Olduvaiblog: Musings on the coming collapse

Home » Posts tagged 'Shell Canada'

Tag Archives: Shell Canada

Supermajors Balk at Canadian LNG Profit Tax

Supermajors Balk at Canadian LNG Profit Tax.

By Joao Peixe | Thu, 27 February 2014 22:45 | 0

Oil and gas companies hoping to win big on Canada’s nascent liquefied natural gas (LNG) export industry are balking at a new gas tax proposed for British Columbia that is great for the province but tough on the industry wallet.

Profits from LNG projects will be taxed at an initial rate of 1.5%, under the proposal, British Columbia Finance Minister Michael de Jong told reporters on 26 February. The rate will rise to as much as 7% after companies recover the costs of building the shipping terminals.

A 7% levy on profits works out to a $0.50/MBtu surcharge,Ziff Energy analysts say – “not a small number when you consider there’s a lot of competition out there.”

Related Article: Small Companies Poised to Ride Canadian Natural Gas Wave

Shell Canada and other supermajors in this game say the proposed tax could hinder the province’s competitiveness.

“We need something that’s globally competitive if we, in British Columbia, are going to build an LNG industry,” said Shell Canada spokesman David Williams.

Shell Canada has proposed a $12-billion plant in Kitimat, with partners PetroChina, Korea Gas and Mitsubishi. The project already has federal export approval and is now awaiting environmental assessment. A final investment decision (FDI) could hinge on the new tax policy.

Exxon Mobil and Chevron are also eyeing British Columbia LNG projects—and all were looking for clarifications of pending tax policies, which has now arrived however unwelcome.

But provincial officials see a chance here to bring in up to $1 trillion by 2046 through the LNG sector alone.

The attraction, despite the tax proposal, is clear: there is plenty of money to be made shipping low-cost Canadian gas to LNG-starved Asian markets, where it fetches a much higher price.

Related Article: Why Europe Won’t See Canadian Crude Anytime Soon

And, as provincial officials have been quick to point out: British Columbia tax and royalty rates as proposed will still be lower than in Australia and the US—at least in the five states competing with LNG projects in the sector.

BC Finance Minister Jong’s response to the supermajor balking is to take it in stride.

“Of course they want zero,” he said, but the proposed tax regime still puts British Columbia ahead of its potential competitors.

The province of British Columbia is promising tax legislation this fall, and is expected to reveal more details about environmental regulation and benefit-sharing plans for First Nations this spring.

By Joao Peixe of Oilprice.com

Potentially damaging Jackpine oilsands mine expansion OK’d by Ottawa – Edmonton – CBC News

Potentially damaging Jackpine oilsands mine expansion OK’d by Ottawa – Edmonton – CBC News.

Shell Canada’s Jackpine oilsands mine expansion plan has received the go-ahead from Ottawa, despite the environment minister’s view that it’s “likely to cause significant adverse environmental effects.”

In a statement late Friday, environment Minister Leona Aglukkaq concluded that the effects from the 100,000-barrel-per-day expansion are “justified in the circumstances.”

The nearby Athabasca Chipewyan First Nation has said the project will violate several federal laws covering fisheries and species at risk, as well as treaty rights.

They said they had received so little information on how Shell plans to live up to conditions imposed on it by a federal-provincial panel that they asked Ottawa for a 90-day delay on the decision – originally expected Nov. 6 – to work some of those issues through.

They were granted a 35-day delay, but Friday’s decision didn’t even wait until that period was up.

Allan Adam, chief of the Athabasca Chipewyan First Nation, was outraged that the federal decision came as the government was still supposed to be in talks with the band about how the project’s effects were to be mitigated.

“They just kept us in the loop and strung us along and played games with us,” he said. “To them it’s all a game.”

Although all 88 conditions the review panel placed on the project are now legally binding, Adam said neither the government nor the company has explained how those conditions will be met.

Adam said the government’s move to go ahead despite the serious environmental consequences of the project leave the band little choice.

edm-allan-adamAllan Adam, chief of the Athabasca Chipewyan First Nation, says the government’s decision has left the band with few options. ((CBC))

“This government has to realize we’ll be holding them accountable,” he said. “We’ll be looking at legal action and we’ll pursue this through legal action.”

Greenpeace speaks out against expansion

Greenpeace Canada issued a statement accusing the Harper government of putting the short term interests of oil companies ahead of environmental protection and First Nations treaty rights.

“Canada would be much better off diversifying its economy, investing inrenewables, green jobs and projects that get us out of this madness not deeper into it,” the statement said.

“How many more extreme weather events will it take till our Prime Minister realizes this is one problem he can’t mine his way out of?”

The Jackpine expansion would allow Shell to increase its bitumen output by 50 per cent to 300,000 barrels a day.

“We’re reviewing the recommendations and proposed conditions attached to the approval,” said Shell spokesman David  Williams.

Williams added Shell must consult with the minority partners in  the project – Chevron and Marathon – before making a formal decision to proceed.

Review panel suggests compensation for ‘irreversible damage’

A review panel concluded last July that the project was in the public interest but warned that it would result in severe  and irreversible damage so great that new protected areas should be created to compensate.

The review concluded that the project would mean the permanent loss of thousands of hectares of wetlands, which  could harm migratory birds, caribou and other wildlife and wipe out traditional plants used for generations.

It also said Shell’s plans for mitigation are unproven and warned that some impacts would probably approach levels that the  environment couldn’t support.

Shell has said Alberta’s new management plan for the oilsands area will provide more concrete data to assess and mitigate environmental impacts.

The company has purchased about 730 hectares of former cattle pasture in northwestern Alberta to help compensate for the 8,500 hectares of wetland that would be forever lost.

 

<span>%d</span> bloggers like this: