Category Archives: Oil and Gas

Jun 20 2014
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Energy, Oil and Gas

Taking stock of our car-loving culture

 

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The horses stand sullenly in the barn where they have dwelt, uninterrupted, for two years. Has it really been that long since my wife and I hopped into their saddles and sped away down the street and around the lake, the soft summer wind peeling the frowns from our faces?

The “horses” – that’s what we call our twin, hybrid two-wheelers with the fancy side bags for boxed lunches and bottles of wine. We bought them from a local outfit six years ago when we became convinced that global warming would doom the infernal combustion engine to a proper extinction. Humanity, we thought, would finally see the error of its fossil-fuel ways. Everyone would soon be riding bikes. We were just ahead of the curve in southeastern New Brunswick. 

Ah yes, how young we were.

Today, the oil and gas industry is pumping away harder than ever. Production in the tar sands of Alberta, where bitumen is king, has never been higher. Now, the only fear policy makers and politicians nurse is whether they can get the stuff to market before competition drives the price down to commercially unsustainable levels. 

That’s certainly what Canada’s finance minister, Joe Oliver, fears. 

Speaking in Ottawa recently, he said weaning the nation from its dependence on American buyers of its black gold is, “an obvious strategic imperative.” Moreover, he added, “the Canadian economy has been bolstered by resource revenue and it’s important that we continue to see that revenue sustained and grow. . .(It’s an) asset that Canadians consider absolutely fundamental to their identity.”

I’m a Canadian, but I’m not sure I will ever perceive non-renewable reserves of oil and gas as innate to my sense of self. Aren’t they more or less necessary evils, the consumption of which we would all do well to curtail? 

Yves Bourgeois of the Urban and Community Studies Institute at the University of New Brunswick might agree. “A lot of people are interested in public or shared transportation because for low-income people it’s often the only means of transportation, he told the Saint John Telegraph-Journal recently. “Decision-makers in municipal or provincial governments are often told they need to fund public transportation because it helps low-income people. . .in New Brunswick, there’s actually a compelling economic argument to fund more shared transportation.”

Still, we remain a defiantly car-loving culture. 

According to the Institute, this province boasts (if that is the word) the third-highest rate of automobile ownership in the country – 1.55 cars per home. The national average is 1.47. Reports the T-J: “They also put five per cent more kilometres on their private vehicles than the Canadian average.”

Is there a causal relationship between this and another disturbing trend in New Brunswick?

“A report released by the Canadian Public Health Association says that 30 per cent of the adult population is obese in Atlantic Canada,” the CBC reported in March. “In New Brunswick, the highest rates of obesity are in the northwest, where 27.4 per cent of adults are obese and in the Acadian Peninsula, where 28.8 per cent are obese.”

Said Stephane Robichaud of the New Brunswick Health Council: “We see that we have a higher rate than the rest of the country of people dying before the age of 75 for treatable or preventable causes.”

In fact, my decision to park the car and zip around on bikes was inspired, in part, by the fact that I was turning 50, that dreaded threshold one crosses when one can no longer kid oneself about maintaining youthful vitality without expending an ounce of effort. 

Still, as the first, fresh days of summer arrive, it’s not too late to take stock of our present lot. My wife and I are planning new excursions, new adventures in cycling thanks to our sturdy horses. For now, as the weather begins to cooperate, the Nissan will stay in the driveway, and once again, we will be in the wind

 

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Jun 06 2014
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Climate, Energy, Oil and Gas, Politics

New Brunswick’s climate change talking points

 

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Greenhouse gas emission targets, like New Year’s resolutions, are made to be broken. Still, as loyal supplicants of the state of denial otherwise known as New Brunswick, it behooves all of us to wish Premier Alward and company all the best with their new Climate Change Action Plan.

Luck? You’re going to need it. 

“To do its part under the Conference of New England Governors and Eastern Canadian Premiers (NEG-ECP) 2013 Climate Change Action Plan,” the strategy, released on Monday, declares. “New Brunswick has committed to achieving greenhouse gas reduction targets of: Ten per cent below 1990 levels by 2020; and 75-85 per cent below 2001 levels by 2050.”

Apparently, this is perfectly doable. After all, as the report notes, the province managed to reduce its greenhouse gas emissions by 17 per cent between 2005 and 2010, even as it grew its economy by 19 per cent over that period.

Forget that in 2011, New Brunswick belched 18.6 million tonnes of 

CO2 equivalent, which amounted to the third-highest per capita emissions in the country, behind Saskatchewan and Alberta.

Forget, too, that as the plan clearly states, “New Brunswick’s economy faces challenges due to its high ‘carbon intensity’. In other words, the province consumes a relatively large amount of energy per dollar of economic production, and despite recent 

progress, much of the energy New Brunswick uses still comes from refined petroleum products. With the transition to a lower carbon economy well on its way, people around the world are making significant changes to the way they do business. As a province that exports much of what it produces, New Brunswick’s reputation and real performance in climate change may affect its trade competitiveness in international markets.”

All of which is another way of saying what U.S. Ambassador to Canada Bruce Heyman warned this week: If we don’t soon get our climate-change act together up here, north of the 48th, there will be economic consequences to pay elsewhere on the world stage.

“We need to continue (the) work together moving toward a low-carbon future, with alternative energy choices, with greater energy choices, with greater energy efficiency, and sustainable extraction of our oil and gas reserves,” he said in a speech in Ottawa on Monday. “This is not a task we can take on individually. It can only be successfully challenged together.”

Mr. Heyman made his remarks as his boss U.S. President Barack Obama’s unveiled sweeping, new plans to cut carbon dioxide emissions from power plants by 30 per cent by 2030. 

Again, like New Brunswick’s targets, the number feels arbitrary. Who knows what can happen in five years, let alone 15 or 35? Almost no one foresaw the industrial output-killing Great Recession of 2008, which, incidentally, did more than all the earnest policy makers in the world to reduce greenhouse gas emissions.

Still, it’s a start, and that’s more than we can say for our own venerable leader Prime Minister Stephen Harper, whose only response to criticism this week that he’s not moving fast enough to match US. initiatives on climate change was downright surly: “(Obama is) acting two years after this government acted and taking actions that do not go nearly as far as this government went.”

The unvarnished truth is, however, that the Yanks are on course to cut all of their emissions by 15 per cent by 2020. In contrast, we Canucks are more or less happily sitting with our heads stuck in the Alberta oil sands, where production dooms any hope of meeting our oft-stated reduction target of 17 per cent a scant six years from now.

In New Brunswick, several factors militate against the new action plan’s chances of success. Oddly enough, none of these has anything to do with tight oil and gas development, an as yet unrealized sweet dream, or wretched nightmare, depending on who’s doing the talking.

Without dramatic, even temporarily traumatic, changes to the energy mix in this province – without a concerted effort to cut back usage, conserve electricity and, finally, migrate to renewable sources for in situ consumption – all of our greenhouse gas reduction targets will remain, like so many of our other promises in New Brunswick, made to be broken.

 

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May 13 2014
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Economy, Employment, Oil and Gas

Where are our new adventures in enterprise?

 

Down the rabbit hole of unemployment

Down the rabbit hole of unemployment

In coming to grips with what ails the Canadian job market, the nation, the region, our cities and towns have tried it all, only to conclude that the 21st Century is looking less like the 20th and more like the 19th.

A piece in the Saint John Telegraph-Journal yesterday brilliantly evokes the wild west that is Fort McMurray. “Go and spend a week (there) and see what life is like,” a local family lawyer, whose juggling several divorce cases, says. “From what I understand, and what’s described to me by women, it’s Dodge City, circa 1870. There are bars, strip joints, hookers.”

Such are the familiar lures of a boom town hooked on the almighty petro-dollar. In fact, most good jobs in this country are going this way (sans strippers and prostitutes as signing bonuses).   

Forget environmental engineering; think geology and hydrology. If that’s too academically rich for your blood (and if you can drive a stick) consider that an oil sands worker with a high school diploma can earn between $90,000 and $120,000 a year base salary. 

Consider, also, that federal government labour policies explicitly encourage people to work in this sector – to leave their homes in their less promising regions and lasso their own personal moons in Big Sky country. 

Yet, lest we fully become a nation of truckers and wildcatters, a few are issuing one last, possibly quixotic, call for reason in the job market. Weirdly, they are bankers who, one could argue, have the most to gain from unalloyed oil and gas prosperity.

Still, writes Gordon Dixon, chief executive officer of the Royal Bank of Canada and chair of the Toronto Region Immigrant Employment Council, “Diversity and immigration are important parts of Canada’s past, present and future.”

His commentary appeared in yesterday’s edition of the Globe and Mail: “Our diverse population is only an advantage to the extent we are inclusive. Full inclusion means means everyone feels enabled to bring their perspectives, knowledge and experience to the table. Diversity, together with inclusion, plays a central role in driving productivity, innovation and growth.”

And here I thought productivity, innovation and growth had only to do with how much oil you can squeeze from a stone. At least, that’s what I read on the packaging before I drank deeply of the Kool-Aid. 

Not that there aren’t immigrants labouring away in the oil sands. It’s just that there aren’t many opportunities in the new west’s resource industries to demonstrate one’s native proclivities for diversity. Fortunately, we don’t have that particular problem in merry old New Brunswick, where our primary industries (such as they are) are failing both to retain existing residents and attract new ones. 

Last week, Statistics Canada (yes, it’s still alive and kicking after the federal government’s latest round of cutbacks, though just barely) reported that New Brunswick had lost 5,400 jobs (or, at least, 5,400 fewer people were working) in April. That pushed up the overall provincial unemployment rate to 10.5 per cent.

Imagine the entire population of Sackville – home of sweet Mount Allison University, alma mater to my grandfather, father and daughter – suddenly packing up their things an hitting the road en mass like a caravan of Okies from Muskogee. 

Charlie Coffey can imagine it. He’s a guest speaker at this week’s provincial jobs summit. The title of his address is “People Power is the Competitive Advantage: Building a Diverse Workforce in the 21st Century.”

Not surprisingly, perhaps, he’s a former executive vice-president of the Royal Bank who retired after 44 years. Again, he says, coming to grips with what ails us in this region is all about recognizing the importance of diversity.

Let’s not put all our eggs in one industrial basket. Let’s open up our hearts, minds and borders to different perspectives, new entrepreneurial opportunities, new adventures in enterprise.

“Since diversity is an integral part of business success, leveraging diversity has little to do with compliance and legal requirements and more to do with good business – smart business,” Mr. Coffey told the Telegraph-Journal recently. “Sometimes people find it hard to see how diversity and the bottom line are related.”

Of course, that’s only natural when, on any given day, the future of our conjoined economies looks very much like their past.

 

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May 07 2014
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Energy, Environment, Oil and Gas

Slow-dancing with shale gas in New Brunswick

 

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Government and industry types, desperate to envision a way out of New Brunswick’s straightened economic and fiscal circumstances, routinely point their fingers to the future and declare it full of shale gas. 

Now, a new report by a group of people that actually knows something about science, evidence and the perils of jumping to conclusions advises us to cool our jets. The future isn’t all it’s cracked up to be.    

The multidisciplinary (and excessively named) Expert Panel on Harnessing Science and Technology to Understand the Environmental Impacts of Shale Gas Extraction, convened by the Council of Canadian Academics at the behest of Environment Canada, warns that not only do we lack adequate information about the effects of tight-play, onshore petroleum production in Canada, most of us are even too ignorant to ask the right questions.

In essence, to paraphrase former U.S, Secretary of Defense Donald Rumsfeld, we don’t know what we don’t know.

“Society’s understanding of the potential environmental impacts has not kept pace with development, resulting in gaps in scientific knowledge about these impacts,” the report says. “In most instances, shale gas extraction has proceeded without sufficient environmental baseline data being collected (e.g., nearby groundwater quality, 

critical wildlife habitat). This makes it difficult to identify and characterize environmental impacts that may be associated with or inappropriately blamed on this development.”

The solution, it appears, is to adopt a go-slow approach, the advantage of which “allow for additional data collection, to permit adaptation to the implications of new information, and to encourage integration of multidisciplinary expertise. . .There may also be some negative impacts of development that cannot be eliminated, and the scientific basis for identifying areas that are particularly vulnerable has not been established.”

None of which is especially good news for the likes of Premier David Alward or his energy czar, Minister Craig Leonard.

For at least three years, they, like most members of provincial cabinet, have been crowing as loudly as they can muster about the extraordinary economic benefits that will accrue from a safe, reliable, environmentally responsible shale gas industry. On this point, they have assembled, drafted, edited, amended and finally released what they claim are the toughest standards and guidelines for shale gas development anywhere in North America.

But, as the report points out, they’re getting woefully ahead of themselves.

Although the panel goes out of its way to acknowledge that the industry in Canada has cleaned up its act in recent years through “recycling (and) reducing land disruption by concentrating more wells at each drilling site, reducing the volumes of the toxic chemicals it uses, and reducing methane emissions during well completions,” it also stipulates that “other impacts, such as cumulative effects on land, fugitive GHG emissions, and groundwater contamination, are more problematic. 

“This is the case because available mitigation technologies are untested and may not be sufficient; scientific understanding is incomplete; and the design of an adequate regulatory framework is hampered by limited information.”

A proper rules system, the experts insist, “must be based on appropriate science-driven, outcome-based regulations with strong performance monitoring, inspection, and enforcement.”

For his part, Mr. Leonard is playing it cool. The report, he says, does nothing to dissuade him from pursuing the current course in the manner he has chosen. Slow down? But, of course, he declares. 

“When people say ‘Slow the process down,’ the fact is we haven’t done anything except for seismic testing over the last three years,” he noted last Thursday, following the report’s release.

“We aren’t going to have any new drilling taking place at least until next year and we probably won’t even have any actual hydraulically fracked wells being drilled in shale formations for a couple of years. So there is time to be building this information.”

And, perhaps, a better consensus across the province. 

Lack of information breeds systemic ignorance, which, in turn, fuels unproductive rancor and fear (as opposes to useful and constructive debate). 

The time this report suggests we purchase for ourselves should be spent educating ourselves about the true and likely impact of shale gas development in the specific geological and geographical conditions that are native to New Brunswick.

Only then will any of us possess the knowledge to accurately foresee the shape of things to come.

 

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May 02 2014
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Economy, Energy, Oil and Gas, Politics

Lessons for New Brunswick from The Lone Star State

 

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In Texas, to quote a phrase, they do things big.

Big sky, big country, big portions, big ambitions all frame the tableau that is The Lone Star State.  So does “big energy”, but not always in a fashion that seems familiar to New Brunswickers embroiled in their own existential debate about natural resources development.

Yes, Texas is synonymous with the oil industry and is home to the famous (or, depending on one’s perspective, infamous) Barnett field, which in one recent year produced 1.11 trillion cubic feet of shale gas. But it is also home to the largest and most successful wind energy industry in the United States.

According to a Wikipedia entry, “wind power in Texas consists of many. . .farms with a total installed nameplate capacity of 12,212 MW from over 40 different projects.” In fact the state “produces the most wind power of any” in the U.S. 

Just as impressive, perhaps, is the speed at which the energy resource has developed there. In a scant 13 years, the state’s annual hours of wind generation by megawatts has skyrocketed from 492,000 to 36 million. How?

Again, the Wiki item is instructive: “The wind boom in Texas was assisted by expansion of the state’s Renewable Portfolio Standard, use of designated Competitive Renewable Energy Zones, expedited transmission construction, and the necessary Public Utility Commission rule-making. Wind power accounted for 8.3 per cent of the electricity generated in (the state) during 2013.”

So, the take-away from all of this is that a happy, productive collaboration between business and government has literally invented a clean, renewable and commercially viable alternative to fossil fuels for electricity generation where none existed at the dawn of the 21st century.

Now, not coincidentally, power rates from wind are among the lowest of any energy source in the state (only those from shale gas are cheaper). 

Even better, the billions of dollars the private sector has invested in the industry to become competitive and profitable has spurred economic development in rural areas, where thousands of people are gainfully employed. This has, in turn, attracted innovators and entrepreneurs chasing the main chances implicit in improving existing energy storage (battery) and smart-grid technologies. 

All of which raises a question: What does Texas know that New Brunswick doesn’t?

For years, we in The Purple Violet Province have known that we are home to enviably strong and steady coastal breezes. Back in 2007, a “wind energy map” of our environs conclusively proved that, with foresight and commitment, the resource was rich enough to support 5,000 megawatts of installed capacity. Currently, we have 500, which isn’t bad; but it’s still far below our potential. 

Last week, Liberal Leader Brian Gallant renewed his party’s commitment to installing a moratorium on further shale gas development in the province should he and his crew be lucky enough to form the next government in September. Citing public opprobrium and lingering doubts among various health experts, he wants more studies. Fair enough.

But a moratorium only delays the inevitable day of reckoning. It won’t convince those who adamantly oppose shale gas on principled (concern for planetary climate change) or practical (concern for local air, soil and water quality) grounds. 

It certainly won’t mollify the petroleum industry. It may buy Mr. Gallant a bit more time. Still, at what cost?

The clock is ticking in New Brunswick, where we have become absolute masters at telling private and public-sector authorities to pound sand whenever they have, on rare occasions, mustered the temerity to suggest that true economic development means taking chances. But if we are not prepared to risk what we cherish on shale gas, then what? What will we risk to build a better future for ourselves and our children?

The “aesthetes” of this province display an exasperating tendency to despise fossil fuel and wind power in equal measure. The former, they say, is smelly; the latter is ugly. These people revile change. They wonder why things can’t just go along they way they always have. This has produced, in government, a pathetic, if typical, response: ossification. Do nothing. Maybe, it will all work itself out, after all.

It won’t.

Texas knows this. Say what you like about that red-necked, killer-executing home of George “Wacko” Bush. 

At least, they do things big there.

 

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Apr 18 2014
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Economy, Oil and Gas, Society

The risky business of economies planning for the future

 

A credible line of thinking among economists who are not enamored of their political reputations holds that governments bent on producing surpluses, come what may, are misguided, even morally bankrupt.

The argument goes something like this: Publicly elected officials and their bureaucratic minions produce nothing fungible; therefore, they should produce no returns. Rather, their function is to collect taxes responsibly and distribute the funds for the general good – to the rich, the poor and the rest of us. 

The general good comprises the schools we attend, the clinics we need, the roads we use, the parks we frequent, and the safe streets and gathering places we expect as dues-paying members of just and enlightened societies. 

In other words, there should plenty of work to occupy the minds of those we pay through the ballot box and those who serve the periodic democratic lotteries we call general elections. And, in this line of argument, ideally there should be nothing left in the kitty at the end of the political day. All money is absorbed, all money is spent. No deficit, no debt and, crucially, no surplus.

Except, of course, the system doesn’t work this way, anywhere.

But what if it did? Sort of. 

A reader writes, “I have been to Norway several times. By the way, Norway has some of the highest retail gas prices going and don’t even think about buying booze over there. Hard stuff was $50 per 750 ml 15 years ago and God help you if you did not bring in your duty-free limited when visiting.”

Still, as this reader points out, that Nordic country of just over five million souls has just now demonstrated (on paper, at least) that, thanks to its public sector’s perspicacity, attention and drive, each of its citizens is a millionaire, and will likely remain in that vaunted economic status for some time, as New Brunswick’s and Greece’s economies meet on the slide to perdition.

That doesn’t mean Norwegians get to cash in, individually; it means that Norwegians, collectively, get to enjoy one of the highest standards of living in the world, the chance that their children will be among the most highly educated in the world, the certainty that their health care will cost less for the benefits they receive than almost any other place in the world and that old-age peace of mind is actually, well, fungible. 

Here’s what the U.K.’s Daily Mail online edition had to say about the development in early January:

“Norway’s sovereign wealth fund has ballooned so much due to high oil and gas prices that every person in the country became a theoretical millionaire this week. The nation is proving to be an exception as others struggle under a mountain of debts. Set up in 1990, the fund owns around one per cent of the world’s stocks, as well as bonds and real estate from London to Boston. The surplus revenue is collected in the Government Pension Fund Global.”

Said Finance Minister Siv Jensen in an email to reporters: “Many countries have found that temporary large revenues from natural resource exploitation produce relatively short-lived booms that are followed by difficult adjustments.” Added Oeystein Doerum, chief economist at DNB Markets: “The fund is a success in the sense that parliament has managed to put aside money for the future. There are many examples of countries that have not managed that.”

Indeed, there are. 

Canada’s legislators drone on endlessly about this nation’s enormous natural resource potential. New Brunswick Premier David Alward almost begs citizens of this province to embrace the opportunities (as yet, unrealized) in shale gas development.

But what, exactly, is he and his confreres elsewhere in this country doing about securing the long-term efficacy such massive developments might contribute to social development: education, skills training, economic diversification, even (and most paradoxically) strategies to employ the windfalls from oil and gas to wean us off oil and gas with brave, interesting, new, renewable energy technologies?

So far, the genius of our political leaders seems confined to balancing the books, perhaps achieving small surpluses at some indeterminate point in the extenuated future. 

The risk of bankruptcy in this endeavor is not merely fiscal; it’s moral.

 

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Mar 12 2014
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Energy, Environment, Idiocracy, Oil and Gas

The roiling tale of two imaginary pipelines

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In one hand, New Brunswick grips the key to its putative economic salvation; a pipeline spanning the better part of the second-largest landmass on the planet, from the oil fields and tar sands of Alberta right into little, old, plucky Saint John where the Irving refinery awaits, with bated breath, another profitable lease on life.

In the other, the picture-perfect province loosens it grip on everything its forebears allegedly designed (a healthy, self-sufficient, environmentally pristine part of the world) in the backwash of a curtailed and stolen future; a pipeline that would foul the ground, incinerate communities and spoil the water; a horrible industrial project that would return fleeting boons to short-term-thinking politicians, their confederates in commerce and not much else.

It’s odd how deliberately these opposing views manage to express themselves in New Brunswick’s print and broadcast media – as if never the twain shall meet, as if we, the sidelined majority, have nothing useful to lend to the debate over the province’s energy providence except, of course, our taxes and (sigh) our ears.

“Putative” and “alleged” are good words to describe the cases for and against a pipeline that does not, in fact, yet exist.

There are, of course, several ways to build a permanent way into a community. None of these, however, should have anything to do with terrorizing the citizenry or fictionalizing the landscape.

When Colleen Mitchell, president of Atlantica Centre for Energy, boosts on the front page of the Saint John Telegraph-Journal the benefits of an East Coast pipeline (without, I will note, a word of reasonable rebuttal), her kite flew so low, her hot air claimed its tail. She both terrorized the citizenry and fictionalized the landscape.

Here she is on her extraordinarily well-written rant:

“Five years (after the Great Recession of 2008) the gap between Atlantic Canada and the rest of Canada remains significant. . .The development of key oil and gas projects have the potential to reverse these economic trends. . .This project (TransCanada’s East Energy pipeline) is of such significance that if it proceeds to completion it will have a profound impact on the Atlantic region”

So profound, she says, it could amount to $35.3-billion in new gross domestic product across the country. So profound, she says, it could result in $266 million in new taxes to New Brunswick (during pipefitting) and maybe as much as $500 million after that. Moreover, she claimed with the sort of authority only an insider gets (and, trust me, she’s no insider), Irving Oil might just well spend upwards of $2 billion upgrading its coking and refining facilities in Saint John.

Oh, really?

This is irresponsible, unverified piffle; its feedstock derives directly from industry, itself. There is no way to credibly measure the merits of her assessments, just as there is no way to calibrate the real value of what she parrots are vast reserves of trapped shale gas in New Brunswick sedimentary rock. Why? Because industry, itself, is still reckoning the commercial viability of the resource. And, frankly, they’re not talking (which, in and of itself, should tell us something).

Still, she’s not the only partisan in the arena. Bid a welcome to the died-in-the-wool naysayers, who would rather buy their hemp oil from The Body Shop than see any of the dirty, necessary stuff that fuels their spectacularly energy-efficient homes spoil their golf-course-sized and well-fertilized lawns and gardens splendidly attended by certified “green” landscapers.

TransCanada Corp. has run afoul of four of nine National Energy Board regulations regarding its proper care and feeding of pipelines. This motivates New Brunswick Green Party honcho David Coon to theorize that “anything that suggests an increased risk of leaks will make everyone nervous.”

Furthermore, he postulates, “Since Stephen Harper has been prime minister, his orientation has been to ensure the National Energy Board is greasing the wheels of pipeline construction, not slowing it down because of things like safety and environmental impact.”

In other words, he seems to be saying, since the National Energy Board is, ipso facto, already compromised by the Conservative agenda, we must assume that its recent “harsh” judgement of TransCanada Corp. actually amounts  kid gloves’ treatment.

Again, so much for empirical evidence.

In one hand, the conspiracy theorists taketh away.

In the other, the apologists giveth back.

And, finally, no hands actually come together.

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Feb 11 2014
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Oil and Gas, Politics

Catching the Tories in Bambi’s headlights

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Canada’s freshly cobbled Finance Minister Jim Flaherty says that the nation’s laws oughtn’t transform charitable foundations, which pay virtually no income taxes, into shelter accounts for fraudsters, money-launderers, terrorists, and organized criminals.

To which, the proper response might be: “Well, duh.”

In advance of today’s federal budget, Mr. Flaherty – his new shoes dutifully acquired from Toronto’s Mellow Walk Footwear – declared to media, “There are some terrorist organizations, there are some organized crime organizations, that launder money through charities and that make donations to charities and that’s not the purpose of charitable donations in Canada. We are being increasingly strict on the subject.”

What’s more, he said, “If the critics of the government (policy to close the apparent loophole) are terrorist organizations and organized crime, I don’t care.”

Sure, but that’s not really the nontaxable sixty-four-thousand dollar question.

If it were, then citizens of this country would have every right to demand what, exactly, the Canadian Security Intelligence Service and Communications Security Establishment Canada – not to speak of America’s Central Intelligence Agency and National Security Agency and the co-dependent operations of Britain’s Secret Intelligent Service – have been doing in the authentic age of surveillance.

I mean, are we or aren’t we fully, bloodily and bodily exposed? And if the critics of the government are, in fact, terrorist organizations, then shouldn’t our “friendly” spies and spooks care rather deeply, even if our finance minister does not?

No, this is not about terrorists or money launderers or organized criminals. This is about that hemp-clad, plackard-waving, fossil-fuel hating, trust-fund baby boomer (and his millennial acolytes) who has roundly peeved Conservative office-holders, lo these many years.

According to the Toronto Star and other news organizations, the Canada Revenue Agency (CRA) is systematically auditing environmental charities that continue to make a connection between fossil fuel production in Alberta and global warming.

It wants to know whether the organizations – Pembina Foundation, David Suzuki Foundation, Tides Canada and Environmental Defence, among others – are running afoul of the 10 per cent rule, which refers to the percentage of a charity’s time and money that may be spent on political or advocacy work as long as the activities are non-partisan in nature (that is, not aligned to particular parties).

John Bennett of the Sierra Club of Canada calls this “a war against the sector.”  Marcel Lauzière of Imagine Canada laments the “big chill out there with what charities can and cannot do.”

All of which may be true, but CRA’s government-sanction audits illustrate, if nothing else, that the sector has struck a nerve in Ottawa. Who knew that Bambi’s tree-hugger brigade would scare the scat out of the establishment fat cats in Ottawa?

In fact, it’s been a pretty good past couple of years for environmental groups bent on countering the federal government’s fondness for the oil sands. The effects of coordinated and aggressive publicity campaigns are especially noticeable in the United States, where the Obama administration continues to drag its feet on the proposed Keystone XL pipeline.

One recent poll by USA Today indicates that only a slight majority of Americans surveyed supported imports of oil sands crude from Alberta. “About 56 per cent say they favor the northern leg of the billion-dollar, Canada-to-U.S. project and 41 per cent oppose it, according to the poll of 801 U.S. adults completed last month by Stanford University and Resources for the Future (RFF), a non-partisan research group,” the newspaper reported last month.

Still, any government that deliberately targets for censure organizations with which it doesn’t agree, and whose growing influence it fears, runs a perilously close risk of trampling on some very hallowed democratic ground.

After all, if you name your organization “Environmental Defence”, apply for and receive charitable status, do you not also assume that your right to criticize official policy   on said environment is protected?

And what utter nonsense is the 10 per cent rule, anyway. All charities fill the gaps in the public and private sector’s attention to social detail. They exist to do precisely what their critics and detractors revile: advocate.

By all means, go after the evil-dowers who distort our charities for larcenous ends. But for the rest of the sector, let’s holster our six guns.

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Jan 23 2014
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Economy, Oil and Gas

The stiff upper lip to success

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New Brunswick’s estimable finance minister, Blaine Higgs, promises as a matter of course that he will announce no new tax hikes at next month’s grand budget reveal. To which we curtsy politely and thank the graveyard of foreboding that dominates Fredericton for small mercies.

Still, at this stage in the daily, grinding, “this-too-shall-pass” culture of what is, indisputably, Canada’s least economically promising province, higher taxes will serve precisely no purpose.

The time for a boost in the HST was four years ago. Today, when a precipitous drop in revenue to government coffers is related entirely to a concomitant decline in business income, the taxman’s various dogs just won’t hunt anymore.

Meanwhile, the list of likely economic saviors grows ever longer, even as it begins to blur the boundaries of credibility.

There is a pipeline into Saint John. It will, we are assured, bring Alberta oil into the Port City for refining and subsequent export to locales both exotic and mundane. In the process, it will employ hundreds of skilled and able-bodied men and women (thousands during the construction phase). At least, that’s the scuttlebutt. Boosters are still looking for the project’s starter pistol, which seems to have gone missing.

There is some fresh promise in the mining sector, no thanks to The Potash Corporation of Saskatchewan which, according to a CBC report in early December,  “issued a blow to one of the Alward government’s hopes for job creation in the province.

The company is laying off more than 1,000 people, including 130 in New Brunswick, due to what it describes as slumping demand for its potash and phosphates, which are used to make fertilizer. . .Just last week the provincial government issued a request for expression of interest to explore for and mine potash in New Brunswick.”

Of course, there is always (groan!) shale gas. In fact, there might be 70 trillion cubic feet of the stuff below ground in New Brunswick. If any of it is extractable in a commercially viable sort of way (that is, before oil and gas prices wobble too far into the red zone), then a new fossil fuel industry could create hundreds of jobs and top up the government’s bank account with new taxes and royalties.

On the other hand, there is the little matter of the screaming meemies to which the chronically anxious among us succumb whenever the phrases “government oversight” and “hydraulic fracturing” appear in the same sentence.

It appears that the rest of us are fated to follow their lead as it is embraced by the next premier of the province, Brian Gallant, who has already announced his planned moratorium on further shale gas development once he trundles into power this fall.

And yet, somewhere, in all of this, we’re missing something vital, and it’s getting us down. Behind every commercial and industrial project – large, like a pipeline; or small, like a high-tech joint venture – are people.

That may sound trite, but our tendency is to perceive our economy as intractably composed of forces that are largely beyond our control. This is the language we allow our political leaders to adopt when times are tough and they shrug their shoulders in defeat: “Hey. . .Whaddya gonna do?”

In most cases, the answer to that question is: “Plenty.”

New Brunswick’s future might look rosier than it presently does if mega-deals for oil and gas and other natural resources were firmly on track. Still, this is not the alpha and omega of the province’s potential.

The real, durable future is being written in the idea factories of the private sector, in the common markets of the province’s small cities and feeder towns and villages, on the entrepreneurial front lines where problems are things you solve and obstacles are things you hurdle.

Listen closely, and you will still hear the relentless hum of enterprise, which remains happily oblivious to the macroeconomic demons that torture the province’s elected leaders, appointed officials and, as often as not, professional chatterers like Yours Truly.

If, as one of my colleagues in arms recently claimed, GDP is two-thirds consumer confidence, then attitude is everything.

Perhaps, then, we should try stiffening our lips and, for once, whistle obstinately past that graveyard of foreboding.

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Jan 15 2014
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Energy, Environment, Oil and Gas

How Neil Young gets it right (and wrong) on oil

Oil is everywhere and everything?

Oil is everywhere and everything?

Fossil fuels make hypocrites of every environmental activist in the world.

The bright ones know that as consumers in the unavoidable petro-economy, they are just as culpable as anyone for climate change; but they push their planet-saving agenda anyway. After all, why remain silent on strategies for using oil and gas to transition to a cleaner, more sustainable future?

The dimmer ones, who never seem to suffer from a loss of words, prattle on about “us versus them” in apparent ignorance of the enormously complex socio-economic web this and other nations have spun with the products of refined dinosaur bones. Forget transforming the world; let’s just shut it down.

Thanks to celebrity big mouths and the media’s even bigger appetite for controversy, the question of the moment is: Into which camp does Canada’s legendary folk-rocker Neil Young fit? Is he a shining light or a broken bulb? A not entirely unrelated question is: Does it matter?

The Prime Minister Office seems to think it does. Why, otherwise, would it have dispatched its spokesman Jason MacDonald to defend Alberta’s curiously vulnerable tar sands against Mr. Young’s vituperative attack on them last Sunday night during the launch of a countrywide tour. At that time, the Grammy Award winner and Rock and Roll Hall of Famer said, using his outside voice:

“To me, it’s a basic matter of integrity on the part of Canada. Canada is trading integrity for money. That’s what’s happening under the current leadership in Canada, which is a very poor imitation of the George Bush administration in the United States. It’s lagging behind on the world stage and it’s an embarrassment to Canadians.”

To which, Mr. MacDonald responded: “Canada’s natural resources sector is and has always been a fundamental part of our country’s economy. . .The resource sector creates economic opportunities, and employs tens of thousands of Canadians in high wage jobs, contributing to a standard of living that is envied around the world, and helping to fund the programs and services Canadians rely on. . .Even the lifestyle of a rock star relies, to some degree, on the resources developed by thousands of hard-working Canadians every day.”

For Mr. Young, overall, so far so good. Whether or not you agree with his characterization of political leaders who are almost giddy at the prospect of selling their country – and First Nations communities in Alberta – down the river for a bag of bucks, you must, at least, acknowledge that he takes a principled stand.

More than this, perhaps, he is keenly aware of his stature, an effective weapon in the public relations battle to win friends and influence people (though methinks the man has already won enough hearts and minds for one life).

But, then, a funny thing happens on Mr. Young’s way to mainstream credibility regarding oil and gas. In his response to Mr. MacDonald’s jab about rock stars‘ reliance on natural resources, “Shaky” gets a little. . .well, shaky.

“Of course, rock stars don’t need oil. I drove my electric car from California to the tar sands and on to Washington DC without using any oil at all and I’m a rock star,” he says. “My car’s generator runs on biomass, one of several future fuels Canada should be developing for the Post Fossil Fuel Age. This age of renewable fuels could save our grandchildren from the ravages of Climate related disasters spawned by the Fossil Fuel Age; but we have to get started.”

He’s right. We do have to get started. But if, as he insists, rock stars don’t need oil, is he suggesting his life is a petroleum-free zone? For, if it is, that would be a neat trick, indeed.

According to one calculation from Ranken Energy Corp., “Americans consume petroleum products at a rate of three-and-a-half gallons of oil and more than 250 cubic feet of natural gas per day each.”

In fact, oil is in just about everything, from floor wax to bicycle tires to golf bags and purses. “Anything that’s not iron or steel or metal of some sort has some petrochemical component,” West Virginia University chemistry professor Dady Dadyburjor told The Associated Press not long ago.

This, one presumes, includes the chassis of Mr. Young’s electric car.

Of course rock stars need oil. We all do. And owning up to our collective addiction is the first step on the royal road to recovery from hypocrisy.

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