My trip to Bali was amazing, but that’s not really what I’m here to talk about. And you probably don’t want to hear about my Christmas either (but just for the record, it was really good – hectic and busy, but good).
In my last post, I said we were due to hand in a submission to the ERCB in late November. And while I was on vacation, that submission was made. As a reminder, the subject at hand was pipeline routing. A couple of months earlier, the ERCB had requested clarification on information we provided before and during the hearing about our chosen pipeline route, which had been selected from a number of possible corridors. We provided the requested information in October, and then interveners had a chance to respond. The November submission was to be our final reply on this matter.
To give some insight regarding our overall stance, here’s an excerpt from our response. “Petro-Canada, in evaluating route options and conducting stakeholder consultations, faced the challenge of balancing varied, and sometimes competing, interests…Petro-Canada understands that from any particular individual perspective, the resulting decision may not appear to be in the public interest. However, what best addresses the public interest cannot be all things to all people. Petro-Canada undertook the task of route selection with the primary focus on addressing the wider public interest.”
So that’s the latest on that issue. But wait. There’s more.
(For some reason, whenever I say that phrase, I picture a grandfather telling his grandkids an elaborate story. I’m not sure why, as I can’t remember my own grandpa ever using the phrase. But I’m off track again. Let’s move on.)
In early December, we received notice from the ERCB that two interveners had requested a re-opening of the Sullivan hearing. Their basis for these requests was, essentially (and to paraphrase), that a) changes in the natural gas industry and economy have negatively affected the viability of the Sullivan project and b) that the Suncor / Petro-Canada merger has also affected the project.
The ERCB asked us to submit a response to these assertions, and once we did (in mid-December), the interveners were to provide the Board with a final reply just before Christmas.
I can’t speak to what the interveners said in that last submission, but our basic response to the above to points was as follows.
Regarding the contention that our industry has been negatively affected by the economic downturn and lower commodity prices, we don’t disagree. But we don’t really see the relevance of this situation to the regulatory approval process. Economic factors are always considered when a company decides when/whether to proceed with a project like Sullivan, but such factors are considered not in the context of the present year, but within the context of the project’s entire lifespan.
And if the ERCB is concerned that we may not proceed, they are able to write a development deadline into the conditions of approval (if approval is granted). These sorts of regulatory deadlines are quite common.
Regarding the merger, we don’t see that it has an impact on Sullivan. The new Suncor has the same level of technical expertise as the former Petro-Canada, and the company continues to place high importance on environmental stewardship and safety.
Some people have argued that because Suncor is an oil sands-centric company, it has no interest in pursuing natural gas projects like Sullivan. That is not the case. While Suncor’s primary focus is the oil sands industry, the company continues to have a business unit actively dedicated to natural gas exploration and production (as well as other non-oil sands businesses).
To sum up – as you’ve probably figured out by now – we made an argument in December that the merger and economy do not justify a reopening of the hearing. We’re now waiting for the next step.
While this post is a bit lengthy, I hope it’s gone some way to explaining events of the last month or so. And now we’ll just have to see what the next month or so brings!