U.S. Ambassador Paul Cellucci and Pat Daniel, CEO of Enbridge, were singing the same tune in Calgary last week. It’s called “Streamline the Rules Blues.” It’s a favourite refrain in the White House and in many an oilpatch boardroom.

Cellucci, in a talk to the Native Investment and Trade Association’s Resource Expo 2003, complained that regulatory constraints in building new pipelines and power transmission lines is the biggest challenge to “sustaining the growth in cross-border energy trade.”

Energy trade? Last time I looked, Alberta’s oil and gas flows south into the U.S. – the same direction that electricity from new co-generation power plants at the oilsands will flow.

Daniel, who spoke at the Ziff Energy North American Gas Strategies Conference, said a joint U.S.-Canadian regulatory agency would help cut through red tape and speed up building of the $4-billion Mackenzie Valley pipeline and the $20-billion Alaska Highway pipeline.

Enbridge CEO Pat Daniel spoke at the Ziff conference.

The gas from these mega-projects will also move one way to feed U.S. markets.

True, our energy flows south while U.S. dollars that pay for it flow north.

But while Alberta will be sending more oil and gas south next year, we can expect to get 13 per cent less for it due to falling prices, Export Development Canada (EDC) says in a report.

EDC chief economist Stephen Poloz says the main factor driving down prices will be Iraq, which he predicts will reclaim its role next year as a major world oil supplier.

It makes good economic sense to sell our energy to our biggest trading partner.

But before we start cutting our environmental rules and other regulations to satisfy the U.S.’s insatiable appetite for energy, how about the Bush administration scrapping some of its protectionist rules and cutting a few deals – in softwood lumber, wheat and live cattle exports, for instance?

Cross-border trade is supposed to be a two-way street.

NO NUKES IN OILSANDS

Energy Minister Murray Smith is right in giving nuclear power a thumbs-down for Alberta, albeit for the wrong reasons.

Smith said at the Ziff Energy conference that the province doesn’t see nuclear power as a realistic or secure way to develop the oilsands, because of concerns about a terrorist attack and nuclear fallout.

A big oilsands or natural gas plant – or a pipeline for that matter – would be an easier target for terrorists to take out than a nuclear power plant.

As for fallout, more workers have died in Canada after breathing in poisonous hydrogen sulphide gas (present in one-third of Alberta’s gas wells) than have been injured by exposure to radioactivity from a nuclear generator.

But what’s really ludicrous is Calgary’s biggest daily newspaper, in a lead editorial, calling nuclear power a “cheap energy source,” and suggesting that Ralph Klein’s free- enterprise government should spur its startup here.

Nuclear power is so “cheap” to develop that the federal government has given Atomic Energy of Canada Ltd. $6.5 billion in subsidies since 1953, including an average of about $150 million annually over the past five years. On top of this, Ottawa doled out $46 million in September to the non-taxable Crown corporation, to help develop its still-on-the-drawing-board new reactor that some spin-doctors prescribe for the oilsands.

But the best reason for not going nuclear is that oilsands producers aren’t interested. Why should government flog a horse that nobody even wants to bring to the track?

OVERSTATED A BIT?

What’s a dozen billion dollars or so when you’re battling those federal fiends in Ottawa?

The Alberta government, during its unsuccessful attempt to torpedo ratification of the Kyoto Protocol last year, feverishly predicted that the accord to cut greenhouse gas emissions would cost the Canadian economy $25 to $40 billion.

Turns out the cost will be more like five to 30 cents per barrel of oil for most oilsands operations, according to a survey of oilsands developers by New York-based Moody’s Investors Service.

In a report last month, Moody’s said the credit ratings of several companies with oilsands development shouldn’t be affected by Kyoto ratification.

More worrisome than the Kyoto bogeyman in terms of future credit ratings, Moody’s said, are project cost overruns, operating cost control, discounted production prices and environmental issues other than greenhouse gases.

BULLSEYE LOOKED TO HIT MARK

A co-founder of Canadian Hunter Exploration Ltd. has launched a new venture – looking for oil and gas that other companies have overlooked.

John A. Masters built his career – and Canadian Hunter – by exploiting bypassed pay zones in the Elmworth/Wapita gas field on the western flank of the Western Canadian Sedimentary Basin.

Masters is now using his methods of “Direct Detection” of hydrocarbons, which derive information from existing reservoir rock samples, to uncover overlooked and potentially large oil and gas prospects in the western U.S.

Canaccord Capital Corp. has launched a private placement of units, selling for $1 US each, to raise up to $5 million US for Masters’ new venture, Bullseye Exploration Ltd.

Bullseye intends to develop nine or 10 prospects over the next 24 months. The properties will be sold or farmed out to third-party companies to do the initial exploratory drilling, while Bullseye will retain the right to participate in all future, lower-risk development wells. Bullseye has agreements with several firms, including some majors, that want to review any prospects Masters – who already has six major resource discoveries to his credit – turns up. Waste Watchers Canadian Hydro Developers, Inc. has started building its $56-million, biomass-fuelled Grande Prairie EcoPower Centre, to be operational in the fall of 2004.

The facility will use wood waste to generate both electricity and steam for Canfor Corp.’s sawmill in Grande Prairie, and electricity for the company’s sawmill at Hines Creek.

Alberta Infrastructure will buy 60 per cent, or 110,000 megawatts, of the “green” power per year for 20 years.

The City of Grande Prairie has committed to a long-term purchase of electricity, with an option to purchase steam for a future district heating system. Canadian Hydro says the EcoPower Centre will cut particulate emissions from Canfor’s two mills by more than 80 per cent by removing existing wood waste incinerators.

Canfor also will be able to eliminate the burning of more than 300,000 gigajoules of natural gas and instead use steam from the facility in its lumber-drying kilns – reducing 17,000 tonnes a year of greenhouse gas emissions.