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Suncor’s Q4 takes a hit

Newfoundland project in question

Suncor, Canada’s leading integrated energy company, has announced it will record a $425 million non-cash after-tax impairment charge in the fourth quarter of 2020 on its share of the Atlantic offshore White Rose asset and West White Rose Project.

White RoseThe West White Rose Project was cast originally as a partnership between Husky Energy, Nalcor and Suncor. However, the recent acquisition of Husky Energy by Cenovus, a $21 Billion Calgary-based oil and natural gas company, has placed a shadow on the future of the West White Rose Project where plans are to access 200 million barrels (gross) of crude oil and extend the life of the offshore White Rose field by approximately 14 years. Discussions are ongoing with the operator and various levels of government to determine the future of the project.

Suncor’s 2021 guidance remains unchanged as the White Rose field will remain online producing as expected. 

The White Rose asset joint venture owners are Cenovus (operator, 72.5%) and Suncor (27.5%). The West White Rose Project joint-venture owners are Cenovus (operator, 69%), Suncor (26%) and Newfoundland and Labrador provincially owned energy corporation Nalcor (5%).



Vapers, smokers take a hit as N.L. budget focuses on prevention



If you took up vaping to avoid the taxes on cigarettes, your luck just ran out.

A 20% tax on vaping products was a key feature of the Newfoundland and Labrador budget September 29, which aimed to focus as much as possible on community health and prevention.

Vaping has so far escaped the province’s sin tax net, even though research suggests the practice can present significant health risks, especially for teens and young adults.

The province also added an extra 10 cents in taxes per gram of loose tobacco and five cents per cigarette.

The budget also allocated $1.7 million for school initiatives, awareness campaigns and cessation programs to help reduce tobacco use and vaping.


N.L. mandatory mask rule comes into effect despite no active cases of COVID-19

On Duckworth Street in St. John’s, N.L., shoppers were compliant, if not outright enthusiastic, about the indoor mask-wearing order that entered into effect across the province Monday.

Newfoundland and Labrador has enjoyed a summer with relaxed restrictions related to the COVID-19 pandemic and fewer than a dozen reported cases of the illness. Health authorities last week declared no active cases of COVID-19 in the province.

Ron Linegar, chef at Caines Grocery & Deli, said he’s heard complaints about the mask order being overkill with such little transmission in the community. But, he said, wearing a mask is an easy gesture of respect for others during the crisis.

“Just get over it. It’s not too hard,” Linegar said Monday outside the store, wearing a blue mask.

The deli has been serving customers throughout the pandemic, and Linegar said masks are another way to take care of them. “For me, it’s more than just I’m told to wear it,” he said. “I want to wear it for the customers.”

Mask-wearing is mandatory for everyone above the age of five, in all indoor public places across the province, such as retail stores, public transportation, fitness centres and movie theatres. People with certain health conditions are exempt.

On Monday, the few shoppers and workers on Duckworth Street who braved the heavy rain sported masks as they dashed from their cars to the stores.

Ceanne Giovannini has been wearing a mask since the beginning of the pandemic, she said, as she is battling cancer. Giovannini said the order makes her feel safer. “I love the fact that we have to wear one,” she said.

Chief Medical Officer of Health, Dr. Janice Fitzgerald, surprised the public when she announced the measure last week.

She said authorities are trying to make mask-wearing widespread before schools reopen and people begin interacting more and in larger numbers.

“This will give people time to get used to wearing them and hopefully will reduce the spread … so that we don’t get a second wave,” Fitzgerald told reporters last week. “That’s what we want, ultimately.”

People can be fined for violating the order but Fitzgerald said the emphasis will be on education rather than enforcement.

Newfoundland and Labrador last reported a case of COVID-19 Aug. 10. The province has reported 268 cases since the pandemic began and three deaths linked to the novel coronavirus.

Fitzgerald noted last week that the public has been generally compliant with her public health orders.

Emma Vatcher, another downtown shopper, said she’s become used to wearing her mask at work in the service industry. But she wondered why the rule wasn’t put in place in the spring when cases peaked in the province.

“I feel like it should have been mandatory to wear them earlier on in the year,” she said. “But at the same time they’re kind of expecting a second wave to happen. If this can prevent a second wave from being really bad I think it’s worth it.”

The order hasn’t gone without opposition.

Small groups of protesters gathered outside the provincial legislature over the weekend with signs decrying the “medical tyranny” of the mask-wearing order. Protesters said the directive infringes on personal freedoms. One person came out to protest outside the legislature Monday afternoon.

The order has also attracted some scrutiny because mask-wearing rules are stricter for the general public than for students and teachers in public schools.

Masks must be worn on buses but only high school students will be required to wear masks, and only in common areas.

The province’s largest school district will provide reusable masks to all students and teachers, but the Newfoundland and Labrador Teachers’ Association still took issue with the discrepancy.

“The NLTA is concerned with looser public health protection for children and teachers compared to the strict public health expectations that all people use masks when in public spaces,” it said in a statement last week.

Electric Vehicle Charging Sign Lg_112917

Federal government commits funding for N.L. electric vehicle charging network

The federal government is giving a funding boost for a network of electric vehicle charging stations across Newfoundland and Labrador.

Ottawa announced it would add $770,000 to the $1 million set aside by the province for a network of 28 electric vehicle chargers.

The province aims to build the stations along the Trans-Canada Highway between St. John’s and Port aux Basques, with a charging site included in Gros Morne National Park.

Construction is set to begin in September.

The project is designed to increase electric vehicle use in the province, using surplus electricity from the Muskrat Falls hydroelectric dam that’s set to begin powering the island during the next year.

Federal Natural Resources Minister Seamus O’Regan says electric cars are part of Canada’s plan to achieve net-zero greenhouse gas emissions by 2050.


New rules to speed up approvals for exploratory drilling off Newfoundland



The Canadian government is moving ahead with new rules it says will speed up approvals for exploratory oil and gas drilling off the east coast of Newfoundland, but conservation groups are warning the changes undermine environmental protections.

Natural Resources Minister Seamus O’Regan issued a statement last week saying the new regulation will improve the efficiency of assessments while upholding the “highest standards” of environmental protection.

“Our government recognizes that Newfoundland and Labrador’s ability to rebound from the COVID-19 pandemic will depend largely on a strong, resilient and innovative offshore,” O’Regan said.

Three environmental groups have launched a federal court challenge, arguing exploratory drilling off Newfoundland will now be green-lit without proper environmental assessments.

The Ecology Action Centre, Sierra Club Canada Foundation and World Wildlife Fund Canada argued earlier this month that the science behind the new “regional assessment” or RA process is flawed.

Lawyer James Gunvaldsen-Klaassen, whose firm Ecojustice is representing the groups, argued that the regulation “flies in the face” of the purpose of environmental scrutiny under the new Impact Assessment Act.

The court later decided the case can proceed to a judicial review, but denied the group’s request for an injunction.

“The federal government stated that it intended to use the flawed RA and a loophole in the … legislation to allow for a broad exemption of all future offshore exploratory drilling in the region,” the groups said in a statement Thursday.

“Left unchallenged, this would set a poor and dangerous precedent for regional assessments, which could otherwise be a promising new mechanism under the Impact Assessment Act.”

O’Regan said the new regulation will help the oil and gas industry remain competitive because it will provide investors with “more predictability and certainty.”

As well, O’Regan said the regulation strengthens conditions to ensure projects adhere to environmental protection standards.

The Newfoundland and Labrador government said the new assessment process will shorten timelines to as little as 90 days. The province said the existing process can take up to 900 days.

“This is a significant improvement over the previous process which caused considerable delays,” the province said in a statement.

Siobhan Coady, Newfoundland and Labrador’s natural resources minister, said the province can now “explore its offshore and hopefully make some great discoveries.”

Provincial officials say the delays started in 2010 when the responsibility for offshore environmental assessments were shifted from the Canada-Newfoundland and Labrador Offshore Petroleum Board to the Canadian Environmental Assessment Agency.

According to the Canadian Association of Petroleum Producers, environmental assessments for exploratory wells in other countries take far less time to complete: 44 days in Australia; 96 days in the U.S. Gulf of Mexico; 79 days in Norway; and 18 days in the U.K.

During a recent industry conference in St. John’s, Coady warned that with oil prices plummeting, companies are closing and jobs are being lost.

In mid-March, Equinor and Husky Energy announced the decision to defer the Bay du Nord offshore development project due to falling oil prices and the economic downturn as countries responded to the novel coronavirus.

In addition, Hibernia has recently suspended its drilling program, the Terra Nova refit for May has been suspended and the West White Rose project has been deferred.

The Newfoundland and Labrador Oil and Gas Industries Association has said in order to remain competitive with Norway, the United Kingdom and Australia, the federal government needs to provide a renewed program of “incentives for offshore exploration.”

The offshore industry accounts for close to one third of the province’s GDP, 13% of wages and 10% of all jobs.



N.L. warns of exodus of oil and gas industry without more federal help

Newfoundland and Labrador’s government is looking for a rapid answer from Ottawa on its request for aid for the offshore oil sector in light of a quickening exodus of exploration rigs from the province.

Premier Dwight Ball, Natural Resouces Minister Siobhan Coady and industry leaders held a news conference May 26 to repeat earlier warnings that hydrocarbon projects could be permanently lost to the province without a commitment from Ottawa.

Ball and Coady repeatedly warned that as each week passes, companies are closing and jobs are being lost.

The global COVID-19 pandemic and plummeting world oil prices have been causing problems for the East Coast industry.

In mid-March, Equinor and Husky Energy announced the decision to defer the Bay du Nord offshore development project due to falling oil prices and the economic downturn as countries respond to the novel coronavirus.

In addition, Hibernia has recently suspended its drilling program, the Terra Nova refit for May has been suspended and the West White Rose project has been deferred.

“Time may not be our friend,” the premier during the event.

imagesThe Newfoundland and Labrador Oil and Gas Industries Association, or NOIA, has said in order to remain competitive with Norway, the United Kingdom and Australia, the federal government needs to provide a renewed program of “incentives for offshore exploration.”

The province is backing many of the industry proposals, noting the offshore industry accounts for close to one third of the province’s GDP, 13% of wages and 10 per cent of all jobs.

Coady noted in an April 20 letter to federal Natural Resources Minister Seamus O’Regan that the province appreciated a $75 million allocation to help its industry reduce greenhouse gas emissions, but it needs further assistance.

Coady wrote that the province needs a program similar to Norway’s system of stimulating exploration through “direct tax payments.”

Her letter also called for a renewal of a regional tax credit program, and the introduction of 100% deductibility of capital costs to encourage companies to continue with their exploration plans.

Charlene Johnson, the chief executive of NOIA, said during Tuesday’s news conference that there are three drilling rigs in the province and the industry is hoping they will remain there, rather than being shifted to other jurisdictions.

“It’s a real toss-up because the minute Norway approves (incentives), it’s going to be very hard to entice them to stay in our waters,” she said.

“These decisions are being made now. We’ve had over a dozen companies end their membership in NOIA because they’re closing up shop here.”

O’Regan, who is also the MP for St. John’s South, said in a tweet that he’d been in discussion with Johnson regarding the growing anxiety in the offshore sector.

“We all have friends and family who are worried about their jobs. Oil and gas is in a state of upheaval out West, and around the world. But I am a champion of our offshore. Together we will get through this.”

Ottawa has been offering programs to help companies with liquidity problems during the pandemic.

Federal agencies last month announced commercial loans, ranging in size from $15 million to $60 million each, to fund cash flow needs for a year for companies that had shown themselves to be financially viable prior to the pandemic.

A spokesman for O’Regan’s office said these kinds of programs have helped provide liquidity to the small and medium-sized players in the industry.

In addition, the Canada Emergency Wage Subsidy program covers up to 75% of an employee’s wages for an employer, and can be applied to oil and gas firms, O’Regan office noted.



Newfoundland minister says food supply safe after shipping company raises concerns

A provincial cabinet minister is advising Newfoundlanders and Labradorians not to panic buy groceries after a major shipping company suggested shipments to Newfoundland could be reduced due to the pandemic.

Sid Hynes, chairman of shipping company Oceanex, told CBC Monday that weekly deliveries of food and other supplies to St. John’s may be affected without a federal subsidy to cover his company’s losses.

He said Oceanex is about $2 million short of its required weekly operating costs due to the pandemic.

On Tuesday, provincial Justice Minister Andrew Parsons posted on Twitter that the situation is not as dire as reported, and Crown corporation Marine Atlantic can handle increased cargo.

Parsons wrote there is no need for hoarding or fear because of the news.

Progressive Conservative Leader Ches Crosbie, who leads the official Opposition, says federal and provincial governments should outline their plans to ensure a secure supply chain of food to the island.


Newfoundland allows specialty vape shops to remain open during COVID-19 crisis



The Canadian Vaping Association (CVA) is commending the Government of Newfoundland and Labrador for allowing specialty vape shops to continue to operate under strict social distancing protocols during the COVID-19 crisis.

“Allowing vape shops to operate using only contactless curbside pickup protocols will prevent thousands of Newfoundlanders from being forced back to combustible tobacco, a product known to kill one in two users,” the association said in a statement.

“We applaud the Government of Newfoundland and Labrador for having found an appropriate means to care for the physical and mental health needs of vapers while ensuring the safety and protection of all individuals in their province.  The vapers in this province will continue to have access to the low nicotine harm reduction products which are only available in adult access product vape shops, while strict social distancing protocols implemented will serve to protect the public and staff,” said Darryl Tempest, executive director of The Canadian Vaping Association. “The CVA has repeatedly voiced our concern over limiting access to harm reduction products. The decision to ensure vape shops continue to operate under the condition that they use curbside pickup will prevent thousands of vapers from returning to smoking, thus saving the lives of many Newfoundlanders.”

The CVA is calling on other provinces to amend their essential services list to include vape shops.

However, the Ontario Convenience Stores Association is calling out some vape shops on social media, highlighting the number of vape shop operators ignoring government directives to close: “These are the stores that Ontario Health Ministry believe can handle adult products better than c-stores. Convenience stores are your trusted neighbourhood business.”

In another Tweet: “Vape shops in Ontario are ‘not’ an essential service retailer but vape supplies are available in convenience stores during these unknown times.”


Project deferral, oil prices troubling for N.L. economy during pandemic

Unknown-2The global COVID-19 pandemic is spelling trouble for Newfoundland and Labrador’s oil and gas industry, adding to existing economic challenges in the cash-strapped province.

Premier Dwight Ball acknowledged last week the province is experiencing “tough times,” referencing deferred investment on projects and historic lows in oil prices.

Equinor and Husky Energy announced the decision to defer the Bay du Nord offshore development project due to falling oil prices and economic downturn as countries respond to the novel coronavirus.

A statement from Equinor Canada says planning on the project will continue with adjusted timelines.

The project in the Flemish Pass Basin, about 500 kilometres east of St. John’s, was announced in 2018 but not yet officially sanctioned. Equinor had set a target of 2020 to decide.

The Bay du Nord project was expected to deliver first oil by 2025. It was a key part of the province’s plan to rapidly increase offshore oil and gasdevelopment, including a goal to double production to more than 650,000 barrels a day by 2030.

Natural Resources Minister Siobhan Coady said the news is disappointing, but she said it’s a positive sign that the project is deferred rather than cancelled during such a tumultuous time.

“These are difficult times, there’s no doubt, and it was difficult to hear that they’re deferring their decision,” Coady said by phone. “I remain kind of optimistic that things will move into a better place as we move forward.”

She said she remains encouraged by exploration ongoing in the province’s offshore.

Ball urged the federal government to take quick action on financial support for provinces on Wednesday but said Ottawa should not respond with a one-size-fits-all approach.

“My message to the federal government is, it’s urgent to get this money moving,” Ball said on Wednesday.

Larry Short, a chartered professional accountant who owns an investment firm in St. John’s, said the situation adds up to a “body blow” for the province’s finances.

“All the bad parts of the Bible have been delivered upon the province, and all the same time,” Short said by phone Thursday.

Short pointed to the immediacy of the COVID-19 crisis, the billions over-budget Muskrat Falls hydro project that accounts for a third of the province’s debt and the oil price collapse as serious challenges to the province’s budget that can’t be ignored much longer.

“We’ve got three major problems here that have suddenly come home to roost, and the province is going to have to really struggle to get through them over the next period of time,” he said.

He said the effects may not be seen until the government tables its budget, likely in the summer after a Liberal Party election set for May that will determine the new party leader and premier.

But with the federal government experiencing financial difficulties of its own, including major blows to Alberta’s oil-reliant economy, Short said Ottawa won’t be in a position to assist Newfoundland and Labrador financially as it normally would.

While prices are being hit hard right now by barrels of cheap oil from Russia and Saudi Arabia, he said Newfoundland and Labrador’s offshore might be left standing as a profitable and desirable drilling site once prices rise again, as the industry is less susceptible to disruptions like pipeline project delays.


Vaping risk awareness campaign launches in Newfoundland and Labrador



Newfoundland and Labrador is contributing $75,000 to an advertising campaign intended to raise awareness about the risks of youth vaping.

The Newfoundland and Labrador Alliance for the Control of Tobacco, which receives $210,000 annually from the province, announced the campaign called “The New Look of Nicotine Addiction” in St. John’s today.

A news release says the campaign is aimed to educate parents and adults about the risks of vaping.

Advertisements will appear on billboards, online and on social media.

It will include information about vaping products such as chemical contents, types of devices, effects of nicotine on brain development and youth being targeted by the vaping industry.

The 2018-2019 Canadian Student Tobacco, Alcohol and Drug Survey reported 47% of youth in the province had tried a vaping product, higher than the national average of 34%.