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CALGARY - Public sector unions are bracing to fight impending provincial cutbacks driven by a multi-billion dollar cash crunch.

And a prominent economist said Premier Alison Redford's TV address to Albertans Thursday fails to come to grips with a looming budget shortfall larger than the province is letting on.

Even before Redford's speech, the Alberta Federation of Labour was readying a public relations offensive to offer alternatives to slashing spending on crucial programs, said president Gil McGowan.

"The public sector unions have been meeting the past couple of weeks to discuss the implications of the budget and, like a lot of Albertans, we're prepared for the worst," McGowan said Friday.

Alberta's fiscal chickens are coming home to roost after years of tax-slashing for wealthier Albertans and a resource revenue giveaway to a wildly profitable energy industry, he said.

"Our provincial GDP is literally 75% higher than the rest of the country, yet we can no longer afford even to have run-of-the-mill services," said McGowan. "I call it the great Alberta disconnect."

After meeting with Finance Minister Doug Horner last Tuesday, McGowan said it's clear areas like education and health care won't be spared drastic action in the budget expected in March.

"Everything we've heard is suggesting the budget won't be as bad as what we saw in the (Ralph) Klein years, but worse than anything we've seen since," he said.

University of Calgary economist Dr. Jack Mintz said Redford's TV address muddied the fiscal waters, and unmentioned obligations like financing requirements could see a shortfall of $8-$10 billion.

"This government has considerable credibility problems as far as their budget plan," he said.

Even with budget cuts averaging 5% over all departments - or a $2-billion slim-down - an ocean of red ink will remain because the discount on Alberta bitumen will also persist for years, added Mintz.

"If they don't make major cuts this years, the sustainability fund will be depleted and they'll be borrowing because they don't want to take it from the heritage fund," he said.

Educators watched Redford with considerable interest, hoping the province's commitment made to them last year in a three-year funding pact will hold in March, said Calgary public school board vice-chairman Lynn Ferguson.

"We are certainly aware of the economic challenges facing the province," said Ferguson.

"I would hope since education is a consistent priority for Albertans, that value would be reflected even in a difficult budget year."

SunNews, Friday, Jan. 25, 2013
Byline: Bill Kaufman, QMI Agency

CALGARY - Public sector unions are bracing to fight impending provincial cutbacks driven by a multi-billion dollar cash crunch.

And a prominent economist said Premier Alison Redford's TV address to Albertans Thursday fails to come to grips with a looming budget shortfall larger than the province is letting on.

Even before Redford's speech, the Alberta Federation of Labour was readying a public relations offensive to offer alternatives to slashing spending on crucial programs, said president Gil McGowan.

"The public sector unions have been meeting the past couple of weeks to discuss the implications of the budget and, like a lot of Albertans, we're prepared for the worst," McGowan said Friday.

Alberta's fiscal chickens are coming home to roost after years of tax-slashing for wealthier Albertans and a resource revenue giveaway to a wildly profitable energy industry, he said.

"Our provincial GDP is literally 75% higher than the rest of the country, yet we can no longer afford even to have run-of-the-mill services," said McGowan. "I call it the great Alberta disconnect."

After meeting with Finance Minister Doug Horner last Tuesday, McGowan said it's clear areas like education and health care won't be spared drastic action in the budget expected in March.

"Everything we've heard is suggesting the budget won't be as bad as what we saw in the (Ralph) Klein years, but worse than anything we've seen since," he said.

University of Calgary economist Dr. Jack Mintz said Redford's TV address muddied the fiscal waters, and unmentioned obligations like financing requirements could see a shortfall of $8-$10 billion.

"This government has considerable credibility problems as far as their budget plan," he said.

Even with budget cuts averaging 5% over all departments - or a $2-billion slim-down - an ocean of red ink will remain because the discount on Alberta bitumen will also persist for years, added Mintz.

"If they don't make major cuts this years, the sustainability fund will be depleted and they'll be borrowing because they don't want to take it from the heritage fund," he said.

Educators watched Redford with considerable interest, hoping the province's commitment made to them last year in a three-year funding pact will hold in March, said Calgary public school board vice-chairman Lynn Ferguson.

"We are certainly aware of the economic challenges facing the province," said Ferguson.

"I would hope since education is a consistent priority for Albertans, that value would be reflected even in a difficult budget year."

Sun News, Friday, Jan. 25, 2013
Byline: Bill Kaufmann

ST. ALBERT, Alta. – A firm linked to a Chinese state-owned company was ordered Thursday to pay $1.5 million in penalties in the deaths of two foreign workers at an Alberta oilsands project.

SSEC Canada Ltd. pleaded guilty last September to three workplace safety charges in the deaths of the Chinese temporary foreign workers.

The men died in 2007 at Canadian Natural Resources' (TSX:CNQ) Horizon project near Fort McMurray when an oil storage tank they were building collapsed.

Alberta Justice spokeswoman Michelle Davio said the penalty is the largest ever imposed by a judge in the province on workplace safety charges.

"The penalty is made up of a $200,000 fine and $1.3 million payment to the Alberta Law Foundation that will be used to support outreach and education programs for temporary foreign workers and for workers who are new to Alberta," she said.

SSEC Canada is the Canadian subsidiary of Sinopec Shanghai Engineering Company Ltd.

The case involved a total of 53 charges involving three different companies, including Calgary-based Canadian Natural Resources and Sinopec.

Charges against Sinopec were withdrawn. All 29 charges against CNRL were stayed, meaning the government can reactivate them at any time over one year.

According to an agreed statement of facts filed in court, problems at the Horizon project began in 2006 when 132 Mandarin-speaking Chinese workers recruited by SSEC Canada were late in getting to the worksite.

Work on the large metal storage tanks fell behind schedule.

SSEC Canada proposed revised construction in which the tanks' walls and roofs would be built at the same time.

CNRL agreed to the revisions, but said the work should be done under its own construction management team which would supervise quality control and safety.

SSEC Canada began work using the new method before CNRL's team arrived on site, even though the procedures hadn't been certified by a professional engineer.

On April 24, 2007, about three weeks after SSEC Canada began using the new approach, a roof collapsed when the wire cables holding it up snapped after being kinked and torqued in high winds.

The two workers were crushed by falling steel. Five other Chinese workers were injured.

Gil McGowan, president of the Alberta Federation of Labour, called the penalty "less than a drop in the bucket."

"This was an opportunity for the Alberta government to send a clear message to companies like Sinopec that if they want to do business in Canada, then they have to observe and follow our rules when it comes to workplace rights and health and safety," McGowan said.

The case was delayed for years by uncertainty over which company was responsible and whether they would be responsible as an employer, contractor or prime contractor.

Sinopec Shanghai Engineering Co. went to the Alberta Court of Appeal in a losing effort to argue that it hadn't been properly served with legal documents, since it had no presence in Canada.

The Supreme Court of Canada refused to hear a challenge.

ST. ALBERT - A Canadian subsidiary of Chinese state-owned oil giant Sinopec has been ordered to pay $1.5 million in penalties for failing to ensure the safety of two Chinese workers killed in a 2007 tank collapse at a work site in northern Alberta.

Sinopec Shanghai Engineering Company Canada Ltd. pleaded guilty to three charges under the Occupational Health and Safety Act in September. It was given the maximum $500,000 fine for each charge in a St. Albert courtroom Thursday.

The total penalty is the biggest workplace safety fine in Alberta's history and one of the biggest in Canada.

Two charges were related to the deaths of the two temporary foreign workers and the third was connected to two workers who were seriously injured.

As part of a creative sentencing agreement between Crown prosecutors and SSEC lawyers, $1.3 million of the fine will be used to educate temporary foreign workers on their legal rights.

Workers Ge Genbao, 28, and Lui Hongliang, 33, were killed on April 24, 2007 when the roof structure of a multi-storey metal holding tank collapsed at a work site 70 kilometres north of Fort McMurray. The site was part of the Canadian Natural Resources Ltd. $10.8-billion Horizon project.

Court has heard that SSEC Canada did not get the tank construction plan certified by an engineer. The wires securing the tank were not strong enough to hold up in even moderate winds, according to an agreed statement of facts.

"The accident almost had a sense of inevitability to it," said provincial court Judge John Maher. The judge said he was struck by the extent of the failure to comply by safety standards.

"This is a particularly egregious case," Maher said. "The size of the penalty is directionally proportional to the consequences of the act. It's hard to imagine in this case why it would not be a maximum penalty."

Crown prosecutor Marshall Hopkins said he was confident such a massive penalty would be an effective deterrent for other companies.

Kevin Flaherty, executive director of the Alberta Workers' Health Centre, said the money enables his group to "do some good work with a bad situation."

The $1.3 million will be used in a three-year program to train 45 people to educate temporary foreign workers about their rights and Alberta's workplace health laws. Flaherty said such workers are particularly vulnerable because they fear loss of their work visas if they speak up.

"They can't just walk across the street and get another job," Flaherty said. "We need to be a much better job of treating these workers as people when they arrive."

Flaherty expects the education program will reach 5,500 workers and spread further by word of mouth.

The Alberta Federation of Labour was not impressed by the court decision and called the fine "a slap on the wrist" that will not be a deterrent.

"One-and-a half-million dollars doesn't even amount to a rounding error in the annual budget of a monstrous global corporation like Sinopec," AFL president Gil McGowan said in a prepared statement. "This fine does nothing to dissuade them from playing fast and loose with the safety of their workforce."

SSEC was the direct employer of the workers and contracted by CNRL. SSEC recruited 132 Mandarin-speaking Chinese workers for the tank project.

The original plan was to build the tank walls first, then use them to support the roof while it was under construction. That plan changed when the project fell behind schedule.

CNRL approved the construction change, but SSEC did not prepare any formal written procedures that should have been certified by a professional engineer.

The construction of 13 tanks began on April 2, 2007. The collapse occurred three weeks later.

Hongliang, an electrician, was struck by a steel girder while standing on the partially completed wall. He died at the scene. His son, in China, was only a year old at the time. Genbao, a scaffolder, was on the floor of the tank and was crushed by falling steel. He died on the way to hospital. He is survived by four older sisters in China.

On Thursday afternoon, SSEC Canada issued a statement that expressed regret for the deaths and said it accepted Maher's ruling.

Sinopec had tried to appeal to the Supreme Court of Canada on the grounds that it had no official presence in Canada and was not under the jurisdiction of a provincial justice system. The nation's top court refused to hear that appeal.

The Edmonton Journal, Thursday, Jan. 24, 2013
Byline: Ryan Cormier

ST. ALBERT, Alta. - A firm linked to a Chinese state-owned company was ordered Thursday to pay $1.5 million in penalties in the deaths of two foreign workers at an Alberta oilsands project.

SSEC Canada Ltd. pleaded guilty last September to three workplace safety charges in the deaths of the Chinese temporary foreign workers.

The men died in 2007 at Canadian Natural Resources' (TSX:CNQ) Horizon project near Fort McMurray when an oil storage tank they were building collapsed.

Alberta Justice spokeswoman Michelle Davio said the penalty is the largest ever imposed by a judge in the province on workplace safety charges.

"The penalty is made up of a $200,000 fine and $1.3 million payment to the Alberta Law Foundation that will be used to support outreach and education programs for temporary foreign workers and for workers who are new to Alberta," she said.

SSEC Canada is the Canadian subsidiary of Sinopec Shanghai Engineering Company Ltd.

The case involved a total of 53 charges involving three different companies, including Calgary-based Canadian Natural Resources and Sinopec.

Charges against Sinopec were withdrawn. All 29 charges against CNRL were stayed, meaning the government can reactivate them at any time over one year.

According to an agreed statement of facts filed in court, problems at the Horizon project began in 2006 when 132 Mandarin-speaking Chinese workers recruited by SSEC Canada were late in getting to the worksite.

Work on the large metal storage tanks fell behind schedule.

SSEC Canada proposed revised construction in which the tanks' walls and roofs would be built at the same time.

CNRL agreed to the revisions, but said the work should be done under its own construction management team which would supervise quality control and safety.

SSEC Canada began work using the new method before CNRL's team arrived on site, even though the procedures hadn't been certified by a professional engineer.

On April 24, 2007, about three weeks after SSEC Canada began using the new approach, a roof collapsed when the wire cables holding it up snapped after being kinked and torqued in high winds.

The two workers were crushed by falling steel. Five other Chinese workers were injured.

Gil McGowan, president of the Alberta Federation of Labour, called the penalty "less than a drop in the bucket."

"This was an opportunity for the Alberta government to send a clear message to companies like Sinopec that if they want to do business in Canada, then they have to observe and follow our rules when it comes to workplace rights and health and safety," McGowan said.

The case was delayed for years by uncertainty over which company was responsible and whether they would be responsible as an employer, contractor or prime contractor.

Sinopec Shanghai Engineering Co. went to the Alberta Court of Appeal in a losing effort to argue that it hadn't been properly served with legal documents, since it had no presence in Canada.

The Supreme Court of Canada refused to hear a challenge.

The Canadian Press, Thursday, Jan. 24, 2013

VANCOUVER - The nationwide Idle No More movement merged with ongoing protests against oil pipeline projects proposed for British Columbia, to bring more than a thousand protesters out to greet the federal review panel conducting hearings in Vancouver.

The community hearings by the federal panel on the Northern Gateway project are scheduled to resume this morning, after a noisy start on Monday night.

First Nations from as far as the Haisla Nation on the North Coast, near the would-be tanker port of Kitimat, B.C., and from the Interior took part in a march to the downtown hotel where the hearings are being held.

"The Harper government has one of the most aggressive, high-carbon strategies in the world," Eddie Gardner, of the Sto:lo Nation, told the crowd as they mobilized ahead of the march.

He blasted the federal Conservatives for changes they've made to environmental laws that will affect oversight of the Northern Gateway proposed by Enbridge (TSX:ENB) and other projects.

"He implemented that legislation, it has become law, and he did it with crass and ruthless disregard for the environment," Gardner told the protesters.

"Stephen Harper is hell bent to expand the tar sands.

"Canada is coming alive to Harper's real agenda ... he is one of the biggest enemies of the environment."

Protesters were met by Vancouver police, who kept them from entering the building. They remained outside the Sheraton Wall Centre for a short time, drumming and chanting "No Pipelines" before moving on.

Kiera Corrigan, 25, said she is originally from Bella Coola, a small community on the central coast.

"I think it's really important that we don't put in this pipeline. My home town is right south of Kitimat, so it hits really close to home if we ever have an oil spill, which there will be," she said.

Protesters also took aim at a proposed expansion of the existing TransMountain pipeline operated by Kinder Morgan.

The pipeline moves oil from the oil sands to port in Vancouver, and a proposed $4.3-billion expansion would more than double the capacity of the 1,100-kilometre line.

The joint review panel, which is weighing the Northern Gateway, has scheduled eight days of hearings in Vancouver.

They're hearing public comment on the controversial plan to deliver oil from the Alberta oil sands to a tanker port on the North Coast of B.C.

Community hearings were held previously in Victoria, and a one-day hearing is scheduled in Kelowna later this month.

The panel limited access to the hearings room to participants.

"Given the large urban nature of Victoria and Vancouver and previous protests held in both locations regarding the proposed Enbridge Northern Gateway project (the project), the panel has decided that it will limit access to the hearing room," stated the directive.

Members of the public are able to listen to submissions in another location. The hearings are also being streamed live on the panel website.

Access to the hearings remained closed off after the protesters dispersed.

Inside, the three-person panel heard from a range of interested members of the public, from First Nations and environmentalists, to a scientist who lamented telling her children and grandchildren about what she did about climate change.

"What will you tell your grandchildren?" the woman asked the panel.

Eric Doherty, a former Canadian Coast Guard marine engineer turned environmental planner, chided the panel for failing to consider emissions from the Alberta oil sands in its assessment.

"It's no longer controversial that global warming is killing people," he said. "It's no longer controversial that global warming is THE threat to our society."

The pipeline project has been incredibly divisive in British Columbia and as the end of the long regulatory process nears, both sides are trying their utmost to rally support.

The United Association of Plumbers and Pipefitters decided to weigh in Monday, with a statement from Canadian director John Telford stating that the project "will provide jobs to members in Eastern Canada as well as the West."

"The regulation of the oil and gas industry as a whole ensures that the impact to the environment and native peoples will be minimal and the benefits should far exceed any possible drawbacks," the union said in the statement.

And Enbridge has been on a charm offensive in the province for months, with full-page newspaper ads and radio ads extolling the benefits of the project and assuring B.C. residents they will employ world-leading safety measures.

The panel held final hearings earlier in Edmonton, Prince George and Prince Rupert, where company experts and interveners answered questions under oath.

Those hearings will resume in Prince Rupert next month, and the panel must submit its recommendations to the Environment Minister by the end of this year.

Huffpost BC, Tuesday, Jan. 15, 2013
Byline: Dene Moore, The Canadian Press

CALGARY — The boom in U.S. shale oil and natural gas production threatens to cut off a key supply of skilled temporary foreign workers for Alberta companies, as more tradespeople opt to work on large infrastructure projects in the United States despite the lure of dramatically higher wages in Western Canada.

"There's going to be a battle between what goes up north versus what comes down south," said Mike Bergen, executive vice-president of Sugar Land, Tex.-based market research firm Industrial Info Resources.

Advances in drilling technology have unlocked new supplies of crude oil and natural gas from hard-to-reach reservoirs across much of the U.S. By 2025, shale gas alone could add more than one million workers to the U.S. manufacturing industry, according to a fall report published by PricewaterhouseCoopers, reducing costs for raw materials and energy by as much as US$11.6-billion annually.

"You get a big [liquefied natural gas] project that takes place and then you get several of these big refinery projects and then here comes a new ethylene plant," Mr. Bergen said. "That's going to draw a lot of labour."

Alberta's perennially tight labour market means average wages for electricians, boilermakers, plumbers and pipefitters, carpenters and structural steelworkers are anywhere from 70% to 136% higher than median U.S. wages, depending on the trade, according to a five-year outlook published Monday by Industrial Info.

The high wages contribute to an operating environment already seen as one of the most expensive regions in the world from which to extract oil, at a time Alberta's heavy blend of crude, Western Canada Select, is subject to steep price discounts in the U.S.

Larry Matychuk, business manager for the Edmonton-based Local 488 branch of the United Association of Plumbers and Pipefitters, said the base wage rate for members is $43.77 per hour plus benefits.

He said the union regularly turns to its U.S. affiliates for additional tradespeople during "shut down season," a four-month annual stretch when refineries and bitumen upgrading plants shut down for maintenance, exacerbating worker shortages.

"We've had 200 to 300 of them up here at a time," he said of the U.S. tradespeople. "We expect that that's going to increase. We offer jobs to Canadians first. However, there is work picking up across Canada now. There's work in Saskatchewan; there's work in Newfoundland. Work is starting to pick up in Ontario and B.C. We don't have access to as many of the Canadians as we used to have."

ExxonMobil Corp. said last week it was moving ahead with its US$14-billion Hebron development offshore Newfoundland and Labrador.

The project, designed to recover more than 700 million barrels of oil from the Jeanne d'Arc basin roughly 350 kilometres southeast of St. John's, will employ up to 3,500 people during construction, the Irving, Tex.-based energy giant said.

That could spell trouble for Alberta oil producers. The latest figures compiled by the Petroleum Human Resources Council of Canada suggest at least 9,500 jobs could go unfilled in the country's oil and gas industry by 2015.

Oil sands production is poised to increase 44% by then from today's levels, to 2.48 million barrels per day, according to the Canadian Association of Petroleum Producers.

An influx of U.S. tradespeople could help with facility expansions needed to boost production, Mr. Matychuk said, "if the Americans are available at the time when we need them."

Gil McGowan, president of the Alberta Federation of Labour, expressed concern about Americans filling Canadian jobs in the oil sands.

"We're not talking about sharing a cup of sugar with them," he said in an interview. "We're talking about jobs that pay in excess of $100,000 a year. We should not be allowing these jobs to go to people outside of Canada without first doing everything we can to provide opportunities to Canadians."

The point may be moot, as workers in the U.S. help rejig facilities to meet new sulphur specifications in gasoline plus accommodate soaring production of U.S. shale oil fields.

Refiners are "engaging in some pretty big projects" on the Texas Gulf Coast, Mr. Bergen at Industrial Info noted. "We're anticipating some pretty decent expansion work on distillate and crude conversions for taking the shale crude," he said.

Financial Post, Monday, Jan. 7, 2013
Byline: Jeff Lewis

The Alberta Federation of Labour (AFL) has added its voice to those worried about the ramifications of Canada's role in China's energy plans.

Following Prime Minister Stephen Harper's approval of state-run China National Offshore Oil Corporation's (CNOOC) takeover of Nexen, the AFL released China's Gas Tank, a report outlining how it believes China is moving to control all stages of its Alberta oil operations.

The report says three state-owned Chinese oil companies, CNOOC, PetroChina and Sinopec, have major investments in the oilsands. It points out these companies' U.S. tax filings admit the three companies are affiliated and sell oil to one another. Chinese state and private investment in the oilsands is unclear, but significant. For example, Chinese-owned Sunshine Oilsands "holds seven per cent of the total oilsands leases in the Athabasca region, or 1.15 million acres of oilsands leases," according to the report.

The report also points to the proposed Northern Gateway pipeline that would run from Alberta to the British Columbia coastline and is ostensibly intended to ease shipment of oil and natural gas to Asian markets. Sinopec is one of the 11 companies investing in that pipeline. Four remain unidentified.

Finally, the AFL asserts the Canadian federal government did a poor job negotiating the Foreign Investment Protection Agreement (FIPA) with China, and should renegotiate before it is officially passed.

"From our perspective the big problem is that the Chinese have interests that run counter to the interests of the Canadian public," says AFL president Gil McGowan. "It's clear that the Chinese are assembling the pieces necessary for what we would describe as a low price strategy for Canadian bitumen.

"What I've been told by people in government and in industry is that we can't be picky about what we send to those markets... we basically have to give them whatever they want.... Frankly I don't buy that argument because they need us more than we need them. But it's not challenged," he says.

Gordon Holden, director of the University of Alberta's China Institute, echoes McGowan's observations. He says China is not happy buying oil from Iran, Saudi Arabia and Sudan, and is looking for more stable sources.

"Alberta is rock solid in terms of the manner of doing business — relatively transparent, but also just without the complications," says Holden.

McGowan says the AFL, which represents 27 labour unions in Alberta, is not alone in its alarm over Canada's hasty business dealings with China. Even internationally, the public is asking Canada to slow down. U.K.-based Avaaz.org is an online campaign network with 17 million members that develops petitions and protest campaigns on social and environmental issues it believes are important to its members.

Avaaz is currently campaigning against the present form of the Canada-China FIPA. Nearly 38,000 people have pledged support to the campaign.

"As the owners of the resource, I think Albertans deserve to know what's going on and what's being lost, but they don't," says McGowan.

Fast Forward Weekly, Thursday, Dec. 27, 2012
Byline: Susy Thompson for News

CALGARY – Nexen Inc. began 2012 as a troubled oil and gas company struggling to meet its production targets and appease its shareholders.

It ends the year on the brink of being sold to China's CNOOC Ltd. for $15.1 billion – the Asian superpower's largest-ever overseas foray.

The transaction reverberated beyond Nexen's sleek glass office tower in downtown Calgary, past the pocketbooks of its investors, all the way to Ottawa.

It forced Prime Minister Stephen Harper to weigh whether foreign state-owned enterprises ought to own Canadian resource companies and, if so, which players are welcome and what extent of control is acceptable.

He ultimately decided that SOEs deserve more scrutiny than private ones, and that the oilsands – the third-biggest reserves on the plant – warrant greater protection than other resources.

"Harper was caught a little flat-footed in the sense that I don't think he fully understood both the political reaction to the CNOOC bid and that there might be subsequent bids from state-owned companies coming into the Canadian oilsands," said Queen's University business professor David Detomasi.

Nexen started 2012 in a rough spot. Marvin Romanow made an abrupt exit as CEO in January. The company's flagship Long Lake oilsands project had yet to come close to producing the volume of crude it was designed to, outages at a North Sea offshore platform were causing headaches and Yemen had just booted it out of a major oil project.

Investors' patience was wearing thin.

It would later be revealed that negotiations to sell Nexen to CNOOC began in earnest once Romanow was out the door.

CNOOC was rebuffed twice before Nexen (TSX:NXY), under the leadership of interim CEO Kevin Reinhart, accepted its offer.

But winning over Nexen's board of directors and shareholders would be the least of CNOOC's challenges.

Gordon Houlden, the head of the University of Alberta's China Institute, said the subject would not have been so prickly if it had been France or Norway bidding for Nexen, and not China.

"Certain state enterprises, certain countries, come with more baggage and China is that because of its size, because of its internal complexities, its history, its profile," said Houlden, a former diplomat with postings in China.

On Dec. 7, the CNOOC-Nexen deal was given Ottawa's blessing.

So, too, was the $6-billion acquisition of Progress Energy Resources Corp. (TSX:PRQ) by Malaysia's state oil and gas company. That deal would have been relatively uncontroversial under ordinary circumstances, but it had the misfortune of being announced right before CNOOC and Nexen dropped their bombshell this summer.

The approvals came with a key caveat for future deals – that state control in the oilsands will only be allowed in "exceptional" cases from now on.

The Harper government's handling of the Nexen-CNOOC file was "reactive in nature," said Wenran Jiang, a senior fellow at the Asia Pacific Foundation of Canada.

It's a stance Jiang found curious, given that the Conservatives had for years been actively courting Chinese investment – not the other way around.

CNOOC, having been burned by its unsuccessful bid for U.S. energy company Unocal seven years earlier, was getting the signal that perhaps the conditions were right to try again.

Instead, Ottawa found itself having to navigate around negative public sentiment toward Chinese investment that Jiang sees as largely "misinformed."

"Somehow we're the boy scout and the Chinese are just coming to invite themselves for dinner and then they're ready to roll us over," he said.

"It's not the case at all. We invited them for dinner. We invited them to come and they bought a big dinner ticket and that's why they thought they were coming – for a good party."

By contrast, Jiang praised Liberal leadership candidate Justin Trudeau for arguing in a newspaper column that foreign investment is good for Canada and that the Nexen takeover must go ahead.

It's an approach Jiang would have liked to have seen from Harper.

"You need to make a passionate, positive and proactive case for China needing energy. There's nothing sinister about it."

China is no stranger to Canada's oilpatch. For the past two decades its companies have been gradually building up their presence through joint-venture deals and small-ish acquisitions.

Jiang said it's hard to argue that their track record has been anything but good, but fears that China is up to something nefarious have nonetheless dominated the conversation.

Still, there are concerns that CNOOC's chain of command does ultimately end with communist government in Beijing.

While an ordinary corporation driven by commercial considerations alone would want to sell its oil for the highest price possible, the Alberta Federation of Labour says CNOOC and other Chinese-state-owned outfits are more interested in getting a lower price, so that the Chinese economy benefits.

AFL leader Gil McGowan brought that concern up during a question-and-answer session at a conference on Asian oilpatch investment, held in Calgary on the Monday after the Nexen-CNOOC verdict.

He bristled at the suggestion that anyone who raises those alarms just doesn't understand the issue.

"People who raise these concerns are not immature, we're not jingoistic, we're not xenophobic," he said.

"We're raising legitimate concerns about business ventures which are not business ventures in the way that we understand them."

One of the conference's speakers, the University of British Columbia's Paul Evans, said a more nuanced discussion needs to take place on the matter of what "state-owned" means.

"There's a view that to do business with China means that you are dealing with the Chinese state, and that when you're dealing with the Chinese state, you're dealing with the Chinese Communist Party," he said.

"When you're dealing with the Chinese communist party, you're dealing with a regime and an approach that is repressive on human rights, on espionage, a whole frame of things."

Evans, with UBC's Institute of Asian Research and Liu Institute for Global Issues, asked: "They're state owned but are they state controlled? What does control mean? What are the actual mechanisms for intersections with the Chinese Communist Party?"

There's been minimal hand-wringing within Alberta's oilpatch over what the government's decision will mean for investment going forward.

Provincial Energy Minister Ken Hughes did warn that "there is the potential for less investment coming into oilsands in Alberta and the impact of that is it will simply increase the cost of capital."

But John Zahary, CEO of early-stage oilsands company Sunshine Oilsands Ltd. said that while it's good to have all options on the table, his company will be able to fund growth through equity, debt and joint-ventures.

"We don't need a takeover, and so we don't feel exposed with respect to this decision."

Hal Kvisle, CEO of Talisman Energy Inc. (TSX:TLM), said foreign dollars will continue to flow into Canada through joint-venture partnerships, which he sees as a less disruptive way to do business than building a company only to sell it all to the highest bidder.

And so what if the oilsands have been singled out? There's "all sorts of good stuff going on there" even if all-out takeovers are mostly off the table, Kvisle said.

It's the natural gas players that are hurting right now, and there's no reason to believe they'll stop attracting Asian partners to help build liquefied natural gas facilities, like the one Petronas will be pressing ahead with now that its deal with Progress has closed.

"I think the government has played this brilliantly, actually," said Kvisle. "I think the Harper government deserves full marks for what they've done here."

Global Edmonton, Wednesday, Dec. 12, 2012
Byline: Lauren Krugel, The Canadian Press

Argus Media

“Pursuing Premium Prices:  Canadian Crude and Evolving World Markets"

November 29, 2012