous that it is actually insulting and the inconsistent messages from them are actually embarrassing to themselves. But we will succeed without them.

The only thing probably more insulting is that in a province where 80% of eastern Canada's discovered oil and gas resources are located, and where we produce almost 50% of Canada's conventional light crude oil, there is absolutely zero Natural Resource Canada employment presence in this province.

In fact, the Canada Hibernia Holding Company is located in Alberta, a slap in the face to a province that contributes over one billion dollars a year to federal coffers in oil revenue.

But I digress.

I firmly believe that all Newfoundlanders and Labradorians hold one very fundamental value in common and that is that we all want what's best for this province that we love so dearly. We all want to see Newfoundland and Labrador prosper and we all want to have a bright future for ourselves, and more importantly for our children and our grandchildren.

And quite frankly this fundamental value was the driving force behind my decision to enter into public life.

I have said before that I was absolutely fed up with the record of giveaways and bad deals that has been our province's history. From the Upper Churchill to the decimation of our fishery, among others, this province so truly rich in natural resources was not achieving the self-sufficiency and prosperity that we deserved.

And it is not just prosperity that we deserved; it is prosperity that should have naturally flowed from the development and exploitation of our natural resource based economy. It never ceases to amaze me that a province like ours has struggled for so long.

The Upper Churchill is one of the great wonders of the world. If you add on the Lower Churchill we have probably the most significant hydro-electric resource in North America. We have also recently discovered that our wind resource in Labrador is, in fact, the best in North America. Our fishery was the envy of the international fishing community attracting vessels from all over the world.

At Voiseys Bay in Labrador we have one of the largest nickel deposits in the world. Our iron ore in Labrador is a world-class deposit, and of course, our oil and gas, while not on the same scale as Alberta, is very lucrative.

And who knows what yet is to be discovered.

So let's recap: hydro-electricity, world class; fishery, it was world class; nickel and iron ore, world class; wind potential, world class; oil and gas, world class; and most importantly, our people, world class. And yet we remain a province with the highest per capita debt in the country, and though the pace has mercifully declined from the levels of the 1990s we continue to see outmigration and watch some of our people leave home for bigger pay cheques and job security elsewhere.

What probably irritates me most of all is that we continue to listen to central Canadian editorialists and armchair critics decry the nerve and audacity of the welfare recipients in Newfoundland and Labrador looking for more than our fair share.

Just last week I listened in awe and exasperation to a popular CTV personality with a national current affairs program twice refer to the welfare that Newfoundlanders and Labradorians receive. This was in direct reference to the current debate about equalization and the Atlantic Accord. What he and countless others failed to mention are the facts.

First of all I would point out that every single province and territory in this country depends upon federal government dollars to some extent. Maybe not all in the form of equalization payments but let's not buy into the myth that Federal Government dollars only flow to have-not provinces.

From transfer payments, to industry subsidies, to other general federal government programs and employment, I can assure you that Ontario and other provinces benefit from federal monies and rightfully so. After all, we contribute to those massive federal surpluses.

What I point out to those central Canadian columnists is that Newfoundland and Labrador has made substantial and meaningful contributions to this great country, financial and otherwise.

The money flowing from our oil and gas, from our nickel deposits and from the Upper Churchill most certainly represent a meaningful and substantial contribution to this federation.

I have said before when I talk to mainland audiences that our oil and gas industry is about much more than barrels and dollars and cents.

This industry, your industry, has transformed the economy of Newfoundland and Labrador and it has contributed to a renewed energy and confidence. Though the more tangible benefits are seen on the Avalon Peninsula, the reality is that oil and gas wealth has helped the entire province. Our Government's goal is to ensure that as we move forward, even more of the wealth generated in this very lucrative industry is put to work to develop a more broad-based economic revolution in the province.

The oil and gas industry has stimulated the growth of multifaceted service, industrial fabrication, and engineering sectors with the Northeast Avalon now established as the primary service and supply area for the offshore. Major industrial fabrication facilities are also located at Bull Arm and Marystown and elsewhere. We also have a very successful downstream petroleum operation in our province.

North Atlantic Refining has been modernized and is now producing some of the cleanest, low sulphur fuels in the world. It exports in the order of $2 billion worth of refined products annually and employs around 700 people in secure, well-paying jobs in rural Newfoundland. A second refinery, an LNG facility may be just around the corner.

All of this would not be possible if not for the skilled and dedicated workforce in the local oil and gas industry, a workforce that is internationally recognized for its expertise and its commitment. The modules for White Rose, for example, were completed right here, on time and on budget; a testament to the men and women of this province who laboured on this project.

We certainly have a strong foundation on which to continue building this industry and coupled with the enormous potential of Orphan and Laurentian and the coast of Labrador.

As we move forward together the provincial government also has an obligation, and a responsibility to the people of the province, as stewards of those resources. We must put in place a set of oil and gas policies and programs and a regulatory framework that will ensure that our valuable resources are developed in the best long-term interests of all the citizens of Newfoundland and Labrador.

Our approach to oil and gas development is within the context of a larger energy policy and ensuring that there are no more giveaways. The long-term consequences of making a deal for the sake of a deal are too great and we know that from our history.

We want to increase the share of R&D that is done in this province. We want more corporate decision making to take place right here in Newfoundland and Labrador. We want to increase the share of petroleum related business activity for local firms. We want to have processing done here and we have already taken some important steps in that direction.

We have appointed some Newfoundlanders and Labradorians who are very knowledgeable and experienced in the international petroleum industry to senior executive positions at Newfoundland and Labrador Hydro. We have strengthened our Department of Natural Resources.

And earlier this month we passed legislation to allow for the creation of a new provincial energy corporation. This will separate regulated activities of Hydro from the unregulated activities associated with the energy corporation.

My ultimate goal is that the equity assets of this new corporation from onshore and offshore oil and gas, wind, hydro, and other energy assets will ultimately have a value in excess of the debt of our province so that eventually we will be debt-free. I don't think there's any of the entrepreneurs in this room that could object to that goal.

In anticipation of the release of the energy plan we have committed $12 million in the fiscal year to begin implementation of energy-related activities. This is money that we will invest in developing our energy industry in the province with particular emphasis on the west coast and Labrador.

For example, $5 million of this will go toHydro for the Petroleum Exploration Enhancement Program that Minister Dunderdale announced at the International Symposium on Oil and Gas Resources in Western Newfoundland just two weeks ago.

Through this program Hydro will have the flexibility to commission seismic work independently and/or partner with private companies to obtain crucial geo-scientific information by investing in their seismic activities in exchange for an equity position. The steps we have taken, and others to follow, will contribute to the common goal we share of building a strong energy industry.

And I want to say with all sincerity that I am very, very, very optimistic about the future of our province's oil and gas industry and I do appreciate the contributions of the companies who make the industry tick. And though there have been issues of concerns on both sides, there are ways to work through them and I believe that we are all sincerely committed to do just that.

I am especially pleased to report that after a brief but necessary hiatus of just over a year, we are progressing with formal discussions with the Hebron proponents to explore a way forward. These are not negotiations but, in fact, meetings to clarify our outstanding issues and are a true cause for optimism.

The companies are sharing concerns over costs which are increasing around the world. They are also updating us on possible scheduling opportunities and threats. At the same time we are continuing to share our thoughts on such issues as equity and royalties. The proponents fully understand that these are entrenched principles for our government and that these principles will be reinforced in our energy plan. They are clearly a condition precedent for moving forward.

But I also think that despite some negativity, around the concept of equity in particular, what our government is asking for is not extraordinary and Norway is the single best example of putting resources to work for people.

One of the lessons learned is that to become knowledgeable, to have access to the information you need to make wise decisions, you have to be at the table with industry. The most effective way to do that is through participation.

Governments in oil producing regions typically set up agencies owned by governments that actively participate in the development of their oil and gas resources by taking an equity stake in projects. The percentage can be very high, often far in excess of 50% for some of the bigger oil producers.

We already have an example of a very successful and well-respected state-owned company involved in our offshore. Norsk Hydro owns a 5% stake in Hibernia and a 15% stake in Terra Nova. Indeed the Government of Norway's fiscal take from it's oil and gas industry is more than 70%.

The idea of participation of the producing jurisdictions having some degree of ownership in its own oil fields is not a radical idea. Rather, it is normal state of affairs within the industry worldwide. We have an example right here in our own backyard with the Government of Canada's 8.5% equity interest in Hibernia. This percentage in no way impedes the private operating partner's ability to reap large profits from this project.

To date Hibernia alone has produced approximately $15 billion with over $1.2 billion to Newfoundland and Labrador, over $4.8 billion for Canada,and approximately $8.8 billion for industry.

In fact, the Government of Canada has recouped its investment three-fold to date; a good time, I think, for Ottawa to give its equity interest and MPI benefit to the province.

Given that success, it should be little surprise that the Government of Newfoundland and Labrador has determined that we want to have an equity participation in our own fields as we go forward.

And let me clear up another misconception. We are not insisting on a free ride for our equity. We are prepared to be a contributing partner and some choose to ignore this fact or simply use the ignorance of the fact as a propaganda tool against us. But the companies, the consortium who are dealing with us in good faith, know what our position is as do our people, and that's all that really matters.

On the Hebron front, I should be clear that while an enormous amount of work still remains before we can come to an agreement, I would categorize the fact that these discussions are even occurring as very, very positive and very productive. It is my hope that full-scale negotiations can resume sooner rather later, certainly this summer, and that a negotiated agreement is not much farther down the road. The owners will then have some work to do to receive final project sanctioning but I am confident that we are on the right track.

I should also mention that a key concern for both parties involves labour supply. Our government and our industry partners have a number of large projects in the works that could potentially lock up both workers and fabrication facilities for a number of years. Marine construction, hydromet, second refinery, LNG facility, the Lower Churchill, to mention just a few, all bode very well for our future in this province.

It is critically important that we factor the Hebron work into the schedule or there may be no facility available in the near future. This potential boom in skilled trades requirement is why we launched our Skilled Trades Task Force some time ago. We want to be as ready as possible for the opportunities that are before us.

More immediate negotiations are underway with Husky on the development of the White Rose extensions. Just recently, John Lau stated in a national paper that the relationship between his company and our province is so transparent that it has resulted in a level of trust that is unusual between companies and governments.

We were very excited to hear the success that Husky has experienced in their drilling program. Their success will be our success. These resources will provide new revenues for Husky and stabilize Government's revenue stream for many, many years to come.

I am also confident that Hibernia South will happen once we receive the information we have requested from the owner companies. As stewards of the resource we have a legal and a moral obligation to ensure that we have all the information we require to properly evaluate any development in this province and we take that obligation very seriously.

I would also like to commend the Hibernia Management and Development Company for the professionalism that they have demonstrated throughout this entire process.

Of course, we are also looking beyond the oil industry and are now having discussions with some of the lead partners who are interested in pursuing the development of natural gas royalties. We have already shared with them our draft natural gas royalty regime and will soon share it publicly. We look forward to positive developments on this front in the coming months as well.

I can assure you that our government will not be sidetracked by the nay-sayers and the critics. Our time is too valuable and our goals too important. Unfortunately some of them do not see the big picture when making narrow-minded observations.

If standing on principle and fighting for fairness and equity and justice is called corrosive or confrontational by adversarial politicians then I say to those critics, it beats the alternative. They should just mind their own business and just keep their promises.

I much prefer to listen to folks like Gerry Byrne who are full of optimism and confidence and are working hard to move the industry forward and attract work for the province that ten years ago no one would have dreamed possible. I choose to listen to the construction workers, the engineers and the trades people who say they are working beyond capacity and are excited about the prospects. I respect and admire the comments and sacrifices of Newfoundlanders and Labradorians working thousands of miles away in Fort McMurray, who tell me that they are prepared to wait if it means no more giveaways and great rewards for their children. They inspire me.

I ask for your patience and your support as we work on deals which finally see our true potential achieved. I don't think they are far away.

Trust my judgement. Short-term pain will lead to long-term gain.

As Jean Jacques Rousseau said, patience is bitter but its fruits are just as sweet, and I see NOIA playing a key role in providing leadership to ensure that Newfoundland and Labrador businesses have a key role in the growth of this industry. I want to make it very clear to you all that I know and I truly appreciate the central role that NOIA has been playing and will continue to play in the amazing success story that is the Newfoundland and Labrador oil and gas industry.

We need to go forward together to build an oil and gas industry in Newfoundland and Labrador that will succeed not just in this province but internationally. The Government of Newfoundland and Labrador is just as anxious as you are for these developments to proceed. I know what it's like to run a business, including an oil and gas business, and how much it means to have these large projects go ahead. You have payrolls to meet and you have bottom lines to worry about.

There is no joy in us for making your lives more difficult.

On the contrary, the more vibrant the small business sector in this province, including those businesses involved in the service and supply sector, the better for the province. But nevertheless, it is our responsibility as government, and my responsibility as Premier, to look at the big picture and to do what we believe is in the long-term best interests of the people of this province including you, the business people.

It is time for the Prime Minister to do likewise.

We need to be united in ensuring that our oil and gas resources are developed so as to create a diversified industry that will be a major driver of our economy for many, many years to come. This is about a partnership for all involved, governments, industry, and organizations like NOIA. Successful partnerships will yield success for all, but success is a journey, not a destination.

Thank you very much.

Hebron: The word from the ground

The Placentia Charter, another of the NL weekly Transcontinental papers, last week published an interesting story on the loss of Hebron called "To produce or not to produce – that is the question" .

The Placentia area would be ground-zero for much of the fabrication work that would have to be done to make Hebron a reality and so a major source of employment for local residents. It's little wonder that the local paper has a point of view on the way government has handled this matter.

It reads in part:

To not keep the door open would be catastrophic to the economy and some say that Premier Williams, though indirectly, did just that.

Several months ago Mr. Williams felt that not continuing with the ongoing oil and gas related discussions may be in the best interest of the province. Williams felt Newfoundland and Labrador could not get its fare share due to the tax structure and the royalty regime while dealing with companies such as Chevron, Exxon Mobil, Petro-Canada and Norsk Hydro.

These are not low-ball players like Mr. Williams may take them for. They will not stick around to play hard ball while other developments are taking place in the world that need their immediate attention.

The development of Hibernia South is considered to contain 220 million barrels of oil and would considerably add to the life of Hibernia for approximately 10 –12 years.

Why travel to Alberta and say ‘we are the best in the East for development’ while the premier is not even talking to the big players.

Much of the article takes a different point of view from many and compares and contrasts the situation in Norway with the situation here. This is a fine piece and is a good example of what these weeklies can produce.

Williams blows smoke: No Hebron talks

I've mentioned before, most recently here, that Premier Williams likes to make casual statements as reported here:

Williams said Tuesday officials with his government and Newfoundland and Labrador Hydro are in discussions with partners in the project "all the time."

He wouldn't go into details of those discussions.

Premier Williams does not specifically claim that the discussions with the partners have anything to do with Hebron although he does try to leave that impression. In fact, both government and the Hebron partners (who are also the Hibernia and Terra Nova partners: ExxonMobile, PetroCan, Chevron et al) talk all the time over operational issues, Hibernia South and other non-Hebron projects without ever talking about Hebron itself.

In fact there have been no discussions at all since the Hebron talks collapsed a year ago. The simple evidence of that is, while premier Williams tosses off vague and bland assurances that everything is under control, industry is very quick to confirm to confirm, yet again, that there are no talks ongoing at all and there haven't been any in a year.

In the Telegram today, Tim Murphy, Chevron's (almost) last man left in the province, says so explicitly:

"Nothing has changed on Hebron. There are no discussions or negotiations ongoing and none are planned. At this stage we don't know what it will take or how long it's going to take to get back to that. From our perspective, as operator, no discussions or negotiations are ongoing. We're not talking to the province about Hebron." [emphasis added]

So while Premier Williams prefers to pretend that the matter is under control, this latest story shows beyond any reasonable doubt that the government's oil development file is not under control at all.

It is way out of control; there have been no talks between government and industry on a potential $10-12 billion government-revenue project in a year.

You can't help but ask a few questions about this.

The first is, what is government waiting for? What "winning conditions" are required before opening talks that will win the province, government and people, a steady source of revenue and jobs for at least 15 years in all? It's not like the federal government will put through the kind of expropriative legislation the Premier wants because they won't. And if the goal is to await far higher oil prices, that's a very risky and irresponsible game at best and won't make a difference since any deal would take that into account.

Second, how is it possible to ever reach a resolution to this matter unless and until government engages in talks. One this is for sure: it is impossible to negotiate unless there are talks and every day there are no talks is another day farther in the future that this project will come to pass.

Third, since there are no talks, why does the Premier want to provide the illusion that there are some kind of back-channel communications. (If there are then they are so secret that industry is not privy to therm.) It seems so uncharacteristic that Premier Williams is simply not announcing to the world that there are no talks and there will be no talks, unless and until some kind of preconditions are met.

Instead we have a sort of chagrined dissembling; none of the bombastic pride the Premier usually derives from conflict. Let's hope that's not because this conflict has already been fought and lost.

Finally we have to wonder: if industry says they are not talking to government and government is saying they are talking to industry, who is Premier Williams actually talking to?

Hebron will get done: premier

It's worth checking out this story in the Telegram today. In it, Premier Williams works to dispel the view that Hebron will come in time and things are OK in the meantime. As an exercise in damage control, it's pretty superficial and falls back on hoary cliches, bombast and semi-facts to ward off public discussions he's keen on tamping down.

Let's look at what he says.

First, as I mentioned yesterday, government is quick to be vague about mysterious "ongoing talks". Formal talks closed a year ago amidst much public acrimony on the province's side and the partners have since been disinclined to carry on under the last set of conditions laid down by government. The Telegram reports:

Williams said Tuesday officials with his government and Newfoundland and Labrador Hydro are in discussions with partners in the project "all the time."

He wouldn't go into details of those discussions.

Interestingly, Premier Williams does not specifically claim that the discussions with the partners have anything to do with Hebron although he does try to leave that impression. In fact, both government and the Hebron partners (who are also the Hibernia and Terra Nova partners: ExxonMobile, PetroCan, Chevron et al) talk all the time over operational issues, Hibernia South and other non-Hebron projects without ever talking about Hebron itself.

So are there talks ongoing all the time about Hebron as the Premier wants people to believe?

The last time government tossed up these kind of vacuous and bland reassurances, media follow-up with the partners revealed that as far as they were concerned there were no kinds of discussions at all; while they were ready to reopen talks, they were very firm that there had been no talks on Hebron going forward since the break-down.

It would be interesting now to go back to the partners, present them with the Premier's quotes and and ask them about the status of Hebron negotiations. As long as the Premier refuses to go into details, he can be as vague and misleading as he wants and that's exactly where his interest lie.

Then there is William's hollow statement that the companies will come back and he notes:

"If we're naive enough to think they're going to walk away from us for 15 to 20 years, then I think we're making a mistake," Williams said.

It may be trite to say that when he calls that statement naive, he's being naive himself but it would still be true. The companies will stay around and maximize their investment in Hibernia South (currently held hostage by government) and White Rose because they can expand that production with little capital or engineering outlay.

But when it comes to a whole new project, especially one at the cutting edge of technology and the marginal end of the economic spectrum (Hebron only makes sense if prices stay very high), there are lots of projects in the world which involve lower capital outlay, more government predictability and higher returns.

In fact, there are more such projects in the world than the major oil companies have people and money to develop them. With 15-20 years considered near-term in the oil majors planning process, obstinance has costs to this province both real and opportunity.

On the matter of the lost jobs and lost opportunities, Premier Williams is caught in a bind. On one side, Hebron represents literally thousands of person-years of work all over the province and $10-12 billion in government revenues. Yet Williams tries to minimize the effects of not having the project through remarks like "St. John's can take the hit" or, as reported yesterday:

"If there doesn't happen to be a job for someone in St. John's in an engineering firm, that's unfortunate. I'm not happy with that. But there has to be some price paid in the short term," he said.

So how unhappy is he with that state of affairs? Clearly not sufficiently unhappy to actually open real talks and do anything about it.

The reality is that we are not talking about one engineer in St. John's, we are talking about hundreds of engineers and support staff in St. John's alone. We are talking about thousands of fabricators in Marytown and Bull Arm, a region that really needs the work. We are talking about uncounted people across the province suddenly getting busy with real and well-paying jobs here in this province instead of out there in Alberta*.

While Premier Williams cavalierly dismisses that one job in St. John's, he pointedly ignores the fact that the oil and oil-related business and associated jobs in the province is province-wide. The Hibernia platform alone, for example, employs people from 90 different communities across the province.

But the most disturbing thing about this story is how Premier Williams casually squanders the one-time limited resource that is oil revenues while proudly using government spending as a substitute for real economic development. Again, as reported in the Telegram:

He said those surpluses are being reinvested into the province's infrastructure.

While things may have slowed in the oil and gas industry, Williams said, paving companies, construction companies and education and health boards are benefitting.

"There's a lot of work going on around the province," he said.

More roads to maintain, more teachers and doctors on salary, and overall more money spent on just maintaining government operations by an administration who can boast a larger public service, in absolute and relative terms, today than when it took office.

At the same time the private sector is in retreat across the province with the latest reports showing that Newfoundland and Labrador will see a decline in private sector capital spending intention and an overall GDP dipping to the lowest in Canada in 2008.

It's the long term spending by private capital that will make the difference in ensuring that this province is a going concern over relating it to the status of a bedroom suburb of Fort McMurray.

And there is still no resource money allocated on an ongoing basis to lowering the provincial debt.

In this interview, Premier Williams is pandering to the 70% who continue to approve of his actions as long as they believe they are paying no cost for them. For the foreseeable future and into the next election, facts will play no role in this debate because of the way this province has divided into two camps.

There are those who don't know or care about the economic impact of this government's actions as long as they can bob along proudly in the glorious wake of Premier Williams' latest jihad.

And then there's those in the real world who have businesses to maintain, homes to keep up and children to feed. And those are the ones leaving for Alberta so they won't be voting anyway.

---------------------------------------

*And make no mistake - there is an exodus of trained and capable workers out of this province because there is no substantial work for them to do. Empty palliative government programs dealing with a skilled labour shortage cannot place of actually producing jobs to attract and keep those workers. You can put this program in the same bin as the provincial immigration strategy which will fail for the same reason government is ignoring: It's the economy, stupid.

Hebron - One year on

There have been a spate of stories centering on the the collapse of these important negotiations. Over the last few weeks, both CBC and the Telegram have been covering the effects of having no new oil projects on deck. And stirring thing up to a fever pitch was the Craig Wescott speech.

Interestingly, while everybody is talking about the effects of having no Hebron, as far as I can tell nobody has asked the Premier about the current state of negotiations.

In the days following the end of talks, Premier Williams floated vague balloons that talks were still ongoing with somebody, somewhere in some way. But while government could not confirm details that this was happening, industry was very quick to confirm that there were no talks ongoing at all anywhere with anybody.

And that's the way things seem to be today.

It's hard to negotiate and come to an agreement without actually talking although it seems industry has already moved on anyway. The fact that Premier Williams has been talking about every issue under the sun but this one leads me to suspect that he knows that too; he'd prefer everybody just forget anything like Hebron every existed.

I'll just close this matter with a link to Caught in the Middle, a piece I wrote published in Atlantic Business Magazine in the wake of collapse.

Danny Williams and Weighing the Cost of Lost Opportunities

I don't like to repost from another but I just couldn't take the chance this might be yanked down.

For the second time in as many months, a prominent NL journalist has expressed the thought that perhaps our emperor has no clothes.

Whether you agree or not, and polls indicate only about 20-25% might, there's no doubt that this presentation will cause more that a few ripples.

Frustration builds when independent-minded people see that there is no public debate on fundamental issues facing the province. Debate is cannot be restricted to the process of issuing pronouncements followed by a wave of scripted agreement and adulation; an echo chamber is no forum for open discussion.

I would expect more of this over the next few months as frustration continues to build; we need more ripples.
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Weighing the Cost of Lost Opportunities
Luncheon Address by Craig Westcott to the Newfoundland Ocean Industries Ocean
March 29, St. John's

Thank you to the NOIA committee for inviting me here today.

When Harry Pride and the other NOIA committee members asked for a title to today's speech, I blurted out the first thing that came to mind: Weighing the cost of lost opportunities.

I could have subtitled it: 'Stuck in the middle with you.'

As Jeff noted in his introduction, I publish a business newspaper called The Business Post.

I started this venture last June. On the very day in fact, when Premier Danny Williams said he was feeling "annoy-yed" by NOIA.

You'll remember he uttered those remarkable words right in the middle of the annual offshore petroleum conference.

During that same conference, the premier chose to go on province wide television to announce he was firing his minister of Natural Resources, Ed Byrne.

He actually scheduled his press conference so that it would be carried live on the supper hour news.

Given the circumstances of Byrne's constituency allowances, we all know now that he had to step aside.

But you've got to wonder about the timing.

During that same convention last year, it seemed to me, in covering it, that Williams did his best to avoid attending any of the functions.

I think he actually showed up at one.

Here was the world's oil industry in town to talk about our oil and gas prospects, the very resources that are driving the economy and giving our government the kind of revenues and balanced budgets we haven't seen in years, and the premier stayed home.

Well actually it was worse than that.

He didn't just snub the industry.

He insulted the people in it, particularly the members of NOIA.

Just before that, at the OTC, Williams had done the same thing.

This was just after the breakdown in talks over Hebron.

If there was ever a time when we needed our top guy at the world's biggest oil show working the rooms and making our case, that was it.

But Williams stayed home.

Even during some of the lowest years for the oil industry in Newfoundland, the premier of the day usually went to Houston for the OTC. Because that's where relationships are made and business gets done.

We're getting ready now for NOIA's 2007 offshore conference here in St. John's.

And we already know that this coming one is going to be missing a major element.

Earlier this week, DMG Media announced it was pulling the plug on the annual international trade show that accompanies the offshore conference.

For the first time in nearly two decades, there will be no trade show during the conference.

I'm told that many companies, from the operators down to many of the local suppliers, didn't think it was worth their while to allocate money and staff to a booth.

The work just isn't here to justify it.

How's that for illustrating the title of today's talk. Weighing the cost of lost opportunities.

Like many of you in this room, I too am dependent on the local oil industry for my living.

I've published 14 issues so far of The Business Post.

One of the very best ones, revenue wise, was number eight, which was distributed to every business in this region just before Christmas.

It was our first Top 50 issue.

A look at the Top 50 players in our oil patch.

People who have invested their money, and their time and their energy, their precious life energy, into building a new industry for Newfoundland.

An industry that pays better than average salaries.

An industry that provides government with better than average revenues to pave roads, and fix schools and buy equipment for hospitals.

An industry that means a bright future for thousands of young Newfoundlanders who want the choice of staying at home for work instead of having to leave their parents and friends to move away.

And not just young Newfoundlanders. But people my age and older too, who find themselves commuting to Alberta, or moving North for work in increasing numbers, now that Danny Williams has all but killed the near and medium term prospects of this industry.

Where did it all go wrong?

Before I try to answer that, let me make one thing clear.

I am not aligned with any particular party.

Over the years, I've voted for all of them at one time or another.

I even published a short-lived, official PC Party newspaper when Loyola Sullivan was leader.

So what I'm about to say is not partisan and it's not meant to be personal or negative towards Danny Williams.

But it's impossible to avoid being negative about a leader who is so negative himself, especially about his critics and some of the people who try to do business in this province.

Getting back to where things went wrong, I would argue that it all started nearly four years ago with the election of a new government.

Those of us who live here will remember that four years ago, the consortium of oil companies that have the development rights to Hebron were just getting ready to tee-up Newfoundland's fourth big oil project.

This was two years after 9-11 in the 'States.

The Americans were at war.

Oil prices were inflating as a result of all the growing risk in the world.

The United States government itself was looking for more secure energy supplies.

The time was never better to start a new oil project offshore Newfoundland.

Then Danny Williams came to office.

He was full of dreams to make Newfoundland prosperous and to, as he put it, "end the giveaways."

Laudable goals.

Then last spring, after months of negotiation, Williams called reporters together to say there would be no deal on Hebron.

Only one side was negotiating in good faith, said the premier.

And that was the government.

For their part, the consortium maintained that never before had a group of oil companies offered as valuable a package of revenues and benefits to Newfoundland for the privilege of developing one of its oil fields.

Clearly, there was a communication breakdown between the two parties.

They couldn't even agree on what they had disagreed about.

Stuck in the middle were the rest of us. Many of whom had spent thousands and in some cases millions of dollars and precious time getting ready to bid for work on Hebron.

To this day, neither the premier, nor the oil companies, have revealed exactly what happened during those talks.

But what happened afterwards is plain to see.

The premier has made a campaign of attacking what he calls, "Big Oil."

Big Oil is out to get us, if you believe Danny Williams. To take advantage of us, to put one over on us like Hydro Quebec did at Churchill Falls.

If you believe Danny Williams, Big Oil is the Bogeyman hiding under our beds, waiting for us to fall asleep, so that it can sneak out on the Grand Banks and rob all the oil.

Now I'm no expert on high stakes negotiations.

But it seems to me, a common principle of business, whether you're selling hot dogs out of a cart on George Street or trying to get a major oil company to develop your resources, is that you treat your prospective partners and customers with respect.

It's not uncommon for negotiations to fail.

Negotiations often fail.

A good deal, as we all know, should be a win-win situation for everybody.

Sometimes that's not always possible.

But when you don't reach a deal, how wise it is to publicly vilify the people you were negotiating with?

It would be like me going into Hickman Motors or Penny Mazda and after looking at all the cars and haggling over the prices, deciding not to buy. For the moment.

I say for the moment, because at some point, I'm going to have to get a new car.

So how sensible would it be for Bert Hickman or Dan Penney to call a news conference and say, 'We couldn't reach a deal with that guy Westcott. He was negotiating in bad faith. He didn't want to pay a fair price for our car. But we decided there would be no more giveaways."

What are the chances of me returning to either one of those car lots if something like that happened? Is that the way to do business?

We all know what's happened since then.

Chevron, the lead operator on Hebron, has all but pulled out of Newfoundland.

ExxonMobil, one of the other partners, has shuffled its checklist of projects, tucking Hebron/Ben Nevis back to 2010 or 2011 before it gets another look.

Hibernia South is on hold.

Even worse, grassroots exploration is at a near standstill.

We need millions of dollars worth of seismic work and exploration drilling every year to find the next big oil field, but we're getting diddly.

It looks like Big Oil has given up on Newfoundland, at least for the time
being.

It appears the oil companies, which have projects all around the world they can chase and advance, are content to wait Williams out.

And if you look at our recent past history, that may seem like it makes sense.

Most premiers don't last all that long.

Brian Tobin lasted four years. Roger Grimes two. Even Clyde Wells, the man of iron will who stared down the country over Meech Lake lasted just over six years.

Most premiers don't last very long. The job burns you out.

But Danny Williams isn't like most premiers.

I've covered politics in this province for 20 years.

I was in the boardroom on the eighth floor of Confederation Building when an exhausted and frazzled Brian Peckford was on the verge of getting out.

I covered Clyde Wells during the hydro debate and the fight over Meech Lake.

I had the pleasure of watching Brian Tobin run to a waiting car to get away from me so that he couldn't face any more questions.

All those guys liked power, but power wore them out.

Danny Williams is a different kettle of fish.

Danny Williams loves power.

He lives for it. He revels in it. He likes to show everyone he's the boss.

All those other premiers I mentioned had their brown nosers and their sycophants.

It was comical after Clyde Wells came to power, how many of his cabinet members waltzed around using the word unconscionable, which was Clyde's favourite phase.

When Tobin was in office, his people were always busy "ramping up" for great things that were going to happen "at the end of the day."

The brown nosers have a way of taking on their leader's mannerisms and pet phrases.

And so it is with this crowd.

Everybody in the PC Party today is "drilling down."

I don't know where they are drilling towards exactly, but I think a lot of the time it's towards the latest phone to call VOCM Open Line.

The Minister of Business, Kevin O'Brien, and the Member for Terra Nova, Paul Oram, seem to have been assigned to monitor the open line shows religiously and to call up whenever anyone utters a bad word about the premier.

Maybe that's what drilling down means.

But you know, most good leaders are sensible enough to know that along with the flatterers and opportunists who inevitably jump onto their coat-tails, they need other leaders with them to share the load.

People who are not afraid to argue a point, or tell them things they don't want to hear.

Frank Moores had John Crosbie.

Brian Peckford had Bill Marshall.

Clyde Wells went and recruited Ed Roberts back from private life and drafted him into his cabinet as an un-elected minister, because he knew the value of wise counsel.

What has Danny Williams done?

He's done just the opposite.

Anyone who is as strong or as smart as he is has been isolated, or forced out.

He expelled Elizabeth Marshall from his cabinet three years ago because she had the audacity to object when he interfered in her department without telling her.

The woman had been Auditor General of this province for 10 years.

She was a deputy minister before that. And a chartered accountant. Nobody in his caucus is more respected, or knows government better.

But none of that matters, because she stood up to Danny Williams and now he won't have anything to do with her.

It's been three years since their spat and she is still on the backbenches.

Most of us know that Loyola Sullivan was a pretty bright fellow.

If you believe the inside accounts of what happened during the Atlantic Accord negotiations, it's clear it was Sullivan who presented the key arguments and had all his facts and numbers in line.

Yet, when Sullivan resigned as finance minister at the end of last year he got absolutely no credit for it from Danny Williams.

'Loyola was a good minister,' Williams told reporters. 'When I was negotiating the Atlantic Accord, he always did what I told him.'

Folks, Danny Williams loves power.

He feeds on it.

He's addicted to it.

And like most people who love power that much, he'll do anything to keep it.

And do you know what the really scary thing is?

He has a lot of people fooled.

He loves their adulation, whether it's deserved or not.

The fishery is dying.

The forestry industry is struggling.

Rural Newfoundland is shrinking by the day.

And he's all but killed the economy's real breadwinner, the oil industry.

And what is Danny Williams doing this week?

He's campaigning against the Prime Minister in a federal election that hasn't even been called yet.

And why?

Because he's got people fooled into thinking that he is fighting for them.

He lives to hear himself praised.

I suspect he listens to the open line as much as Kevin O'Brien does.

I know he follows what people are saying about him on the blogs. He has even threatened to sue some of them!

He's making time for that apparently, during his busy day.

Danny Williams is another Joey Smallwood.

Whenever things were going terrible for Joey on the home front, when the factories he imported weren't working, or some minister was involved in a scandal, Joey would look for an enemy from the outside.

Like island populations everywhere, Newfoundlanders rally when they perceive a threat from the outside.

For Joey it was John Diefenbaker or H. Landon Ladd of the I-W-A.

For Danny it's Big Oil and Abitibi and Stephen Harper and whoever else happens to stand up to him.

Nothing is being done at home to develop this economy, because Danny has all guns now trained on Ottawa.

I'm too young to have been in business when Joey Smallwood was premier.

But I am told by people who know and whom I respect, that Joey was a vindictive man.

That you had to be a friend of Joey to get a contract with government, or even to get a job in the civil service.

You had to be Joey approved.

Well, it's been 36 years since Joey left office.

We've had reforms such as the Public Tendering Act, implemented, directly as an effort to rectify those kind of abuses.

But if you ask me, Joey is back in power.

I happen to coach two minor hockey teams.

So I spend a lot of time in hockey rinks throughout this region.

I spoke with a man one day, a consultant, I won't say who, because I don't want the wrath of the premier coming down on him.

But he said to me that that people in his business are growing increasingly nervous about bidding on government work.

There is a real fear that things might reach the point where you could spend thousands of dollars and hundreds of hours preparing a bid on a government job that might all be in vain if you are deemed unfriendly to Danny.

People are afraid that the quality of their work, or the price they submit may not count when they look for business with government.

Some people are genuinely afraid that the real deciding factor might soon be whether they are seen to be a friend or foe of Danny.

You see, with politicians like Danny Williams, you're one of two things: You are a friend, or you are an enemy.

He doesn't allow you the luxury of being independent or unaligned.

I know this from personal experience.

As I've said, I've been covering politics in Newfoundland for 20 years.

I've covered seven premiers.

I've written things about Roger Grimes, for instance, that were truly hurtful.

No doubt I made him angry.

No doubt, like other pundits, I wounded his pride.

But he was always professional.

Danny Williams isn't.

Danny Williams can't take criticism.

A week after I wrote a column about his handling of the F-P-I debate in the provincial legislature, his press secretary informed me that I was being cut off from all future interviews with the premier.

She said I was unfairly critical. That I should have checked with the premier before running my column.

She has since phoned a number of the publications I write for to tell them the premier's office has nothing to do with me.

Telling them, in other words, you shouldn't do business with this guy, if you want to continue to have access to the premier.

Likewise, the business I started last June.

The Business Post is mailed to every business on the Northeast Avalon.

Every issue, I pay Canada Post to mail a copy of the paper to every business in St. John's, Mount Pearl, Conception Bay South, Paradise, Torbay, Portugal Cove-St. Philips and the Goulds.

The paper is distributed at most major business events in the city as well as at trade shows in Vancouver, Toronto, Montreal and this coming May in Houston.

In other words, The Business Post is hitting the target audience of anyone who wants to reach a business clientele.

And yet, the paper has not received one ad, not one ad, from the provincial Department of Business, or the Department of Innovation, Trade and Rural Development.

And it's not from lack of asking.

These two departments advertise their business funding and assistance programs all the time in other publications.

But they won't advertise with me.

Why?

Because I have dared to criticize the Great Leader.

Under the regime of Danny Williams, you pay a price for being independent.

And it doesn't matter if you're as big as ExxonMobil or Bell Aliant, or as
small as the local media outlet.

You've got to watch your Ps and Qs, stroke his ego, be careful that you don't go afoul of the premier.

Folks, that's not democracy. That's dictatorship.

Why would anyone, whether it's an oil company or anyone else want to invest in this province if the ground rules are everything has to please Danny Williams?

That you've got to do everything his way.

Where anyone who holds a different view is deemed to be unpatriotic or out to get Newfoundland?

How can you do business fairly and safely in a place like that?

And so I ask you, what is the cost of all this fighting with Ottawa and big business?

What is the cost to Newfoundland?

To the people who need a prosperous economy to pay for their roads, and schools and hospitals?

Who need productive companies and employers, so that their children can find work at home?

What is the cost to you, the business leaders of this province, who watch as the oil companies close their offices and pull out of town leaving you behind with all your investments and hard work going down the drain?

What is that cost?

It is the cost of lost opportunity.

It is the cost of a resource-rich province that will forever be dependent upon hand-outs from Ottawa, because the man who leads us is unable to negotiate, or take sensible advice.

It is the cost of lost hope, cast in the eyes of every father who kisses his little boy goodbye at St. John's Airport as he boards the plane for Alberta.

That is the cost.

What we have to ask ourselves is, is that a cost worth paying?

I say it is not.

And if it is not, what do we do about it?

Well, the first thing we have to do is try putting this guy in his place.

Because Danny Williams is not going away.

Trying to wait him out is not an option.

Not when he is at 74 per cent in the polls and is addicted to power.

Even when the public does wake up years from now and realizes what he has done to them, he still won't go easily.

He pretends now and then that he's fed up and ready to leave.

But that's just to get people's pity.

No, like Joey Smallwood, Danny Williams is going to have to be dragged kicking and screaming from office.

He'll be digging his fingernails into the desk trying to hold on.

For a man like that, power is everything.

So it falls to us to somehow circumscribe that power.

To limit it, to blunt it, to lessen the damage of his reign.

I'm not telling you to vote or campaign against him, or to fund other political parties.

But I think you shouldn't be afraid of telling Williams how you feel about the job he is doing so far.

Neither should you hold back from letting the clique of yes men around him know how you feel.

Most of all though, you have to educate your friends and neighbours. The people who think Danny can do no wrong.

Let them know what he is doing to your business and your industry.

Tell him how their future is threatened, because of this guy's inability to put his province ahead of his own ego.

And let me add one thing.

You also have a duty to talk to Big Oil.

To let the leaders of the oil companies know that you care about this industry.

And that they should care about it too.

That Newfoundland is a good place to do business.

That their future prosperity depends in part on developing high class fields like Hibernia and Terra Nova and White Rose, in what is perhaps the safest place in the world.

Unfortunately, Big Oil often makes it really hard for people to like them.

Because when they put projects like Hibernia South on hold, and do things like challenging the Supreme Court ruling on how much they should spend here on R & D, they're not punishing Danny Williams.

They're punishing the people of Newfoundland and Labrador.

And it's the people of Newfoundland and Labrador who give Danny Williams his power.

So what Big Oil should be doing is making its case directly to them.

Telling its side of things.

Showing Newfoundlanders that they value our resources.

And if Big Oil does that. And if you do your part to educate your fellow Newfoundlanders, maybe we can get things back on track.

Maybe Newfoundlanders will look twice at Danny Williams.

And nothing is scarier to a man who is obsessed with power than an electorate that thinks for itself.

And that, my friends, is an opportunity that is too good to pass up.

Thank you.

Pre-Development Projects: Hebron

This is the 2nd of 4 stories on energy projects to come recently published in the Natural Resources Magazine supplement to Atlantic Business Magazine. Where the project details have changed since the article was written last December, I will note that at the end.

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If any story could be said to have dominated Newfoundland and Labrador’s petroleum environment in 2006 it is the collapse last March of the negotiations between the Hebron Ben Nevis consortium (led by Chevron Canada) and the Williams administration.

A year later, no further talks have since been held nor are any planned for the immediate future. In the Atlantic Premier’s Alberta Trade mission held in January 2007, Williams never even mentioned Hebron in his laundry list of imminent economic mega-projects.

Hebron Ben Nevis was poised to be the fourth offshore development for the province, a “next-generation” GBS and topsides that would bridge the gap to a strong petroleum future. While the Williams government stands firm on its position of "no more giveaways", local fabricators and service providers stands frustrated on the sidelines.

For the local supply sector, Hebron represented momentum and continuity, a smooth transition of business and employment opportunity from one project to the next. Now firms are now looking for opportunity in other parts of Canada and withdrawing personnel and capital from the province. The Burin Peninsula has been particularly hard hit, since the regional fish plants, the only other source of significant employment, have also closed.

Meanwhile, lost government royalties and taxes (at least in the immediate term) are estimated to be equal to the other three projects combined: some $8 10 billion, depending on oil prices. This revenue was scheduled to arrive just as the other projects’ production revenues are scheduled to go into a steep decline from a peak of $1.4 billion in 2012 13.

The mid term tipping of the provincial budget from surplus to deficit due to the recent shutdown of Terra Nova points to the need to have more projects in play.