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The lost boys of oil and gas are back

NORVAL SCOTT

From Saturday's Globe and Mail

Latest comment posted at 12:33 AM EST 19/04/08

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  1. Gnarly Kanuck from Canada writes: CQV has just drilled through one good target in Newfoundland and is on the way to another...the price of oil is making these finds feasible
  2. Political Junkie from Canada writes: A large percetage of Canadian oil and gas output is produced by 'small oil' not 'Big Oil' as some would have us believe.
  3. Bill G from Calgary, Canada writes: Great article and has relevance to the royalty debate. The oil patch has always introduced new technologies to keep the oil and gas flowing. They are innovators and risk takers.
  4. Antonio San from Calgary, Canada writes: Few years later and the same boys who grounded companies and shareholders value are back at it and get promoted by the media. David Johnson... the Duvernay etc... This is not information, it's PROMOTE!
  5. Another Canadian from Calgary from Canada writes: This is great news for the Juniors...the boys are back...2 yrs of hunkering down on their yachts in Florida shoud make them lean and mean...and ready to work again. Higher Royalities my a$$ ..me no questions...With record oil an gas prices...the Oil patch wizards have overcome the expensive to produce Sask Bakken play and chasing gas in BC...where the Royalities are higher than Alberta...go fiqure..
    Hope Eddy Stellermack 's not reading this article..
  6. Peter Fulton from Canada writes:

    Yeah, that's what we need, another fat-cat oil and gas man. When is enough enough? How many oil wells to we need? How rich does this country have to be? Will it really make any difference to our happiness? How about preserving some of this stuff for our children, or theirs, instead of the wanton greed and destruction without a word of what has any real value in our world.
    I'm really sickened at Canada over it's environmental record. And to think Americans are made fun of in this regard.
    I'd like to think this country used to stand for something a bit more than obscene greed, but one look at this guy's photo and you know it's carte blanche.
    Is this the best we can do?
    These oil and gas men are not leaders of anything other than their own avarice, just more followers at the trough. You know when it comes to the consequences of their ripping the ground up and polluting the skies, they'll be long gone to their yachts, oddly absent to comment on the debate over the disgusting mess they made...
  7. Howard Beale from Canada writes: So I suppose Peter Fulton lives in a cave, 1000 meters underground and uses geo thermal heat and eats a lot of mushrooms.. I don't suppose there is much in the way of light or electricity down there, I wonder how he manages to read the paper or post his comments.
  8. bill williams from Canada writes: -

    I'm with Peter Fulton. When do we do something to put a price on the carbon that these individuals just pour into the market? Anthropogenic global warming is the biggest market failure in history. The negative effect of emissions as an 'externality' is well understood ... we just refuse to pay the cost of what we're doing; it's not an externality, it's an 'ignority' (to coin a term).

    Why is all of this happening? Because demand is off the clock. We need charges on emissions for the user (to dampen domestic emissions by consumers and energy intensive synthetic crude production in the tar sands), and we need high export tariffs on all fossil fuels so that we can do our little bit to restrain migration of economic activity (and emissions volumes) to other countries.

    This is obscene; we know that it's obscene. The only argument for doing it is 'if we don't profit, someone else will': tragedy of the commons writ large. Let's end this. Aren't any of these people expecting to have grandchildren?

    But, really, I'm not worried; Harper will do the right thing. AS IF!

    I'm disgusted by what we've let our country become: double-doubles and doughnuts at the Horton's on our way to Fort Mac (or the latest 'play' in BC). Don't we expect anything of ourselves other than figuring out new and exciting ways of extracting and selling what we all know is pure environmental destruction?

    Don't want to hear it? Hear it! This is rape of the planet, and death to its most vulnerable. You can rationalize and whine and moan all you want, but we all know exactly what we're doing, and it's clearer every day.

    It will require a big economic adjustment for Canada to wean itself from the oil/gas economy, but, BUT, every day we delay makes an ultimate economic meltdown more and more likely.

    But who cares? Get the money in an offshore account and buy a boat. 'Ha! Boat! Get it?'

    -

  9. Hendrick Larose from Canada writes: Bill Williams,

    Who gets to decide to wean us off the oil based economy? I hope we are still a democracy and that gets put to a vote. I don't think we all know that this is obscene. In fact the environmental movement overplays this stuff which is why they don't have the support of the people. If you get the support of the people and therefore the leaders you get to do the draconian measures you would like to have done. And no that doesn't make the majority of Canadian ignorant idiots who just don't understand. More likley they have a balanced view of what is important to them and yes their grandchildren.The rants of people against the energy industry are overdone and have no credibility because they are overdone. Want proof,? Where is the government policy to support the obvious rape and pillage of the environment that you suggest? Governments are elected by the majority. Where is your majority?
  10. Peter Fulton from Canada writes:

    OK, I'll be the pariah.

    Of course I didn't say there should be no oil and gas industry; but of course someone has to make the stupid 'living in a cave' comment, leaving me to reflect on who the cavemen really are.

    What disgusts me is waste and environmental destruction. Yes, the oil and gas men. But while we're at it, it's mostly the consumer. Funny how the rest of the world can survive on half or less of our energy consumption without the sky falling in.
    And yet any call for restraint is met by a bunch who basically are willing to be as progressive as they can possibly be, so long as they don't have to actually do anything, and god forbid ever go without.

    No, I don't believe the average person has the right to be able to 'afford' to drive alone an hour each way to work without the gas expense being high.

    Let's attach the real price of oil and gas to these activities. It's a fantastic, precious resource. It should consumers more, as in Europe. And you know what, people will consume less of it, and we'll all be able to live off oil and gas for longer. Why is that so hard for people to grasp.

    You cant have everything in the world, get used it. I'm ashamed to live among such a bunch of weak, selfish cry-babies, who would flush the planet rather than be so much as inconvenienced, even occasionally.

    And no, I dont own a car, my PC uses electricity from hydro power, as does my bus to work each day. I don't pretend to be perfect, but I'm at least willing to try something, unlike 99% of people, who would rather just look at what is the most convenient for THEM, never mind the consequences.

    I hardly make any sacrifices to tell the truth, and yet my oil and gas consumption is a fraction of the average.

    But it takes optimism, not cynicism to make change.
  11. Hendrick Larose from Canada writes: The rising prices for energy will deal with conservation much more effectively than any pamphlet from an environmental group could ever have done. All the CO2 talk did very little but the higher prices will cause conversions to fuel efficient vehicles. High prices are good for our economy and good for CO2 reduction efforts. It doesn't get any better than this.
  12. bill williams from Canada writes: -

    Hey Hendrick, The 'rant' is not against the oil/gas industry, the post is addressed to the reader: WE are doing this.

    If I sound frustrated, it has a lot to do with a couple of factors that you raise (but get wrong): (1) The majority did not elect the government, a minority did, and that's usually the case in Canadian politics, even when we have 'majority' governments. (2) Our political system is not serving the will of the majority; polling consistently indicates that a majority of Canadians recognize the problem of global warming and want to do something about it.

    In fact our political establishment in its entirety has failed us on this.

    This is not 'environmentalists' ... I am not an environmentalist. This is what very well understood (though denied) uncontroversial science is telling us. Is it a bunch of 'third world' UN scientists? No; the scientific academies in countries where scepticism is the highest assure us that the science is valid (USNAS; Canadian Royal Society - Academy of Science)

    Most of the people get it. Most of business gets it (NRTEE, Canadian Council of CEOs, Conference Board). Even the big players at the global level in the oil/gas business get it (Google Jim Mulva and Conoco Phillipps enrollment in USPAC).

    Bush gets it. Harper gets it. But they don't want to DO anything about it because they see it as economically challenging in the SHORT TERM, and the short term is all that they care about.

    No one overstates the problem, and there is all the support that we need to act on it. Our 'leaders' (what a joke) won't act.

    In the face of well understood consequences of failure to act this is unconscionable.

    We have wealth in the oil/gas industry. I say convert some of that wealth into the economic capacity to act. Would that action put marginal oil and gas 'plays' back into the rainy day bin? Yes. Good!

    -
  13. Hendrick Larose from Canada writes: Bill Williams, I agree with some of what you say but I disagree with the polling results. People all say they want to do something but not if it is at all inconvenient or costs them anything. I think you are saying the same thing. Have you seen the complaining on these posts about the BC carbon tax?

    So the problem from my perspective is the failure to engage the Canadian public to action. I think that failure is partly with Gore Suzuki who have overstated the situation and have shown their contempt for any economic activity that may be needed to sustain this country.

    People are being confronted with scenarios that are big sacrifices beyond what they can handle where the approach should be gradual to allow people the time to adapt.

    Tell that to the Gore crowd and they will say its not enough which brings us right back to square 1 where nothing happens.

    It is a frustrating issue for me because I believe in conservation but I also believe that we can have a balance between the economy and the environment.
  14. bill williams from Canada writes: -

    Hendrick, I don't think that Gore or Suzuki play much of a role in the discussion. They've been effective in getting the word out ... period. But it's interesting that I'm not getting the same message from them as you do. They both quote Sir Nick Stern who says in his study that we can not resolve this issue by paralyzing the world economy: we have to have economic strength to deploy wealth into the solutions side of this.

    One thing that people keep forgetting is that fiscal action to address climate change can be revenue-neutral: Raise the tax on carbon; reduce taxes on other things. No net hit to the consumer, but a big swing in household spending decisions.

    Can the same thing be done for major emitters in the oil patch? Somewhat. The tar sands operations are major gas burners a tax on carbon would drive their costs up. But one of the rays of hope that they hold out is Carbon Capture and Sequestration. That technology will cost them money. Harper's answer? Don't tax the carbon, and by the way, spend public money helping them R and D CCS with no commitment to implement. That's completely wrong. Tax the carbon, and then help them deploy CCS through higher capital depreciation or whatever. What are we doing now? Straight subsidy to the industry on tar sands production facilities. Exactly wrong.

    Nothing big has to happen. Nothing sudden has to happen. Nothing scary has to happen. But SOMETHING has to happen. We don't have to have the problem solved by the end of this year. But we should be started, and we should know where we are going.

    Harper's current 'plans' are a joke. Baird went to Bali and couldn't even bring himself to face the youth delegation.

    I'm in my 60's on fixed income and yet I am ready to move on policy, and HAVE made changes in my personal life. If I'm ready, we all should be ready. And it is the job of our LEADERS (!) to help everyone understand that it's needed.

    -
  15. Hendrick Larose from Canada writes: Bill Williams,

    I don't blame the leaders. They were elected on their platform and are carrying it out. The Conservatives were never the green party so why would they lead on environmental issues? The polls suggest people are ready for change so I expect the people of this country to demonstrate how they plan to change and making their wishes known.

    So far, a whole lot of complaining by the Canadian public and no real action. The leaders of the conservation, green etc movements have failed to move the public to action. Why would the leaders of the government shoot themselves in the foot to try and move the population to an agenda that does not appear to be supported.

    When people take this issue seriously and start making changes in their lifestyles look for the Canadian government (whichever party ) to jump in very quickly.

    My guess is that the broad public thought that the CO2 issue would be dealt with by taxing the heck out of oil companies. That would solve the problem and the Canadian public would also get their hands on some of that oil money. Now that they realize they have to pay for carbon taxes and the sacrifices of conservation (trade in that SUV) they are not in favor of this green thinking at all. Not that the globe and mail's posters are a cross section of public opinion but following these posts the last couple of years, there is clearly a bias toward conservation as long as someone else deals with it.

    I think we also know that there is a large part of Canada that is not convinced of why conservation is important at all. As long as the majority of Canadians are apathetic to this issue (and they clearly are) nothing of substance will be promoted by any government because it will not get or keep them elected. Kind of explains why the Liberals did not do anything for the last decade on this issue. It is not an election issue and that is the responsibility of the Canadian voters not the leaders.
  16. bill williams from Canada writes: -

    Yeah, very helpful insight from you Hendrick.

    I just want to play you a clip from a famous speech made by Churchill back in '39:

    '...and just as soon as Britons rise up --on their own-- and take boats across the Channel with hoes in hand and demonstrate to me that they are ready to personally hack the enemy to smithereens ... why then I stand ready to assume leadership of that endeavor. I will go to Parliament, and cobble together a compromise war appropriations bill while the members of a proud nation take the lead and start planting gardens and composing inspirational music ... and ... and ...getting on with it. When it comes to getting off my chair once the parade has started ... I will never let you down! ...'

    Recognize it? No ... neither does anyone else.

    Wake up people. email Harper and tell him you're ready I guess.

    -
  17. Hendrick Larose from Canada writes: Bill Williams.

    None of our leaders are of that calibre and neither is this world war II but a good post by you. I guess nobody sees this as a top priority rightly or wrongly. I am hopeful that the world community would make this an election issue if its really important to them. Have a good evening. I enjoyed the exchange.
  18. Tim Bryson from Claresholm, AB., Canada writes: Bill and Hendrick...nice debate. Good to see two people going at it in an intelligent and respectful manner.

    BTW, what's new on the royalty front in Alberta? I heard that Stelmach was going to revisit the gas side of the equation. Last fall, the sky was falling, but now, its all sweetness and light because of high prices. Is the royalty increase still an issue?
  19. Hendrick Larose from Canada writes: Tim Bryson,

    Yes the royalty increase is still an issue. What has happened is that the oil and gas companies have lost trust in the Alberta government so they have permanently moved capital investment to other places. The government's olive branch is intended to draw back some of the lost capital investment from unintended consequences. There is no question that this approach is positive but will not draw capital back to the province as quickly as it was lost.

    The sad part is the Alberta public will find out in upcoming budgets that the actual royalties received by the government has come down which is largely due to reduced land lease sales because O&G companies have taken their capital spending elsewhere.

    Ed Stelmach really got himself into a mess but now that he has won the election he will end up undoing some of the rules because in the long run the royalty changes were negative for all Albertans despite what the public was led to believe by a very uninformed panel.

    The environmental groups will sing the praises of reduced activity in Alberta which was their agenda all along but those that thought the royalty changes were about getting more for Alberta will be sorely disappointed.

    No question the higher prices may hide some of this comedy of errors but knowledgeable Albertans know they lost on this from an overall economic perspective
  20. Antonio San from Canada writes: Bill Williams, your ignorance on Climate Change is one thing. But now you claim to know anything about the Oil and Gas business. So on both counts, ;earn instead of parroting either IPCC, Gore Suzuki or Beer bar talk on an industry you know NOTHING about.
  21. bill williams from Canada writes: -

    Hey Antonio,

    Thanks for the pleasant comment. I'll make my own decisions on what I will or will not discuss here, thank you. But as long as we're on the subject, what do YOU know anything about?

    -
  22. Super Funds from Canada writes: This is an awesome theme. The junior oil and gas space is ripe for the pickings...

    These companies are trading at silly valuations and the commodity price just won't back down... cash flow will be awesome from these firms...

    I invested in January in a mutual fund that was launched by Aston Hill Financial.

    The Ark Aston Hill Energy Fund is up like 15% in like 2 months... can't wait to see where this goes...... my view is much higher!

  23. Antonio San from Canada writes: Well Billy Bob I know David Johnson is not to be trusted since he run aground another company few years ago and was bailed out by his pals while shareholders were left hanging dry...

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