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EDITORIAL: Trotting out Nalcor’s Mini-Me

Natural Resources Minister Siobhan Coady speaks at a news conference in St. John’s Monday as deputy minister Ted Lomond looks on.
Natural Resources Minister Siobhan Coady speaks at a news conference in St. John’s Monday about the province’s new oil and gas company, flanked by deputy minister Ted Lomond. — Telegram file photo

Will the new logo be Liberal-red to serve as a counter-point to the blue of the Progressive Conservatives’ Nalcor pick?

Given their “The Way Forward” slogan, will the Liberals name the new oil company Petro-Forward or The Way-Gas?

How much will the contract for logo design, stationary, signage and rebranding cost?

And what will change? (Answer to the last question? At this point, literally nothing but the name.)

Monday, the provincial Liberals announced they were moving ahead on a promise and splitting the oil and gas assets out of Nalcor Energy and into a new Crown firm called, for the moment, “Oil and Gas Corporation of Newfoundland and Labrador.” (Since the Liberals are touting the new corporation as part of “Advance 2030,” the Liberal plan for increasing the size of the province’s oil business, it might be worth copyrighting the name “AdvanceCor” right about now.)

How much will the contract for logo design, stationary, signage and rebranding cost?

The new company’s budget won’t be any larger than the one Nalcor’s oil and gas division currently has, and the mandate won’t be functionally different, though the new corporation will have a new board of directors and a new chief executive officer. Key oil and gas assets — the royalty streams from equity stakes held in oil and gas projects currently held by Nalcor — will stay with Nalcor. That means the new company will have expenses but not income, at least, not at the beginning, so look for a new line item in the upcoming provincial budget to pay for the bills.

Oily-Gassy Son of Nalcor will also share some exemptions that Nalcor was so famous for, including exemptions from parts of the province’s access to information and public tendering rules.

One difference? The new company will be more closely tied to the province’s Department of Natural Resources, though, and that raises interesting and familiar questions.

First and foremost, how does a provincial government — even acting through a spin-off company — act as investor, owner, supporter and, most importantly, regulator? After all, the new firm would take on the investment and possible returns from the nascent Bay du Nord oil field, if that project moves ahead.

The firm will also continue doing, and paying for, planned seismic work to try and entice more players to the province’s offshore, even though more and more concerns are being raised about the environmental effects of seismic work.

Looking at Nalcor’s biggest project, the Muskrat Falls hydroelectric project, it’s easy to see that the province’s environmental regulations were demoted to second-class issues, after first handling the necessity of getting the project underway as quickly as possible.

When the province’s own equity revenues are tied to the success of oilfield projects, it’s easy to see that the government would have a vested interest in making sure that those projects move ahead as expeditiously as possible. It is the very definition of conflicting interests.

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