Guest Post by Cabot Martin
Uncle Gnarley is a fine fellow.
I was supposed to do a piece on one of my favorite issues – why an law suit against Emera for “Civil Deceit” regarding their role in the Muskrat fiasco would make a whole lot of sense and just might get us off the hook for billions.
I’ve written on this on Uncle Gnarley before but was going to take things a step further by broaching the idea of getting a Civil Deceit “Class Action” case going – every rate payer in the Province would be eligible to participate - and surely there must be some sharp young lawyer (or lawyers) out there willing to tackle such a case.
But like I say – Uncle Gnarley is a fine fellow, so when a couple days ago there was “breaking news” re our offshore gas resources in the international oil & gas press, I simply had to go back to him and plead the case for a change in topic. He agreed.
The publication that sparked this change of plans is “Upstream” – their publication’s name indicates they specialize in the oil industry’s exploration and development sectors; it comes out of Norway in print and digital formats; they have a big presence in London and correspondents around the world.
Class act and well respected for carrying the straight goods.
The
article that got me going only came out a couple days ago and is by Iain Esau, a long time, London-based offshore
oil correspondent .
His corporate title says he is covering Europe and Africa but he has long been a keen observer of the Newfoundland offshore scene. Recently he continued that coverage by pieces in Upstream on the Bay du Nord project, as well as on Equinor’s Capahayden and Cambriol exploratory wells.
He knows our problems and potential well. Particularly because our offshore is really part of (and completes in) the North Atlantic Basin which happens to include the North Sea.
We
use the same or at least similar offshore equipment and have been working back
and forth offshore one way or another for 50 years. Sure our crude is sold at
Brent (North Sea) prices, not that for West Texas Intermediate (WTI).
So when I saw the title of his most recent piece, I just had to bring it to your attention - verbatim.
His title kind of says it all:
“Time is now ripe to tap the abundant gas resources off Newfoundland & Labrador”
Now this is an “Opinion” piece – it’s free advice by an experienced, respected member of the international oil reporting fraternity, someone who spends his time gathering info, dissecting corporate plans and monitoring project progress.
Here it is – as I said verbatim.
“OPINION: Time is now ripe to tap the abundant gas resources off
Newfoundland & Labrador | Upstream Online by Iain Esau
The decision by Canada’s
government to give C$320 million (US$239 million) to Newfoundland &
Labrador was welcomed by local authorities, fearful of the economic impacts of
Covid-19, the energy transition and low oil prices.
Since the cod fisheries
collapsed some 40 years ago, the oil industry has become the linchpin of the
provincial economy, accounting for 23% of its gross domestic product and
supporting 23,500 jobs.
Four offshore fields —
Hibernia, Terra Nova, White Rose and Hebron — produce about 285,000 barrels per
day in total, driving the province’s economic growth since Hibernia came online
in 1997.
But poor market conditions
are jeopardising the provincial economy, with Husky Energy and Equinor stalling
their respective West White Rose and Bay du Nord oil projects.
While Husky could ditch its
project entirely or even walk away from Newfoundland, Equinor looks to be
staying, with Bay du Nord’s economics improved by successful nearfield
exploration drilling.
Ottawa’s funding will help
offshore workers but will not revive West White Rose, where Husky wants the
federal government to buy a stake. The cash-strapped province, meanwhile, is
also helping its offshore sector via an exploration incentive unveiled by
Premier Andrew Furey.
These initiatives from St
John’s and Ottawa are laudable, but it is time for them to grasp climate change
and look to an increasingly decarbonised future with the focus on gas.
Incentives must be enacted
to stimulate development of the province’s 12.5 trillion cubic feet of gas
resources and exploration for extra gas. This would reduce carbon dioxide
emissions, generate power, produce blue hydrogen and could initiate liquefied
natural gas production.
St John’s and Ottawa
ploughed vast sums of public money into the disastrous C$12.7 billion Muskrat
Falls hydroelectric project in Labrador — C$5 billion over budget and five
years behind schedule.
Premier Furey must establish
a framework to help investors develop the province’s increasingly valuable gas
resource that has lain neglected for 40 years. If not now, when?
(This is an Upstream opinion
article.)
Iain Esau
Correspondent
(Africa-Europe)
Remember now – this is what has been read all over the world by the most influential players in the offshore oil industry.
I
hope our new Minister of Industry, Energy and Technology has seen it – and
wonder, if he has, if he will give such advice his full consideration.
As Mr. Esau says, smart offshore policies now must go include a “decarbonized” component – offshore gas development certainly fills that bill. Every time natural gas displaces a ton of coal you are cutting CO2 emissions.
As the old people used to say “Read, Mark and Inwardly Digest”.