Making a case for industry ‘facts’

GARY PARK

For Petroleum News

Saskatchewan Premier Brad Wall is fast emerging as the most outspoken of Canada’s government leaders in promoting the petroleum industry.

Telling a Canadian Energy Pipeline Association conference he is concerned about a growing, vocal minority that wants to end fossil fuel production, he said the industry needs to do a better job of making a case for itself or risk losing the battle for public opinion.

“We’re at some disadvantage when it comes to this argument,” he said.

“The other side has great scientific minds speaking out for them, like Neil Young and Daryl Hannah,” Wall said, referring sarcastically to the aged rock singer and the “Splash” actress who have called for the oil sands to be shut down.

“We don’t have a lot of glamour on our side ... but here is something we do have. We have facts.

“I humbly suggest to this group that we urgently redouble our efforts to present the facts, to be disseminators of them, to be purveyors of the truth,” he said.

Wall said resource proponents must emphasize what Canada has done to protect the environment through advancements in technology such as carbon capture and storage, along with the safety measures introduced by the pipeline sector.

He said while it might be a laudable goal to get the world off fossil fuels, it is “magical thinking” to believe that can be done quickly and painlessly.

Wall said renewable energy, despite its gains, is nowhere close to the point where it can be relied on, especially at peak consumption times.

An outspoken defender of the oil and gas industry, Wall, who faces an election in 2016, has expanded that role since the election in May of the left-wing New Democratic Party government in Alberta.

Now that Alberta has launched separate reviews of royalties and climate change measures, the Saskatchewan government has been quietly rolling out a welcome mat to any companies inclined to cross the border.

Meanwhile, those companies with operations in Saskatchewan are closely watching developments unfold in neighboring Alberta, especially if the royalty review takes a bite out of asset values.

Scott Saxberg, chief executive officer of Crescent Point Energy, told a Toronto conference the last round of royalty increases in Alberta in 2009 - which the government eventually scrapped - made “a dramatic economic impact” in that province.

“There is a significant risk in Alberta that if you make a tweak here and a tweak there, like eliminating the royalty holiday, it can completely change (asset) valuations,” he said.

Crescent Point, a leading producer in the Saskatchewan Bakken, has deftly built up its holdings over the past 14 years, turning itself into one of the largest non-oil sands producers in Canada.

Saxberg said it is “prudent” for companies active in Saskatchewan to “be patient” pending the results of the Alberta review.

Neil Rozell, chief executive officer of Raging River Exploration, which has interests in both provinces, agreed with Saxberg that it is better to wait until the royalty review is complete.

“We are quite cautious about what we are prepared to bid on over at least the next three months,” he said, indicating his company will not take advantage of acquisition opportunities until the bid-ask spread narrows.