For the Kenney government and almost anybody interested in oil and gas investment, it was the Sunday night slaughter — sudden news that Teck Resources has cancelled its $20-billion Frontier oilsands mine.
Federal cabinet was expected to rule on the mine this week. Teck’s sudden decision to withdraw its application has many consequences, but one is to get Ottawa off the hook for a ruling that deeply divided the Trudeau cabinet.
Premier Jason Kenney had made Teck the big test of whether the Trudeau government will allow further oilsands projects. Now the Liberals won’t even face the test.
When the word came out Sunday evening, the province still hadn’t been officially informed by the company or by Ottawa.
But soon enough, Premier Jason Kenney blasted Ottawa for creating such chaotic security risks, including the refusal to clear rail blockades, that the company felt it couldn’t go ahead at this time.
“Teck’s decision is disappointing,” he said in a news release, “but in light of the events of the past few weeks it is not surprising.
“It is what happens when governments lack the courage to defend the interests of Canadians in the face of a militant minority.
“The timing of the decision is not a coincidence. This was an economically viable project, as the company confirmed this week, for which the company was advocating earlier this week, so something clearly changed very recently.”
Earlier Sunday, Environment Minister Jason Nixon was proudly announcing crucial new agreements with Mikisew Cree First Nation and Athabasca Chipewyan First Nation.
Technically, they related to dealings between the province and the First Nations, but they had a bearing on Teck and thus made the agreement of 14 Indigenous groups complete.
“My only reaction is that I’m disappointed . . . why would I put a press release out today (announcing support for the project) to hear this kind of news?” Athabasca Chipewyan Chief Allan Adam told Postmedia on Sunday evening.
Teck did not specifically cite the rail blockades but said “there is no constructive path forward for the project,” given that the company is now “squarely at the nexus of much broader issues that need to be resolved.”
Teck makes no mention of resubmitting the application in the future.
This seems to be the end of a project that’s been a decade in the making, passed both federal and provincial regulatory hurdles, and would have created thousands of jobs with potential investment of $20 billion.
“The factors that led to today’s decision further weaken national unity,” Kenney said.
“The Government of Alberta agreed to every request and condition raised by the federal government for approving the Frontier project, including protecting bison and caribou habitat, regulation of oilsands emissions and securing full Indigenous support.
“The Government of Alberta repeatedly asked what more we could do to smooth the approval process. We did our part, but the federal government’s inability to convey a clear or unified position let us, and Teck, down.”
The company pointed out that it had done all the required work and secured unprecedented Indigenous agreement, but still had to cancel because “global capital markets are changing rapidly, and investors and customers are increasingly looking for jurisdictions to have a framework in place that reconciles resource development and climate change, in order to produce the cleanest possible products. This does not yet exist here today.”
Teck expressed hope that withdrawing from the fray will allow Canada to finally settle the issues. True optimists, these people.
There’s an immediate suspicion that Ottawa somehow strong-armed Teck into this decision. But for the directors of this company, just following the daily news was probably enough.
Rail blockades continue to spring up, paralyzing vital economic links. In B.C., the Horgan government has moved the goalposts on the Coastal GasLink pipeline, sending it back to Wet’suwet’en for further consultation.
Premier John Horgan is now fully immersed in the very mess he created for the Trans Mountain pipeline expansion, whose own future is still very much in doubt.
We’ve now had Energy East cancelled because of endless hurdles thrown up by governments. Kinder Morgan abandoned Trans Mountain because it saw no way to get the project done.
Teck is just the latest abandoned project — and maybe the last, because it’s unlikely that anything of this size will even be proposed again.
There will be a mighty uproar for days and weeks to come. But one early message is this — First Nations approval, once touted as the route to approval and Indigenous prosperity, no longer means a thing.
Canadian restaurant sector laid off 800,000 in March, with wave of permanent closures expected this month – Financial Post
The Canadian food service sector laid off 800,000 people in March as the coronavirus crisis forced shutdowns across the country, according to a survey released on Thursday.
Restaurants Canada, the industry association behind the survey, is now warning that nearly 30 per cent of restaurants will not reopen if the situation continues unchanged for another month.
“There’s a lot of people who just won’t make it through May 1 or June 1,” said David Lefebvre, the association’s vice-president for federal affairs.
The 800,000 out-of-work employees are about two-thirds of the country’s entire food-service labour force, which totals some 1.2 million people. Many more workers have likely been let go since the survey was conducted last week: 70 per cent of respondents said they were planning more layoffs in the near future.
A growing chorus of concerned restaurateurs have formed a coalition to pressure the federal government to do more, arguing that the 75-per-cent wage subsidy and $40,000 loans for small businesses won’t be enough to prevent damage that could take a generation to recover from.
Save Hospitality, a group of more than 1,000 restaurant owners, said it is meeting with political officials to develop a restaurant-specific stimulus plan, since wage subsidies won’t be able to prop up the hospitality sector amid blanket bans on social gatherings that stop most restaurants from operating. The $40,000 no-interest government loans will barely cover one or two month’s rent, the group said.
“Some of our rents are over $100,000 a month,” said Andrew Oliver, one of the Save Hospitality leaders and chief executive of Oliver & Bonacini Hospitality Inc., which has 26 locations in Canada, including the Bay Street institution Canoe and several other prominent downtown Toronto restaurants.
Food-service revenues are expected to drop by $20 billion during the second quarter of 2020, Restaurants Canada said. Some restaurants continue to offer takeout and delivery, but those options for most are the equivalent of “putting on a Band-Aid when you’ve lost your leg,” said Oliver, whose business has lost 99 per cent of its revenue despite offering take-out at a few locations.
“This has been one of the most devastating times of my life. I had to lay off thousands of people, ruin thousands of dreams,” he said. “One of the hardest things is I’ve had a dozen calls or text messages, people reaching out, asking me to take the keys to their place because they’re going to give up.”
The Restaurants Canada survey was conducted from March 25 to March 29 with 655 restaurateurs who operate 13,300 locations in total. It found that 10 per cent of the country’s 97,500 restaurants, bars and cafés have already permanently closed. Another 18 per cent said they will be forced to close for good within a month if current conditions continue.
“In the next 30 days, you have one in three restaurants boarded up. Think about that for a minute,” Oliver said. “If all of our costs continue to build with zero revenues for three months … when they come up with this report again, we might have it where one in 10 restaurants think they will survive. Imagine what that looks like for the economy.”
I had to lay off thousands of people, ruin thousands of dreamsAndrew Oliver, CEO, Oliver & Bonacini Hospitality
Save Hospitality wants forgivable government loans to keep businesses alive through the coronavirus crisis and incentivize them to reopen and hire back employees as soon as it’s safe to do so. The group is suggesting the loans should count for 10 per cent of a restaurant’s annual revenue, and could be provided by the banks, but funded and guaranteed by the federal government.
“Make that investment for us so that we can continue to pay you guys the tens of billions of dollars in taxes that we contribute to our communities,” Oliver said.
Federal programs to support laid-off workers and even calls to defer rent payments and property taxes are only stop-gap measures, Oliver said. If the only solution is to delay paying expenses, he said business owners — in an already low-margin industry — will emerge from the crisis with crippling debt, leading to a much higher vacancy rate and a steep drop in market rents.
Russian Oil Firms Ready To Agree To A Production Cut Deal – OilPrice.com
With oil prices below Russia’s budget breakeven and with over 20 percent of global oil demand wiped out by the coronavirus pandemic, Russian oil firms could be ready to participate in a global production cut deal with Saudi Arabia, the United States, and other major producers, sources familiar with the matter told Bloomberg.
Russian oil firms, who did not increase production this month as promised weeks ago when the OPEC+ deal collapsed, have signaled a readiness for global coordinated action to stop the price crash, as the demand destruction during the lockdowns from India to the U.S. turned out much more than initially thought, according to Bloomberg’s sources.
Four sources at Russian oil firms told Bloomberg that they could be ready to agree to some kind of a three-way deal among Russia, Saudi Arabia, and the United States.
Two weeks ago, Russia was dismissing all calls for and reports about returning to the negotiating table, confident that it would outlast Saudi Arabia in the oil price war.
However, the global oil demand outlook has become more and more pessimistic by the day, with some analysts expecting the demand loss in April at 30 million bpd – nearly a third of the world’s typical consumption of oil.
Russia’s President Vladimir Putin is slated to hold a video call with oil executives from the local firms later on Friday to discuss the “unfavorable” situation in the oil market, Putin’s press secretary Dmitry Peskov said today.
On Thursday, Peskov told reporters that no one had launched any talks about a potential new oil-production deal to replace the OPEC+ format, but noted that “no one is happy” with the current oil price.
The current prices of Brent Crude are well below Saudi Arabia’s fiscal break-even price of $80 a barrel oil, below the break-evens of nearly all U.S. shale production, and below the Russian breakeven price, too.
Shortly after Kremlin’s spokesman said no talks were being held, U.S. President Donald Trump said that he hoped and expected that Saudi Arabia and Russia would “cut back approximately 10 Million Barrels, and maybe substantially more,” while OPEC’s top producer and de facto leader Saudi Arabia called for an emergency meeting of OPEC+ and “another group of countries” to try to find “a fair solution” to the current market imbalance. The video meeting will be held on Monday, and the U.S. oil regulator will also be invited to take part in the discussions.
By Tsvetana Paraskova for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.
IEA: OPEC Can't Save The Oil Market – OilPrice.com
Even if the OPEC+ group and other major oil producers in the world were to agree to deep production cuts, they would be unable to prevent what is sure to be an enormous global inventory build this quarter due to unprecedented demand destruction, Fatih Birol, Executive Director of the International Energy Agency (IEA), told Reuters on Friday.
The measures many countries have taken to try to flatten the curve of the coronavirus pandemic are destroying unprecedented volumes of oil demand as more than 3 billion people—from India to Europe to the United States—remain in lockdown.
As a result of restricted commuter travel, grounded flights, and economic slowdown, demand for oil in April is expected to drop by 20 million bpd year on year, and probably more.
Even if OPEC+ plus other producers were to discuss, agree to, and implement a collective cut of 10 million bpd, global oil inventories would still rise by 15 million bpd in the second quarter, the IEA’s chief told Reuters.
Earlier this week, the IEA said that the world has seen some oil shocks before, but “none has hit the industry with quite the ferocity we are witnessing today.”
The reason the shock is unique this time around, the IAE says, is because one of the usual stabilization factors, consumers, is unable to do its part. As billions of people around the world are still in lockdown, consumers are unable to react to falling prices like they usually do—by consuming more. So for as long as the pandemic lasts, boosts in demand that were seen during other oil shocks are “highly unlikely.”
Meanwhile, producers from the OPEC+ group and from another group are expected to discuss potential ways to react to the massive demand loss and the low oil prices that hit their lowest level in 18 years earlier this week.
While U.S. President Donald Trump touted a cut of 10 million bpd, and possibly 15 million bpd, many oil analysts, cited by Reuters, remain highly skeptical that an agreement of these proportions could be reached and implemented.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
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