Tuesday, October 21, 2014

Read a newspaper Shelly Glover!

"Jaws" Glover is a true Harper sycophant. Kept in the dark about delays eh? Pick up a newspaper ..... Anonymous Winnipeg Free Press Reader

Up next .....

See Manitoba Law Courts what could happen if you insist on keeping cameras out of the courtroom?

Good Day Readers:

Seem to recall a case in Cleveland a couple years ago where cameras were excluded in a big, fat, juicy, salacious trial involving misappropriation of municipal funds. An enterprising court reporter obtained daily electronic transcripts and made a set of puppets to represents those appearing in court. Needless to say it was hilariously popular.

Clare L. Pieuk

Monday, October 20, 2014

Don't miss "The Great Canadian Judicial Travelling Sideshow" returning to Winnipeg October 27-29 2014!

Canadian Judicial Council provides an update regarding the work of the Inquiry Committee into the conduct of the Honourable Lori Douglas

Ottawa, 20 October 2014 –The Inquiry Committee into the conduct of the Honourable Lori Douglas has scheduled two weeks of hearings beginning 24 November 2014. In preparation, the Committee comprised of the Honourable Francois Rolland (Chair), the Honourable Austin F. Cullen and Me Christa Brothers will hear preliminary motions and procedural questions on 27, 28 and 29 October 2014. These proceedings will be held at 363 Broadway, Suite 400, Winnipeg, Manitoba, starting at 9:30 a.m. The proceedings of the Committee are held in public, however, space is limited and the Committee may, in some circumstances, order than portions be held in camera.

The Inquiry Committee expects to hear submissions from Independent Counsel, Ms Suzanne Côté and from counsel for Associate Chief Justice Lori Douglas, Ms Sheila Block.

As directed by the Committee, submissions and other relevant information will continue to be made available to the public on the Council's website.

The mandate of Council in all judicial conduct matters, is to ensure that allegations of misconduct against any judge are reviewed in a fair and transparent manner

Norman Sabourin
Executive Director and Senior General Counsel
(613) 288-1566 ext 302

Good Day Readers:

Norman Sabourin stole CyberSmokeBlog's thunder! Just as it was prepared to publish an update on the Douglas Inquiry he issued this press release. If you visit the CJC's website:


the top two links provide the latest taxpayer wrangling between Sheila Block of Team Douglas
and Independent Counsel Suzanne Cote.

Long story short

Team Douglas has filed four motions:

(1) Allegation #1 (Alleged Sexual Harassment of Alex Chapman) and Allegation #2 (Alleged Failure to Disclose in the Applications Process) be summarily dismissed

(2) Allegation #3 (Alleged Incapacity as a Result of the Public Availability of the Photos) be struck from the Notice of Allegations for a lack of jurisdiction, or in the alternative summarily dismissing Allegation #3

(3) Returning Douglas ACJ's photographs and if necessary, declaring that the photographs are inadmissible

(4) Sealing the confidential private medical evidence filed by Lori Douglas in support of this motion

Previously, Team Douglas had requested a change of venue so the upcoming preliminary motions hearing take place outside Manitoba but lost. Earlier Independent Counsel was unsuccessful in her attempt to have a fifth Allegation added to the list - misuse of a Representational Allowance available to federally appointed judges.

The Inquiry per se is "supposed" to re-convene November 24 but will it? If Team Douglas loses any of its motions it could appeal the Inquiry Committee's decision(s) to the Federal Court of Appeal and you know what that could mean - more delay, delay, delay .....

So that's - and God knows what else - is what "The Taxpayers' Looney Toons Inquiry" will be arguing come October 27.

Clare L. Pieuk


You know, it's really too bad a debt clock like the Canadian Taxpayers Federation uses couldn't be installed in the courtroom so you could watch the cost of this "Inquiry from Hell" mount by the second - you'd likely be blown away!

Friday, October 17, 2014

"Hi there boys and girls it's your uncle Stephen here with all kinds of Halloween goodies for your parents if they vote for me!"

Your kids are being used as campaign props, Canada

It's positively eerie, Just in time for Halloween, the Tories appear prepared to treat voters to a pre-surplus basket of goodies. Chief among these is an extension of the age range for children receiving the $100 monthly child care tax.

The Canadian Museum for Human Rights ..... a kiss on the cheek a knife in the back!

Good Day Readers:

After reading the Winnipeg Free Press article below one is reminded of the late Jacqueline Kennedy's comment, "Politics is a game of knives."

Perhaps a wing of the CMHR should be dedicated and renamed the Stephen J. Harper Centre for Ethics, Honesty and Integrity in Canadian Politics with its annual award The Golden Arse given to the Conservative who best displays these attributes - that is, if you can find one.

Two exhibits complete with annual scholarships should figure prominently. The Shelly Ann Glover Wikipedia Award recognizing innovative political biographical writing, as well as, The Glover Tupperwear Award for excellence in innovative home-based political fundraising,

Clare L. Pieuk


So what do you figure readers? Is that thumbs up in the photograph below by Stephen Harper trained seal Shelly Glover ("Arf! Arf! Arf! Arf!") her acknowledging she got his message to dump Stuart Murray and how do you figure the Asper family will react - pour a lot of money into the Trudeau campaign chest to dump Shelly Glover?
Murray caught up in political animosity
Conservatives, Asper family at odds over museum

By Dan Lett
Friday, October 17, 2014

Stuart Murray (left) and MP Shelly Glover in August unveiled a stamp commemorating the new rights museum, along with Canada Post official Bill Davidson. (Ken Gigliotti/Winnipeg Free Press)

Think of it as death by patronage.

Just a few weeks after a splashy official opening of the Canadian Museum for Human Rights, politics finally caught up with Stuart Murray, the CMHR's president and CEO, a longtime Tory who was appointed to the job just five years ago.

Related Items

Without warning this week, federal Heritage Minister Shelly Glover informed Murray his contract -- which expires November 1 - would not be renewed. No replacement has been named. In fact, the process of finding a replacement has not really begun.

For his part, Murray admitted he was a bit shocked when Glover called and informed him of the decision. "The end certainly came sooner than I had expected," Murray said in an interview.

Murray would not discuss the details of his demise any further, only that he wanted to stay and had good reason to believe his contract would be renewed.

'The end certainly came sooner than I had expected' - Stuart Murray

Although Murray would not say it, sources confirmed the federally appointed board of the museum had in fact recommended his contract be renewed. The sources said the board was similarly given no warning by Ottawa its recommendation had been rejected.

The boards of Crown corporations can only recommend appointment of presidents and CEOs; the power to appoint start with, and remains with, the federal government. Specifically with the Government in Council, which means the federal cabinet. Which really means the decision can be traced back to Prime Minister Stephen Harper.

Why drop the axe on Murray now, just a few weeks after the opening?

Officially, the word from Eric Hughes, chairman of the museum's board, was that Murray's contract was up and it was decided to bring in someone new to take up "the next cycle of strategic planning." He would not elaborate.

Sources believe part of the decision was due to the fact nearly half of the museum's galleries will not open to the public until mid-November, nearly two months late.

However, when all factors are considered, it appears more likely Murray was a casualty of the increasingly bitter relationship between Harper's government and the Asper family, particularly Gail Asper, who championed the museum in the name of her late father, Israel Asper.

Federal Tories hold Murray largely responsible for not being able to keep a tighter rein on Gail, who privately and publicly pressured Harper to provide more money as the cost of the museum kept going up.

It appeared that in the lead-up to the opening last month, Murray would be spared as focus shifted to celebrating the launch of a new federal museum. However, conflict was building behind the scenes, ultimately boiling over on Sept. 18, the night before the official opening ceremonies.

Sources said tensions were already running high when Harper cancelled plans to attend the opening ceremonies. The tension only increased at a gala dinner that night for donors and dignitaries hosted by the Friends of the CMHR, the Asper-led fundraising foundation.

Emotions boiled over at that dinner after former Liberal prime minister Jean Chrétien delivered an impromptu speech that dealt in part with his own role in the making of the museum.

Chrétien had struck the original deal with Izzy Asper to provide $100 million for construction. However, Chrétien insisted the museum remain private and his government would not fund operations. It was Harper who made the museum a reality when he agreed to create a Crown corporation to help with construction and operation.

Sources confirmed federal Tories at the gala, including Glover, were enraged at Chrétien's speech, which they saw as an attempt by Gail Asper, a prominent Liberal, to punish Harper for skipping the opening ceremonies.

In a logic that only makes sense in the world of political patronage, Murray ended up wearing the blame for these and other perceived slights. This, despite the fact sources said he had the faith of the board and its chairman, Hughes, a close confidant of Harper.

Murray's role in the making of the museum -- which was primarily to occupy the uncertain ground between two powerful and petulant combatants -- should be seen as a great political accomplishment. Although the CMHR's success is still a matter of debate, it is open. Given all that has happened, that's a remarkable feat in itself.

Instead, Murray must suffer the indignity of being thrown under the bus by his political masters with the knowledge none of his supposed allies has the fortitude to pull him to safety.

It's a sad end to a remarkable accomplishment. But then again, it's hardly an unprecedented scenario.
Political appointees live by the good graces of their political benefactors. And just as often, they die by those same hands.


Republished from the Winnipeg Free Press print edition October 16, 2014 A4

Thursday, October 16, 2014

Creepy, sneaky, greasy politicians need fans to disperse the hot air emanating from the back of their shorts ..... while perspiring like Richard Nixon!

BigOil will get it to market one way or another!

Good Day Readers:

A good article to explain the differential in oil prices which have cost the Alberta and Canadian governments so much in lost revenues - an estimated $20 billion last year..

With a global recession looming on the horizon, the best option still appears to be an Energy East Pipeline because it will open Canadian crude to world markets while making the country completely oil self-sufficient. Recessions come and go and there's no reason to believe the next will be any different.which is a reason to proceed with the project.

It also avails the country of the opportunity to diversify away from such heavy economic dependence on the United States. While they may be our best neighbours and friends, time and time again they've shown when economics gets tough they get protectionist.

Clare L. Pieuk
The plunging oil prices a game changer for major pipeline projects

Jeff Rubin
Tuesday, October 14, 2014

A worker is reflected in a puddle at Sydney's Caltex Oil refinery in Kurnell, October 14, 2014, after the completion of shutting down the refinery and its transition to a storage facility. (Jason Reed/Reuters)

A sharp correction in oil prices is putting the debate around major pipeline projects, such as Keystone XL, into a more nuanced light.

Part of the impetus behind constructing new pipelines to carry bitumen from northern Alberta to the U.S. Gulf Coast, Kitimat on the Pacific, or even all the way across the country to Saint John, New Brunswick was to help close the substantial discount between Canadian oil and world prices. Well, crude’s recent drop into the $85-a-barrel range has basically collapsed the once wide-open spread that had existed between West Texas Intermediate and Brent crude with hardly any new lengths of pipe being laid into the ground at all...

It’s quite a turnaround considering that not that long ago WTI had traded as much as $40 a barrel lower than Brent. The difference between Brent and a barrel of Western Canadian Select, the benchmark price for oil sands product, was even more significant, a fact that had caused considerable hand-wringing in downtown Calgary as well as on Parliament Hill.

Oil sands players, as well as U.S. producers in North Dakota, have been clamouring for pipeline approvals, claiming that all of the political foot-dragging around pipeline projects weakened pricing power and critically hampered their operations. While those producers are still waiting for new pipelines to be built, the price of a barrel of WTI and Brent crude are now trading within a few dollars of each other (in part due to the rapid emergence of oil by rail).

It’s a development, however, that won’t be causing any champagne corks to be popped in the boardrooms of Suncor or Canadian Natural Resources. Canada’s oil patch suddenly has bigger fish to fry than figuring out how to get its oil to tidewater. The worry now is what’s happening to the global oil prices, which they’ve been coveting.

The world looks much different from the days since multibillion-dollar pipeline projects such as Northern Gateway and Keystone XL were first proposed. Both Brent and WTI are trading below $100 a barrel and it won’t be long before they fall below $80. If you doubt that outlook just note what Saudi Aramco did earlier this month. Instead of cutting back production by several million barrels a day to support prices like they did in 2008 and 2009, the Saudis instead chose to protect their market share by slashing prices.

For those wondering about the future direction of oil prices, the behaviour of the world’s most important oil supplier and lead member of OPEC is instructive. Saudi Aramco has now cut all of its export prices, reducing prices to Asian markets to their lowest levels since the 2008 recession.

It’s not hard to figure out where this is going for oil sands producers. When commodity prices fall, whether it’s coal, iron ore, copper or otherwise, the effect on supply is the same. Falling prices hit high-cost producers first and hardest. Guess what’s happening in the oil sands right now?

In the last several months alone we’ve seen two major announcements of shelved or cancelled projects. Total SA is walking away from its Pierre River project, while Norway’s Statoil is doing the same from the Corner mine. In light of the current outlook for oil prices, such decisions aren’t a surprise.

Even production from prolific shale plays like the Bakken, which straddles North Dakota and southeast Saskatchewan, are at risk. At price levels below $80 a barrel, you can expect to see the current frantic pace of drilling in the region start to gear down.

For pipeline companies with major proposals on the table, such as TransCanada and Enbridge, falling oil prices are a game-changer of the same magnitude that rising prices were a decade ago. Back then, soaring prices created an urgent need to build new pipelines to connect North America’s burgeoning supply to coastal refineries and world markets.

We’re now in a different world. At the root of today’s problem is global demand that is no longer growing quickly enough to support the prices necessary to keep expanding expensive unconventional sources of supply such as the oil sands. Lower prices will effectively strand those reserves regardless of the transportation options that may become available. Even if President Obama approved Keystone XL or the National Energy Board gave the green light to Energy East, falling commodity prices mean that soon there might not be enough oil flowing out of northern Alberta to fill those new pipelines.

Editor’s note: An earlier version of this column incorrectly said Norway’s Statoil is walking away from the Joslyn mine. In fact, it is the Corner mine.

Wednesday, October 15, 2014

Thursday, October 09, 2014

The Energy East Pipeline: Keystone XL on steroids!

Good Day Readers:

An excellent article well worth the read - well researched.. It's the inside story of how Canadian east and west oil handlers came together to devise the plan to build a 4,600 kilometer pipeline, largely using existing facilities, from the oil fields of Alberta to the Irving refinery in Saint John, New Brunswick. Hitherto, oil producers in the west had operated largely independently from their eastern cousins..

The incentive? Barack Obama's announcement earlier this year that approval for Keystone XL would be delayed yet again which seemed to be the last straw. The Energy East Pipeline, which if eventually built, has several advantages over both Keystone and Northern Gateway:

(1) The oil sands is land locked this would free it

(2) Its only customer currently is the United States

(3) Because of (1) and (2) it's been susceptible to price discounting on world markets something that cost Alberta oil producers an estimated $20 billion last year

(4) Indian refiners have already run oil sands crude. It works and they're ready to purchase more

(5) Irving refinery is already set up to handle the world's largest tankers

(6) Believe it or not it's less travel time from Saint John to India than Vancouver to India

(7) And perhaps the best part of all, Energy East would checkmate the Americans there's nothing they could do about it

Clare L. Pieuk

Keystone darned: Canada finds oil route around Obama

By Rebecca Penty, Hugo Miller, Andrew Mayeda and Edward Greenspoon
Wednesday, October 8, 2014

Storage tanks stand at the Irving Oil Limited refinery in Saint John, New Brunswick. (Photographer: Aaron McKenzie/Bloomberg

So you’re the Canadian oil industry and you do what you think is a great thing by developing a mother lode of heavy crude beneath the forests and muskeg of northern Alberta. The plan is to send it clear to refineries on the U.S. Gulf Coast via a pipeline called Keystone XL. Just a few years back, America desperately wanted that oil.

Then one day the politics get sticky. In Nebraska, farmers don’t want the pipeline running through their fields or over their water source. U.S. environmentalists invoke global warming in protesting the project. President Barack Obama keeps siding with them, delaying and delaying approval. From the Canadian perspective, Keystone has become a tractor mired in an interminably muddy field.
Related: The Keystone Killer the Enviros Didn't See Coming

In this period of national gloom comes an idea -- a crazy-sounding notion, or maybe, actually, an epiphany. How about an all-Canadian route to liberate that oil sands crude from Alberta’s isolation and America’s fickleness? Canada’s own environmental and aboriginal politics are holding up a shorter and cheaper pipeline to the Pacific that would supply a shipping portal to oil-thirsty Asia.

Instead, go east, all the way to the Atlantic.

Paul Browning, former Chief Executive Officer of Irving Oil Limited smiles during a tour. (Photographer: Aaron McKenzie Frazer/Bloomberg)

Thus was born Energy East, an improbable pipeline that its backers say has a high probability of being built. It will cost C$12 billion ($10.7 billion) and could be up and running by 2018. Its 4,600-kilometer (2,858-mile) path, taking advantage of a vast length of existing and underused natural gas pipeline, would wend through six provinces and four time zones. It would be Keystone on steroids, more than twice as long and carrying a third more crude.

Supertanker Access

Its end point, a refinery in Saint John, New Brunswick, operated by a reclusive Canadian billionaire family, would give Canada’s oil-sands crude supertanker access to the same Louisiana and Texas refineries Keystone was meant to supply.

As well, Vladimir Putin’s provocations in Ukraine are spurring interest in that oil from Europe and, strange as it seems, Saint John provides among the fastest shipping times to India of any oil port in North America. Indian companies, having already sampled this crude, are interested in more. That means oil-sands production for the first time would trade in more than dribs and drabs on the international markets. With the U.S. virtually its only buyer, the captive Canadians are subject to price discounts of as much as $43 a barrel that cost Canada $20 billion a year.

And if you’re a fed-up Canadian, like Prime Minister Stephen Harper, there’s a bonus: Obama can’t do a single thing about it.
Done Deal

“The best way to get Keystone XL built is to make it irrelevant,” said Frank McKenna, who served three terms as premier of New Brunswick and was ambassador to the U.S. before becoming a banker.

So confident is TransCanada Corporation, the chief backer of both Keystone and Energy East, of success that Alex Pourbaix, the executive in charge, spoke of the cross-Canada line as virtually a done deal.

Crude on the Move

“With one project,” Energy East will give Alberta’s oil sands not only an outlet to “eastern Canadian markets but to global markets,” said Pourbaix. “And we’ve done so at scale, with a 1.1 million barrel per day pipeline, which will go a long way to removing the specter of those big differentials for many years to come.”

The project still faces political hurdles. U.S. and international greens who hate Keystone may not like this any better. In Quebec, where most new construction will occur, a homegrown environmental movement is already asking tough questions.

Special Relationship

Still, if this end run around the Keystone holdup comes to fruition, it would give a lift to Canadian oil and government interests who feel they’re being played by Obama as he sweeps aside a long understood “special relationship” between the world’s two biggest trading partners to score political points with environmental supporters at home.


Shale Boom Tested as Sub-$90 Oil Threatens U.S. Drillers
New Pipelines Threaten U.S. Gulf Coast Oil Premium

It will also prove a blow to the environmentalists who have made central to the anti-Keystone arguments the concept that if Keystone can be stopped, most of that polluting heavy crude will stay in the ground. “It’s always been clear that denying it or slowing Keystone wasn’t going to stop the flow of Canadian oil,” said Michael Levi, senior fellow for energy and environment at the Council on Foreign Relations.

Keystone Delays

This Canada-only idea surfaced in the days after Obama’s surprise November 10, 2011, phone call informing Prime Minister Harper that Keystone was on hold. Harper, who had vowed to turn his nation into an energy superpower, responded with a two-track strategy: Get in Obama’s face on Keystone and identify other ways out for Canada’s land-locked oil sands, which, at 168 billion proven barrels, contain the third-largest reserves in the world.

Keystone remains bogged down, awaiting the outcome of litigation in Nebraska. Last year, Obama gave a speech at Georgetown University and said he wouldn’t approve Keystone if it would significantly exacerbate carbon dioxide emissions.

The pipeline to the Pacific, known as Northern Gateway, looks increasingly iffy due to opposition from aboriginal groups.

TransCanada is thus expected to file an application to build Energy East with Canada’s National Energy Board in the coming days, according to people familiar with the plan. Approval may come in early 2016. “This is almost certainly the most important project TransCanada has right now in our portfolio,” said Pourbaix.

Culture Shift

While Republicans continue to make Keystone approval an issue of the mid-term congressional elections, its fate has become less fraught for Canadians. Make no mistake – they still want it approved under the theory that oil sands reserves are so vast that it will require multiple large pipelines to develop them properly. In the interim, they have already begun to deploy alternatives to get Alberta oil to market, moving 160,000 barrels a day to the U.S. by rail.

Canada needs another oil export pipeline by 2018 or output may be squeezed, Martin King, a commodity analyst at FirstEnergy Capital Corporation in Calgary, said today in a presentation.

“That’s crunch time,” King said. “Supply growth in the oil sands is certain to 2020.”
‘Real Shift’

Reflecting this new post-Keystone mood, Harper told a British business audience in September that the U.S. “is unlikely to be a fast-growing economy for many years to come” and after a hundred years of trying to maximize exports south, it’s time for “a real shift in the mindset of Canadian business culture.”

Which is what Energy East represents. Yet before it emerged as a standard bearer of this shift, it had to survive a rough gestation. Harper himself was slow to warm to it. Others declared it “stranger than science fiction.”

And then there were the mutual suspicions of the oil producers of the west and the refiners of the east to overcome. The inside story of how this developed into an unusually broad political consensus was put together after interviews with more than 50 industry and government executives who have been in and around the often tense negotiations.
No History

One initial difficulty: The Calgary-based oil patch and New Brunswick’s Irving Oil Limited operators of Canada’s largest refinery and 900 service stations in eastern Canada and New England, had virtually no history with each other. Alberta oil had never flowed farther than Montreal. They were petroleum potentates operating in separate spheres who might as well have been in separate countries.

The Calgary crowd had a lot to learn about the Irvings. Besides extensive Canadian holdings ranging from timber to tissues and shipbuilding to radio stations, this clan of aw-shucks billionaires from the poorest region of the country supplies 60 percent of the gasoline in the greater Boston area. They are the fifth-largest private landholder in the U.S., with tracts sufficient to cover four-fifths of Delaware. Their fortune has been calculated by Bloomberg News at more than $10 billion.
Falling Out

For Arthur Irving, who gained control of the family oil assets after a falling out among his brothers a few years earlier, word that an eastward pipeline was afoot was a godsend. It held out the promise of a career-capping crowning achievement, not to mention long-term profits -– if only the oil executives from the west saw it his way.

They didn’t. Arthur Irving and his company had quickly sown discord in Calgary with their steadfast resistance to commit to take a set number of barrels from Energy East, according to people with knowledge of the controversy. As far as the oil producers could discern, Arthur wanted the option to take crude at will, as he had done for years in picking the most favorable sources of foreign oil at a given moment. Before they would entertain a decades-long arrangement, the producers insisted Irving would have to put skin in the game.

Even more critical was the terminal, from where much of the pipeline capacity would be exported. The Irvings dominated traffic in and out of the port of Saint John. The Calgary producers bristled that Irving was demanding too much money for putting their crude “the last mile” through his sprawling facility.

More Sway

The oil drillers also worried that Irving Oil, situated alone at the end of the line, would hold too much sway over them. They wanted more than a single outlet. Many preferred stopping the line in Quebec and exporting on smaller ships from there, cutting Irving Oil out altogether, or at least reducing its leverage.

According to people close to the talks who aren’t authorized to speak, Arthur Irving, in turn, was livid that TransCanada, in a bid to pacify the producers, was weighing an export terminal of its own -- right on his home turf. The Irvings depended on the port like no other, loading and unloading about 400 ships a year. Arthur couldn’t stomach the idea of outsiders operating there.

It was in that frame of mind that on June 18, 2013, the then-82-year-old was in Toronto on business with Paul Browning, the new Irving Oil chief executive officer. His frustration burbling away, Irving decided he needed the assistance of one person.

Right Man

When they called that morning, Frank McKenna was at his desk at the Toronto-Dominion Bank headquarters. Irving and Browning hurried over. Irving had come to the right man. McKenna had staked first claim as the project’s philosophical father. On November 28, 18 days after Obama’s call to Harper, McKenna - stunned like many Canadians at the Keystone delay - floated the notion of going east in an op-ed in the National Post newspaper. He liked the “nation building” politics of linking Alberta’s prosperity to Atlantic Canada’s potential. “The Keystone XL delay has shocked us,” he wrote. “Hopefully, it has also energized us.”

McKenna, vice chairman of TD, began working the phones. With six years under his belt at Canada’s largest bank and a board seat on one of Calgary’s most successful energy companies, he knew the inner workings of Alberta’s oil patch almost as well as his native New Brunswick. By evening, with advice gleaned from McKenna, Browning boarded a flight to Calgary on a mission to put things back on track.

Shale Boom

Just as Obama’s delays on Keystone was worrisome for the Canadians, so was America’s shale boom. Irving Oil’s CEO at the time of Energy East’s conception, Mike Ashar, and TransCanada’s Pourbaix could foresee the disruption pounding their businesses and had even discussed the concept of shipping oil east.

Pourbaix had come to appreciate that shale gas, by depressing prices, was discouraging new gas investment in Alberta while the Marcellus and Utica formations in Pennsylvania could compete to supply the lucrative Ontario market. Together, these developments would curtail usage of the company’s historic gas mainline from Alberta to Montreal -- an ambitious and controversial nation-building exercise of its own in the late 1950s.

Growth Projections

Energy East offered potential salvation by converting that gas line -- which would comprise two-thirds of the route -- to take advantage of “the incredible growth projections” for the oil sands, said Pourbaix. “Even with Keystone, even with Gateway, it was becoming quite clear that producers probably needed another way to get their oil to market.”

On the other end of the country, Irving Oil fretted that its refinery was starting to be elbowed out by U.S. Midwest and Gulf Coast competitors. Long accustomed to picking and choosing among imported crudes, it now watched as rivals profited from access to cheaper shale and oil sands production from the interior of the continent.

“We went from being an advantaged refiner from a crude supply point of view to being disadvantaged,” Browning, who succeeded Ashar, said in an interview in August. (Two weeks after that interview, he would, without explanation, depart the company after only 16 months on the job.)

The Irvings had a lot on the line. Their empire dated to 1924, when K.C. Irving began building out from the foundation of his father’s general store in Bouctouche, New Brunswick. Soon, he operated filling stations and car dealerships and snapped up timber lands and shipbuilding yards.
Chevron Partner

In 1960, he opened a refinery on the Saint John waterfront in a partnership with Standard Oil Co. of California, a predecessor of Chevron Corp. (CVX) The Irvings took full ownership of the facility in 1988, investing heavily over the years in expanded capacity and state-of-the-art technology.

In 2000, Arthur handed the controls to his son Kenneth, a 17-year veteran of Irving Oil. Kenneth, now 53, built a liquefied natural gas import terminal on the Saint John waterfront with Repsol SA (REP) and announced plans in 2006 for a second refinery, with BP Plc coming aboard as a partner in the C$8 billion project.

After the recession hit in 2008, the Irving world changed radically. The brothers fell out and divvied up the family assets, the refinery expansion was shelved and, in 2010, Kenneth took stress leave and checked into a Boston hospital, people close to the family said.

Strong Patriach

In short order, he was banished from Irving Oil and deprived of contact with the father he worshipped, ending up, according to documents on file in the Supreme Court of Bermuda, on the losing end of a Shakespearean court fight in which he sought a greater share of the Irving trust. Chief Justice Ian Kawaley described it as a battle between “a strong patriarch and an equally strong-willed son...infused with deep-seated emotions of an intensity rarely seen outside of familial relationships.”

Kenneth Irving didn’t comment for this story and Arthur Irving declined an in-person request for an interview and didn’t respond to follow-up calls and an e-mail.

Negotiations with Arthur Irving were bound to be interesting. He was a man known for his idiosyncrasies. Finding something inappropriate about FM radios, he agitated to have them removed from company vehicles, said a person familiar with the company. He constantly griped about a convenience-store chain operating out of Irving service stations because he believed the chain didn’t clean bathrooms to Irving standards.

Moon Shot

With his son in exile, Arthur promoted Ashar, previously recruited by Kenneth from industry stalwart Suncor Energy Inc. (SU), as CEO. Ashar’s bona fides in Calgary made him the perfect guy to advocate for an eastern pipeline.

It’s almost 5,000 highway kilometers from the eastern edge of Alberta to the western edge of New Brunswick and as far as many Albertans were concerned, it might as well be the distance to the moon, so little was their knowledge. Ashar set about educating them.

He promoted Saint John’s deep-water, ice-free port, Irving Oil’s long experience in handling huge volumes of crude coming into the country and the fact any energy project in Saint John could make use of environmental permits left over from the scrubbed refinery.

India Link

And there was yet something else, once again counter-intuitive. Saint John was closer in shipping days than Vancouver to India’s refinery row, where incipient interest was being expressed about Alberta’s oil. When challenged at one meeting in Calgary, New Brunswick Energy Minister Craig Leonard pulled out a map to prove the point. Harper’s own Natural Resources Minister at the time, Joe Oliver, was still dubious and ordered his officials to check for themselves before he would believe it.

The Indians turned out to be better informed than the Albertans. When various Canadian cabinet ministers visited Indian oil companies such as Reliance Industries Inc. (RIL) and Indian Oil Corp. (IOCL) they were astounded by the depth of knowledge about Energy East, including its shipping advantages, according to those who were there.

At one such meeting, a Reliance executive assured the Canadians his refinery could handle Alberta’s tarry bitumen. How could he be so sure? The company had already procured a tanker of the stuff from a terminal in Burnaby, British Columbia, and ran it through the facility. Both Ashar and Browning have visited the Indian refiners and Indian Oil has since signed a letter of intent with an Alberta supplier, assuming Energy East will be built.

Jobless Rate

The politics were also lining up. Energy East would become the only major pipeline proposal to win the support of all of Canada’s major political parties.

The province of New Brunswick, though home to an anti-fracking movement, found economic reasons to back the project. Its unemployment rate, at almost 9 percent, runs chronically higher than most of the rest of Canada and its per-capita income is the second lowest of any province. Many breadwinners regularly commute across the country to work in the oil sands.

Former New Brunswick Premier David Alward - voted out in elections last month in part because of his pro-fracking stance - joined as an early and strong force in favor of Energy East and, with the help of McKenna, brought along his Liberal Party opponents. He understood firsthand the frustrations of those flying in and flying out of Alberta. His 24-year-old son, Ben, spends two of every three weeks working as a pipe fitter around the oil-sands hub of Fort McMurray.

High Fives

Alward, during an interview, spoke as a father when he said that while a job in the oil sands afforded his son an “incredible opportunity... we’ve got a little farm at home and his passion is here, it’s not in Alberta.” About 20,000 New Brunswick workers are in the same situation, he said. Once, on the way home from an Alberta trip promoting Energy East, Alward found himself getting high-fived in the aisle of the plane by a group of these itinerant workers excited the project could create jobs and allow them to go to work in the morning and home to their families at night.

Harper himself was initially non-committal on Energy East, eager for an alternative around Obama’s Keystone foot-dragging but uncertain that the project was technically and economically feasible. He didn’t want to put his prestige on the line if the oil patch and Irving couldn’t make it work.
Build Consensus

With eight of New Brunswick’s 10 seats in the House of Commons, Conservative Party members of parliament pushed him to get out front. Noel Kinsella, the speaker of the Senate and a Saint John native, hosted a meeting around the dining room table of his Ottawa chambers. The province’s Conservative Party contingent drafted a private March 22 letter to Harper urging “a proactive approach” that would “build a consensus with the governments in the six provinces the pipeline will span.”

Though not a man prone to cross-province consensus-building, Harper liked this turn of events. Before assuming office, he had critiqued what he labeled “a culture of defeat” in New Brunswick and Canada’s Atlantic region as a whole. Provinces there, he thought, were far too dependent on government programs. Suddenly, here was a market-based plan to generate economic activity that would benefit New Brunswick, where his father had grown up, as well as his own home province of Alberta, according to those who know his thinking.

Secret Meetings

As he moved toward supporting Energy East, Harper had his office arrange a secret meeting for April 11 with oil patch executives, Arthur Irving and others with an interest in Energy East. The stakes were high, he told the group. Keystone was faltering and the Northern Gateway would be a tough sell. Setting out what sounded like a challenge to get Energy East moving, he asked what can be done to get this oil to market, said Andrew Dawson, an Atlantic Canadian trade union official who attended the meeting.

Jason MacDonald, Harper’s director of communications, said the government supports the “diversification of markets for our resources.” Harper declined to comment for this story.

Others shared Harper’s original reticence, notably Calgary’s biggest energy producers for whom transporting Alberta oil cross-country to Saint John was testing imaginations. Many preferred terminating the line in Quebec, where they had long operated, and then assessing later if it made sense to proceed to the Atlantic coast.

This sentiment drove McKenna to distraction. As premier of New Brunswick from 1987 to 1997, he had watched neighboring Quebec’s modus operandi up close. Once the pipeline paused there, he argued, the province would hold enough leverage to ensure it never went beyond. You couldn’t cross a chasm in two bounds.

Edwards View

Executives of Canadian Natural Resources Ltd. (CNQ), the nation’s largest heavy oil producer, were among those who wanted to go no further than Quebec City. Chairman Murray Edwards, who wields great influence among his oil patch peers, warned at one meeting that he’d be watching to make sure Irving Oil didn’t get too greedy, according to a person in the room that day.

Edwards, in response to a Bloomberg News query, said he said no such thing. Rather, he argued that both Quebec and New Brunswick needed to realize tangible benefits from the line and that the best way to ensure shipments “will not be held hostage to the Irving refinery” was to make sure they had export options.

“From Day 1, I’ve always been of the view these issues had to be addressed -- benefits to the provinces the pipeline terminates in and that barrels are not held to ransom,” he said.

McKenna just happened to sit on the board of Edwards’s company. In the end, Canadian Natural agreed that it would commit equal amounts of Energy East oil to Quebec and Saint John.
Ah-ha Moment

The best argument in favor of going to Saint John turned out to be going to Saint John. The Irving facilities were spotless and nothing like the stereotypical 1950s-style belchers of noxious fumes. For Alison Redford, Alberta’s premier at the time, the ah-ha moment came watching from a helicopter as a moored supertanker unloaded its shipment into a buoy connected to underwater pipes that carried the crude ashore. Irving Oil has capacity to store six million barrels and handle the world’s biggest ultra-large crude carriers.

“To see that, I knew that was essentially the key to Alberta being able to unlock a competitive price for its oil,” she said.

Irving Influence

By the time Arthur Irving dropped in on McKenna in June, the Energy East game was into late innings –- and still in danger of falling apart. TransCanada had reached its official deadline the previous day on a so-called open season during which it sought long-term commitments from producers. Arthur Irving had removed one hurdle by consenting to take a minimum 50,000 barrels a day for his refinery (a figure Irving Oil would later increase.)

On June 19, Irving’s Browning sat down with TransCanada’s Pourbaix to work through the final sticking point -- the inordinate influence Irving could exercise through its control of the end of the line. Should anything go wrong at the terminal, the refinery would become the only conceivable buyer and could force distressed pricing on them.

TransCanada -- much to Arthur Irving’s annoyance –- had worked around him by quietly winning the provincial government’s assurance of land if it proved necessary to build its own terminal, according to people familiar with the plan. At that June 19 meeting, the company backed off, agreeing to form a 50-50 joint venture with Irving Oil, with Irving as the operating partner. In exchange, TransCanada won an assurance that the producers would not be held ransom.
Open Season

Open season was closed. TransCanada had made it known that the pipeline needed 500,000 to 600,000 barrels a day to be viable. Commitments grew to 900,000 barrels, including oil that would exit the pipeline at Quebec.

As TransCanada readies to file its regulatory application, challenges still exist. Quebec, as a hydro-electric superpower, has developed a strong green mindset even as it stands to benefit most from Energy East’s new construction, gain refinery jobs and turn inward shipments of imported oil from places like Algeria and Angola into exports up the St. Lawrence River. The oil sands at the other end of the line are alien to its political culture.

Quebec would get a small export terminal out of the deal. Environmentalists are warily eyeing TransCanada’s proposed location as well as the need for the line to cross the St. Lawrence, a major source of drinking water, recreation and commerce. A Quebec judge temporarily shut down TransCanada’s exploratory work on the terminal site until beluga whales clear the area in mid-October.

Slam Dunk

“It would be wrong to think this will be a slam dunk for TransCanada and that the Quebec government will just rubber stamp it,” said Steven Guilbeault, senior director of the Montreal-based environmental group, Equiterre.

For its part, TransCanada, slow to respond to Nebraskan concerns that the route crossed a sensitive aquifer, is paying attention to such matters this time. When the northern New Brunswick city of Edmundston complained the proposed eastern line put its drinking water supplies at risk, TransCanada quickly moved the route by four kilometers.

Back in Saint John, Arthur Irving, now 84, stands on the threshold of the regulatory review for a project with political, economic and environmental hurdles to clear without the counsel of his son or Mike Ashar or now Paul Browning. Irving Oil is without a CEO.
Nation Building

Despite such personal and commercial complications, the Irvings, builders of businesses for nearly a century, could see their under-appreciated East Coast assets become Canada’s chief outlet for its largest energy resource, reaping Irving Oil a stream of profits while providing substance to Stephen Harper’s eight-year-old energy superpower promise.

“It’s serendipitous,” said McKenna, matching “eastern refiners with western producers and is a great nation-building exercise.” If it also pokes a stick in the eyes of the Obama administration, so be it.

True to form, the Irvings aren’t talking. In early June, the wives of K.C. Irving’s two living and one deceased sons were honored for their works at a Rotary Club dinner at the Saint John Hilton.

As the event wrapped up, a reporter approached Arthur to ask if he would discuss Irving Oil’s Energy East role. “Ah, we’re just little guys up here,” he said as he turned back to his table.

To contact the reporters on this story: Rebecca Penty in Calgary at +1-587-702-3025 or rpenty@bloomberg.net; Hugo Miller in Toronto at +41-22-3179220 or hugomiller@bloomberg.net; Andrew Mayeda in Ottawa at +1-613-667-4801 or amayeda@bloomberg.net; Edward Greenspon in Toronto at +1-416-203-5708 or egreenspon@bloomberg.net To contact the editors responsible for this story: Timothy Coulter at +44-20-7330-7901 or tcoulter@bloomberg.net Ken Wells, David Scanlan

The Looney Tunes gang is back!

Good Day Readers:

There've been more filings posted on the Canadian Judicial Council's website in the past couple days. To avoid boring you with more legal wrangling, legelese and lawyerspeak here's a brief summary:

(1) The CJC has dropped the first allegation against Lori Douglas, that is, the alleged sexual harassment of Alex Chapman

(2) The complaint by Manitoba Chief Justice Glenn Joyal that Ms Douglas had misused an expense fund available to federally appointed Judges will not be pursued - that must please him to no end!

(3) Team Douglas filed a motion requesting all remaining allegations against ACJ Douglas be dropped. Open to the public, it will be argued later this month (October 27-29 inclusive)

(4) Still to be decided is where.Team Douglas is arguing the hearing should not be held in Winnipeg because the adverse publicity would be unfair to Ms Douglas and her relatives. Independent Council Suzanne Cote maintains not so. Team Douglas had earlier lobbied unsuccessfully to have the Inquiry per se held outside Winnipeg.

Will the previously November 24 announced re-start date for the Inquiry be met? Hard to say. While the motion hearing will go ahead (wherever), if Team Douglas does not like The Council's ruling, presumably it could file for a judicial review of the decision in the Federal Court of Canada. Yet another delay? Entirely possible.

Clare L. Pieuk  

Wednesday, October 08, 2014

Still texting and driving are we?

Good Day Readers:

The inspiration for this posting was a segment the other day on CBC Radio's daily national affairs program The Current hosted by Ann Marie Tremonte.
In it she interviewed New York Times and Pulitzer Prize winning reporter Matt Richtel about his book, A Deadly Wandering: A Tale of Tragedy and Redemption in the Age of Attention. It profiles the death back on a Utah highway back in 2006 of two scientists on their way to work at the hands of all American boy Reggie Shaw who was texting.

Several times Mr. Richtel singled out the Utah state trooper recently returned from a combat mission in Afghanistan who headed the investigation for his tenacity. Initially, Mr. Shaw claimed he didn't have any recollection of what happened because it occurred so fast. However, the trooper was not satisfied with the explanation so kept digging. Through his persistence he was able to establish Reggie Shaw had been texting at the time keeping in mind in 2006 texting was so new police often didn't know enough to ask about it.

The Utah case became the genesis of shock film maker Werner Herzog's public service documentary, From One Second To The Next a compendium of three case studies the third of which graphically describes the Shaw story.

It's too bad when Winnipeg police ticket someone for texting while driving rather than paying the fine by mail they couldn't force them to attend at the police station, placed in a holding cell to watch the Herzog documentary. Hopefully, high schools that give driving lessons will show students, From One Second To the Next. Manitoba Public Insurance's public safety awareness advertising campaign would also benefit from showing excerpts from the Herzog film.

If that doesn't wake people up nothing will.

Clare L. Pieuk

The two approaches