It’s time global oil and gas firms created the position of vice-president, whistleblowers.

Appointing somebody at the top to be responsible for squawking about unethical corporate behaviour might prevent the hear-no-wrongdoing, see-no-wrongdoing, speak-no-wrongdoing attitude that prevailed among senior executives at the Royal Dutch /Shell Group.

The widening scandal over the petroleum giant’s inflated reporting of its oil and natural gas reserves – a crucial measure of value in the industry – has claimed another casualty.

The company recently ousted chairman Sir Philip Watts and Walter Van de Vijver, the former head of oil and gas production.

Last week, Judith Boynton stepped down as chief financial officer. Her fall from the executive suite came after an independent report, prepared for Royal Dutch/Shell by U.S. law firm Davis Polk and Wardwell, concluded that Boynton “took virtually no action” early on to investigate the extent of the reserves overbooking.

The debacle has shaken investor confidence in the Anglo-Dutch firm, undermined its credit rating and forced the company to cut its reserve estimates three times since January by 4.35 billion barrels, or 22 per cent, to 15 billion barrels.

Scandal travels on shuffling feet. And now that sound can be heard outside the Calgary office of Linda Cook, who took over last year as CEO of Shell Canada Ltd.

Davis Polk and Wardwell, as part of its investigation, found that Royal Dutch/Shell inflated its reserve estimates mainly in the 1997-2000 period. Cook was a member of Royal Dutch/Shell’s exploration and production executive committee from July 1998 until December 1999. One of her duties at the time was responsibility for the reserves reporting process. She reported directly to since-dumped chairman Sir Philip.

Does this mean Cook is in line to get the boot?

Only if the facts show she knew about the inflated reserves reporting and was in a position to do something about it, but didn’t.

Davis Polk and Wardwell interviewed Cook once as part of its investigation. But she has not been approached by others investigating the company’s conduct – including the U.S. Securities Exchange Commission and the U.S. Justice Department.

Even if Cook was aware of the reserves overbooking (something we don’t know and on which she has yet to comment), there wasn’t much she could do to change the practice unless she had the authority to do so. At the time the transgressions were made, Sir Philip himself ran the exploration and production division responsible for the reserve bookings.

Mind you, there is one thing that all senior executives in Royal Dutch/Shell could have and should have done, in good conscience, if they knew about unethical conduct: Blow the whistle.

But perhaps that responsibility is best left to the vice- president of whistleblowers – if only companies had one.

Dollar Sinks Profits

The soaring loonie pecked away at first-quarter profits of Imperial Oil Ltd. and Husky Energy Inc.

Nibbled by the strong Canadian dollar, Imperial Oil’s net earnings for the period ending March 31 fell 5.4 per cent to $509 million, or $1.40 per share, compared with $538 million, or $1.42 per share, for the same quarter last year.

Imperial’s revenue totalled $5.06 billion in the first quarter, down from $5.47 billion a year ago.

Husky Energy also blamed the appreciating loonie for taking a big gobble out of its first-quarter profits.

The company’s net earnings fell 35 per cent to $263 million, or 60 cents per share, compared with $408 million, or $1.01 per share, a year ago. Revenue also dipped to $2.1 billion from $2.2 billion last year.

Imperial and Husky – like the rest of Alberta’s oilpatch – are still enjoying healthy profits thanks to near-record world oil prices, set in U.S. dollars.

But watch for the loonie to take a chunk out of the profits of other companies still to report their first quarter this year.

No Pipe Dream

The energy sector’s dream of pipelines transporting natural gas from the Canadian Arctic and Alaska is a little closer to becoming reality.

Imperial Oil Ltd. says it will be in a position to file an application with regulators by mid-year to build the $5-billion Mackenzie Valley pipeline project through the Northwest Territories into northern Alberta.

Imperial is leading a group that includes Shell Canada Ltd., ConocoPhillips Canada Ltd., parent firm ExxonMobil Corp., and the Aboriginal Pipeline Group in the N.W.T., in a proposal to construct the pipeline.

In another step forward, the Dene Tha’ aboriginal group in northern Alberta earlier this month announced a “protocol agreement” with TransCanada Corp.

The agreement is to build a relationship that will allow TransCanada to build a so-called crossover pipeline on traditional aboriginal territory to link the southern end of the Mackenzie pipeline, which would end near the Alberta-B.C. border, to the Fort McMurray oilsands region – where most of the Arctic gas is destined for use.

Here’s another sign of the quickening pace. Western and Northern Canada’s regulatory bodies have formalized the environmental review process for the Mackenzie project, in preparation for processing an application by July. Regulators have also invited applications for funding from participants in the review.

TransCanada, meanwhile, says it will file an application within the next few weeks with the State of Alaska to build a $4.5-billion pipeline from Alaska’s North Slope to the Yukon border – the first leg in the proposed $20-billion US Alaska Highway pipeline project.

The application will reactivate work on state right-of-way applications for the pipeline – applications that TransCanada first filed in 1981 and has held ever since.

Despite the flurry of activity, neither pipeline will start moving gas until late this decade.

Southern Breeze

The Americans are coming, the Americans are coming! With their windmills, no less.

Suncor Energy Inc. and EHN Windpower Canada Inc. have chosen giant GE Energy in the U.S. to supply wind turbines for the two firms’ joint $48-million Magrath wind-power project south of Lethbridge in southern Alberta.

The 30-megawatt project will generate enough power to supply about 13,000 homes per year and will be the first installation of GE’s wind turbine technology in Canada.

GE, based in Atlanta, Ga., will provide 20 of its 1.5-MW turbines for the project, which has already been approved by the Alberta Energy and Utilities Board. Installation of the turbines – the largest currently assembled in North America – is expected to begin in May and be completed in August.