Tuesday, May 8, 2007

One reporter’s take on our oil and gas industry

Newfoundland's future is slipping into the hands of Alberta, largely because of Premier Danny Williams' unrealistic expectations.

That’s the opinion of Financial Post reporter and commentator Claudia Cattaneo, writing in today’s paper. You can read the full text here.

Last week, Cattaneo wrote an in-depth piece about the stalled oil and gas industry in this province. You can read the full text of that article here. But these first two paragraphs set the tone:

Barely a year ago, St. John's was a signature away from Alberta-style prosperity -- with a lineup of big oil and gas projects, a cascade of high-paying jobs, membership in the exclusive club of oil-producing hubs feeding off the global energy supply crunch, tantalizingly just out of reach.

Instead, a sequence of 'For sale' and 'For lease' signs jars the core of this quaint port city on the rocky shores of the Avalon peninsula, as Alberta employers host job fares almost weekly, snaring its youth by the planeload, and oil-industry operators quietly downsize.

Cattaneo follows up that article with today’s more subjective commentary, which concludes with this stark observation:

The bottom line: While Mr. Williams now tries to revive Hebron discussions and says he is optimistic its partners will accept a deal, warning terms will tougher with his new energy plan, his province is sitting out the biggest boom in the commodity's history, while Alberta is milking it for all it's worth.

He will need to beat Alberta -- not live in the past -- to get in on the next round.


NL-ExPatriate said...

One glaring problem with that piece is that it is comparing apples to oranges.
Alberta's Tar sands is a labour, and infrastructure intensive investment. They can give away their tar and make up the difference in income, taxes, investment and infrastructure.

A more realistic comparison would be to compare our oil and gas with a similar situation like the north sea.

Geoff Meeker said...

You might need to explain what you mean. Our oil patch is competing directly with Alberta for both investment and skilled people. The investment is pouring into Alberta now, and our skilled engineers, technicians and tradespeople are moving to where the action is. This will emerge as a real issue when a major project starts up here, and we have to entice these workers back from Alberta and elsewhere.

Deirdre Greene said...

Also, NL Expatriate, while the oilsands are labour and infrastructure intensive, the NL offshore is technology intensive (particularly in terms of mitigating harsh cold ocean environmental risks not experienced in the North Sea). Further, both are geographic and technology frontiers, quite different from the mature North Sea. The result is a similar level of investment to extract petroleum from the oilsands as from the NL offshore.

Edward G. Hollett said...

Ahhh, ex-pat that must have been you posting elsewhere as "anonymous".

The argument is exactly the same.

Your contention was wrong there and it's wrong here as well.

There are already two brief factual replies to that effect.