Archive | December, 2012

PetroChina, Encana strike natural gas pact

15 Dec

Shawn McCarthy, The Globe and Mail, December 13, 2012

Encana Corp. reached a $2.2-billion joint venture with PetroChina to develop the hot new Duvernay property in Alberta, in a deal that will fly just below the radar of Investment Canada’s new guidelines on state-owned enterprises.

The pact comes less than a week after the federal government unveiled investment rules that raise new hurdles for foreign state-owned companies to take over Canadian oil and gas producers and encourage exactly the type of deal that Encana and PetroChina concluded Thursday.

The deal shows foreign players remain anxious to invest in the Canadian energy industry even with the new guidelines. Chinese officials have said the government’s rules could put a chill on their investment plans in Canada, but PetroChina was clearly eager to proceed with Encana. Sources say the deal was essentially done weeks ago, but the firms held back their announcement until after Ottawa released its CNOOC decision and the new rules of engagement for state-owned enterprises.

Encana CEO Randy Eresman said the partners received assurances from Ottawa that the transaction would not be reviewed under the Investment Canada Act prior to closing the deal on Thursday because there is no transfer of control.

“We think this kind of transaction . . . largely to bring foreign capital in to help us develop undeveloped resources but having a minority interest is the ideal way to go,” Mr. Eresman said in Calgary.

In a statement last night, Industry Canada said investments that do not involve acquisition of control are not reviewable. But the government will undertake further due diligence to ensure this investment does not involve transfer of control.

Under the terms of the agreement, PetroChina – China’s largest international oil company – will gain a non-controlling, 49.9-per-cent interest in Encana’s 445,000 acres in the Duvernay in west-central Alberta for $2.18-billion.

Encana will remain the operator with a 50.1-per-cent interest. The partners expect to spend $4-billion over the next four years to develop the Duvernay land that is rich in natural gas and condensates, an oil-like substance that is used to dilute bitumen for shipment in pipelines.

Encana entered into a similar $2.9-billion joint venture with Japan’s Mitsubishi Corp. last February to develop a shale gas field in Alberta and British Columbia.

Asian companies – whether state-owned or private-sector – are keen to buy Canadian gas reserves and are backing projects to liquefy Canadian gas at plants on British Columbia’s coast and ship it to their home markets, where gas prices are far higher than they are in Canada. The same rationale was behind the $6-billion acquisition by Malaysia’s state-owned Petronas of Calgary-based Progress Energy Resources Corp., which the Harper government approved last week.

Ottawa also gave the green light to CNOOC Ltd., another Chinese state-owned company, in its $15.1-billion (U.S.) bid to acquire Nexen Inc., which owns a controlling interest in the Long Lake oil sands project and a 7-per-cent stake in Syncrude Ltd.

Prime Minister Stephen Harper said his government will not approve any more acquisitions of oil sands companies by state-owned enterprises (SOEs), and acquisitions in other sectors by companies that are controlled by foreign governments would only be approved if they operate as commercial entities and are not unduly influenced by their home governments.

Faced with rock-bottom prices for natural gas in North America, Encana has shifted its focus to new unconventional plays that contain not only gas but liquids like butane, propane and condensates. The company has been selling assets and looking for joint venture partners to finance that shift.

Mr. Eresman said complex projects like the Duvernay have high up-front costs that can be reduced through aggressive development and a steady stream of capital spending.

“That’s part of the reasons to bring in partners,” Mr. Eresman said. “It assists us in really accelerating the pace at which we can move these projects forward to commercialization.”

PetroChina and Encana aborted a $5.5-billion joint venture project last year, but the Chinese company said the new deal represents part of its long-term commitment to the North American natural gas business.

“This joint venture will build a foundation for the successful development of the Duvernay play and help to diversify our business portfolio,” Zhiming Li, president of PetroChina’s Canadian subsidiary, said in a statement. “Encana is our ideal long-term partner for the development of our future natural gas business.”

With files from reporter Boyd Erman in Toronto

Republished from The Globe and Mail:


China Gobbling up Alberta and BC’s Oil and Gas

15 Dec
China and it’s giant state oil companies have been making waves of late with deals and takeovers of Canadian companies. China is very savvy in terms of geo-political positioning in the context of a resource-scarcity future. Whether rivers in India or land grabs in Africa, China is looking into the future and is after water, food, and fossil fuels. Canada will be a major energy battleground moving forward.
china canada oil, fippa canada
Graphic by Craig Fleisch ( for The Vancouver Observer
Reproduced from the Vancouver Observer

Canada-China FIPPA agreement may be unconstitutional, treaty law expert says

15 Dec

Beth Hong, October 17, 2012

The Canada-China Foreign Investment Promotion and Protection Act (FIPPA), Canada’s biggest foreign trade treaty since NAFTA, will come into effect at the end of October and bind both the federal and provincial governments of Canada to its clauses for the next 31 years until 2043. International investment law expert and Canadian citizen Gus Van Harten says provinces have a strong case for challenging the treaty on constitutional grounds.

Prime Minister Stephen Harper shakes hands with Wen Jiabao, Premier of the People’s Republic of China, in the Great Hall of The People in Beijing, China. PMO photo by Jason Ransom.


With two weeks remaining before the controversial Canada-China Foreign Investment Promotion and Protection Act (FIPPA) is ratified, international investment law and treaty expert Gus Van Harten says BC has the option of delaying the treaty’s ratification through the courts.

“The province can call for an injunction in the BC Superior Court, requesting the courts to order the federal government not to ratify the treaty until the constitutional issues are resolved,” Van Harten told The Vancouver Observer.

The other option, Van Harten added, was an upswelling of public opinion against the treaty that will pressure elected officials in Parliament as well as provincial legislatures.

According to international law, a foreign investment protection agreement (FIPA) treaty binds the state regardless of changes in federal or provincial governments.

“It’s a done deal between the two countries—by signing a treaty, the Harper government can bind future governments and bind the Canadian electorate for 31 years,” Van Harten said.

Van Harten—who has a PhD in international law from the London School of Economics, and teaches law at Osgoode Law School—is one of five internationally recognized experts in Canada on international investment and treaty law and how they work on a practical basis. He said that he is an outlier for speaking out, based on his experience.

“The difference between me and many others is that a lot of academics work in the system as lawyers or arbitrators or experts, and they’re much more cautious about saying things that are critical of the system,” he said.

He noted that FIPPA is a good news for lawyers, who stand to profit off potentially multi-million dollar lawsuits.

“The lawyers who work in this field will like that—their business is to sue,” he said. “It’s not good for Canadian taxpayers.”

Any province with Chinese investors in natural assets over the next 31 years has right to challenge constitutionality of FIPPA

BC isn’t the only province that has a strong case in courts against the federal government over FIPPA because they face potentially serious fiscal risk if Chinese companies invest in major assets.
“It could be Ontario down the road, it could be the ring of fire—which is a strip of mineral rich land in Northern Ontario. In the north, there could be development of mines in northern Canada,” Van Harten said. “Same with Saskatchewan, with the mineral right there.”
“In Alberta, the Alberta economy is going to have a significant portion of Chinese ownership in its resource sector, and if Alberta was concerned for a long time about not having control over its resources vis-à-vis the federal government, how does it feel not having control over its resources vis-à-vis Chinese investors?”

The only provincial governments that shouldn’t be concerned about FIPPA are the ones which won’t expect to be getting any significant Chinese ownership of assets, Van Harten said.

“I don’t think any responsible government can assume that that’s going to be the case. In fact, they should be assuming the opposite and asking the questions now before the 31-year commitments are finalized on October 31 In fact, they should be assuming the opposite and asking the questions now before the 31 years kicks into effect on October 31.”

Van Harten’s concerns “speculative”: BC Environment Minister Terry Lake

Van Harten also sent letters to premiers of all across Canada, including BC Premier Christy Clark. He did this to help the provinces understand the scope of the fiscal risks this treaty will have on them and taxpayers.

Clark’s Press Secretary Michael Morton confirmed that Clark’s correspondence branch received the letter. Clark did not respond to questions from The Vancouver Observer about her reaction to any of the concerns it raised.

BC Minister of Environment Terry Lake responded to Van Harten’s letter to the Premier and concerns about FIPPA in a written statement, calling the letter “speculative”:

“We are intervenors in the hearing and examining  issues that are critical to our five conditions that must be met on all pipeline projects in BC. At the same time we are working with our federal counterparts on [Northern Gateway Proposal] related issues where BC’s interests are at stake.”

“As this is ongoing work and international treaties are the purview of the federal government I am not going to comment on speculative comments by Mr. Van Harten.”

No response from feds about concerns over FIPPA

FIPPA is the biggest foreign trade agreement since the North American Free Trade Agreement (NAFTA). FIPPA is an agreement with provisions to protect Chinese investors in Canada, and vice-versa. However, it also contains many clauses that have alarmed Van Harten and opposition MPs such as Green Party MP Elizabeth May. May requested an emergency debate on the treaty at the beginning of October to the House Speaker. Her request was denied.

Van Harten wrote a letter to Prime Minister Stephen Harper and Minister of International Trade Ed Fast last week outlining his concerns as a legal expert and Canadian citizen, but has yet to get any confirmation on whether his letter has been recieved.

A spokesperson for Minister Fast responded to questions from The Vancouver Observer  about Van Harten’s letter and concerns with the following written statement:

“With regards to investor-state dispute settlement, it is Canada’s long-standing policy to permit public access to such proceedings. Canada’s FIPA with China is no different. As we do with all other investor-to-state disputes, this FIPA allows Canada to make all documents submitted to an arbitral tribunal available to the public (subject to the redaction of confidential information).

It is also important to note that under this treaty, both Canada and China have the right to regulate in the public interest. Chinese investors in Canada must obey the laws and regulations of Canada just as any Canadian investor must.

We’ve been clear that Canada wants to continue to expand its relationship with China, but we want to see it expand in a way that produces clear benefits for both sides. By ensuring greater protection against discriminatory and arbitrary practices, and enhancing predictability of a market’s policy framework, this FIPA will allow Canadians to invest in China with greater confidence.”

Harper government rushing FIPPA, not allowing enough debate

However, Van Harten disagrees on with the Minister on various points.

“Why it is being concluded now in a form that is not advantageous to Canada is perhaps because the Harper government wants to pass it quickly while it has a majority in Parliament, and has been prepared to give away things that it would not have given away presumably as a minority government because it would not have been able to pass it through Parliament”

He added that the bulk of the responsibility for FIPPA lies at the majority Conservative government.

“To be honest, the provinces didn’t start this. It’s the federal government which has taken this reckless step,” he said.

NDP MP Don Davies proposed a motion in the Standing Committee on International Trade to debate, study, and recommend amendments to FIPPA on October 2.

After the majority Conservative committee voted for a confidential, in-camera meeting, the motion was removed from the Committee’s agenda.

International Trade committee member and Liberal MP Wayne Easter decried the killing of the motion, saying it was hindering Parliament from doing due diligence.

“We should be doing what Parliament is supposed to do and hold a consultation so that we know just exactly what is happening under the investment agreement, and so that we can look at the implications,” Easter said.

Two weeks won’t be enough time to fully debate and study the implications for all provinces, hence Van Harten’s recommendation for provinces to request a delay, and then the courts for an injunction based on constitutional grounds.

“I just want to emphasize to you the actor who is to blame at the moment is the federal government,” he said.

“The provinces would be to blame if they sat on their hands despite the implications of this treaty.”

LeadNow, a citizen’s advocacy group, has launched a petition to stop FIPPA.
Republished from the Vancouver Observer:

Gas line explodes in West Virginia: Homes burn, Freeway damaged

15 Dec
By Kari Huus, NBC News, December 11, 2012


A gas line explosion rocked the town of Sissonville, W.Va., Tuesday, setting off an inferno that burned multiple homes, damaged and closed a portion of the freeway, and knocked out power and phone lines to some residents — but remarkably, took no lives.

 The blast, which was reported at about 12:40 p.m. PT in Sissonville, a community of about 4,000 people located 10 miles north of Charleston.

Flames shot some 100 feet in the air and hopped the main north-south arterial Interstate 77, as emergency responders scrambled to cap the ruptured gas line — a 20-inch transmission line owned by Columbia Gas — and bring the blaze under control.

The blaze destroyed four homes and damaged at least five others, WSAZ-TV, the NBC station in Huntington, W. Va. reported, citing county officials.

Gov. Earl Ray Tomblin told reporters at a press conference Tuesday afternoon that several people were  transported from the scene for smoke inhalation-related injuries. But he said emergency crews had concluded there were no deaths and everyone had been accounted for.

Earlier, an official said that the blast was near the Cedar Ridge Health Care Center, a senior-assisted nursing home. Metro 911 dispatchers said that the nursing home was not on fire, and its residents are not in danger.


A section of I-77 near Sissonville, W. Va, on Tuesday after a gas explosion rocked the area. The flames shot more than 100 feet in the air, and jumped the highway caused the asphalt top to crumble.

Tomblin said that the area within 1,000 feet of the explosion site has been evacuated.

A fiber optic cable was also damaged in the blast, affecting phone service in several states, according to WSAZ.

Local officials said that some 1,600 local residents had been directly affected, either by losing power or because they had to take a 50 mile detour around the closed highway.

Columbia Gas confirmed that one of its transmission lines was the source of the explosion.

“The site where the incident occurred has been secured and the fire has been contained,” according to Chevalier Mayes, communications manager for the company. “There were residents near where the explosion occurred. Columbia Gas employees and first responders are working to assess the situation and accommodate the residents. Columbia Gas is still working to determine the cause of the explosion.”

Tuesday evening, the National Transportation Safety Board announced that it was sending a crew to investigate the blast and fires in Sissonville. The team was to travel to West Virginia Tuesday night and be on the scene Wednesday, the federal agency said.

Meantime state transportation officials were dispatching crews to repair damage to an 800-foot stretch of I-77.


A suspected gas line explosion rocked an area near Sissonville, W.Va., on Tuesday.

“The road is not melted,” said Brent Walker, a spokesman for the state Department of Transportation, correcting reports by multiple outlets, including NBC News. Speaking to NBC-station WBOY in Clarksburg, W.Va., Walker said the heat had caused the asphalt surface to crumble when the road was engulfed in flame.

The highway was closed and traffic was being diverted.

Walker said crews will be working to resurface the highway as soon as they can get through and may get traffic moving through as soon as this evening.

Officials of a plant in the vicinity of the blast, NGK Spark Plugs, said that they had shut down for at least two work shifts, according to the report.

Residents in the area, including children at Sissonville Elementary school had been told to remain inside, according to WSAZ. Later, school officials were arranging buses to take students across Sissonville to their homes.

For residents who lost their homes or could not get home, Aldersgate Methodist Church in Sissonville opened as a shelter for the night, according to Metro 911, an emergency website provided by the county’s emergency responders.

Republished from

FNLP Meeting in Moricetown Raises Tempers: Unis’tot’en remain opposed to gas pipeline

14 Dec

Sarah Komadina, 12/7/2012

Tempers flared as the Pacific Trails Pipeline was the subject of an information session held in Moricetown last night.  Unis’tot’en Clan of the Wet’suwet’en Nation set up a blockade last month to stop surveyors of the project from working in the area.

The information session was explain the potential benefits of the natural gas pipeline, but before the representatives of the First Nations Limited Partnership (FNLP) could finish, they were interrupted by protest.

Members of the Unis’tot’en clan traveled from their blockade to say that no information session should be held, since they’ve already said no. Dini Ze Toghestiy of the Unis’tot’en Clan accused the FNLP of “attempting to disempower us as people in the decision making process.”   He said the FNLP told the crowd that “15 nations signed up for the agreement; that it would be next to impossible for them to get out of the agreement; that this was going to happen whether we like it or not…  and that’s not something that we are going to take.”

Moricetown Band Manager Lucy Gagnon says, “I’ve had a chief’s name for almost fifty years, and I’ve never seen a war song brought into our feast hall;  you know there were wars that have happened many years ago and it was the first time that I’ve seen it and to have that dancer come in was a total surprise.”

Last night’s town hall meeting was solely for information purposes from the FNLP and a decision is on the proposed pipeline is not in imminent at this point. Gagnon says, “We will discuss the turn of events and see how they want to proceed with it all.   I was told we will meet with the hereditary chiefs and see in the new year where we will go with it;  if the community doesn’t want us to sign on with it, then the council will listen to that.”

Office of the Wet’suwet’en Natural Resources Manager David De Wit says, “There is still work ahead of us to really capture the values and the interest and really quantify those values on the land.”

FNLP representative Al Hudec says once things settle down at last night’s meeting, they were able to get their message across.  “In the end, it was very helpful when a senior matriarch stood up and gave her story on how the elders want respect at these things, and… to respect the presenter.”

15 First Nations have already signed on and the Wet’suwet’en Nation is the last one required.  If the final answer is NO, then the company would have to decide whether or not the pipeline will go though. Hudec urged members to “weigh the benefits to accepting the financial benefits package, any cost of impacts and then make their decision to participate in FNLP or go it alone.”

Republished from CFTK-TV:


TransCanada gas pipeline may sidestep environmental review: Federal environmental assessment not guaranteed on B.C. pipeline with 320 water crossing

14 Dec

By Larry Pynn, Vancouver Sun November 26, 2012

TransCanada gas pipeline may sidestep environmental review
TransCanada’s planned 650-kilometre natural gas pipeline to Kitimat would cross about 320 watercourses including the habitat of more than 100 species at risk, such as white sturgeon, woodland caribou and marbled murrelet, company documents show.

But under Conservative government changes to environmental laws, there’s no guarantee the Coastal GasLink project will undergo a federal environmental assessment.

“It’s a travesty of the public trust,” said Otto Langer, retired head of habitat assessment and planning for the federal fisheries department in B.C. and Yukon. “If we can’t have an environmental review on a project of this sort, this is proof we have gutted Canada’s environmental protection.”

The federal government is soliciting public comment on whether a federal assessment is warranted for the Coastal GasLink project.

Céline Legault, spokeswoman for the Canadian Environmental Assessment Agency, said that even if the project is not subject to a federal environmental assessment, “all applicable federal legislative, regulatory and constitutional requirements must be fulfilled.”

TransCanada has also submitted its project description to Victoria in advance of an official assessment by the B.C. Environmental Assessment Office.

Langer dismissed the notion of a provincial assessment because the B.C. government is “giving the green light everywhere” to projects and that its environmental review process is too soft on industry.

“It’s pretty sad,” he said. “I don’t know how we slipped down this slope so quickly … and I don’t know where it will all end.”

B.C.’s Environmental Assessment Office reported in August it had conducted assessments of 162 projects in the last 20 years. Only two were refused outright — Kemess North copper-gold mine in 2008, and the Ashcroft Ranch landfill project in 2011.

Coastal GasLink’s 1.2-metre-wide pipeline would extend from near Groundbirch, a community 40 kilometres west of Dawson Creek, to a proposed liquefied natural gas facility near Kitimat.

The buried pipeline would initially have a capacity of 1.7 billion cubic feet of natural gas per day, which could be expanded to five billion cubic feet per day.

TransCanada documents outlining the pipeline project say it would cross four major drainages — the Peace, Fraser, Skeena and Kitimat rivers.

Of 286 species identified along the pipeline corridor, about 37 per cent (107 species) are recognized as species of management concern, Trans-Canada says.

That includes 17 species federally protected under the Species at Risk Act, 27 species recognized by the Committee on the Status of Endangered Wildlife in Canada, and 35 species designated as red (extirpated, endangered or threatened) or blue (of special concern) by the B.C. Conservation Data Centre.

More than 20 species of fish, including all five Pacific salmon species and steelhead, could be affected.

“Given the large number and diversity of species that may be encountered as a result of construction and operation of the project, there is the potential for project-related activities to affect fish and fish habitat,” the documents state.

“The potential effects of the pipeline construction on aquatic species and habitat are well known and understood. These potential effects may arise through construction of watercourse crossings or through erosion and include the deposition of sediment into watercourses, temporary disturbance of species present at crossings and potential disturbance to fish habitat.”

Langer said that despite reduced federal environmental protection, the Canadian Environmental Assessment Agency has the nerve to boast of “Canada’s strong environmental laws, rigorous enforcement and followup, and increased fines” on its website.

Concluded Langer: “It makes me want to puke.”

Craig Orr, executive director of Watershed Watch, said he is “astounded that there is even a thought of exempting something of such magnitude, with such potential risk.

“There is so much discretionary power now in whether anything gets an environmental assessment. I don’t think it serves Canadians well, especially those concerned about the environment.”

Under Bill C-38, passed by Parliament last June, Ottawa has limited federal protection of fish habitat to activities resulting in serious harm to fish that are part of a commercial, sport or aboriginal fishery. Serious harm is defined as “death of fish or any permanent alteration to, or destruction of, fish habitat.”

Bill C-38 also transfers greater responsibility for environmental assessments to the provinces. The Conservative government argued that the move helps to avoid duplication and allows it to focus on major projects.

Ottawa continues to be involved in environmental reviews of B.C. proposed projects such as the Enbridge Northern Gateway pipeline, Taseko’s New Prosperity mine in the Chilcotin, and BC Hydro’s Site C dam on the Peace River.

Bill C-45, an omnibus bill tabled last month in the House of Commons, is being criticized for further eroding environmental protection, including exempting pipelines from the Navigable Waters Protection Act, which would become the Navigation Protection Act. Only three oceans, 97 lakes and 62 rivers will be covered by the new act, representing less than one per cent of Canada’s waterways.

On Nov. 21, a coalition of groups, including the B.C. Assembly of First Nations, David Suzuki Foundation and Ecojustice, released an open letter to the federal government urging that the bill not be passed.

The groups complain that the bill would also give industry the “option to request that their existing commitment to protect fish habitat be amended or cancelled” and would eliminate the Hazardous Materials Information Review Commission.

“These are major changes that, if not stopped now, will ripple out across communities everywhere in Canada — putting our water, air, food and quality of life at risk,” the letter states.

The Sun reported Aug. 22 that the federal government had washed its hands of environmental assessments on 492 projects in B.C., including gravel extraction on the lower Fraser River, run-of-river hydro projects and wind farms, and bridge construction, as well as demolition of the old Port Mann Bridge, shellfish aquaculture operations, hazardous-waste facilities and liquid-waste disposal.

The deadline for written responses on the Coastal GasLink project is Dec. 3. A decision will be made available on the agency’s website no later than Jan. 3, 2013.

Construction of the project is proposed to start in 2015, with completion in 2018.

Republished from the Vancouver Sun:

Coastal GasLink Focus

11 Dec

Coastal GasLink is a prospective shale gas pipeline that would link to a proposed LNG (Liquid Natural Gas) processing terminal in Kitimat, BC. The project is owned by a consortium of Companies called LNG Canada led by Shell Canada Limited, including Mitsubishi Corporation, KoreaGas (KOGAS), and, not inconsiderably, Petrochina. TransCanada Pipelines Limited is the company contracted by LNG Canada to build Coastal GasLink, the same company trying to force through the notorious Keystone XL Pipeline from Alberta to the Gulf Coast in Texas.

PetroChina is a subsidiary of the parent company and oil giant China National Petroleum Company (CNPC). China is now featuring prominently on the Canadian scene with the recent FIPPA deal, the Canada-China version of the Foreign Investment Promotion and Protection Agreement, and the Nexxen foreign takeover deal. The deal saw the China National Offshore Oil Corporation (CNOOC), the third largest national oil company in China, swallow up Canadian oil company Nexen Inc., one of the biggest players in the Alberta Tar Sands.

LNG Canada and the Coastal GasLink project with Shell’s reputation and CNPC’s power have the largesse and experience that Apache Corporation and the Pacific Trails Pipeline lack. What PetroChina and LNG Canada’s Asian connections provide is contract clout and access to lucrative Asian market contracts where Apache and other smaller LNG projects are having difficulty securing those higher Asian prices.

The LNG Canada project in Kitimat has been estimated to be in the $ 12 billion range, while the Coastal GasLink Pipeline is estimated at $ 4 billion, and according to BC Energy Minister Rich Coleman is slated as “one of the largest, if not the largest, investments ever in B.C.” The pipeline dimensions are projected at 48”, six inches larger in diameter than PTP. In short, everything about this pipeline is, big.

As the weeks and months move forward, WestCoast Pipeline Watch will feature a focus on the LNG Canada/Coastal GasLink Project as a very important piece of the North American and international energy infrastructure puzzle, and the business news, construction, developments, opinions and resistance in relation to it.

Below are a few articles and info links to get started.

Happy Reading!