Oil down on surging Middle East output, stronger dollar

Oil prices settled down more than 1 per cent on Monday, snapping two consecutive days of gains, on caution over galloping Middle East crude output and a firmer dollar boosted by speculation of a U.S. rate hike by year-end.

A pledge by Nigerian rebels to end hostilities against their oil industry also appeared to pave the way for more crude exports from Africa’s No. 1 producer, which experienced numerous pipeline blow-ups and other disruptions to output earlier this year.

Key Middle East oil producer Iraq, which has exported more crude from its southern ports in August, will continue ramping up output, its oil minister said on Saturday. The world’s top crude exporter Saudi Arabia has kept output at around record levels this month.

The dollar hit a three-week high against the yen after Federal Reserve Chair Janet Yellen bolstered expectations in a speech on Friday that the central bank would raise interest rates soon. A stronger dollar makes commodities denominated in the greenback less affordable for holders of other currencies.

The focus on production and the strengthening dollar offset data from energy monitoring service Genscape showing a drawdown of 287,444 barrels at the Cushing, Oklahoma delivery point for U.S. crude futures during the week ended Aug. 26, traders who saw the Genscape report said.

Brent crude settled down 66 cents, or 1.3 per cent, at $49.26 a barrel.

U.S. West Texas Intermediate (WTI) crude also finished down 66 cents, or 1.4 per cent, at $46.98.

Oil rallied with few stops from early August until mid last week after hints by Saudi Arabia and fellow members of the Organization of the Petroleum Exporting Countries that they might agree to an output freeze with non-OPEC oil producers at a meeting in Algeria on Sept. 26-28.

“The market is increasingly likely to discount the outcome of the event, given, even in the instance of a freeze being agreed, compliance will be an issue,” Barclays said in a report.

Despite that, some analysts cautioned investors against taking an outright short position on oil as OPEC was likely to counteract with production freeze talk.

“While we see high probability of some 80 to 90 per cent of a return to $39 WTI, we also feel that achievement of this objective could still be some four to five weeks away,” said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates.

Despite a rebound this year, oil trades at less than half of mid-2014 peaks above $100 due to glut fears. Senior officials at Shell and ConocoPhillips told an industry conference in Norway the oversupply could extend into 2017.

Courtesy: The Globe And Mail

Ivanhoe seeks ‘strategic advice’ in wake of unsolicited interest

Ivanhoe Mines Ltd. says it plans to hire a banker and get “strategic advice” to deal with the unsolicited interest the company and its projects have received in recent months.

Robert Friedland, executive chairman of the Vancouver-based company, said the bank’s mandate will be to advise the board on all strategic options for Ivanhoe.

The announcement sent Ivanhoe shares soaring 14 per cent to close at $1.91 on the Toronto Stock Exchange.

“The mining industry has taken notice of our company,” Mr. Friedland said in a news release.

Ivanhoe did not provide names of potential buyers but said it had received “a number of unsolicited inquiries from significant mining industry participants in Asia, Europe, Africa and elsewhere.”

One of Ivanhoe’s main assets is the Kamoa copper project in the Democratic Republic of the Congo. Ivanhoe and China’s Zijin Mining Group Co. Ltd. jointly own 95 per cent of Kamoa through a holding company, with the DRC government owning a 5-per-cent stake.

Although weak copper prices have made it difficult for companies to offload lower-quality copper mines, there is demand for top-tier assets. Barrick Gold Corp. managed to sell part of its top Chilean copper mine for $1-billion (U.S.) when copper prices were dropping.

The company recently announced positive drilling results from Kakula, the southern part of the Kamoa project. At the time, the company called it a significant discovery.

The price of copper is trading near $2 a pound compared with more than $4 in 2011.

It is unknown whether Mr. Friedland aims to sell the entire company, or just specific assets such as Kamoa or the miner’s Platreef platinum-palladium-gold-nickel-copper discovery in South Africa.

There is likely more demand for individual assets rather than the entire company.

Mr. Friedland made his name with the $4.3-billion (Canadian) sale of the Voisey’s Bay nickel-copper-cobalt discovery in northern Labrador to Inco Ltd. in 1996.

Ivanhoe said on Monday that it has started investor and banking analyst tours of its projects, including Kakula.

Analysts and investors need to get a first-hand understanding of the progress and potential of the project as well as its scale, said Ivanhoe chief executive officer Lars-Eric Johansson.

Ivanhoe is also upgrading its Kipushi zinc-copper-lead-germanium mine in the DRC.

Also on The Globe and Mail

The sinking feeling in China’s over-mined regions

Courtesy: The Globe And Mail

Protests stall Energy East hearings in Montreal

TransCanada Corp. received an angry reception in Montreal on Monday as protesters chanting anti-pipeline slogans shut down a scheduled regulatory hearing into its proposed $15.7-billion Energy East pipeline.

The company and its industry backers face major hurdles to win public acceptance in Quebec for the project that would deliver 1.1 million barrels per day of Western crude – much of it diluted bitumen from the oil sands – to refineries and an export terminal in Eastern Canada.

Energy East hearings in Montreal cancelled after protests
(BNN Video)

After four sessions in New Brunswick earlier this month, the environmental assessment panel was scheduled to commence several days of hearings in Montreal but cancelled the session before it began when a burly protester charged the hearing table and had to be restrained by several security guards.

The National Energy Board late Monday said it will postpone proceedings on Tuesday in light of the disruption. Critics in Quebec are complaining about pro-pipeline bias among panel members and urging the federal Liberal government to suspend the review.

The Energy East project has pitted some eastern politicians, aboriginal leaders and environmentalists against industry and government leaders in the West, who are eager to gain broader market access and international prices for crude exports.

While the federal government has jurisdiction over pipeline approvals, Prime Minister Justin Trudeau has stressed the importance of resource projects winning social acceptance from the local citizens and First Nations.

Montreal Mayor Denis Coderre, along with the mayor of Laval and other municipal representatives, walked out of the hearings Monday not long after the demonstrators charged in. Mr. Coderre was the first person scheduled to give testimony Monday but chose instead to leave, calling the protests a “masquerade.”

He and other local mayors oppose the project. TransCanada has not been able to confirm what approach would be used for the pipeline to cross the Ottawa River, raising concerns about a potential spill upstream from the drinking water intake for Greater Montreal.

“There are too many problems we are witnessing to accept the project,” Mr. Coderre told reporters after he decided to leave Monday’s hearings.

“We’re saying the project [TransCanada] presented is wrong, it’s bad and we don’t have the answers. And frankly, one of the main issues is contingency plans, everything regarding safety.”

TransCanada spokesman Tim Duboyce said the company was eager to resume the review process.

“We have had and continue to have a positive dialogue with Quebeckers on Energy East,” he said in an e-mailed statement. “Listening, earning trust and dealing with the public’s concerns will help us build and operate a safe pipeline.”

Mr. Duboyce noted that Quebec business and labour leaders have endorsed the project, which the company says will generate 3,100 direct and indirect jobs in the province during its construction. Members of Quebec construction unions demonstrated in support of the pipeline outside the building where the hearing was to be held.

Former New Brunswick Premier Frank McKenna said Monday’s protest and previous opposition from Mr. Coderre suggest the project’s critics are uninterested in evidence about safety measures that would be presented at the hearings.

“Before the evidence is even submitted, they say they will not support it under any circumstances,” said Mr. McKenna, now a deputy chairman at Toronto-Dominion Bank and a long-time Energy East ally. “This isn’t about pipeline safety but about opposition to a carbon-based economy … The government shouldn’t simply listen to the loudest voices.”

Chiefs and elders from three Mohawk communities were also due to appear Monday but said afterward they were unsure whether they will participate in rescheduled hearings. The Mohawks complained the National Energy Board process is inadequate in dealing with their aboriginal rights, and accused the panel of being biased in favour of approving the project.

The federal agency is “trying to convince people that this is the right thing to do,” Grand Chief Joe Norton, of the Mohawk Council of Kahnawake, told a news conference. “Our primary goal is to ensure the safety of our land and our people.”

Last week Mr. Coderre asked for the hearings to be suspended after media reports revealed that two of the three NEB commissioners overseeing the review process met with former Quebec premier Jean Charest, who was at the time paid as a consultant for TransCanada.

The commissioners met privately with a number of Quebec stakeholders – including business groups and environmentalists – last year as they prepared for the review. Numerous environmental groups have urged the federal government to suspend the hearings to deal with what they say is the perception of bias.

Mr. Duboyce acknowledged that Mr. Charest was being paid as a consultant to TransCanada at the time of the meeting but insisted he “was not asked to lobby or advocate on the project’s behalf.”

Courtesy: The Globe And Mail

Twin Butte headed for receivership after takeover rejected

Twin Butte Energy Ltd is set to be shopped around through a receivership ?after its debt holders rejected a proposed takeover bid, leaving the company with few options as it sought ways to repay lenders.

A banking syndicate led by National Bank Financial is forcing the move ?after holders of Twin Butte’s debentures voted overwhelmingly on Monday to reject the takeover bid by Hong Kong-based Reignwood Resources Holding Pte. Ltd.? The company has about $223-million in bank debt. The move could come within a day or two, a source with direct knowledge of the matter said.

Earlier Monday, only 32 per cent of the debt holders voted in favour of the deal at a meeting in Calgary, with the majority arguing that the offer, at just 14 cents on the dollar, vastly undervalued their securities. It needed two-thirds support to pass. 

Calgary-based Twin Butte had earlier warned that debenture and equity holders could be left with nothing if the Reignwood bid were rejected and the company were forced into receivership.

The suitor had offered $21.3-million for the shares, drawing support from 78 per cent of the unit holders on Monday. The debt holders had argued that they were entitled to more money as a senior security class.

Also on The Globe and Mail

Gasoline stockpiles drop but energy market still glutted
(BNN Video)

Courtesy: The Globe And Mail

Alberta to increase in-situ oil sands monitoring after study finds contaminants

Alberta has promised to increase environmental monitoring of the in-situ oil sands industry following research that shows such plants can release contaminants into the land and water.

“It’s a clear red flag that’s something’s going on and we need to look into it,” said Bill Donahue of Alberta Environment’s monitoring and science division.

On Monday, the University of Ottawa released a study on a small lake near Cold Lake, Alta., where there has been extensive in-situ development.

Such mining involves injecting high-pressure, high-temperature steam underground to soften bitumen enough so that it can be pumped to the surface. Most of Alberta’s production is now driven by steam, not giant trucks and shovels, and most of the industry’s future expansion is expected to involve in-situ techniques.

In-situ extraction doesn’t leave behind large tailings ponds or vast landscape disturbances as do open-pit mines, so it’s often described as more environmentally friendly.

But when scientists took core samples of sediment in the lake, they found potentially toxic chemicals associated with petrochemicals had grown steadily in concentration as development increased. Those levels are now 137 per cent higher than in 1985.

The levels are still too low to have environmental impacts. But they are real, growing and raise questions about whether they’re coming from pipeline leaks, leaky well bores, process water, groundwater or underground fault lines.

“It behooves us to look into the problem,” Donahue said.

When Alberta set up its new oil sands monitoring program in 2012, it was mostly focused on the giant open-pit mines most often associated with the industry, he said. But in-situ facilities were “a big elephant in the room,” said Donahue.

“One of the issues that was looming was looking into the in situ industry and looking into what its environmental impacts are, and beyond just contaminant dynamics,” Donohue said. “That was the obvious next step and we’re starting to do that.”

The two priorities are to figure out where such contamination might be a problem and how contaminants end up in the environment.

“The next step is to figure out a plan,” Donahue said.

Terry Abel of the Canadian Association of Petroleum Producers said there is already significant attention on in-situ extraction.

“CAPP is very supportive of those joint efforts to make sure we’re monitoring the right things, we’re identifying the right science, identifying gaps, and then making responsible decisions about what we need to do next,” he said. “I see this study as one more piece of information that goes into those discussions.”

Abel said industry supports strong monitoring.

“We want to know if there’s any indications of something changing so we can study it properly.”

The in-situ industry has already been criticized for its high carbon footprint – greenhouse gases are created as fossil fuels are burned to heat up the bitumen – and for its fragmentation of wildlife habitat.

Simon Dyer of the clean energy think-tank Pembina Institute welcomed the province’s intention to look more closely at in-situ impacts. He pointed out that such projects often receive a lower level of assessment during regulatory hearings: open-pit mines get federal-provincial panels and in-situ projects are only scrutinized provincially.

“Given the scope and scale of some of these projects and the potential for impacts, we think there’s a role for federal oversight in review of in-situ projects,” Dyer said.

Also on The Globe and Mail

Energy East hearings in Montreal cancelled after protests
(BNN Video)

Courtesy: The Globe And Mail

The big bank branch shutdown: 121 more bank branches doomed in whirlwind

  • Banks are ramping up branch closure programme
  • Local communities are facing up to life without a bank branch
  • We take a look at where the closures are – and the local people it hits 

The retreat of banks from Britain’s high streets is in full flight. Branches across the country are being axed at a rate never witnessed before as the big banking organisations seek to ruthlessly cut costs and push more people online.

In many instances, the closures are leaving villages and towns without a bank, forcing both residents and retailers to travel further afield to do their banking.

Communities that a year ago had a choice of banks have now become banking wastelands with only the local post office and the odd cash machine – banking tumbleweed – providing locals with access to cash and basic services.

Deserted: Communities that a year ago had a choice of banks have now become banking wastelands

Deserted: Communities that a year ago had a choice of banks have now become banking wastelands

Although some towns and villages – such as Colyton in Devon – are furiously fighting the imminent closure of their last branch, fearing it will have an adverse impact on the rest of the community, the banks are playing hardball and refusing to budge. 

The Mail on Sunday has long campaigned for banks to share high street premises in communities which would otherwise be bankless.

While charities and business groups such as Age UK, the Federation of Small Businesses and Which? support such an idea, the big banks have resisted and now appear to have crushed the concept. 

The Campaign for Community Banking Services, led for the past two decades by ex-NatWest banker Derek French, has quietly been dismantled – leaving the banks to steamroller through branch closures in their droves.

Last week, French confirmed the campaign’s website was being taken down ‘so as not to give any encouragement to communities which think they can save their branch once its closure has been announced’.

He added: ‘Community banks would have been right for everyone – communities and the banks. But the battle has been lost and we must now brace ourselves for a bout of branch closures that in terms of scale and adverse impact has never been witnessed before in this country. High streets are going to take an almighty pounding.’

French is right to be gloomy. The Mail on Sunday has exclusively obtained details of the branches that two of the country’s biggest banking groups, HSBC and part state-owned Lloyds, have put on notice of closure by early December. The closure lists make for frightening reading.

Last week, HSBC shut seven branches, bringing its total closures this year to 145. It has also informed customers at a further 61 outlets that their branch is being axed. Five of these 61 will close as early as this Friday.

HSBC has been the most eager among the big banks to decimate its high street network. In the past three years, it has steadily ramped up its closure programme – from 47 in 2013, 95 in 2014 to 109 last year. 

This year’s total – equivalent to nearly four closures per week – is already double last year’s total and further closure announcements by the year end cannot be ruled out. 

The bank says the closures are in response to a 40 per cent reduction in usage of its branches over the past five years – with 93 per cent of contact with the bank now made via the telephone, internet or smartphone. Some 97 per cent of cash withdrawals, it says, are via a cash machine.

Lloyds has also provided The Mail on Sunday with a list of 60 branches that will be culled by November. Closures affect all its high street brands – Bank of Scotland, Halifax and Lloyds. 

And 200 branches will go next year, bringing total closures between 2014 and 2017 to 400. The closures, it says, are in response to changing ‘customer behaviour’.

Royal Bank of Scotland, which embraces the NatWest brand, has shut 51 branches this year. It says there are no branches currently on notice of closure but it is busy reshaping its branch network.

The bank is creating 600 ‘main’ branches out of a network of 1,300 where customers will be able to access the full range of services. 

The rest of its branches will be ‘local’ outlets, offering basic services such as cash banking and with opening hours tailored ‘to the needs of the local community’.

Barclays has cut 24 branches this year. Its Bexley branch in South London shuts early next month. It declined to reveal if other branches were on notice of impending closure.

Last week, we spoke with the residents of three communities where the plug is being pulled on their last branch in town.

Battle: Lloyds closure plan has caused an uproar in historic Colyton, Devon

Battle: Lloyds closure plan has caused an uproar in historic Colyton, Devon


The town of Colyton in Devon prides itself on its rebellious past. In the late 17th Century, 105 of its residents backed a quest by the Duke of Monmouth to overthrow King James II. 

The Monmouth rebellion failed spectacularly but it is still spoken about in the town to this day with residents labelling Colyton the ‘most rebellious town in Devon’. 

It is not surprising therefore that Lloyds’ decision to close the only bank in town on October 12 has caused an uproar among the 3,000 residents, various local business groups and councillors.

Jacqueline McCullogh, chairwoman of the ‘Promote Colyton’ group, believes Lloyds should be ashamed of itself. 

She says: ‘We have had a bank in Colyton for some 200 years. It’s part of the town’s fabric as is the local pharmacy, the two convenience stores, the library and the health centre. 

‘By deserting us, it has put its pursuit of profits before the proud people of this great community of ours who strive every day to make Colyton great.’

She adds: ‘I am sick to death of hearing about online banking and how the young are eagerly embracing it. 

‘But what about a more financially inclusive society where the banks not only look after the internet-comfortable but those who like or need to use a high street branch – the elderly, local retailers and charity workers who fundraise tirelessly. Colyton needs and deserves a bank, plain and simple.’

Liz Berry, parish clerk, says the bank’s closure will particularly hit the elderly who will have to travel to Axminster or Seaton, seven and three miles away, if they want to use a Lloyds branch in the future.

‘Public transport around here is virtually non-existent,’ she says. ‘So it is going to take some effort for many of our elderly residents to use these alternative Lloyds branches. 

‘My fear is that once these people go to Axminster or Seaton for their banking, they will do their shopping there as well. That in turn will threaten the viability of many of the shops in Colyton.’

Local retailers are not only worried about a possible downturn in business once Lloyds shuts up shop. 

They are also concerned about how they will bank their takings. Cathy Richards, who runs the local newsagent’s with her husband, says the bank’s closure will cause them a ‘real headache’.

She says: ‘We run a cash-only business and rely on Lloyds to bank our takings. Given I don’t drive and my husband is busy in the shop from dawn to dusk, how are we supposed to pay in our takings? 

‘Most of our customers are elderly. What are they going to do once the bank goes? At the moment, we have a vibrant town centre but I am afraid it will take a turn for the worse once Lloyds disappears.’

LLOYDS’ RESPONSE: We invited Lloyds to comment on its decision to close its Colyton branch. It said the branch had only 46 regular weekly customers and nine in ten personal customers used other branches such as at Seaton. 

It also said these customers could use the town’s post office to do basic banking. Berry disputes Lloyds’ statistics, as do local residents and businesses who complain about constant queues in the branch.


Robert Jones’s plea to The Mail on Sunday, made last week, was heartfelt: ‘If there is anything you can do to help an area in dire need of a bank, we would be very grateful.’

A retired secondary school teacher, Robert has spent the last 46 years living in Blaenau Ffestiniog, Gwynedd, a town famous for its roofing slate and the narrow gauge Ffestiniog Railway that used to transport the slate to the harbour of Porthmadog where it was shipped to all four corners of the world.

Steam-rollered: Robert Jones faces a 24-mile drive after HSBC announced the closure of its Blaenau Ffestiniog branch

Steam-rollered: Robert Jones faces a 24-mile drive after HSBC announced the closure of its Blaenau Ffestiniog branch

Steam-rollered: Robert Jones faces a 24-mile drive after HSBC announced the closure of its Blaenau Ffestiniog branch

As long as he can remember, Robert, 73, has banked with HSBC – or Midland Bank as it was previously known. But now he doesn’t know what to do, given the bank has decided its Blaenau Ffestiniog branch must close next month. 

He is faced with three choices, none of which he likes – to use the local post office to do his banking; drive to HSBC’s branch in Porthmadog (a round trip of 24 miles); or bank online.

Robert, recently widowed, says: ‘What annoys me about HSBC’s decision is that it comes just a year after NatWest pulled out of the town. To lose two banks is awful. To be left with no bank is inexplicable. 

‘Blaenau Ffestiniog has its economic challenges but if a community of 5,000 people does not warrant a high street bank, it does not bode well for hundreds of other towns.’

Like many people, Robert is not keen to use online banking. ‘I am loath to use a banking system where I cannot see the person I am dealing with. I also do not want to leave myself open to internet fraud.’

HSBC’S RESPONSE: The bank, not deflected by an 800-strong petition against the closure, says it is doing all it can to help customers consider ‘alternative ways of banking’ with it.

HSBC also says customers will be able to use the local post office to bank. It boasts it has kept councillors and local MP Liz Saville Roberts fully in the picture.


Like Blaenau Ffestiniog, Bourne End had two banks a year ago – NatWest and Lloyds. First NatWest closed and now Lloyds is shutting. In early October, the town will be bankless.

Martin Sharpe, a retired banker, lives in Bourne End and says Lloyds’s decision is illogical. ‘The branch is one of the busiest in this part of Buckinghamshire. I just don’t understand the economics behind the closure.’

Dianne Lake, a retired personal assistant, agrees. Although she lives in Marlow, she does most of her banking in Bourne End because it is easier to park and the staff are so helpful. 

She says: ‘Lloyds has given no thought whatsoever to the local community. I call it dire customer service.’

LLOYDS’ RESPONSE: Lloyds says its Bourne End branch has only 34 regular weekly personal and business customers. It also says the post office is only ‘a short walk away’.


Courtesy: Daily Mail Online

Bank profit margins are set to be squeezed further

  • Santander cut the rate on its 123 current account to 1.5%
  • Halifax and Lloyds current accounts now ‘under review’
  • Expert says squeezed margins mean other rates could also fall 

It has been a miserable few years for savers with traditional rates collapsing and easy returns on the high street becoming increasingly difficult to unearth.

One ray of light has been interest-paying current accounts. Santander led the way, launching its 123 current account four years ago, offering three per cent on balances between £3,000 and £20,000.

As the years have rolled on, this account has looked more and more generous. However, as exclusively revealed by us, it is to cut the rate to 1.5 per cent from November.

Current accounts: They have become a popular destination for savers, starved of decent rates elsewhere on the high street

Current accounts: They have become a popular destination for savers, starved of decent rates elsewhere on the high street

Millions have signed up to the account, lured in by the offer of interest while savings rates tumbled.

Santander also now charges £5 a month for the account, opposed to £2 before. 

This double whammy may mean many could be taking their business elsewhere, annoyed by the way Santander has moved the goalposts.

Santander blamed events such as the Bank of England cutting base rate to 0.25 per cent for making the decision. 

Other banks quickly reduced savings rates in the aftermath, but so far, current account interest has remained untouched.

But could this soon change? Andrew Hagger, of information website Moneycomms, thinks so.

He said: ‘Clearly the economics no longer stacked up for Santander but with base rate teetering towards zero it may not be the last bank to trim its in credit current account rate.

‘I think the Santander move will prompt a fair chunk of 123 customers to look to place some or all of their monies elsewhere – it could mean a big influx of funds for the likes of Lloyds, TSB and Tesco Bank.

‘These banks will be reducing standard variable mortgage rates come 1 September and thus their profit margins will be squeezed further.

‘So as well as chopping rates on traditional savings accounts, interest paying current accounts may well get caught up in the cull too.’ 

A Lloyds Banking Group spokesman said: ‘Given changing market conditions, including the market expectation that interest rates will be lower for longer, we will be reviewing our current accounts in due course. 

‘Any customers affected will be notified of changes in advance so they can take appropriate action if needed.’

This could mean a cut in interest on the Club Lloyds current account is on the horizon. 

It offers a meaty four per cent on balances up to £5,000, which is likely to be a popular destination for those fed-up with Santander.   

Nationwide Building Society told This is Money there are no planned changes or a review to its FlexDirect current account, which pays five per cent interest on balances up to £2,500 for the first year.

This, unlike the Santander offer, is far less generous as Britain’s biggest mutual chose a time limit on the deal and a far lower cap, meaning it is unlikely to be costing anywhere near the same as the Spanish giant to maintain.

Tesco Bank echoed that sentiment, stating it had no plans to change the three per cent it offers on balances of up to £3,000. 

TSB also says it has no immediate plans to change the rate it offers on its Plus Account, which gives five per cent on balances up to £2,000 – but that it ‘regularly reviews rates across its whole product range.’

Courtesy: Daily Mail Online

Energy East Pipeline review heads to hostile territory

The National Energy Board’s review of the Energy East Pipeline heads to hostile territory Monday when it resumes in Montreal, where the city’s mayor has called for the process to be suspended.

Denis Coderre, who has long opposed the $15.7-billion project, is scheduled to be the first to speak at the public hearings.

But he has said he is “not comfortable” with the review following revelations that former Quebec premier Jean Charest met last year with the board chairman and two review panel members while working as a consultant with TransCanada Corp., the company behind the 4,500-kilometre pipeline.

“I’m not sure of the impartiality of the process,” he said Thursday. “I think they should take a break and look seriously at how it’s done.”

Steven Guilbeault, spokesman for environmental group Équiterre, said he has similar concerns even though his organization, as well as municipal leaders, First Nations representatives and others, also met with commissioners in advance of the hearings.

“I’m not saying that there is a conflict of interest, but certainly you want people to have trust in these processes,” he said, adding that he told commissioners at the time that the meetings were unusual.

“Perceptions are very important [and] right now there is a perception that there is a bias.”

He said the commissioners who participated in the meetings should recuse themselves or the NEB should ask them to step aside and replace them.

The NEB said last week it was accepting written comments until Sept. 7 on motions calling for two of the three people who met with Mr. Charest to step down from the panel over perceptions of bias. The board said it would consider those submissions and establish any further steps, if necessary.

The NEB has said that at no time during meetings with Quebec stakeholders did NEB officials permit any inappropriate discussions on pipeline projects under review.

Mr. Guilbeault said a suspension of the proceedings would allow TransCanada to complete its application, which he said fails to explain how the company plans to cross the Ottawa and St. Lawrence rivers.

With more than 60 per cent of Quebeckers depending on the St. Lawrence for their drinking water, concerns about spills are driving opposition to the project in the province, he said.

Louis Bergeron, TransCanada’s Quebec vice-president, acknowledged that the Calgary-based energy company faces a “big challenge” given the number of opponents in the province, which include more than 300 municipalities, First Nations and the Quebec Farmers’ Association.

“I understand that it is of concern [among citizens], but I cannot change the past,” he said, referring to the meeting with Mr. Charest, which TransCanada says it didn’t initiate.

“We are in a new phase of the project and Mr. Charest is not present.”

The chief of the Mohawks of Kanesatake, Simon Serge Otsi, said he plans to question the legitimacy of the board when he speaks before the hearing.

“They have no credibility to speak to the First Nations,” he said.

Mr. Otsi said the project requires First Nations consent, something that was raised by Mi’kmaq communities at the public hearings earlier this month in New Brunswick.

“These are our lands. We never ceded them. We never surrendered,” he said.

While the pipeline has fomented dissent from some, others including business leaders and some construction industry unions have backed the project, saying it would create jobs and be a boon for the national economy. Other supporters say it would also help get Alberta’s land-locked crude resources to markets overseas.

The NEB plans additional hearings in several other cities including Quebec City before concluding in Kingston in December. Quebec will also hold its own environmental hearings.

The board must submit its report by March, 2018, after which the federal cabinet will have the final say on the project.

Also on The Globe and Mail

Energy East hearings kick off in largest-ever pipeline review
(BNN Video)

Courtesy: The Globe And Mail

Canadian farmers brace for China’s new canola standards

As they begin to harvest what may be one of the largest canola crops on record, many farmers are growing increasingly concerned over the prospect of a drastically smaller export market as China stands firm on its plan to stall Canadian exports of the seed.

China – Canada’s largest canola-seed customer, importing an average of four million tonnes per year – is preparing to implement a new standard on Sept. 1 that will require the amount of extraneous plant material, known as dockage, in canola seed exports to make up less than 1 per cent of each shipment.

A majority of the sales to China have already stopped ahead of the deadline, said Canola Council of Canada president Patti Miller, leaving many in the industry bracing for a significant hole in the market and potentially lower prices as harvest begins. The new standard would require an increased level of cleaning that Ms. Miller says would be time-consuming and more costly.

“The kind of cleaning you would have to do would take more time, take more effort and it costs more. It slows down not only how quickly you can ship canola but how quickly you can turn over other crops in your elevator,” she said.

About 40 per cent of Canadian canola seed exported abroad goes to China, worth a total of about $2-billion.

Over all, Statistics Canada estimates Canadian farmers will produce 17 million tonnes of canola this year, while other industry experts peg that figure at more than 18 million tonnes, which would place this year’s crop among the largest in Canadian history.

Chinese officials say the new standard is designed to prevent the spread of a fungal disease known as blackleg. They also say the disagreement over canola is a scientific matter that should not be on the agenda when Prime Minister Justin Trudeau visits the country this week ahead of the G20 summit.

Brian Chorney, who farms about 800 acres of canola on his 2,500-acre farm in East Selkirk, near Winnipeg, says the issue is nothing new and farmers have been working to address it for years, growing blackleg-resistant varieties and following strict crop rotations, among other things.

He’s concerned that the standard will slow down the shipment of other grains on his farm.

“Our fear is that if you go ahead and we are held to that standard, the export terminals may get tied up because, from my understanding, it takes more time to clean to that standard … and that means that the wheat we want to ship might be slowed down,” said Mr. Chorney.

Despite the impending change to stricter dockage standards, sales to China have not come to a complete halt. Ms. Miller said smaller shipments that meet the 1-per-cent standard have been exported to China, but describes it as “more like a specialty shipment” that is not feasible for all of Canada’s canola exports.

“From time to time, would some companies be in a position to meet that standard? Yes. But would the entire industry be able to meet that on a consistent basis, for four million tonnes? It’s not practical and I think more importantly there’s no scientific justification to do that,” Ms. Miller said.

Ms. Miller and other industry officials insist that research shows that reducing dockage in shipments will not decrease the risk of blackleg.

“The risk of blackleg transmission is already extraordinarily low and there’s no difference in risk between the current levels of dockage that we have and what China is suggesting,” Ms. Miller said.

Tony Tryhuk, branch manager at RBC Dominion Securities in Winnipeg, said if the main Canadian export companies – including Cargill Ltd., Louis Dreyfus Corp., Viterra Inc., Richardson International Ltd., and Parrish and Heimbecker Ltd. – are unwilling to clean to the new standard, China would be virtually eliminated as an export destination until the issue is resolved. That slowing demand would result in depressed pricing.

“If other countries are price-sensitive buyers, then you can expect them to take up some of that slack, but it’s unlikely they will ever be able to replace the demand from China,” Mr. Tryhuk said, adding that if China goes ahead with the new standard, Canada’s domestic processing industry could experience a boost as the market operates closer to maximum capacity.

“I don’t think it’s all doom and gloom,” said Mr. Tryhyk. “Yes, it’s a concern, but I don’t think it’s the death of the canola industry. It just means that demand will shift to other places. It’s a trade dispute that needs to be resolved.”

Mr. Chorney said he’s hoping Canada and China will reach an agreement “sooner rather than later.”

“Any uncertainty is going to have a detrimental effect on pricing,” said Mr. Chorney. “We probably would have to hold back on selling canola until something positive happens, hopefully a resolution.”

Courtesy: The Globe And Mail

Amid threats, security efforts on the rise at African mining sites

Canadian mining firms, lured to West Africa by low taxes and friendly governments, must now grapple with an emerging new risk: the rising threat of attack by Islamist radicals in the region.

Canadian gold miners have been among the biggest investors in many West African nations in recent years. But after a wave of terrorist assaults on hotels and tourist sites over the past year, along with a report of a rocket attack on a French uranium mine, West Africa is becoming a more dangerous place for foreign investors.

In a sign of the new anxieties, Burkina Faso announced this month that it will deploy more than 3,600 soldiers and police to protect the nation’s 18 mining sites from the escalating threat of attack by Islamist extremists who have already struck at targets in the country.

Gunmen from an Islamist radical group killed 30 people, including six Canadians, in an attack on a hotel and restaurant in Burkina Faso’s capital in January.

Iamgold Corp. of Toronto is one of Burkina Faso’s biggest employers, operating a modern gold mine at Essakane in the country’s northeast, near the borders of Mali and Niger. The company’s officials, replying to questions about the new military deployment, said they have a policy of refusing to comment on security matters.

In the past, Canadian mining companies have pointed out that the terrorist attacks and other violent conflicts in Africa are usually in the capital cities, far from their remote mining sites. But this may be changing.

In late May, an Islamist radical group said it had fired Grad rockets at a uranium mining site in the Agadez region of Niger. The site belongs to the French uranium mining company Areva, although the company did not confirm the attack.

A notorious radical militia, al-Qaeda in the Islamic Maghreb (AQIM), claimed responsibility for the Areva attack and warned that all Western businesses were “legitimate targets.” Just two months earlier, the same group claimed responsibility for a Grad rocket attack on a gas facility in Algeria.

In a recent report on Burkina Faso, the International Monetary Fund said there are concerns about the security threat in “rural and border areas” in the country. “Mining companies in particular note that they have had to step up security measures as they cannot fully rely on the police or army,” the IMF said in the June report.

Burkina Faso’s foreign minister, Alpha Barry, in an interview after the terrorist attack in January, pledged that his government would strengthen the protection of Canadian mining companies. He pleaded with Canadian miners to keep their investments in the country. “These are companies that enable Burkina Faso to live,” he said. “Our economy depends on it.”

Islamist radicals could attack Western mining companies for kidnapping operations or for strategic reasons, analysts say. “Such institutions remain at a credible threat of being targeted, given the dynamic nature of terrorism in the Sahel and Maghreb regions,” said Ryan Cummings, director of Signal Risk, an Africa-focused risk analysis consultancy.

“Mining sites in countries located within AQIM’s operational theatre, namely Mali and all countries sharing a border with the country, are susceptible to an attack,” he said.

Mining companies in West Africa have already been targeted for kidnapping operations to raise revenue from ransom, Mr. Cummings noted. But groups such as AQIM could be targeting mining companies because any economic decline in West African countries would make it easier to radicalize their populations, he said.

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Courtesy: The Globe And Mail