Energy Plan Question (4)

“For the first time,” reported David Cochrane today, calling in his Energy Plan bit for CBC Radio Noon from the Johnson GeoCentre, “ we do have a royalty regime for natural gas. I’m not going to get into the math of it, cause it’s R = 2XY sort of thing…”

At which point host Ramona Dearing helpfully chimes in, “the kind of stuff journalists just can’t do!”

Besides rithmetic, another thing journalists just can’t do, it would seem, is reading. (Or perhaps a 75 minute lock-in wasn’t long enough?)

Because Cochrane also reported (.ram audio link):

What they’ve settled on is a ten percent equity stake, which means any future oil and gas developments that are done in the waters off Newfoundland and Labrador, here onshore, the provincial government is going to insist on the right to buy in and own ten percent of the project, so that’s up from the 4.9 percent they got in Hebron, so this is more or less doubling it and going back to what they really wanted as their target when they went into the Hebron negotiations in the first place.

No, “they” have done no such thing.

What the Offshore Oil Election Platform Energy Plan actually says is:

We will assume an ownership interest in the development of our energy resources where it fits our strategic long-term objectives…

The Provincial Government will require a 10 per cent equity position in future offshore petroleum projects that require Development Plan approval, where it fits our strategic long-term objectives.

The condition so nice, they said it twice.

In other words, this solemn requirement is not a requirement at all. It is entirely conditional.

So, the question: what are the “strategic long-term objectives” under which 10 percent equity would be required, and which are the ones under which it wouldn’t?

Bonus points: why the equity requirement, “where it fits”, for offshore oil and gas development, and not, shall we say, onshore mines?