Canada's biggest natural gas pipeline companies are starting to look a lot like the NHL owners and players - inflexible.
Surely a "rink" that's worth $20 million US (the cost of the Alaska Highway pipeline project) is big enough for more than one company to skate in.
TransCanada Corp. chief executive Hal Kvisle vowed last week to protect 27-year-old permits that give his company the right to build the Canadian section of the planned Alaska Highway pipeline.
The Northern Pipeline Act (NPA) awarded TransCanada the rights-of-way and other permits in the late 1970s, when the project was first proposed. Hard-talking Hal insists the line be built under the NPA - or else!
On the other side of this increasingly public dispute is rival Enbridge Inc. and chief executive Pat Daniel, whose "team" includes Alaska gas producers BP PLC, ConocoPhillips Co. and ExxonMobil Corp.
Sounding just as stubborn, they argue that the project has changed substantially since the NPA awarded the rights to TransCanada, and that the pipeline should be regulated as a new project by the National Energy Board.
That, of course, would render TransCanada's rights about as useful as a pogo stick in muskeg. It would also let Enbridge, the Alaska producers and anybody else bid to build the line, including choosing a new route if they wanted.
The federal government is itching to referee and offer its call on which regulatory process makes the most sense.
But if TransCanada and Enbridge don't want Ottawa deciding who gets to build this project, they'll resolve their differences before that happens.
After all, both companies are members of the Canadian Energy Pipeline Association, which includes the industry's heavy hitters and whose stated top priorities include "regulatory efficiency."
So - get efficient! Get Kvisle and Daniel and whoever else needs to be there into a room and negotiate a deal that makes economic and regulatory sense. Kvisle and Daniel are both frequent complainers about the regulatory red tape that government wraps around pipeline projects. Well, here's their chance to settle this fight before Ottawa blows the whistle.
The Canadian players don't have much time left to haggle, however.
They're facing a rival American proposal to build an "all-Alaska" pipeline stretching 1,200 kilometres from Prudoe Bay to Valdez. At Valdez, the gas would be liquefied and shipped by LNG tanker to the U.S. West Coast.
Alaska Gasline Port Authority, a group of Alaskan communities, and Sempra LNG of Texas have put their proposal in front of the Alaska state legislature.
If Kvisle and Daniel want to stay in this game, they'll start talking to each other and forget about dropping the gloves.
Another skirmish in the "Great Canadian Pipeline Wars" could also be avoided if chief executives decided to co-operate instead of butting heads.
Enbridge Inc. is battling Vancouver-based Terasen Pipelines Inc. to build a multimillion-dollar line to transport oilsands crude from Alberta to the West Coast and new export markets in Asia and California.
Terasen said last week it's proceeding with a $50-million expansion of its Trans Mountain pipeline after receiving "strong support" from 17 different parties, including new and existing customers.
But Enbridge said last month that it soon expects to sign preliminary deals to anchor a $2.5-billion pipeline from the Edmonton area to either Kitimat or Prince Rupert.
Trouble is, there's probably room in the market for only one major new oil export pipeline from Alberta to the West Coast.
As with the Alaska Highway pipeline project, a major new oil export pipeline should be an opportunity for the big players to sit down and negotiate a shared, win-win arrangement.
Instead, Terasen and Enbridge's chief executives are too busy telling anyone who'll listen why their company's proposal is the best thing to come along since headlights.
Of course it's a free market and I'm not saying stifle the competition. But doesn't it make sense - given the size and complexity of these pipeline projects - for companies to team up and share the costs as well as the rewards?
Joint ventures are common among builders of new oilsands plants, natural gas processing plants and even coal-fired power plants.
Pipeline company CEOs need to learn that sometimes, it's good business sense to make your fiercest competitor your strongest ally.
Looks like gremlins are running amok in the oilsands.
Production from the giant Syncrude plant will fall in the current quarter by 25 per cent below target, due to a hydrogen plant explosion in late January.
Canadian Oil Sands Trust, the largest partner in the Syncrude joint venture, says first-quarter production will drop to 15 million barrels from the target of 20 million barrels.
In mid-December, Syncrude blamed a power outage for cutting output by about 10 per cent for three weeks as it brought an upgrader slowly back online.
Suncor Energy Ltd., meanwhile, is running at half production capacity until the summer, due to an explosion and fire that damaged one of two upgraders at its Fort McMurray operations.
It was the third fire for Suncor since July 2003.
Last week, Suncor's plant also had a 13-hour spill that released more than 10 million litres of hydrocarbon wastewater into a cooling pond that empties into the Athabasca River.
Fire and water-handling problems have dogged other oilsands operations, including those run by Western Oil Sands Inc., Shell Canada Ltd. and Petro-Canada Inc.
Maybe it's time the oilsands companies got together and did a thorough, co-ordinated review of the reliability of their operations. When it comes to safety, there's no harm in double-checking.
EnCana Corp. continues to focus on what it does best.
The company plans to sell off assets in Ecuador, the Gulf of Mexico and additional conventional oil and gas properties in Western Canada.
Analysts expect EnCana to use the anticipated $2.5 billion U.S. from the sales to buy back more of its shares and boost per-share value, while expanding its growing unconventional natural gas holdings in the U.S.
CEO Gwyn Morgan says the sales plan is consistent with the company's "sharpened focus on our North American resource play holdings in Western Canada, the U.S. Rocky Mountain states and Texas."
EnCana's strategy is to produce predictable amounts of gas from wells drilled, in an assembly line-type operation, into proven reserves in so-called tight geological formations.
It's not as sexy as drilling high-risk wildcat wells in Alberta's eastern slopes, but it guarantees a steady, reliable return for investors.
(Mark Lowey can be reached at mark@businessedge.ca)
