Clouds on the horizon
By NEIL WAUGH, EDMONTON SUN
A 66% approval rating in the polls going into your first party meeting this weekend, following the often-bitter Alberta PC leadership race, is not a bad position.
And since the latest Ipsos Reid survey revealed that Ed Stelmach is within striking distance of Ralph Klein - the premier who walked on water until his own party cynically sunk him but still held a 71% approval rating days before his shelf life expired last November - life is even better for Steady Eddy.
The only dark cloud is his 57% approval in Calgary, a number any premier would die for in the rest of Canada.
But while Stelmach is riding a wave of success, the seeds of doubt continue to be sown.
For one, the Alberta Tories' deeply flawed oilsands policy continues to unravel like a cheap curling sweater.
The first mega-project bit the dust last week when Synenco Energy announced a "strategic repositioning."
Instead of charging ahead with its Northern Lights oilsands mine and processor north of Fort McMurray and the $6.3-billion upgrader on Upgrader Alley, the plans have now been "retracted."
Sure Synenco's bizarre scheme to fabricate the Fort Mac plant in Korea then barge it in giant modules up the Mackenzie River will apparently continue.
But in the meantime, company brass will ask the EUB to "implement a timeout" while they "maximize the shareholder value" for what they call "world-class assets".
In other words, they're going to flip the leases and cash out. Because the PCs' goofy oilsands strategy has no use-it-or-lose-it clause.
This is the second proposed fire sale in less than a week after North American Oil Sands Corp. sold 257,200 acres of lease south of Fort McMurray for $2.2 billion to the Norwegian government's oil company Statoil.
Statoil called it an "important strategic move." But what happens to the 250,000 barrel-a-day heavy oil upgrader that North American was going to build at Scotford?
Upgrading was to be part of Stelmach's new Alberta when he was talking tough on the campaign trail last fall. Comparing shipping raw Alberta bitumen stateside to stripping the "topsoil" off a farm.
EnCana first tested Stelmach's resolve when it linked up with ConocoPhillips to ship raw bitumen to refineries in Illinois and Texas. Last week, two more oilsands firms clearly indicated they have the Alberta Tories figured out as all bluff and no bite.
First, Husky Energy president John Lau announced a "significant step" and an "ongoing strategic move"and then forked over $1.2 billion to Valero Energy for a 165,000 barrel-a-day refinery in Ohio.
Lau also revealed that Husky will "review options for reconfiguring and expanding the refinery to process heavy crude oil and bitumen." He also mused about "additional future investments in the community." In other words, an upgrader.
More jobs head down the pipeline while Albertans get a penny-on-the-dollar royalty and oil companies inflict severe environmental damage on the pristine boreal forests of northeastern Alberta.
Canadian Natural Resources Limited brass - short days after the death of two Chinese workers on its Horizon site - was updating shareholders on its latest troubles.
"The increased cost pressures, the outcome of the royalty review and the impact of environmental regulations," last week's CNRL shareholders' report gloomed, "may adversely impact the company's future net earnings, cash flow and capital projects."
It talked about a company "focus" to develop a "blending strategy" and "working with refiners to add incremental heavy crude conversion capacity." Which sounds like more stateside upgraders as CNRL tries to move processing south of the line to avoid the feds' punitive carbon tax and emissions rules.
The document reveals CNRL was already shipping 135,000 barrels a day of blended heavy crude in the first quarter.
The naive Edmonton Economic Development Corporation and the Alberta Tories' equally disconnected Employment, Immigration and Industry Department issued a breathless study last week which claimed there are "six upgrader projects under development" and "several more under serious consideration" in the Edmonton area.
Once running, the plants will require supplies, services and capital upgrades that could "very easily exceed" $100 billion over their life cycle. And upfront procurement costs will range from $18.8 to $32 billion. Sadly two of the plants on the EEDC's wish list are the Synenco and North American projects.
Meanwhile Ed Stelmach is a hugely popular premier. At least for now.
