It sure is nice to hear a good news story, especially now that every day is bookended by news reports of massive stock losses, layoff after layoff, historic drops in customer confidence, and updates on almost inconceivable dollars in government bailouts. Osum’s Taiga project is that good news story (at least right now).
Two summers ago, Osum Oil Sands learned a hard lesson about what happens when a community really, really doesn’t want an industrial project developed in its backyard. The private junior had been granted permits to conduct seismic on Marie Lake, a favourite body of water frequented by the cabin community in the Cold Lake region of Alberta. After intense backlash despite the company's assurances of environmental protection, the Alberta government withdrew the approvals, and Osum cancelled its leases.
Popular watering holes stand decrepit and decaying along Franklin Avenue. They used to be swarmed with workers comforting themselves with alcohol after a day of back-breaking toil at the plants north of Fort McMurray, the Oilsands City. The letter B in the sign of the famous Boomtown Casino dangles, ready to drop any time a massive whoosh of wind wallops the once busy gambling den. A Tim Hortons drive through has closed after several years of car lineups spilling onto Highway 63.
It wasn’t the kind of public relations the pipeline construction industry wanted as a new year dawned.
Fort McMurray has come a long way since its origins as a fur trade post established by the Hudson’s Bay Company in 1870. In 1900, it was aptly described as “abandoned” after the company relocated its trade centre on the Athabasca River from Fort McMurray to Fort McKay, about 40 miles further north. Although the community was clinging to life during the first decade of the 20th century, the residents during those years laid the foundation for what today is the main centre in the Regional Municipality of Wood Buffalo, the heart of Alberta’s oilsands industry.
Amidst the cries for industry bailouts, failed bank bonuses, and the general run up of avarice that arguably spawned the financial mess the world is in now, it’s easy to become disillusioned with human nature. Fear, greed, and delusion may seem like the order of the day, but there are—as there always have been—people of vision and solid values whose hard work will eventually bring this ship around again.
“The tar sands of Canada constitute one of our planet’s greatest threats…. The horrendously carbon-intensive unconventional fossil fuels, tar shale in the U.S., and tar sands in Canada cannot be developed. The carbon emissions from tar shale and tar sands would initiate a continual unfolding of climate disasters over the course of this century. We would be miserable stewards of creation. We would rob our own children and grandchildren.
It looks like 2009 is starting off with a bang and then a resounding thud. An unsolicited (and woefully inadequate) offer for UTS Energy by Total S.A. resulted in a strong bid for the other smaller, less financially secure oilsands companies. At the same time, the larger players like Nexen suffered the most when the prospects of a foreign takeover diminished. What does this mean for true investors? The way I see it, the prices have dropped low enough that you are likely to see more of these predatory takeover attempts until credit markets unfreeze and energy prices recover from 2008’s historic decline. The upside to the takeover speculation is that the Oil Sands Sector Index managed to make a small gain while crude oil, natural gas, and the TSX Energy benchmark lost significant ground in January.
Name: Darcy Morgan
Age: 50
Title: Vice-president, Business Performance and Integration
Employer: Enerjet, a charter airline focused on workforce transportation.
Education: B. Comm., Haskayne School of Business
Length in position: 4 months
