Gas shortaGe in nova scotia GettinG ‘pretty desperate’

CAA sees ‘700 per cent’ increase in fuel-related callsWhile the gas pumps are flowing in parts of Nova Scotia, some owners are still waiting for fuel delivery days into a provincial shortage.A late delivery of gasoline to the Imperial Oil terminal in Dartmouth has caused many filling stations across the province to run out of fuel.Trucks have been driving in and out of the distribution terminal since 8 a.m. on Monday, but at least one rural station is still dry.Kerry Muise runs DK Muise Motors, an independant Shell gas station in Yarmouth.She ran out of regular gas Saturday morning and says her last delivery was the Tuesday before.“Today is nine days with no delivery, so we’re pretty desperate,” she said.“It’s hard, I mean last week we sold all our gas at a loss because the price decreased and then this week we have no gas at all,” she said.Muise says her phone is ringing off the

hook with people looking for gasoline.“We’re the only full-service gas station in the area, so we pump people’s gas and we service a lot of people who are elderly, disabled and a lot of other places aren’t as accessible for them,” she said.Muise said another Shell station three kilometres away received a 20,000-litre delivery while her station sits empty.“The bigger stations all seem to have gotten gas and I’m not quite sure why the load wouldn’t be split. Even if we get 5,000 litres as opposed to our normal 15,000 to 20,000 litres, that would be a real help to some of our customers.”Muise said she’s being told she might get a delivery Wednesday or Thursday.Some stations in Halifax reported getting a delivery on Monday, but quickly running out.Bill Simpkins, with the Atlantic division of the Canadian Fuels Association in Halifax, urged against stockpiling gas.“I think the overall issue for people to keep in mind is that just like any business, just like stocking shelves in grocery stores, is it’s a just-in-time operation. You’re not going to fill your shelves at home with

butter for a year or cereal,” he said.“If everybody went up to top up their car at the same time you would have run outs. The system is just not designed for that.”He said the combination of a drop in price and the shortage is a “self-fulfilling issue.”“You will drain the tanks,” he said.While gas stations worry about their deliveries, the Canadian Automobile Association has been busy helping people who couldn’t even make it to the pump.CAA spokeswoman Claire Ryan says they’ve seen a 700 per cent increase in fuel-related calls from Aug. 28-Aug. 31, 2014 to this year.“Now mind you we’ve gotten 28 calls so far but at this time last year our fuel calls were only four, so a pretty big jump,” she said.Ryan said she hasn’t seen something like this before.“Especially where this was something that was really unexpected, we’re always reminding members that it is best to try and keep their fuel levels topped up just in case of any circumstance. Typically we think it’s weather related but this

is a good example of why it’s just always best to be prepared.The province’s RCMP say they’re monitoring the situation but so far their fleet is unaffected by the shortage.The city says its fleet is also fine since most buses and fire trucks run on diesel.Nova Scotia’s Business Minister Mark Furey says he “understands” frustration shared by Nova Scotians at being inconvenienced by ongoing shortages of gasoline that began on Saturday and continue in some parts of the province.But Furey says his government doesn’t plan to introduce regulations to prevent future runouts.“The province has no role in managing the supply of fuel, that’s the responsibility of industry,” he said.Muise disagrees.“The biggest mistake ever made was letting the refinery close because we’re so vulnerable now. Without those tanker deliveries into Halifax, look what happens. Our whole province can be shut down in two days,” she said.“So to me it’s a crucial thing that the government should definitely be involved in.”

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air canada sticks by enbridGe after tim

hortons bails

Doughnut chain dumped the pipeline company after an online petitionAs you fasten your seatbelt on an Air Canada flight, the seatback screen begins to play a commercial for Enbridge, the same type of 30-second spot that landed Tim Hortons in a public relations melee earlier this summer.How does Air Canada skate away from controversy, while Tim Hortons sparked outrage from both oil lovers and haters? The reasons are wrapped up in branding, expectations and head office decisions.When it comes to customer relations, expectations go a long way. Tim Hortons and Air Canada

contrast significantly in this regard.The in-restaurant entertainment system at Tim Hortons was still relatively new and customers were still becoming accustomed to what it was all about. Tims TV can run advertisements, promote Tim Hortons products or provide news as you wait in line for coffee or as you sit down with a honey cruller.That was one factor in the problems that arose for Tim Hortons. Customers didn’t know what to expect, according to marketing expert Jacqueline Drew, with Calgary-based Tenato Strategy Inc. “I don’t think they had an established roster of advertisers, so when they jumped in with Enbridge, it just seemed like, ‘What’s this?’” says Drew. “People were more used to seeing things promoting Tim Hortons

summer kids camps and suddenly you throw an Enbridge ad in there and it seems like, ‘Why is this promoting Enbridge’s values at a Tim Hortons?’”It didn’t help that the Enbridge commercials were not selling a particular product, but more promoting a positive image of the company and its role as an energy provider.Drew suggests that’s one reason why the advertisements rubbed some people the wrong way, leading to complaints against the coffee chain.Air Canada is in a very different position with its in-flight entertainment. Even occasional flyers are accustomed to having to sit through a series of commercials before being able to surf through TV shows and movies while soaring through the sky. It’s accepted that the advertisements aren’t related

to Air Canada, but simply a way for the airline to make money and cover the cost of the programs you can watch. Air Canada has established itself as an advertising medium, similar to billboards and transit buses, for example. Tims TV could have grown into a revenue source for Tim Hortons, similar to the extra cash generated by similar in-store systems south of the border such as the Walmart TV Network and the McDonald’s Channel.But the company suspended the ads and later reviewed the program once all the complaints started coming in from anti-pipeline advocates upset about Tim Hortons working with Enbridge. Enbridge is the company behind the proposed $7.9-billion Northern Gateway pipeline, which would ship oilsands

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bitumen from Alberta to the west coast. It’s a controversial project, one even the current Alberta government is not endorsing.“I thought Tim Hortons had made a very knee-jerk reaction,” says Debi Andrus, a marketing professor at the University of Calgary. “But they have to look at what could my audience perceive, what will I lose in terms of revenue, how can I be perceived to be a good corporate citizen — they have to weigh all of those issues.” Andrus says social media is making it more difficult for companies who want to always present a good image in the world. Not only do companies have complex relationships with suppliers and customers, but there are special interest groups to also work with.Air Canada hasn’t had to face any online petitions or fierce social media campaigns about its involvement with Enbridge, although there are some instances of people raising the issue with the airline.

banks expected to squeeze canadian

oil companies

Starting in earnest after Labour Day, oil and natural gas companies will begin the twice-yearly pilgrimage to their banks to discuss funding. It’s not going to be easy, with companies from Penn West Petroleum Ltd. to Athabasca Oil Co. under pressure to sell assets to keep the money flowing.With no relief from low oil prices, companies are cutting more staff, reducing dividends and even selling hedging positions on commodities and currencies to boost cash flow.

Banks will next likely force some producers to sell their best assets to avert bankruptcy, said Rafi Tahmazian, senior portfolio manager at Canoe Financial LP in Calgary.“The banks are going to tell these guys to sell their coveted assets,” said Tahmazian, who helps manage about $1 billion in energy funds. “That means the strong companies get to lick their chops.”The oil slump has already made victims out of many of Canada’s fossil fuel producers which have cut thousands of jobs, most of them in Calgary. Banks approached struggling producers in the spring and told them to do what they could to strengthen their balance sheets and find ways to raise funds, Tahmazian said.“This time, they won’t be so friendly,” he said.The Standard & Poor’s/TSX energy sub-index has lost about $85 billion in value this year, as the price of West Texas Intermediate crude touched its lowest point since 2009. Of the 63 members in the index, all but three have posted stock losses in the past 12 months, according to data compiled by Bloomberg.Companies have so far been reluctant to sell. There were 14 pending and completed oil and gas deals worth $418 million in Canada’s oil patch in the third quarter, on pace for the the lowest quarterly value since at least 2003, according to data compiled by Bloomberg.Penn West, which earlier this week cut its workforce by 400 jobs, is still looking to sell properties after earning $1.5 billion over

the past two years selling assets producing about 30,000 barrels of oil per day. The Calgary-based company is still in compliance with its financial covenants on its syndicated loan and notes.“While the current commodity price environment poses challenges, we will continue to take a disciplined approach to our process and we remain confident in our ability to complete additional transactions to further advance our goal of debt reduction,” the company said Sept. 1.Spokesmen for Calgary-based Penn West and Athabasca Oil couldn’t be reached for comment.Bond prices are already factoring in more challenges ahead for companies whose budgets are stretched. U.S. dollar debt of Canadian high-yield energy companies has lost 6.4 per cent this year, a percentage point more than the broader index, which is on track for the worst year since 2008.“The market is pricing in a higher default rate,” said Geof Marshall, who runs $11 billion in high-yield bonds for CI Investments Inc. in Toronto. “The market has actually done a remarkable job over the years of pricing that in.”Defaults or bankruptcies mean assets will be on sale in the coming months as debt-laden producers are forced to sell some of their best properties to raise liquidity. “If you had a completely unlevered balance sheet right now you could buy whatever you wanted — if you assumed the debt that came with that asset,” said Marshall.There are buyers out there with

enough cash to make purchases, said Canoe Financial’s Tahmazian, who declined to identify any possible purchasers. Suncor Energy Inc. chief executive Steve Williams said in July that the company “looks at the opportunities,” adding that there’s “nothing particular to talk about.”One group of investors that may take advantage of assets on the market in the coming months are from India, said Bob Schultz, a professor at the University of Calgary Haskayne School of Business.“I expect the Indian companies to swoop in and buy,” he said, adding that they have been less active in the past than U.S. or Chinese buyers. That will change if the conditions are right, including more cash-strapped Canadian producers being squeezed by the oil price.“These companies will have to restructure,” said Schultz. That means they’ll be looking for buyers.

conocophillips, penn West cut over 900 oil and Gas jobs

A fresh wave of layoffs is hitting the energy sector as two oil and gas companies cut a total of 900 jobs, mostly in Calgary.Penn West Petroleum is cutting its workforce by 35 per cent for a loss of over 400 full-time employees and contractors.And ConocoPhillips Canada plans to lay off 400 employees and 100 contractors, for a 15 per cent workforce reduction.Penn West (TSX:PWT) says most of

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the job cuts it announced Tuesday are effective immediately, while ConocoPhillips told its employees on Monday that its workforce reduction will happen by mid-October.The companies say they are responding to the recent decline in oil prices that looks to be prolonged.North American crude has been trading below US$50 a barrel in recent weeks compared to over US$100 a barrel last summer.Penn West is also suspending dividend payments to its shareholders after its next payment in

October and reducing compensation for its board of directors.It has also identified a further $75 million of capital spending that will be put off, reducing this year’s capital budget to $500 million — a 40 per cent reduction from its original plan to spend $840 million in 2015.For next year, Penn West will aim to keep its capital spending within cash flow generated from operations, with a focus on its light oil properties in the Viking and Cardium shale formations in Western Canada.“We have made a number of

exceptionally difficult decisions in order to remain competitive in the current commodity price environment,” Penn West chief executive and president Dave Roberts said in a statement,Penn West estimates that the workforce reduction will reduce spending about $45 million a year. The suspension of its dividend after the previously announced payment of one cent per share on Oct. 15 will reduce annual cash outlays by $20 million.Payments to non-management

directors on Penn West’s board will be cut 40 per cent and the payment to Penn West chairman Rick George will be cut by 50 per cent.

husky enerGy reports major Gas leak, c-nlopb says

The regulator for the offshore oil industry in Newfoundland says Husky Energy (TSX:HSE) has reported a major hydrocarbon gas leak from a pipe linked to two of its subsea wells.The Canada-Newfoundland and Labrador Offshore Petroleum Board

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says the gas release happened Monday in the southern drill centre in the White Rose Field.It says Husky estimates that 8,938 kilograms of natural gas was released before it was shut off 12 minutes after the initial alarm.Husky spokeswoman Colleen McConnell says an underwater inspection indicated the release came from a piece of flexible pipe connecting subsea components and leading into the wells.She says it means there are limitations on the gas flow to the two wells, but they can still produce oil from the field.The board is reviewing the incident and Husky is investigating.

nexen says shutdoWn of lonG

lake oilsands facility Will take up

to 2 Weeks

Nexen Energy says the process of complying with a suspension order from the Alberta Energy Regulator (AER) will take up to two weeks to complete. AER said Friday the shut in at 95 pipelines in northern Alberta is because of “noncompliant activities at Long Lake oilsands operations” to do with pipeline maintenance and monitoring.“Nexen is complying with the AER’s suspension order,” said spokesperson Diane Kossman in an email to Global News. “We’re providing them with necessary documentation, suspending our pipelines, and shutting down our Long Lake oilsands operations.

We’re managing the risks associated with safely shutting down this complex and integrated facility and, to our best estimate, the process will take up to two weeks to complete.”Kossman said no “material impact” was expected on CNOOC Ltd.’s operations or financial conditions.She said all affected pipelines either feed into or are situated within the Long Lake site.A spill of about five million litres of bitumen, sand and produced water was discovered near Nexen’s Long Lake oilsands facility, about 35 kilometres southeast of Fort McMurray in late June. The break occurred just over a kilometre from the Long Lake plant. Nexen “sincerely apologized” for the impact it caused and is investigating along with AER.AER spokesperson Bob Curran told Global News Friday the regulator received a letter during the course of its investigation into the spill that “indicated Nexen was noncompliant.” He said that letter was received Aug. 25.“Noncompliance could mean things like not being able to demonstrate they’ve been adequately monitoring or inspecting lines, things they’re required to do under the Pipeline Act or Pipeline Rules,” said Curran.

janet holder, public face of the northern GateWay

pipeline project, dies

Holder became well known after appearing in a series of TV advertisements promoting the pipeline

Janet Holder, who rose to prominence as the project leader for Enbridge’s controversial Northern Gateway Pipeline project, has died of leukemia. “Janet will be dearly missed by everyone at Enbridge,” wrote Enbridge president and CEO Al Monaco in a statement. “She taught many of us the importance of being positive and supportive of each other, no matter how big the challenge. “Holder was named Enbridge executive vice president of Western Access in 2011, and soon afterwards, relocated from Toronto back to her home town of Prince George. She became a recognizable face to many after fronting a number of folksy-themed television ads promoting the pipeline project. Holder

resigned from Enbridge December 31, 2014 saying she wanted to focus on her family and her personal health. She had beaten cancer on at least one previous occasion.

canadian oil sands ltd says syncrude

Won’t return to normal operations

until end of september

Canada’s largest synthetic crude project will return to normal operations toward the end of September, its operator said late on Wednesday, confirming market talk of an extended

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outage after last weekend’s fire.The Syncrude venture, which produced 326,000 barrel per day of synthetic crude in July, will operate with “minimal synthetic crude oil shipments and operating rates” for the next two weeks as part of a phased recovery, Canadian Oil Sands Ltd, the joint venture partner with the largest stake in Syncrude, said in a statement.“Affected units are planned to be subsequently restored to operation, with a return to more normal production rates anticipated towards the end of September,” it said.The disruption means that Syncrude output this year will be “near the low end” of the current 96 million to 107 million barrel range for the year, COS said.The company said the fire had damaged “pipes, power and communication lines on a pipe rack between a hydrotreating unit and its associated amine unit,” but did not damage mining and extraction operations or other major upgrading units.The operating rates of undamaged

units have been “safely reduced in a controlled and stable manner,” it said.Cash prices of Canada’s synthetic crude jumped on Wednesday, swinging to a premium against U.S. crude on the growing fears of a prolonged outage after the fire at the facility’s Mildred Lake upgrader on Saturday. The worries also contributed to a rally in the U.S. crude futures market, traders said.While some traders originally expected the outage to last for days, three sources said earlier that the company was now anticipating the loss of 6.1 million barrels in September.Light synthetic crude from the oilsands for October delivery jumped to US$2.00 per barrel above the West Texas Intermediate benchmark, according to Shorcan Energy brokers. That was the strongest premium since late June and US$6.50 higher than last Friday, prior to the fire.The front to second month WTI spread tightened on Wednesday, trading from as wide as negative 68 cents US up to negative 55 cents US

around midday, as traders anticipated less crude arriving at Cushing, Oklahoma, the delivery point of the U.S. crude futures contract.

tsx sheds almost 400 points as oil

price slumps aGain

GDP data and lower oil prices send Canada’s main stock index sharply lowerThe Toronto Stock Exchange lost 377 points today after following the lead of a global stock sell-off and investors digested underwhelming GDP data out of Statistics Canada.The S&P/TSX Composite Index closed at 13,481, down 377 points. In addition to the GDP number showing contraction in the second quarter, Canada’s benchmark stock index was also dragged lower by oil prices that came back down to earth after a huge jump on Monday.The price of a barrel of oil lost more than $4 to trade just above the $45 US a barrel level when stock markets closed in North America.The TSX is closely correlated to

fluctuations in the price of oil, as many of the index’s heaviest hitters are tied to energy prices. So, too, is the loonie, which shed a quarter of a cent to 75.71 cents US.U.S. stocks also sold off, with the Dow Jones down 469 points to 16,058. Weakness in U.S. stocks was more based on some fresh numbers out of China showing an index of the country’s factory purchasing managers dropped to a reading of 49.7 points in August. Anything below 50 implies contraction.The factory data was taken as more possible evidence of a slowdown in the world’s second-largest economy that would impact growth everywhere else. No less than the IMF said exactly that on Tuesday, with head Christine Lagarde saying “overall, we expect global growth to remain moderate and likely weaker than we anticipated last July.”“Monday’s relatively peaceful markets are a distant memory as Chinese data and shares sparked another severe overnight reaction from the developed world,” said John Briggs, head of fixed income strategy at the Royal Bank of Scotland.

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