MONEY That's What It's All About
By: Scott Jeffrey
Published: Energy Processing Canada
It comes as no surprise that we're the industry everyone loves to hate. Even the nukes don't come in for as much criticism, despite little mishaps like Chernobyl, Fukushima, and Three Mile Island.
On of the reasons for this is that oil and gas is a daily fact of life. Most of us heat with natural gas and get a bill for it. We stop for gas and oil and get charged for it. We bemoan the price increases, and conveniently forget the decreases.
Another reason is that we've not always been good stewards of the resource. In our pursuit of the hydrocarbon molecule, we have often let money take the fore, and the environment, and sometimes the people have paid the price.
However, you don't have to do much scratching to realize that it's all about money. The producers extract the resource, and everyone wants a piece of it. They do the math, multiplying the number of cars in North America by the number of fills, and they come up with megabucks.
That brings us back to the money. Let's start with government, another group we love to hate. it's a fact that the resource is owned by the people, but government begs to differ. They begrudgingly allow the oil and gas explorer to buy rights to find and develop the resource, and then they tax the resource. If they could, they would cut out the middleman, but time and again it has been proven that government actually needs the industry. Otherwise, the resource would either stay in the ground or be produced for more than it is worth. So they play it safe, taxing the producer in many different ways. So much do they tax the industry that they have often been surprised by the flight of capital and expertise to less repressive jurisdictions. Governments hate their dependence on the industry, pander to the anti-oil faction, but gleefully take the money "on our behalf."
Here at home, B.C. laid out five conditions for the TransMountain pipeline to proceed. The only real condition was money, and when Kinder Morgan agreed to the cash demands of Premier Clark and company, opposition vanished and the pipeline was approved.
In Quebec, Denis Coderre, mayor of Montreal, was more upfront. He declared that there was no, or not enough economic benefit in allowing the Energy East Pipeline to transit the sacred lands and waters of Montreal. As soon as the industry figures out a way to make the stickup look like a gift, Energy East will be a go.
The environmental lobby is also all about money, but they are more devious. They need a cause, because then all those well-meaning green minions will lighten their wallets and fatten the coffers of their well-oiled machines. They have decried "tar sands," want no pipelines, and say that natural gas heat can easily be replaced. Fear replaces facts, and the more they monger, the more secure their executive compensation is. President Trump has taken the heat off oil and gas for the time being, but they have linked him inextricably with big oil, and their hysteria knows no bounds.
They don't want consultation and consensus. They want money.
Opposition to oil and gas projects by First Nations people is well entrenched in North America. Legitimately, they want native lands protected, and they want traditional rights respected. Written into every proposed agreement, whether it be a pipeline or a gas plant, are those protections. The sticking point invariably comes down to money. If a producer makes an offer, it's seen as a starting point, and the producer can afford more. Economics aside, and just like government, a band can kill a deal if they feel access to their land is worth more than what is affordable.
The process gets a little trickier when a project is not on First Nations land. We have home grown examples, but let's look at the Dakota Access project. The Cheyenne River and Standing Rock Sioux have held up a part of the line because it will pass under a portion of Lake Oahe, even though it is not on the reservation. They claim safety concerns, despite the fact that there are eight existing pipelines already. They sate that the new pipeline will defile the water by its very existence, but they're a little late with that argument. Perhaps the amount of product increases the defilement.
In fact, the bands are looking for ta way to cash in. They can't charge a toll to use native land, but they can make enough noise to have a few dollars thrown their way. The irony here is that they are now facing a cleanup bill of $1.0 million (paid for out of a $6 million dollar fund) from protesters occupying reservation land. They were also peeved when access to their casino was compromised by the protesters.
The oil and gas industry should be held to account by those who care about the world we live in. However, those who care include the men and women who work in and depend on the oil and gas industry. The industry is not full of monsters, despite the demonization of "big oil" by the environmental lobby. We all care about what kind of world our children live in.
We may be portrayed by the self-interested as the epitome of greed, but greed is without a doubt not the sole domain of the oil and gas industry.
Published: Energy Processing Canada
It comes as no surprise that we're the industry everyone loves to hate. Even the nukes don't come in for as much criticism, despite little mishaps like Chernobyl, Fukushima, and Three Mile Island.
On of the reasons for this is that oil and gas is a daily fact of life. Most of us heat with natural gas and get a bill for it. We stop for gas and oil and get charged for it. We bemoan the price increases, and conveniently forget the decreases.
Another reason is that we've not always been good stewards of the resource. In our pursuit of the hydrocarbon molecule, we have often let money take the fore, and the environment, and sometimes the people have paid the price.
However, you don't have to do much scratching to realize that it's all about money. The producers extract the resource, and everyone wants a piece of it. They do the math, multiplying the number of cars in North America by the number of fills, and they come up with megabucks.
That brings us back to the money. Let's start with government, another group we love to hate. it's a fact that the resource is owned by the people, but government begs to differ. They begrudgingly allow the oil and gas explorer to buy rights to find and develop the resource, and then they tax the resource. If they could, they would cut out the middleman, but time and again it has been proven that government actually needs the industry. Otherwise, the resource would either stay in the ground or be produced for more than it is worth. So they play it safe, taxing the producer in many different ways. So much do they tax the industry that they have often been surprised by the flight of capital and expertise to less repressive jurisdictions. Governments hate their dependence on the industry, pander to the anti-oil faction, but gleefully take the money "on our behalf."
Here at home, B.C. laid out five conditions for the TransMountain pipeline to proceed. The only real condition was money, and when Kinder Morgan agreed to the cash demands of Premier Clark and company, opposition vanished and the pipeline was approved.
In Quebec, Denis Coderre, mayor of Montreal, was more upfront. He declared that there was no, or not enough economic benefit in allowing the Energy East Pipeline to transit the sacred lands and waters of Montreal. As soon as the industry figures out a way to make the stickup look like a gift, Energy East will be a go.
The environmental lobby is also all about money, but they are more devious. They need a cause, because then all those well-meaning green minions will lighten their wallets and fatten the coffers of their well-oiled machines. They have decried "tar sands," want no pipelines, and say that natural gas heat can easily be replaced. Fear replaces facts, and the more they monger, the more secure their executive compensation is. President Trump has taken the heat off oil and gas for the time being, but they have linked him inextricably with big oil, and their hysteria knows no bounds.
They don't want consultation and consensus. They want money.
Opposition to oil and gas projects by First Nations people is well entrenched in North America. Legitimately, they want native lands protected, and they want traditional rights respected. Written into every proposed agreement, whether it be a pipeline or a gas plant, are those protections. The sticking point invariably comes down to money. If a producer makes an offer, it's seen as a starting point, and the producer can afford more. Economics aside, and just like government, a band can kill a deal if they feel access to their land is worth more than what is affordable.
The process gets a little trickier when a project is not on First Nations land. We have home grown examples, but let's look at the Dakota Access project. The Cheyenne River and Standing Rock Sioux have held up a part of the line because it will pass under a portion of Lake Oahe, even though it is not on the reservation. They claim safety concerns, despite the fact that there are eight existing pipelines already. They sate that the new pipeline will defile the water by its very existence, but they're a little late with that argument. Perhaps the amount of product increases the defilement.
In fact, the bands are looking for ta way to cash in. They can't charge a toll to use native land, but they can make enough noise to have a few dollars thrown their way. The irony here is that they are now facing a cleanup bill of $1.0 million (paid for out of a $6 million dollar fund) from protesters occupying reservation land. They were also peeved when access to their casino was compromised by the protesters.
The oil and gas industry should be held to account by those who care about the world we live in. However, those who care include the men and women who work in and depend on the oil and gas industry. The industry is not full of monsters, despite the demonization of "big oil" by the environmental lobby. We all care about what kind of world our children live in.
We may be portrayed by the self-interested as the epitome of greed, but greed is without a doubt not the sole domain of the oil and gas industry.
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