Alberta oil and gas voices calling for innovation while Newfoundland’s Hibernia workers face layoffs on June 12

Alberta’s Minister of  Energy, Sonya Savage outraged many Canadians with her comments on May 25  that the Covid-19 pandemic offers a “great time to build pipelines” because of the lack of protestors , and construction on the TransMountain pipeline began in Kamloops B.C.  on June 2.  Yet,  Max Fawcett, former editor of Oil and Gas magazine writes in a CBC Opinion piece, “Alberta could be fighting its last pipeline battle”   (May 27), stating:

“It will be difficult for a government that prides itself on its willingness to fight for one vision of the oil and gas industry to adapt to this rapidly changing landscape…..It will be tempting for it to continue railing against the federal government, environmental activists, and all of its other enemies, foreign and domestic. And if Biden wins the White House, and follows through on his pledge to cancel Keystone XL’s presidential permit, that temptation may prove overwhelming.

But the ground has shifted under the Government of Alberta’s feet, just as it has for all of us, due to COVID-19.

The sooner it comes to terms with that, and helps the rest of Alberta do the same, the better.”

Fawcett also criticized the Alberta government of Jason Kenney in  “Still waiting for Alberta to get the memo on climate-conscious investing”,   commenting  on the implications of the Norway’s Government Pension Fund decision to divest from Canadian oil and gas companies  because of their excessive climate impacts. Fawcett  calls for Alberta to tell a “more honest story”.

Notably, voices from Canada’s oil sands industry “Establishment” are also speaking out and signalling a shift in attitude.   On June 1, as part of the  Climate Knights Planning for a Green Recovery series, Mark Little, the CEO of Suncor Energy and Laura Kilcrease, CEO of the government agency Alberta Innovates  wrote an OpEd titled, “Canada’s oil sands are best positioned to lead the energy transformation”.  Hearkening back to the 1970’s in Canada and citing a 2019 BNP Parabas report on the declining future of oil , they acknowledge the inevitable coming transition with this:

“While Canadian oil and gas will remain a significant part of the global energy mix for some time, we have to take advantage of new opportunities that offer attractive growth prospects. The temporary economic lockdown triggered by the 2020 pandemic is giving us a glimpse into a not-too-distant future where the transformation of our energy system could disrupt demand on a similar scale. Disruption breeds opportunity and forward-looking companies and countries will need to step up and lead.

Now is the time to take a big step forward. As the history of the oil sands reveals, disruption and transformation are nothing new for Albertans and we’re optimistic that the Canadian energy industry is up to the challenge and best positioned to invest in and lead energy transformation.”

Industry response to the joint OpEd appears in “Suncor, Alberta Innovates op-ed a game-changer as oil and gas industry finally embraces energy transition” appeared  in EnergiMedia (June 2).  noting “ ….. it cannot be a coincidence that the same day the op-ed was published, Alberta finance minister Travis Toews told Postmedia that the Alberta government is preparing an economic recovery plan that will focus on diversifying “various industry sectors that we know have a great future in the province, certainly energy and agriculture as you would expect.”

Layoffs in June as Newfoundland’s Hibernia and offshore oil industry in crisis 

offshore rigOn June 3, CBC reported “Hibernia layoffs about to begin ‘with heavy hearts,’ drilling company says” , summarizing the announcement by Hibernia Management Development Corporation (HMDC) that it will suspend drilling operations starting June 12, as a cost-cutting measure in response to a collapse in oil prices.  The 18-month suspension of drilling  had already been announced in April , even before the negative impacts on demand by the COVID-19 pandemic.   The total number of layoffs may approach 600 members of  Unifor Local 2121 , which represents workers at  the Hibernia offshore installation and also at the affected Terra Nova FPSO vessel.  According to Article 32 of the current collective agreement  , six months’ written notice was required “In the event of platform closure, partial platform closure, technological change or restructuring, which will involve permanent reduction of regular rotation employees….”

These developments are the latest in a series of setbacks which constitute a crisis for the oil and gas industry in Newfoundland, summarized in  in “How a pandemic and production war thrashed one of N.L.’s 4 producing oil fields” (May 20) . The political lobbying for federal funds is described in “N.L. oil industry, former premier, rally behind MP Seamus O’Regan in quest for federal help”  (May 14)  and a Canadian Press article “N.L. warns of exodus of oil and gas industry without more federal help”  (May 26).

On June 4, the provincial government of Newfoundland announced  a “New Regional Assessment Process Protects the Environment and Shortens Timelines for Exploration Drilling Program Approval”  which  reverses a 2010 decision and places authority for exploration approval back with the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB), rather than the federal Canadian Environmental Assessment Agency (CEAA). Calling the drilling of offshore exploration wells a “low impact activity”, the press release promises a faster approval process which “allows the province to become more globally competitive while maintaining a strong and effective environmental regulatory regime.”   This comes a week after the government-appointed  Wilderness and Ecological Reserves Advisory Council released their long-delayed report, A Home for Nature   which proposes  32 protected areas and a framework for ecological protection on land and offshore.

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