Official (Alberta) Oil Discussion Thread

[Corral]

Originally Posted by IliketoPuck

To expand on my previous post, I would encourage those with a few minutes to watch the video in the link:

http://www.bnn.ca/oil-patch-sentimen...a-ceo-1.562463

What is occurring in the Canadian midstream industry is a direct result of our inability at a provincial and federal level to provide a stable regulatory regime capable of approving large scale projects. We, as a country, have caused our major, home grown midstream companies to look to our greatest competitor for expansion opportunities.

These are real dollars not being spent in the Canadian economy. Billions of dollars that will not filter into medicine, education, welfare, infrastructure.

I hope people really start to consider the folly and naivete of trying to obtain environmental social license the longer this drags on.

We are letting the Americans aim the gun at our foot, but we are the ones pulling the trigger.

Actually no - this is incorrect. We have stable regulatory regimes at both the federal and provincial levels with knowledgeable good people capable of approving projects. The current inability to get approvals thru is a direct result of Canadian politicians FOR DECADES at all levels ignoring systemic social problems associated with major energy development while cozying up to the likes of Gwyn Morgan who convinced them to socialize losses and just work to get re-elected every four years.

[Mr.Coffee]

Originally Posted by Corral

Actually no - this is incorrect. We have stable regulatory regimes at both the federal and provincial levels with knowledgeable good people capable of approving projects. The current inability to get approvals thru is a direct result of Canadian politicians FOR DECADES at all levels ignoring systemic social problems associated with major energy development while cozying up to the likes of Gwyn Morgan who convinced them to socialize losses and just work to get re-elected every four years.

Could you please be more specific or post links to demonstrate what you're referring to here?

[Corral]

Originally Posted by Mr.Coffee

Could you please be more specific or post links to demonstrate what you're referring to here?

Northern Gateway provides a good illustration. The NEB process led to an approval of the pipeline project - but the NEB really had no ability to address the major issues which were always going to dog this and now are doing so - the dangers of heavy off shore tanker traffic in that region - a subject which the federal and BC governments have known about and dragged their heels on for a long time and have failed to put in place a set of rules to address the dangers - and first nation rights in BC - again a subject which both levels of government have had like 40 years to make progress on - since it first became apparent that this was a problem for resource development in BC.

Really in Alberta just about every major energy project I can think of has been approved by the provincial regulatory regime, so I don't even know where the inability to approve major project is within Alberta?

As for govn't officials cozying up to the likes of Gwyn Morgan ... well I can't prove that one for you. But there was this little bit of disclosure a few years back about Alberta officials discriminating against groups who speak out against energy development

http://business.financialpost.com/ne..._lsa=c0a3-d0bf

[Peanut]

Interesting perspective. My interpretation of a federal regulatory approval being "quashed" (after an almost decade-long approval process in the first place) is that the regulatory regime itself is unstable.

What good is the approval via the regime if it doesn't actually mean you have approval?

[Corral]

Originally Posted by Peanut

Interesting perspective. My interpretation of a federal regulatory approval being "quashed" (after an almost decade-long approval process in the first place) is that the regulatory regime itself is unstable.

What good is the approval via the regime if it doesn't actually mean you have approval?

It was quashed by the Courts because the federal and BC govnt's failed to meet their legal obligations to consult with first nations in the development of the project. The quashing had nothing to do with the NEB process or the regulatory regime. No tinkering with the regulatory regime will solve the problem facing the BC and fed govn't of having to take aboriginal interests seriously - ie not just lip service - when energy projects cross their traditional territory in BC. Like I said, they've had at least 40 years to figure this out.

[Mr.Coffee]

Let's talk about taking aboriginal rights seriously. First of all, the courts implied in their ruling that the energy companies actually did adequate consultation but that the governments were essentially useless, you're right. Consultation is supposedly on the government, but in practice the governments never do it (or, rarely do it and rely on energy companies to do it).

But where it all breaks down for me is that the burden of consultation hasn't been properly prescribed (maybe this is more to your point with unclear rules?). No treaties in BC mean that random FN band 700 miles away can make dubious claims to traditional territory if a pipeline goes through it. This fact regarding adequate consultation for the process makes it tough to appease so many different (and largely unaffected today) groups. I don't think it's right, and by extension it renders the regulatory process ineffective (I don't want to use the term stable, I don't think that's quite the right term).

Changing the regulatory requirements for clear descriptions of what consultation is and should consist of, would be of benefit to everybody (including First Nations I think).

[Peanut]

I think it's just a difference in defining the scope of "the regime", possibly. I would argue for regulatory regime stability, the issues with the First Nations do need to be addressed and captured as part of the process. The federal and provincial governments duty to consult is part of the regulatory regime as a whole. And their failings in dealing with the First Nations creates instability in the regulatory process.

Also side note but the EUB becoming the ERCB becoming the AER and now there's talk of moving back to a split Environment and Energy regulator again in Alberta... That's instability as well. Maybe not major instability but it's still a lot of churn.

[Mr.Coffee]

Most bands in Alberta aren't exactly thrilled with how Albertas energy regulator has handled consultation either, but Alberta has done a decent job of providing timely guidance to companies on specific projects.

Alberta also has the advantage of Treaties 6, 7 and 8 to help guide how consultation and conduct of liaison should be. BC doesn't have that same advantage and the Feds, who weigh in on cross provincial projects as its their jurisdiction, are really unclear.

[Regorium]

Originally Posted by Peanut

Interesting perspective. My interpretation of a federal regulatory approval being "quashed" (after an almost decade-long approval process in the first place) is that the regulatory regime itself is unstable.

What good is the approval via the regime if it doesn't actually mean you have approval?

This is evidence of political instability, and not instability of the regulator.

The regulator has fulfilled its mandate, as it has for decades and decades without issue.

[IliketoPuck]

Originally Posted by Corral

Actually no - this is incorrect. We have stable regulatory regimes at both the federal and provincial levels with knowledgeable good people capable of approving projects. The current inability to get approvals thru is a direct result of Canadian politicians FOR DECADES at all levels ignoring systemic social problems associated with major energy development while cozying up to the likes of Gwyn Morgan who convinced them to socialize losses and just work to get re-elected every four years.

So the answer to solving systemic social problems is driving away billions of dollars of tax revenues that could be directed in a socially beneficial manner?

Right. C'mon Corral!

[calgarygeologist]

Originally Posted by Peanut

I think it's just a difference in defining the scope of "the regime", possibly. I would argue for regulatory regime stability, the issues with the First Nations do need to be addressed and captured as part of the process. The federal and provincial governments duty to consult is part of the regulatory regime as a whole. And their failings in dealing with the First Nations creates instability in the regulatory process.

Also side note but the EUB becoming the ERCB becoming the AER and now there's talk of moving back to a split Environment and Energy regulator again in Alberta... That's instability as well. Maybe not major instability but it's still a lot of churn.

The regulator rebranding themselves every few years is really bizarre. They have changed three times in 10 years. It must cost a lot of money to update websites, documents, letterhead, clothing, etc. Doesn't really make much sense.

[burn_this_city]

EIA reporting a 14.5MM barrel draw in US inventories last week.

http://ir.eia.gov/wpsr/wpsrsummary.pdf

[DiracSpike]

We can't be held hostage developing critical infrastructure by any and all native groups who feel that the pipeline is crossing their "traditional land". Enbridge wasn't going to just raze a path and put pipe in, any parties that actually owned the land would have been compensated. If anything the consultation process was too far reaching, it's really become a joke process where anyone from anywhere who has any concerns can come bog down the process. This has taken years, and people are still crying they weren't consulted enough.

A much more legitimate concern is tanker traffic off the north coast, but even still it shouldn't hold up this project. Kitimat port would only be scheduled for 220 tanker calls a year. The most pessimistic failure rate of tankers I can find is 3X10^-6 vessles per year, which could also be expressed as 1 per 333,333 per year. Divided by 220 that means we can expect a disaster once in the next 1500 years. Which seems like over the top risk aversion compared to the national benefits to be gained.

[IliketoPuck]

http://www.bnn.ca/over-50-groups-urg...ocess-1.563107

Seems like a reasonably stable regulatory regime.

[peter12]

Originally Posted by DiracSpike

We can't be held hostage developing critical infrastructure by any and all native groups who feel that the pipeline is crossing their "traditional land". Enbridge wasn't going to just raze a path and put pipe in, any parties that actually owned the land would have been compensated. If anything the consultation process was too far reaching, it's really become a joke process where anyone from anywhere who has any concerns can come bog down the process. This has taken years, and people are still crying they weren't consulted enough.

A much more legitimate concern is tanker traffic off the north coast, but even still it shouldn't hold up this project. Kitimat port would only be scheduled for 220 tanker calls a year. The most pessimistic failure rate of tankers I can find is 3X10^-6 vessles per year, which could also be expressed as 1 per 333,333 per year. Divided by 220 that means we can expect a disaster once in the next 1500 years. Which seems like over the top risk aversion compared to the national benefits to be gained.

I was on Enbridge. It was a gong show.

[Regorium]

Originally Posted by IliketoPuck

http://www.bnn.ca/over-50-groups-urg...ocess-1.563107

Seems like a reasonably stable regulatory regime.

None of the complaints are about the technical capabilities of the NEB, nor its mandate.

If you want to expand the NEB's mandate to include first nation consultations, respecting Canada's emissions targets and all that stuff, that's purely politics.

The churn at the NEB is not because the NEB is incapable. It's because noone (including at the NEB) knows what Trudeau and the public want from them.

Edit: My main beef is the characterization that the NEB is in chaos. They're not. They've been the same that they've always been, whether it's under Chretien, Harper, or Trudeau. The difference is the general public.

[IliketoPuck]

Originally Posted by Regorium

None of the complaints are about the technical capabilities of the NEB, nor its mandate.

If you want to expand the NEB's mandate to include first nation consultations, respecting Canada's emissions targets and all that stuff, that's purely politics.

The churn at the NEB is not because the NEB is incapable. It's because noone (including at the NEB) knows what Trudeau and the public want from them.

Edit: My main beef is the characterization that the NEB is in chaos. They're not. They've been the same that they've always been, whether it's under Chretien, Harper, or Trudeau. The difference is the general public.

Agreed for the most part. And to be clear, I'm not pointing fingers at the NEB as the source of instability. They can only work within their mandate, and in my opinion are quite professional in doing so.

I should have defined "regulatory regime" more clearly, my apologies.

In my mind the regulatory regime in Canada has grown to encompass not only the actual regulators (NEB / AER / etc.), but the whims of whichever political party currently holds office federally or provincially. Maybe a more elegant term to describe the combined process to get a major project approved is necessary.

We have clearly jumped the shark in Canada on national energy projects. There is no longer a rational debate being had. It is one side yelling at the top of its lungs, while the other tries to play within the rules (which keep changing).

Completely understandable that businesses looking to allocate easily transferable capital resources are choosing to do so in jurisdictions that make doing business far simpler.

[burn_this_city]

ENGOs are desperate to undermine the regulatory body regardless if its problematic or not. A science based regulator doesn't weigh hyperbole and negative feelings adequately enough to tip the scale in their favor. The majority of pipeline projects will be approved if empirical evidence is used to determine the outcome.

[Peanut]

Originally Posted by IliketoPuck

Agreed for the most part. And to be clear, I'm not pointing fingers at the NEB as the source of instability. They can only work within their mandate, and in my opinion are quite professional in doing so.

I should have defined "regulatory regime" more clearly, my apologies.

In my mind the regulatory regime in Canada has grown to encompass not only the actual regulators (NEB / AER / etc.), but the whims of whichever political party currently holds office federally or provincially. Maybe a more elegant term to describe the combined process to get a major project approved is necessary.

We have clearly jumped the shark in Canada on national energy projects. There is no longer a rational debate being had. It is one side yelling at the top of its lungs, while the other tries to play within the rules (which keep changing).

Completely understandable that businesses looking to allocate easily transferable capital resources are choosing to do so in jurisdictions that make doing business far simpler.

Yes I agree with this and it's what I was also trying to articulate. I'm not pointing fingers at the NEB either. My perspective is that the regulatory climate in Canada includes the actual regulatory body (NEB, AER, etc), and also the government and the First Nations issues. It all ties together to create uncertainty for corporations. Changes at the regulatory level seem to often be driven by politics, so in my mind it's hard to distinguish between regulatory instability and political instability. AER for example - ERCB merging with Alberta Environment created regulatory uncertainty. But the merger was driven by politics.

Maybe "regulatory climate" is more all encompassing as a term.

[IliketoPuck]

My opinion only, but I strongly believe that so long as the Liberal's are in power, Energy East will not be approved; TMX has a better chance.

Rationale being, if you are a majority federal government you need to maintain power in Quebec. Approving EE virtually assures the Liberal government loses Quebec seats to either the NDP or the PQ (won't go to the PC's who are pro-pipelines).

B.C. is just not as large a threat to re-election for the federal Liberals, therefore approving TMX comes with less of a price.