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Exxon warns it will shelve Mackenzie pipe without subsidy

SHAWN MCCARTHY

From Thursday's Globe and Mail

Latest comment posted at 1:39 PM EST 31/05/07

Oil giant says project isn't viable without federal assistance ...Read the full article

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  1. J G from Canada writes: Exxon is making record profits and the natural gas is required for a heat source for the tar sands ie the oil companies. To hell with a subsidy paid for by the taxpayers.
  2. mike h from Sunland, Canada writes: ROTFLMAO! The first paragraph is all I needed to read, the rest is just filler. And in the past 12 months all we ever heard was about the massive PROFITS that these big companies were making... and now they are asking for handouts? Well, lucky for them our government is going to give them whatever they wish. Since they are SOOOOO poor, they need all the financial help they can get.... and why is it again gas is so expensive? I could not care less....I dont drive, I laugh and point at the suits and ties in 50 000$ pickups(and the square shoes)...for a buck 20 for gas is a laughing matter. And it seems like car dealerships are just giving vehicles away now.. NO credit? No Problem! oh the humanity.
  3. Don Adams from Canada writes: If the pipeline is really needed for northern development, then it should go ahead, but if Imperial is going to build and operate it, there shouldn't be any subsidies.

    However, if they won't build it without subsidies, then perhaps Canada should build and operate it, thereby saving the subsidies AND scoring big profits from the line. If this proposition were to be put to Imperial, ie, no negotiating, take option 1 or option 2, I think they'd back down and build the line themselves.
  4. E. S. from Canada writes: I'm with J G. Forget the subsidy by Canadian tax payers. If we were to invest, then we should have part ownership of the pipeline and the revenue coming from it. And if the line is so strategic for North American gas supply, maybe the US taxpayers would like to invest to guarantee their supply? Finally, given the cost of construction in Alberta right now, maybe delaying the project for a few years would result in reduced costs and a better economic return without having to resort to taxpayer subsidies. I'm paying for the cost of these projects by having my tax dollars provide fewer roads and hospitals than I would otherwise be able to get, and by having to pay lots more for any skilled labour to work around my house. Why would I want to support someone to drive my costs up even more?
  5. Paul, Bytown, from Canada writes: Hey Exxon, if you want Canada to be a Socialistic state and hand out welfare, then we should do like all the other socialistic countries and nationalise our oil and gas. What's good for the goose is good for the gander. Where's Chavez when you need him.
  6. Ernest Keen from Azilda Ontario, United States writes: Ref.Exon Needless to say I feel that Exxon should withdraw immedately from the Mackenzie pipeline project.They should not even think about seeking additional subsidies from the Canadian public.Since they are the largest and most profitable of any corporation in Canada how can they justify this request?They claim that if the project goes ahead as to their liking it will open up the north.I dont believe it.Let us be honest on this subject as we all know that where there is money to be made there will always be someone out there willing to put up the cash.In spite of the fact that Exxon is the largest it does not make them the best player for this project.Lets stop subsidiseing these energy companies and let free enterprise function as it should.Quit giving all these handouts to corporations that measure their profits in billions.If for the time being we have no players to get this project moving dont be too concerned because what we have is a product in demand and will eventually be developed.As to cost to increasing I dont think that we should be alarmed.Just check the price we are paying for our energy requirments at the moment and you will see just how and who will foot the bill For your info I am and always will be a true capitalist. Ernest Keen
  7. G. Sam from Canada writes: Canada should DO to Exxon/Imperial/Shell?Petrocan exactly what they are doing to Canadians! Sc-ew them!
  8. Paul Thompson from Canada writes: You almost sounded like a socialist there for a bit, Adams. Maybe there's hope for you yet.
  9. Paul Thompson from Canada writes: Or to take a more capitalistic approach, as opposed to Don Adam's surprisingly socialistic solution, Mr. Keen also offered a very sensible perspective on the matter. No money for Exxon, especially while there is still even 1 homeless person or 1 patient somewhere waiting too long for an operation in this country.
  10. john earl from Charlottetown (we have windmils), Canada writes: So Exxon is going to have a big sucky -pout if it doesn't get what it wants. WAAA! WAAAAA! WAAAA!
  11. I ohrarzt from Canada writes: Maybe Exxon can call Danny Williams, he had no problem telling Exxon to shove it when they tried to screw NL on the Hebron deal.

    How much money did Exxon make last year? Bugger off, you're not getting a penny of my money
  12. Thomas Price from Whitefish, Canada writes: I have no problem with Exxon getting a subsidy but since 95% of the product is destined for US market I would suggest that he should be talking to George for help. Of course this may backfire as George may elect to make a pre-emptive strike on Canada to get us to comply.
  13. Tim Bee from Canada writes: Good. Screw off!!
  14. Ian Gunn from Minneapolis, United States writes: Oh this is rich :) The wealthest company in the world asking for handouts. This is the company that gave 400 million as a going away gift to its x-CEO in 2005. Perhaps you can ask him for a loan?
  15. A Moron from Canada writes: Profit for Exxon in 2005 was $35 Billion (yes $35 Billion). If Exxon wants a subsidy they should own up and pay up for the Valdez oil spill 20 years ago. They have been fighting to have reduced every penalty against them. Will this pipeline be as well maintained as the BP one that had few inspectors and had to be shut down because of leaks? The cost of the pipeline, $16.2 Billion, is less half of their profit. After subtracting all my expenses from my income, dividing by 2, I end up with about $2,500. Sure, I can give Exxon a few bucks to help them out, after all they did ask really nicely.
  16. Bill M from Canada writes: And once it's built the natives will file a land claim and try to take it over.
  17. CPT America from United States writes: Hey E. S. from Canada, "maybe the US taxpayers would like to invest to guarantee their supply?" Well since the US supplies 90 of its natural gas from domestic sources (read US based) we don't need your stinkin' gas...ever hear of global warming? I can hardly wait for the next ice age so I can see Canada under a 3 KM thick ice sheet!
  18. dd dddooffuss from Ottawa, Canada writes: The company that last year posted the biggest profit of any company in the world, ever in history, wants Canadian taxpayer money to help build a pripeline that will fuel tarsands development to get out the oil that will go to consumers in the United States. So no new natural gas to heat Canadian's homes, and no oil for Canadian consumption. But our money to help build it and give Exxon even greater profits, that don't get invested in Canada.
    And I'll bet they'll want cheap temporary foreign workers to build it too - 10 to 1 says the jobs won't go to northern residents.

    Rich....
  19. albert v from Canada writes: Shelve it?

    Good!
  20. Gardiner Westbound from Canada writes: .

    The domestic oil cartel is pillaging consumers. Nonetheless it has the 24-carat chutzpah to demand a taxpayer subsidy. NO, NO, NO, NO!!!!
    .
  21. Cryin Outloud from Canada writes: Three things already mentioned above that crossed my mind as I was reading the article:

    Since when is subsidizing corporations called a "free market"?

    Maybe the U.S. could subsidize Exon as the gas will be most advantageous to them.

    Canada needs to nationalise our energy. Why not have all Canadians share in the billions rather than giving it to a few elites?
  22. M Horon from Calgary, Canada writes: Exxon's profit expectations are higher than the rate of return one can get from pipelines. This is why Esso has sold off many of its canadian pipelines to midstream o&g companies. Why should the Government get involved in propping up non-viable projects? Why would anyone throw their money away?
  23. Hung Long from Hong Kong writes: If the pipeline was planned for Quebec, federal politicians would be falling all over each other in a rush to provide subsidies.
  24. gaetan diotte from Ottawa, Canada writes: Isn't it funny how they scream for tax cuts and tax breaks, they scream about Gov't interference but they are the first ones to ask for a handout so as to be able to rape the rest of the country with their obscene profits. Have the courage to stick up for your Capitalistic beliefs and leave our tax dollars alone. If you do use our tax dollars to fund your growth then all Canadians should expect a dividend cheque. We, tax payers, pay for the risk without any recourse to the benefits. Yup, you have to love the MegaCorp philosophy.
  25. Marv M from Edmonton, Canada writes: This makes me sick!

    Exxon a company that gave their retiring chairman a 400 Million dollar going away retirement present last year is crying that they cannot afford to build a pipeline without Ottawa's help. TELL THEM WHERE STICK THEIR PIPELINE !!!!!

    "Soaring gas prices are squeezing most Americans at the pump, but at least one man isn't complaining.
    Last year, Exxon made the biggest profit of any company ever, $36 billion, and its retiring chairman appears to be reaping the benefits.
    Exxon is giving Lee Raymond one of the most generous retirement packages in history, nearly $400 million, including pension, stock options and other perks, such as a $1 million consulting deal, two years of home security, personal security, a car and driver, and use of a corporate jet for professional purposes. "
  26. Alfons Materna from Dogs Nest, Canada writes: Me, I just don't buy Exxon's argument.
    I don't buy their gas, either
  27. Stude Ham from Outremont, Canada writes:
    EXPLETIVE EXPLETIVE EXPLETIVE YOU EXXON!!!

    Exxon's Gouging everyone of us at the pumps is not enough??? Exxon must now loot our taxes???

    Watch flakey and the harperservatives hand over to exxon on a silver plate our tax moneys to subsidize one of the greatest corporate hogs ever to be spawned in the US.

    We need the late Trudeau's middle finger in here.
  28. W F from Canada writes: To CPT America from United States: You comments are rude and unwelcome. You should have checked your facts before getting on your soap box, because, if you did, you would have discovered that Canada is the leading supplier of oil, gas and electricity to the US. We even rank above Saudi Arabia on the oil side of the equation.

    You bloody rude American's really piss me off. I think we should shut James Bay down for a few months and see how you like huddling in the dark.

    Prick.
  29. W F from Canada writes: I agree with the posters here who are outraged that a company the size of Exxon should be trying to blackmail the Canadian government and citizens.

    I support a 'made in Canada' energy policy for domestic development; the only problem is that the NAFTA agreement prevents this. Under NAFTA we are legally obligated to sell the Americans oil and gas at the same price that we sell it to the rest of Canada and they have a treaty right to equal per capita volumes of supply as well.

    Thanks so much Brian Mulroney.
  30. Chi Guy from United States writes: WF, not all American's are rude. Based on CPT America's previous posts that I have seen I'm either pretty sure he is a Canadian posting as an American or just moved here from Canada. As for Exxon Canada should tell them to take a Looong walk of a short pier! They have been raking us over the coals for the longest time here. We are at $3.61/gallon here in the north burbs of Chicago!! Oh, and Capt America, not sure where u are in US, if you are even here, but we do need Cnd'n oil and gas bigtime,w/o it I imagine most of the US the price of oil would skyrocket and our economy would tank as a result. So shut your piehole.
  31. Richard Soley from writes: A lot of tough talk here this morning from some very ignorant people. Let's take the individual who doesn't drive, I gues he dosen't eat either but his food all comes from trucking which needless to say requires fuel. When this project was first shelved because of Native concerns, it left a void that wasn't filled, that void was northern schools, hospitals, development, services, jobs etc. While it is difficult to condone subsidy in cash terms there are many ways in which help can be given without tax dollars being injected. But lets throw out the idea that Ottawa can build a pipeline if such a notion were to ever be attempted it would be the biggest catastorphy for tax payers ever to hit Canada. Aside from all the foolish notions the spinoffs of a project this size would help the industrial east part of Canada as well as the west. This project should be done and it should be done as soon as posssible before it gets shelved for another generation.
  32. Len van der Heyden from Marbella, Spain writes: Instead of investing a 'half-year' annual earnings in "boring, predictable, next-door, NAFTA constrained" Canada, Rex Tillerson would be better of convincing his institutional shareholders that Exxon should put their $30 billion annual earnings into the Russian Federation - like Shell and BP; or, perhaps into Iraq, Iran, Nigeria, Venezuela?

    In the meantime, we Canadians may keep our resources as a legacy for our kids; NAFTA permitting. I cannot think of a better NIMBY scenario. Hopefully, the Federal Government agrees our tax money is better spent on education, infrastructure, arctic icebreakers rather than misplaced corporate welfare largesse.
  33. J M from Calgaristan, Canada writes: Absolutely no subsidy should come from the Canadian government. In fact, with the problems inherent in the project they must use the NEB to shelve it for good. It is not in the best interests of Alberta, nor the tens of thousands of people who work for Canadian oil and gas companies. We have not replaced production in Canada in over a decade now. Demand is rising steadily as a result of conversion to natural gas generation and the oil sands. That makes for a robust outlook for prices for Canadian natural gas for decades to come and since most of the non-oil sands companies are heavily gas weighted then this will really benefit them. The economic activity, the Alberta governments take, and the federal governments take is enormous. If we brought Mckenzie gas down we would see a stabilization or deflation in prices that would reduce all of the above. Without Mckenzie gas there should be a healthy upward trend in prices. After all, with current natural gas prices current rig utilization is running at about 20%. No Mckenzie gas means lots of revenue for the government, lots of economic activity, and shareholder profits which now thans to Mr. Flaherty will be taxed appropriately.
  34. Howard Beale from Canada writes: The longer it takes to get a MacKenzie Valley pipeline built, the more likely it is that the Alaska Highway pipeline will be built. The proponents of the Alaska Highway Pipeline had their application approved about thirty years ago. The other alternatitive is that Alaska will then start to use LNG terminals to get it's gas to market. Once Alaska gets it's gas to market, there will be no need for Canada's northern gas for ten or twenty years as the market can't afford two pipelines and certainly if gas from both sources hit the market at the same time, prices would fall and make the pipelines even more uneconomic. Alaska needs the revenue to replace it's oil revenue which is in decline. It currently has no income tax and gets more than 80% of it's revenue from oil royalties. They have been trying to get US loan guarantees and or subusidies for several years to get the pipeline built. One of these days they will succeed and Exon will go back to sleep for another decade.
  35. Iain's Opinion from Canada writes: Why is it all one or the other? What's wrong with a partnership between big oil and big givernment? It would only demonstrate the reality of the situation anyway (government is the entertainment division of big business). Exxon puts up the cash and expertise, Gov't of Canada gives tax holliday etc (but keeps track of the gifting). The pipeline is built and operated and the profits are used to repay the gov'ts gift 2 0r 3 times over and everybody is happy. Except of course the enviromentalists who are counting carbons instead of carbo's nowadays.
  36. Andre Carrel from Salmo, Canada writes: "The company will shelve the long-delayed Mackenzie Valley pipeline project unless it can get significant taxpayers' assistance for it."

    The answer should be obvious:

    Our governments, have for a number of years now, been preaching that the private sector can do anything better than government can do it. Our governments are privatizing anything and everything and preaching the benefits of tax cuts. Our governments are closing schools and hospitals. Our governments are promoting the user-pay principle for anything from dental care to drinking water.

    I forget now, what was my point?
  37. Y NOT from Canada writes: Hhmmm!!! Well, if Exxon cannot afford to build on their own, it must not be needed. Maybe the govt could spend this potential handout on companies that are actualling adding value to the Canadian economy by way of green technology. I for one do not agree with subsidies to oil companies as the market will dictate wether it is built or not. But if one wants to subsidize then do it for Cdn companies that are on the cutting egde of adding value to the environment.
    At 1.18 a liter gas, Exxon can afford to go alone. SCRAM!!!!
  38. Gronck the realist from Canada writes: So shele it and tell Exon to 'bugger off'
  39. Howard Beale from Canada writes: Andre Carrel, I bet private enterprise could deliver piped water in a more cost effective manner to small northern towns than government can, right?
  40. J M from Calgaristan, Canada writes: Keep in mind that this is a natural gas project and the oil sands will get their gas one way or another. They want more, the price goes up, and so does the governments take which on natural gas in not insignificant.
  41. D Brown from Canada writes: NO CORPORATE WELFARE! Enough already, Bombardier, now EXXON? Under NAFTA, most of our natural resources already belong to the US. Scrap the pipeline, then work on scrapping NAFTA, then in 20-30 years when the world is crying for energy, Canada can extract the gas and let Canadians benefit, not just some fat overpaid Exxon executives.
  42. W F from Canada writes: To Chi Guy from United States - well it's refreshing to hear that we are at least, appreciated by some.
  43. Howard Beale from Canada writes: D Brown, go ahead, scrap NAFTA. I doubt that the Americans will impose duties on the import of our oil and gas. We will sell to them just as we did before NAFTA. However, watch how quickly duties get imposed on manufactured goods. Be careful what you wish for.
  44. W F from Canada writes: To Howard Beale: Canada has lost over 250,000 manufacturing jobs to Mexico and China since globalization took hold. That comes on the heels of overwhelming US corporate divestiture in Canada immediately after and in the years following NAFTA's implementation. The idea that countries can 'export their way' to prosperity is a nice notion, but it mainly benefits the countries that are consuming, i.e. the US. I think now that we have taken the hits on jobs in Canada anyhow, that it is the perfect time to revisit NAFTA. So what if the Americans slap duties on our manufactured goods - they aren't buying them anymore anyhow. And, let's not forget the softwood lumber and cattle trade debacles. Even though we had a trade agreement; and even though we won every NAFTA tribunal ruling in the softwood lumber dispute, we still lost because now the Americans have imposed what amounts to a quota on our lumber (nice free market activity there), and, we ended up handing over 1 Billion dollars of duties that were collected by the US in spite of our 'wining' the dispute. we should have all keyed on the fact that it was never called the "Fair Trade' agreement, but the 'Free' trade agreement. They got the free and we got the stick.
  45. Al MacDonald from Think GR$$N, Canada writes: So EXXON! Shelve it then, until it is viable. But under no circumstances should the taxpayers subsidize one of the richest companies in the world, as they can contiune to fleece at the pumps everyday.

    If this pipeline actually does need to be built and Exxon will not build it without government assistance, then the government should step in and build it. Then we can bill Exxon, on a user pays basis, for its use. At least that way the taxpayers would get their money back, and maybe even make a few dollars.
  46. Howard Beale from Canada writes: WF, so what you are saying is that all those trucks that cross the Canada / US border everyday are going back empty and those manufacturers that say they are being hurt by the high Canadian dollar are really lying because they don't have any sales to the US?
  47. W F from Canada writes: Al MacDonald - agree with you completely. It is not unaffordable for the government to put together a construction consortium to build this pipeline and then rent it out to the highest bidders, be they Exxon, Shelly, Conoco or whomever.

    The costs would obviously exceed 16 Billion before the project was completed, but, I can't think of a better way to invest money in Canada for Canadians.

    We build the national railway this way and we sure as hell can build a pipeline.
  48. Robert Billyard from mission bc, Canada writes: These crooks are utterly shameless! At a time when they are robbing the public blind on gas prices they want subsidies. What is worse is the turkies in Ottawa will give them what they want. Corporate welfarism has become a pestilence on the land.
  49. W F from Canada writes: To Howard Beale - Canada's overall trade with the US is declining and if you strip out the value of energy exports, the net dollar value of what we sell them is somewhere in the neighborhood of 65 billion. That is not an insignificant number, but it also would not be the end of the world if the number was reduced.

    Speaking of reductions - the Americans actually sell us more than we sell them. No fewer than 39 US states count Canada as their number 1 export market, so, I think that when you are talking trade, the arguments cut both ways.

    If we are going to be continually screwed on trade issues, then I think it would be much more in Canada's interests to scrap NAFTA, develop a made in Canada energy pricing policy for Canadian business and pursue markets in China, India and Africa.
  50. Elmo Harris from Niagara, Canada writes: Nationalize it. In fact nationalize the entire oil industry.
  51. Jeff C from Canada writes: J M from Calgaristan, Canada writes: "Absolutely no subsidy should come from the Canadian government..."

    I agree with you there in essence, although some sort of partnership or tax holiday in which the gov't gets money back at better than prime could be beneficial. At the same time however, this pipeline is going to take a few years at least to build, and I'm sure they're quite a ways yet from breaking ground. With the oncoming oil sands facilities Alberta should see a significant increase in demand and the large NG companies are barely increasing production right now as it is.

    As of yesterday Western CDN rig utilization is at 17% (Nickles) but that is misleading as it's still breakup for a lot of the province. Even so I don't believe I saw the rig utilization number climb much above 70% at all during Q1, which is typically the busiest time of the year. It'll be interesting to see how many companies fail to increase production this year.
  52. Jeff C from Canada writes: Also has there been much interest in this program from a midstream/downstream company? You'd think this would be a better option than from the upstream or integrated companies.
  53. W F from Canada writes: And another thing. For years Canada enjoyed a preeminent position as a wheat exporting country. Our biggest customers were China and Russia, so, how did our 'friendly' neighbour to the south react to this. The US government has, for 20 years, subsidized the cost of production of a bushel of wheat produced in the US by $ 2.50 US. The net effect of that has been that we lost our primary customers to 'cheaper' US wheat.

    Now they want Canada to get rid of the wheat board because they say it represents an 'unfair' monopoly. Right.

    Also, they have begun to subsidize US farmers who grow oil sees and specialty bean crops such as canola and lentils. Canadian farmers have tried to raise the alarm on this but are not being heard.

    If this kind of activity is called fair on the part of the US, the I say screw them.
  54. Howard Beale from Canada writes: Al MacDonald and WF, you just don't get it. If the cost of building a pipeline is not economic, it doesn't matter whether it is built by the government or a private company. If production costs plus transportation costs exceed the sales value then it will be a white elephant. If the government stubbornly builds a pipeline that isn't used then the taxpayers will take a bath. At least the backers of the pipeline are smart enough to know this. There is a reason why they are rich and you most likely aren't. I'm with a previous poster, (J M from Calgaristan). If the pipeline is not economic, don't build it. My holdings in other gas plays will then go up in value.
  55. W F from Canada writes: Here is an excerpt from Statistics Canada web site:

    http://www.statcan.ca/Daily/English/070508/d070508a.htm

    A major factor in exports was the industrial goods and materials sector, specifically metals. Exports of metal ores and alloys surged to a record high of $45.2 billion, a 25.5% gain over 2005. This was nearly double the value of $26.0 billion in 2003, thanks mostly to increased demand from China, which sent prices skyrocketing.

    The report also showed a growing propensity among Canadian companies to do business with countries other than the United States. While the United States was still by far Canada's largest trading partner last year, its share of both exports and imports declined.

    Contributing to this shift were rising exports of metals, aircraft, wheat and canola to the rest of the world, combined with lower exports of autos, forestry products and natural gas to the United States.

    The United Kingdom edged out Japan as Canada's second largest export destination last year, after the United States. Exports to the United Kingdom hit $10.1 billion, compared to $9.4 billion for Japan. The major factors in the United Kingdom's increase were export values for gold, uranium and nickel as well as higher exports of aircraft.

    In addition, while imports from the United States rose last year, they were outpaced by imports from countries such as China and Mexico, and oil-exporting nations such as Algeria, Iraq and Nigeria.
  56. Les Caine from Canada writes: Why should Canadian citizens through their government subsidize the export of our precious non renewable resource that because of the proportional sharing clause of NAFTA gives Americans who recieve more in export than Canada uses and can thereby excludes Canadians necessary access to their own resources in this cold country?
  57. W F from Canada writes: Howard - sometimes you build things in 'anticipation' of the economic activity to come. World oil consumption is currently running at 78 million, yes that is MILLION boe/pd. Assuming that the IEA is correct and world demand will grow at 3% a year, which is a low estimate in my opinion, then we are headed for a situation where the world will be consuming 1 Billion boe's every 10 days. Under such a scenario it would not take long for such a pipeline to become profitable.

    I could go on, but I would simply point out that when we built the railways in this country, especially in the west, there was no existing market for the service. That didn't mean the railway wasn't needed, it did mean that the people who had the vision to build it knew that it was going to be the foundation of greater things to come.

  58. The Skipper from Canada writes: Good - shelve it Exxon ! If you don't build it, someone else will.
    C'mon Canada, tell Exxon to shove it where the sun doesn't shine !
    If private capital can't finance it, why should the Canadian taxpayor!
  59. W F from Canada writes: It's about time that we woke up in this country (Canada) and started doing a lot more 'value added' selling rather than just letting foreigners come in an purchase our resources in bulk. A pipeline in the MacKenzie valley would be a very nice 'value added' play. And China will take all the energy we can supply.
  60. Howard Beale from Canada writes: WF, once again I don't understand you. You are suggesting that we will be more succesful selling our manufactured exports to China than to the US? By the way, when you come up with your made in Canada energy pricing please exclude Alberta supply and most likely BC as well. You must be from back East as you exhibit that classic Eastern attitude that the west is your personal piggybank. I suppose you'll also want to slap tariffs on imports and reintroduce discriminatory freight rates.
  61. Howard Beale from Canada writes: WF, the MacKenzie Valley pipeline is for gas. Are you now suggesting that we liquify the Beaufort gas and sell it to China? As for the railway, it was built to keep the Americans out of the west not directly for economic purposes. By the way, it was built by a private company that got huge government subsidies. It was not economic to build it otherwise.
  62. Midtown Bob from Toronto, Canada writes: XOM-N made almost $40,000,000,000 in profit last year,
    see globeinvestor.com?id=xom-n

    and they want a subsidy from the taxpayers?
    No.
  63. Green Canada from Edmonton, Canada writes: i agree with comment ...subsidize then nationalize. imagine the government banking the many of billions and using it for the public good. Don't get me wrong I'm for a free market...hear that Exxon...a free market. you want it? you pay for it! -the O & G co's arlready get an inequitably sweet deal.
  64. W F from Canada writes: I see Howard. There is Canada and then there is Alberta. Are you a Canadian or a separatist. Do you care about advancing the economy for all or just a few?

    Perhaps Ontario should stop sending 13 Billion dollars a year to Quebec.

    We could definitely use that money in this province. But then you would probably end up with Quebec separating and then entire Canadian federation fracturing. I guess that doesn't matter to you eh, mister money bags.
  65. W F from Canada writes: Howard Beale from Canada writes: WF, the MacKenzie Valley pipeline is for gas. Are you now suggesting that we liquify the Beaufort gas and sell it to China?

    Yes Howard, that is exactly what I am suggesting.

    And, don't forget. It wasn't so very long ago that the price of a million cubic feet of gas was north of $ 15.00 US. That day will come again and a lot sooner than you think.

    As for selling our manufactured products to China, India, Europe, Africa, the middle east, South America - yes to that again. Canada has been a world player in Telecommunications, aerospace, steel, base metal mining and refining, oil and gas production, and many other things. I think the combined market concentration in China (1.3 billion), India (1 Billion), Europe (.5 Billion) and the other parts of the world can keep us busy for a very long time to come.
  66. nathan w from China writes: Thank you

    Good bye, Exxon

    It can be developed later on when it's feasible. Handouts to Exxon under such circumstances would provide beautiful ammunition against the present government for those who are looking for it.
  67. Howard Beale from Canada writes: WF, the money grabbers are the people in Ontario who set tariffs so high that we were forced to pay inflated prices to buy the stuff they manufactured. As if that wasn't enough of a tilt, you set freight rates so that it was cheaper to send a fridge, let's say, that was built in Ontario, to Winnipeg, than it was to send that same fridge from Winnipeg to Ontario. Go ahead and stop sending 13 billion dollars to Quebec, I could care less. And yes, I would like to see an independent Alberta, with or without our immediate neighbours.

    By the way, I believe the last project the federal government built in anticipation of future demand was Mirabelle Airport.
  68. W F from Canada writes: The Athabasca tar sands are said to contain 1.7 Trillion* barrels of oil equivalent. At $ 100.00 per barrel that gives the sands a value of 17 Trillion dollars (in conservative valuations).

    The population of Alberta in 2001 was 2.9 million people, lets round that out the 3 million.

    So, if Alberta just kept all the money in the oil sands for it's own citizens, that works out to $ 566.66 *Milllion     dollars per capita.

    Howard - isn't that a little gross of you to be suggesting that each Albertan is due such an amount?
  69. W F from Canada writes: Oh yes, Mirabel. Well, Quebec has always had problems with the things it does.

    What about Olympic venues, highways, electricity generating capacity, schools, bridges etc etc etc.

    we build those in anticipation of future demand; they are every bit as expensive as a pipeline and I don't see anyone, including private industry complaining about tax payer money being spent on those - why - because so called 'private' enterprise reaps the benefits of tax payer spending all the while pretending to be 'independant' of government. What a laugh. And so are you.
  70. Tony Burson from Canada writes: Well then I suggest that the pipeline will not be built. It is my understanding that for the new Conservatives in Ottawa, a tenet of their rule is to take government out of business. This will be an excellent time to show publicly, that they believe in what they say. Corporate blackmail should never be tolerated.
  71. Frank Spelde from Canada writes: To: W F from Canada,

    Alittle bit of civility would go a long way don't you think.

    Our moderator is out for (to) lunch, obviously
  72. Howard Beale from Canada writes: No need to shout WF. You say that you build "highways, electricity generating capacity, schools, bridges " in anticipation of increases in demand. The facts once again don't bear that out. If they did you'd have excess electrical capacity in Ontario and would have shut your coal genrators down years ago. Also your schools, hospitals and roads wouldn't be overcrowded. And you are right about taxpayers subsidizing auto companies. There should be a huge tax placed on all vehicles manufactured in Ontario to cover the environmental costs, health costs and road costs. In an independent Alberta we'll be buying our vehicles from Germany and Japan.
  73. Ray S from Canada writes: For all the whackjobs who think Nationalizing our energy reserves so we can ALL "share" in the billions please give your head a shake. How many Venezuelans, or Cubans, are "sharing" in the wealth. The only people "sharing" are Castro and Chavez's families who are systematically taking the money and putting it in foreign bank accounts. Socialism does not work.

    Would you like to cut off your nose to spite your face? "Hey everybody, lets nationalize the gas and oil so we can all get really cheap gas!!!" "That make sense, but Fidel, what do we do when we don't have any food or jobs?????" "Don't worry, Comrade Justin Trudeau and Comrade Dion will save us"

    Nice argument. I am not for any subsidy at all, but the nationalizing anything in this country is ridiculous and does not work.
  74. Barry Turner from Ottawa, Canada writes: Shelve it, move on. It is not something Canada needs. The US needs it. let them pay.
  75. Rick Czarnota from Calgary, writes: I don't support a subsidy for this project, however most posters here have no clue what they are talking about.

    All most of you can come up with is "they posted record profits of $35 billion last year". Do any of you realize how much they spent to make that profit? Their rate of return was 27%. A very healthy profit but hardly obscene. If any of you feel it is unfair they made $35 billion in profit last year pony up the $100 billion and start doing what they do. Oh what's wrong...you don't want to risk investing $100 billion of your own money.

    Without the subsidy this project will go ahead at a later date or the alternative proposed route will be built. Of course by that time our heating bills will have doubled.
  76. Rain SCM from Canada writes: If they want taxpayers' subsidies then we get a portion of the profits of the oil export once the pipeline is completed. The same percentage that the Canadian taxpayers invested in the final cost of the pipeline, so if we paid 25% of the construction, our income from the export of oil would be 25% for as long as the pipeline is used. That would seem like a fair business agreement and a good long term return on our investment. How likely is Exxon going to accept that?
  77. Rick Czarnota from Calgary, writes: Jeff C from Canada writes: As of yesterday Western CDN rig utilization is at 17% (Nickles) but that is misleading as it's still breakup for a lot of the province. Even so I don't believe I saw the rig utilization number climb much above 70% at all during Q1, which is typically the busiest time of the year. It'll be interesting to see how many companies fail to increase production this year.

    Jeff most of the oil companies will see their Canadian production numbers decrease this year. Excessive costs have started a slowdown...drilling is expected to be down by about 25% in 2007.
  78. W F from Canada writes: Howard: My apologies for yelling and yes, I can do a lot better in keeping this discussion civil. I come from a family who has deep roots in Canada and I was brought up believing in the future of this country. It is very disconcerting to me to constantly hear about people who want to tear it down. Quebec included.
  79. W F from Canada writes: Howard: My apologies for yelling and yes, I can do a lot better in keeping this discussion civil. I come from a family who has deep roots in Canada and I was brought up believing in the future of this country. It is very disconcerting to me to constantly hear about people who want to tear it down. Quebec included.
  80. W F from Canada writes: Howard: My apologies for yelling and yes, I can do a lot better in keeping this discussion civil. I come from a family who has deep roots in Canada and I was brought up believing in the future of this country. It is very disconcerting to me to constantly hear about people who want to tear it down. Quebec included.
  81. b mac from Canada writes: This NG pipeline will have to be built if the price of natural gas is to remain below $10 a unit. It's high time the USA & Canadian governments got involved and provide the incentives needed to build this pipeline.
  82. Rick Czarnota from Calgary, writes: Elmo Harris from Niagara, Canada writes: Nationalize it. In fact nationalize the entire oil industry.

    Worst idea ever. Canada has a lot of oil and gas reserves. All that means is there is potential.

    The projects to bring this resource to market costs billions. 1 facility alone takes an investment of $5-10 billion. Not a chance in h$ll a nationalized company develops that resource properly. It would be rife with political interference and in all likelyhood the Liberals would just start funnelling off oil profits to their friends in brown paper bags. We would have drastic shortfalls in infrastructure.

    As an engineer in Canada's oil and gas industry I would leave the country before working in the mess that is a nationalized industry.
  83. Howard Beale from Canada writes: WF, apology accepted. I don't agree with your position but I respect your passion.
  84. W F from Canada writes: You know, this is such a weird country. We never really have developed a very strong sense of what it means to be a Canadian other than saying, well, we're not American.

    The current developments in the oil sands are being supplied with pipe from Saskatchewan and Ontario, workers from the East Coast, and capital from the Bank of Canada. To me that makes the development of that resource a Canadian operation.

    There is no way this country will hold together if one small segment of the population drives the new Canadian petro dollar out of sight along with interest rates.

    Unless we adopt a national strategy for developing and utilizing the wealth created by such a huge resource, then Canada will cease to be, in any real sense.
  85. Dr Demento from Canada writes: Troll CPT America from United States writes "the US supplies 90 of its natural gas from domestic sources".

    Then I guess the US Dept of Energy publishes incorrect data.

    According to the USDOE, in 2006 the USA consumed a total of 21,883,000,000 cubic feet of NG of which it imported 4,187,000,000 cubic feet, primarily from Canada, which works out to over 19%.

    2006 US NG consumption: http://tinyurl.com/2pcscj
    2006 US NG imports: http://tinyurl.com/36e236
  86. sean wood from vancouver, Canada writes: Obviously most people are against tax subsidys for Exxon. The Government would love to see the McKenzie pipeline built but all they can see is a ballot box and they would not want to give the opposition a club to whack them with. Like it or not Exxon is in the business of making a profit, so they will probably shelve this one. Unlike Governments, Exxon plans 30-40 years ahead and will have no problem waiting out the natives, environmentalists, Gov't. and most of the posters here, who will probably be pushing up daisies by that time. And while everyone is in the mood to slash subsidies, lets slash all the handouts to Bombardier and the three dying auto makers in Ontario or lets just nationalize the car industry along with the oil as others would suggest. When I think of Government building something I just have to look at the fast ferries permanently tied to the dock in N. Van. to have reservations on that idea.
  87. Stubborn Old Goat from South of, Canada writes: As an oil patch expat who is close to retirement (& pissed at the exorbitant CEO retirement packages)...I question whether Exxon / Imperial Oil actually 'needs' a subsidy to get this project going....but then again, this is probably how they are able to post such incredible paper profits. Please keep in mind that these subsidies will be in the form of royalty and tax relief (i.e. a loss of gov't income) versus an outright cash handout. It's all the same in my books. This is something every Canadian politician should be well versed on....so go ahead and question the hell out of your local MP. There's no way an oil & natural gas rich country like Canada should continue to tax the crap out the average Joe Canadian at the pumps or with your heating bill. These are the best of times for the natural resource sector of Canada (oil, gas, mining) yet there is not any significant tax relief to the average Canadian. I question whether the politicians in Ottawa have the business acumen to decipher Exxon's analysis and feasibility studies. Spare me the oil macroeconomic lessons but every time Ottawa throws a Royal Commission at the situation, the results (which should be simple) are usually lost with some oil company's smoke and mirrors show. I agree with Barry Turner's comment of "The US needs it...let them pay". Finally, remember who owns the tap (i.e. you the taxpayer) versus who controls it (i.e. the puppet government of the day)...don't squander it away.
  88. Jeff C from Canada writes: Rick Czarnota - I agree with your comments and completely understand what you're saying. I work with drilling contractors quite regularly and development teams so understand their struggle.

    W F just to be a nitpicker it's $15/mcf or thousand cubic feet (don't want anyone to be wondering why they're paying so much for heating bills). And 1 mcf = 1.02 million BTU = 1.08 GJ.
  89. M Poland from Canada writes: No subsidies should be proffered.
  90. J M from Calgaristan, Canada writes: b mac. I would have to disagree that we need to keep prices down to a certain level. The higher the price, the higher the tax and royalty revenue and the more money governments have to spend.
  91. Rob Backhouse from Canada writes: Uh excuse me?? Nothing is going to be built in the way of a pipeline down the Mackenzie until the federal government addresses the issues outstanding with The Deh Cho First Nations who have a legitimate claim for self governance in an area that is roughly 40% of the land over which such a pipeline would pass. Period. First things first.
    • Posted 31/05/07 at 1:09 PM EST | Aler