Feltham Rambles

I myself am made entirely of flaws, stitched together with good intentions.~ Augusten Burroughs

http://www.theglobeandmail.com/servlet/story/LAC.20070606.RNEWOIL06/TPStory/Business

The soap opera continues with Newfoundland & Labrador’s never ending battle to take a greater control of its natural resources. On one hand, the province is exchanging blows with the bureaucrats in Ottawa, while on the other, the province and the sleazes from big oil and kicking each other in the nuts. I can’t help but laugh when I read statements such as, “Industry officials warn that, if the province insists on making unrealistic demands, the international oil companies will simply not explore or develop in the waters off Newfoundland”. This is a croc on so many different levels; for starters the demands are no different than what the majority of other countries around the world already have in place with oil companies. If the resource belongs to the people, and they are willing to place the capital upfront and take a portion of the risk, why is it unreasonable to ask for a stake of the profits? Known world oil reserves reached their peak several years ago and have been in a steady decline ever since. It doesn’t take a genius to realize that the prices are going to continue to rise at alarming rates. This rise in cost is putting pressure on all areas of the processing chain to get the oil that they can while they can. And, the consensus within Newfoundland & Labrador is simple; the oil can stay in the ground forever until we receive greater profits from it. As Rex Murphy once stated, “…affection for Newfoundland is stronger than a chemical dependency”. My personal stubbornness is shared by many and whether it’s me or my great-great-great grandchildren that receive the true benefits from our mighty natural resources than so be it. The price of oil will continue to rise, and the value of what’s under the ground will only strengthen the provinces stance; the sooner big oil realizes that it is Newfoundland & Labrador that has the upper hand and not them, the better it will be for all parties involved.

I will however, beg the question; what if the same content that is published on a regular basis in our national news papers, quoted by our politicians and conversed by our citizens stayed the same, but, the word ‘Newf’ or ‘Newfie’ was replaced by Nigger, Spic, Towel-head, or Chink, would it be tolerated? Don't worry, I already know the answer.

guy grand from calgary, Canada writes: All they need is a palm tree or two and they can be totally third world. Have Newfs ever thought that working might create wealth?

k s from writes: Gord Cee: Once a "welfare white trash neighbour" always a " welfare white trash neighbour".

guillaume afleck from Canada writes: “…and please get off Federal Welfare because it is embarassing to have oil tycoons taking money from Poor people in the rest of Canada while playing JR Ewing”.

Marty McCluskey from Canada writes: Canadians are tired of the welfare provinces not getting their own spending in control before they keep coming back to the trough for more.

guillaume afleck from Canada writes: “…There's a lot of other 3rd world countries where we can find that behaviour. Get off the false victimhood and look closer to home for most of your problems.

Green Jerry from Canada writes: The Newfies sure seem a bit uppity lately

john chuckman from Canada writes: Danny and the Pirates. Someone should do a cartoon strip for the newspapers.

WHO ME?? from HERE, Canada writes: I am quickly losing my respect for NL and their inhabitants. I am seriously wondering if Canada is better off with NL. I just wish they would all have a fog attack and shut up for a few years and give our ear drums a rest. With their few seats in Parliament who the hell cares what they think or want to do!

The province has long been a scapegoat within this federation; bureaucrats in Ottawa and their mindless followers have made Newfoundland & Labrador a relatively easy target for the cause of numerous problems within Canada, since joining the country 57 years ago. And, now that the province has finally started to make a modest turnaround with its economic woes, hoping to improve the standard of live for its people and control its own destiny, the discrimination has become more heated. The more news the province makes when requesting a greater share of its own natural resources, the angrier the oppressors become. It has become so fashionable in Canada to put down anything related to Newfoundland & Labrador, that the majority of the population no longer look at the facts or the issue at hand. They would rather personally attack the in ways that would never be tolerated across any other distinct group of people within this pathetic excuse for a country.

Nfld. throws down gauntlet on energy
Province wants 5% stake in future oil and gas projects
SHAWN MCCARTHY

Globe and Mail
June 5, 2007

The government of Newfoundland and Labrador will demand an equity stake of at least 5 per cent in all future offshore oil and gas developments, and will plow that money into a new energy company that will embark on exploration and development projects of its own.

Natural Resources Minister Kathy Dunderdale said from St. John's yesterday that the practice is followed in much of the world, where state corporations are major players in the development of their natural resources.

"We're well within the confines of what is happening in many, many other parts of the world," she said. "So there is nothing unreasonable going on in Newfoundland and Labrador, though many people like to describe it that way."

Ms. Dunderdale introduced legislation last week to divide Newfoundland and Labrador Hydro into two units: an operating energy company and the traditional regulated utility that provides electricity to the province.

The energy company - armed with $600-million in province-backed borrowing power - will invest in the development of oil and gas, hydroelectric power and wind. It will also hold the equity in offshore projects that the province obtains from the oil companies as part of negotiated benefit packages.

Premier Danny Williams has been battling international oil companies, led by Exxon Mobil Corp. and Chevron Corp., over his insistence that the province receive a 4.9-per-cent equity stake in the proposed Hebron offshore project. The oil companies have disbanded the Hebron project team and disbursed their workers around the globe, saying other projects are more attractive.

Ms. Dunderdale said the Hebron partners are simply going to have to accept that the province is going to be a partner in the development.

The Hibernia consortium that is planning to develop a second phase of that highly profitable initial offshore project will face similar demands, she indicated.

"On any new development going forward, there is going to be a requirement for equity," Ms. Dunderdale said, reiterating Mr. Williams's position. And she said the Hebron partners would be better off returning to the negotiations that had already begun rather than waiting until fall, when they will have to comply with new rules that will be released in a long-awaited energy plan some time before the provincial election scheduled for October.

"It's going to be larger than what was asked for in those negotiations, so it's probably in their best interest to get that matter settled before the energy plan is released, because the ask will be greater than the 4.9 per cent," she said.

The minister defended Mr. Williams's hard-ball approach, saying the federal-provincial Atlantic accord specifies that Newfoundland and Labrador was to be the principle beneficiary of offshore oil development. To date, she said, the province has received only $1-billion of the $17-billion in profits generated, while oil companies have earned $11-billion and Ottawa has received $5-billion.

Under the accord, Newfoundland has the right to set royalty and other fiscal measures - such as the requirement for equity participation - that govern the offshore developments.

In addition to the stalemate over Hebron, the province rejected the development plan for Hibernia South, and demanded the consortium provide additional information on its application - a move that will delay approval of the project until after the new energy plan has been released.

In a way, Mr. Williams's Conservative government is stealing a page from the federal Liberal energy policy of the 1970s, when the government of Pierre Elliott Trudeau created the now-privatized Petro-Canada as a "window" on the oil industry and a vehicle for public participation in the development of national resources.

A more modern model is Norsk Hydro, the highly-respected Norwegian state-owned company that is now a global player. Norsk Hydro has a 5-per-cent stake in Hibernia and a 15-per-cent slice of Terra Nova.

Ms. Dunderdale said she did not believe the province's demand for equity participation in the offshore projects - in addition to royalties - would chase away investment, although she acknowledged there will be "some resistance" from the industry.

"These are the rules that they have to operate under in most other parts of the world," she said. "We have world class projects here that will give a very generous rate of return to companies that are prepared to make the investment."

Paul Barnes, of the St. John's office of the Canadian Association of Petroleum Producers, said the industry would not object to having the province as a partner in development, so long as it is willing to put up money and take on some of the risk.

However, he said, there will be serious opposition if Premier Williams demands equity, plus royalties, in a benefits package, as the Premier is clearly intent on doing.

He said the Hebron impasse has left the industry "uncomfortable" with Mr. Williams's approach, and the uncertainty has resulted in a hiatus in exploration off the Newfoundland coast.

Reluctant offshore partners

Offshore oil and gas developers are not happy that the government of Newfoundland and Labrador wants at least a 5 per cent stake in future projects.

Hibernia:

2006 production: 178,350 barrel a day (average)

Total reserves: 1.2 billion barrels

Production to March 31, 2007: 531 million barrels

Terra Nova:

2006 production: 72,795 barrels a day (average)

Total reserves: 354million barrels

Production to March 31, 2007: 188 million barrels

White Rose:

2006 production: 87,800 barrels a day (average)*

Total reserves: 283 million barrels

Production to March 31, 2007: 46 million barrels

*(Plans to increase production to 125,000 b/d in 2007)

SOURCE: GOVERNMENT OF NEWFOUNDLAND AND LABRADOR

We are what we pretend to be, so we must be careful what we pretend to be. ~ Kurt Vonnegut