IN THE NEWS ~ Harper faces energy conundrums
July 24th, 2012 - 12:00pm
Published: Prince George Citizen (Final) News, Page 4.
DUPLICATES: THE STARPHOENIX (SASKATOON) (FINAL), BUSINESS, Page: C5; MONTREAL GAZETTE (FINAL)
BUSINESS, Page: B7; CALGARYHERALD.COM ONLINE; THE PROVINCE (FINAL) MONEY, Page: A19; THE LETHBRIDGE HERALD NATIONAL GENERAL NEWS, Page: A1; PRINCE GEORGE CITIZEN (FINAL)
NEWS, Page: 4; THESTARPHOENIX.COM ONLINE; RED DEER ADVOCATE ALBERTA, Page: A3; PRINCE GEORGE CITIZEN (FINAL)
NEWS, Page: 4
First China, then British Columbia.
Two major developments on Monday are putting the centrepiece of Stephen Harper's much-vaunted economic strategy to the test.
Harper has moved aggressively to put natural resource exploitation at the forefront of his government policy, aiming to ensure Canada's future as an energy superpower.
But Monday's massive $15-billion takeover bid for Calgary's Nexen Inc. by the state-owned China National Offshore Oil Company will force Harper's hand, making him decide how much say foreign interests can have on how Canadian energy is developed.
And statements from British Columbia's government -laying out new conditions for the Northern Gateway pipeline to carry Alberta bitumen to the West Coast -add more uncertainty to the future of the controversial pipeline.
The pipeline has been a key part of Harper's strategy to diversify Canada's trade and ship more oil to Asia. Both developments raise pointed questions about who gets the spoils of natural resource development, and who shoulders the risks. Observers of all stripes say the sands are shifting so rapidly, it's now time for Canadian political leaders to hash out a coherent plan on how the country's energy bounty should be dealt with in the interest of all of Canada.
"It's really important for Canada as a whole," said University of Calgary economist Jack Mintz. "It's important we get our thinking straight, to make sure we do it for the benefit of all Canadians."
Environmentalist Gillian McEachern said she hopes to see that kind of direction coming later this week from the premiers when they meet in Halifax and discuss a national energy strategy.
"Canadians need to come together to decide what's in our best interest, and what kind of energy future we want," McEachern said.
CNOOC's $15-billion proposed all-cash takeover of Nexen was a friendly bid, offering shareholders a generous 60-per-cent premium on their holdings.
The real test will be at the political level. The deal requires approval from federal Industry Minister Christian Paradis, who will need to determine under the Investment Canada Act whether the transaction is of net benefit for Canada.
His review will take an initial 45 days, and can be extended by 30 days or more.
As is standard, the Competition Bureau will also require a review to see if the transaction would dramatically reduce competition.
That review will take an initial 30 days, and can be extended if the bureau requests more information.
But for the opposition NDP, those reviews fall far short. Natural resources critic Peter Julian said he wants a full public review, through a House of Commons committee, to discuss whether the takeover would benefit the country.
Julian also wants Paradis to come forward with the more transparent rules on foreign investment, promised two years ago in the wake of the government's "secretive" rejection of the takeover bid for Potash Corp. by Australia's BHP Billiton.
A combination of public hearings and more transparent investment review procedures would reveal whether the Nexen deal is truly good for the Canadian economy, the environment and communities, Julian said.
"The ultimate question here is, are we selling all of our resources to foreign investors, and are they being put to the best use for the best value," said Reynold Tetzlaff, the Canadian energy leader for PricewaterhouseCoopers LLP in Calgary.
The growing Asian involvement in the oilpatch raises the stakes for the building of a pipeline to the West Coast, he added, because the foreign investment assumes Canada will build a pipeline one way or another.