Caution and optimism

Moira Baird & Terry Roberts
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Oil and gas Offshore industry reacts to the province's energy plan

The energy plan is out, and members of the province's offshore oil and gas industry are cautious, delighted and. in some cases, still digesting the details.

On Tuesday, the provincial government released its 93-page energy plan mapping the future of energy developments in Newfoundland and Labrador.

The energy plan is out, and members of the province's offshore oil and gas industry are cautious, delighted and. in some cases, still digesting the details.

On Tuesday, the provincial government released its 93-page energy plan mapping the future of energy developments in Newfoundland and Labrador.

Bob Cadigan, president and CEO of Newfoundland Ocean Industries Association (NOIA), says the release of the energy plan is good news for the industry.

"It's positive, and we'll just have to wait and see.

"Overall, I think the plan shows a really good long-term view of our energy resources."

NOIA represents more than 400 offshore service and supply companies in the province.

Cadigan is also confident the government and industry will reach an agreement on oil and gas royalty regimes.

He pointed to recent, good-news announcements, such as the tentative Hebron deal and approval of White Rose expansion, as evidence the government and industry can work out deals. The energy plan also commits to creating a $5-million investment fund to help develop export opportunities for fabrication and manufacturing businesses working in the province's oil and gas industry.

"At the end of the day, we're going to have an industry on the ground that's going to export outside of Newfoundland as well," said Cadigan.

The Canadian Association of Petroleum Producers, which represents oil and gas companies, has been waiting for the energy plan for some time.

Paul Barnes, CAPP's Atlantic Canada manager in St. John's, is pleased to see the plan.

"It does give us some indication of what some of the government policy is and some of the royalty rules and regulatory rules."

Barnes says CAPP members will assess the natural gas royalty regime, do the math and decide "whether it makes Newfoundland competitive or not versus other jurisdictions."

"The tell-tale sign will be in the coming months and years if this will actually encourage exploration activity; whether we'll see successful land sales.

"They'll be the telltale sign of whether this policy is effective or not."

Barnes pointed to one gap in the energy plan - a new, generic offshore oil royalty regime. It's still a work in progress.

"It's not an immediate concern for us, but we wouldn't like to see it drag on for too long without actually seeing the rates and triggers associated with the oil generic regime," he said.

"While we may speculate that that regime may be similar to what Hebron has negotiated, we don't really know."

Jerry Byrne, NOIA chairman, called the plan a "watershed document" that lays out a long-term strategy for the development and management of energy resources.

"I think it's the beginning of a very significant opportunity for the province," said Byrne, who is also president of D.F. Barnes Ltd.

The St. John's-based fabrication company has capitalized on offshore work in the past decade.

Byrne sees the energy plan as a step in the right direction.

"We see tremendous opportunities there for us. As chair of NOIA, we put a submission in about a year and a half ago, and everything we asked for has been delivered."

Byrne said the true test of the plan is how it's accepted by all companies in the oil and gas industry.

"If they buy into it, then I think we have something going."

The St. John's Board of Trade says the energy plan adds stability, certainty and guidance to all future energy developments in the province.

"The energy plan looks ahead with a clearer focus on Newfoundland and Labrador's valuable inventory of renewable and non-renewable resources, the opportunities for development that we have in front of us, and how we might co-ordinate and capitalize on these to the fullest," said board president Cathy Bennett, in a statement.

"Strategic development of the province's energy resources for future generations requires a stable regulatory framework that encourages investment, generates capacity, and promotes sustainability, and the plan released today lays that foundation," she said.

mbaird@thetelegram.com troberts@thetelegram.com

Organizations: Newfoundland Ocean Industries Association, Canadian Association of Petroleum Producers, D.F. Barnes St. John's Board of Trade

Geographic location: Newfoundland and Labrador, Hebron, St. John's White Rose Atlantic Canada

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Recent comments

  • W
    July 02, 2010 - 13:33

    You mean, like Danny Williams came through on his promise not to treat Labrador like a treasure trove ?

  • Mike
    July 02, 2010 - 13:30

    I'm not swallowing this dreamt up piece of nonsense & half truths , the unfortunate thing is that many people will & Danny will win next months election . But one day he will have to answer for all these promises , bluffs & smoke screens.

  • Michael
    July 02, 2010 - 13:20

    First of all, I would like to ask if any of you even bothered to read the Energy Policy. I doubt not!!

    Wouldn't you guys like to see NewOil , my name for the new unregulated Newfoundland oil and gas company', succeed and employ 3000 Newfoundlanders with high paying jobs and a mandate for exploration, development, and production? What about all the R&D associated with it and the innovative ideas that will blossom once 'NewOil gets a seat at the oil table with 'Big Oil !! I think Husky Oil and Chevron could be great mentors. Don't you think so?

    I read the 'entire' Energy policy document and it does outline the way forward. It provides a progressive royalty program for future oil and natural gas developments based on profitability. Equity also gives Newfoundland a new 'window on the industry' and 'profits'. It also promotes consultation and partnership, which you guys don't seem to understand.

    I always read the comments in the Telegram and I am always amazed at how opinionated they are. They never describe the facts or the current situation. I think for the most part, people hate to see someone like Danny Williams doing a good job. I even had to argue with my father about Danny's 'good deeds' because to my father Danny seemed arrogant; just because of his success. It is in some peoples' nature to always criticize and belittle other people probably because of their own childhood and upbringing. For myself, I am a Newfoundlander that had to leave the island when I was 12 because my father had to travel for work. He has since returned and retired back on Port-au-Port peninsula. I am too young to retire so I am working in the educational field in Korea but I will retire back on the Port-au-Port peninsula. I want Newfoundland to become successful and show the world their pride and openness.

    How long does it take to pay off a 150 000 dollar mortgage? 20 years or longer!! Do you think Danny Williams can turn around Newfoundland in 4 years? This Energy plan is long term! For me, I can see progress in just the last four years, but it'll take longer to put the entire plan in effect and gain the long term sustainable benefits that we all want. There is reason to believe!

  • W
    July 02, 2010 - 13:13

    Sincere apologies for the abundant clichés and mixed metaphor in that last comment.

  • keith
    July 02, 2010 - 13:13

    sorry guys, this is a plan there are no promises made here, Whether it's good plan well have to wait and see, but it's only a plan

  • keith
    July 02, 2010 - 13:10

    sorry there are some promises, but danny has come through in the past and i can't see why he won't now

  • W
    July 02, 2010 - 13:08

    No, Mike, he won't. When the writing appears on the wall, he will cut and run, leaving his successor to fall on a sword on the Great Man's behalf.

  • W
    July 01, 2010 - 20:22

    You mean, like Danny Williams came through on his promise not to treat Labrador like a treasure trove ?

  • Mike
    July 01, 2010 - 20:18

    I'm not swallowing this dreamt up piece of nonsense & half truths , the unfortunate thing is that many people will & Danny will win next months election . But one day he will have to answer for all these promises , bluffs & smoke screens.

  • Michael
    July 01, 2010 - 20:02

    First of all, I would like to ask if any of you even bothered to read the Energy Policy. I doubt not!!

    Wouldn't you guys like to see NewOil , my name for the new unregulated Newfoundland oil and gas company', succeed and employ 3000 Newfoundlanders with high paying jobs and a mandate for exploration, development, and production? What about all the R&D associated with it and the innovative ideas that will blossom once 'NewOil gets a seat at the oil table with 'Big Oil !! I think Husky Oil and Chevron could be great mentors. Don't you think so?

    I read the 'entire' Energy policy document and it does outline the way forward. It provides a progressive royalty program for future oil and natural gas developments based on profitability. Equity also gives Newfoundland a new 'window on the industry' and 'profits'. It also promotes consultation and partnership, which you guys don't seem to understand.

    I always read the comments in the Telegram and I am always amazed at how opinionated they are. They never describe the facts or the current situation. I think for the most part, people hate to see someone like Danny Williams doing a good job. I even had to argue with my father about Danny's 'good deeds' because to my father Danny seemed arrogant; just because of his success. It is in some peoples' nature to always criticize and belittle other people probably because of their own childhood and upbringing. For myself, I am a Newfoundlander that had to leave the island when I was 12 because my father had to travel for work. He has since returned and retired back on Port-au-Port peninsula. I am too young to retire so I am working in the educational field in Korea but I will retire back on the Port-au-Port peninsula. I want Newfoundland to become successful and show the world their pride and openness.

    How long does it take to pay off a 150 000 dollar mortgage? 20 years or longer!! Do you think Danny Williams can turn around Newfoundland in 4 years? This Energy plan is long term! For me, I can see progress in just the last four years, but it'll take longer to put the entire plan in effect and gain the long term sustainable benefits that we all want. There is reason to believe!

  • W
    July 01, 2010 - 19:52

    Sincere apologies for the abundant clichés and mixed metaphor in that last comment.

  • keith
    July 01, 2010 - 19:52

    sorry guys, this is a plan there are no promises made here, Whether it's good plan well have to wait and see, but it's only a plan

  • keith
    July 01, 2010 - 19:46

    sorry there are some promises, but danny has come through in the past and i can't see why he won't now

  • W
    July 01, 2010 - 19:44

    No, Mike, he won't. When the writing appears on the wall, he will cut and run, leaving his successor to fall on a sword on the Great Man's behalf.