“There are many large players in the oilsands, but others are certainly having a look at it. Others that may have dismissed it earlier are being or have been intrigued by it,” said David Drinkwater, chairman of Rothschild Canada, which last week said it was opening an office in Calgary, Canada’s oil capital.

Drinkwater told Reuters in an interview that investors who might otherwise see opportunities in deepsea oil are turning to Canada as an alternative after last year’s BP spill.

The accident, which led to 4.9 million barrels of oil flowing into the Gulf over several months, raised uncertainty about the future of deepsea drilling as it forced governments re-examine their regulatory regimes.

A White House panel probing the spill called earlier this month for an overhaul of the U.S. regulatory system, while oil companies have voiced concerns that new rules could hamper offshore exploration and drive up oil prices.

Rothschild is the latest M&A adviser to bolster its presence in the financial centre of the Canadian province that’s home to the oilsands, containing the world’s largest petroleum reserves outside the Middle East.

Last July Toronto-Dominion Bank, Canada’s second largest bank, acquired Calgary’s Ross Smith Sousa to work on large private deals in Canada’s oil and gas sector. In the same month Europe’s largest bank, HSBC, hired a new director for its M&A advisory business in Canada to take advantage of a recovery in deal-making in the resource sector.

ECONOMIC UNCERTAINTY

For the Canadian oil and gas industry, uncertainty over the global economic recovery will influence how much deal-making takes place this year, Drinkwater said, complicating any attempt to forecast activity.

“It is probably harder to predict this sort of thing today than at any time in my business career,” he said. “The challenge is we’re still uncertain about how broad and deep this economic recovery is going to be, and so there’s much more uncertainty in the market.”

Rothschild, a family-owned bank founded in London in 1811, announced plans to open offices in Calgary as part of a drive to expand its advisory business in North America. It’s aiming to offset a downturn in mergers and acquisitions on its European home turf.

Oil and gas deals comprised about a third of all merger and acquisition activity in Canada last year, with deals ranging in size from the millions to the billions of dollars.

The biggest came in April when a subsidiary of China’s Sinopec Group agreed to pay $4.65 billion for ConocoPhillips’s stake in the huge Syncrude oilsands project.

“While certain things you can cover from other cities like Toronto, in order to really get embedded in the city and into the business community and the activity that comes there, you need to be on the ground there,” he said.

The number of investment bankers in Calgary tends to ebb and flow with the fortunes of the industry. The latest wave coincides with a return to $100-a-barrel oil for the first time since 2008. Production shutdowns, falling inventories and growing demand are pushing prices higher.

Strong cash flows that high oil prices foster are pushing energy companies and their service providers to think about strategic growth again after years of defensive spending during the global economic downturn.

“There are a lot of medium-sized oil and gas exploration companies that are trying to be bigger-sized that choose Canada … even though their assets are in Southeast Asia, Australia, South America, and other places in the world,” Drinkwater said.

Rothschild last week said it was hiring veteran investment bankers Bob Gibson and Paul Moynihan – founders of the boutique firm Mustang Capital Partners – to run its Calgary office.

Read more: http://www.vancouversun.com/news/Canadian+oilsands+gain+from+spill/4133924/story.html#ixzz1Bd97tW3U

Despite efforts to reduce energy consumption and improve fuel efficiency, the American Petroleum Institute says America’s appetite for oil is growing.

Jack Gerard, the president of the U.S. oil industry’s largest trade group, says the solution is to expand offshore drilling – which in turn will create thousands of new jobs.

“Over the next three, four, five years, we have an opportunity to be a significant economic engine to help stimulate the recovery,” said Gerard. “These are well-paying, highly sought-after jobs and again, what we need is the political will to provide the opportunities.”

Gerard says opening up areas now off limits to development could create as many as 500,000 jobs by 2025 and generate $150 billion in government revenue.

He’s urging lawmakers to set aside political differences and allow expanded drilling in the Gulf of Mexico, off the East Coast and in parts of Alaska.

It’s wise not to rely on just one source of information. Humans are fallible creatures. Knowing that, we feel much more comfortable when we can confirm something someone tells us either directly through observation or indirectly by going to a well-vetted source. We can, for instance, easily verify whether the Empire State Building has 103 stories, either by going there and counting the stories or referring to some reputable source of information. Furthermore, whether the Empire State Building has 103 stories is not really a matter of opinion. It’s either true or it isn’t.

When it comes to murkier matters such as peak oil, we must admit that our perceptions and conclusions are always based on incomplete information. In such instances, humans, being social creatures, seek confirmation from others when they receive information that is new and not easily verified. They wonder, quite rightly, whether other people accept such information as correct.

Now, as we know, the mere fact that large numbers of people accept a certain conclusion is not necessarily proof of its veracity. Still, with little to go on and little time to do independent research, many people essentially resort to polling. Does my reference group, the people I hang out with most, accept a particular conclusion? Does the broader public, reflected through the media, accept it?

This confirmation strategy has worked against the peak oil movement for many years as very few highly placed people dared to utter the words “peak oil” in public–even if they believed the issue was important. That has changed rather radically in the last 12 months, and it hands peak oil activists another important rhetorical tool, namely, the phrase: “You don’t have to take my word for it.”

In rhetorical terms this phrase is, of course, an appeal to authority. Those who argue the peak oil case most often rely on appeals to reason. That works with some people. But others can find such argumentation tedious and difficult to follow. A shortcut for them is to check out what experts and officials are saying. Increasingly, those experts and officials are saying that peak oil is near, that it is a serious danger, and that we are unprepared for it.

Perhaps the most important announcement in this respect is the turnabout at the International Energy Agency (IEA) late last year in its 2010 World Energy Outlook. The Paris-based IEA is an intergovernmental energy research and policy organization serving its 28 member states including Australia, Canada, France, Germany, Japan, the United States, and the United Kingdom. It was formed in the wake of the 1973 Arab Oil Embargo to advise member states, most of which are oil importers, on energy policy.

Consistently optimistic in the past about future energy supplies, the IEA undertook its own field-by-field survey of oil reserves in 2008 and has become increasingly concerned about oil supplies. This year the agency explicitly discussed peak oil for the first time and proclaimed that conventional crude most likely peaked in 2006. It continues to believe unconventional oil from the tar sands, the Arctic and deepwater fields along with natural gas liquids can make up for declining conventional oil and lead to increases in world oil production for two more decades. But it warns that this is no longer a foregone conclusion without the necessary and rather large investment required.

There were earlier indications that the IEA was about to change its official views. In 2008 the chief economist of the IEA, Fatih Birol, wrote in a guest editorial in the British newspaper The Independent that “we should leave oil before it leaves us.”

This turnabout is significant because the public listens much more closely to officials who change their minds than it does to those who’ve advocated a position consistently. The public feels that an insider who changes his or her mind about an important policy topic must have special inside knowledge that confirms the change. More important is that IEA officials are changing their minds not because it is merely fashionable to do so, but because mounting evidence has convinced them that our energy future, particularly our oil future, will not be smooth sailing.

That has been the case again and again in official circles recently. In 2005 the so-called Hirsch Report, a report about peak oil commissioned by the U.S. Department of Energy, stood practically alone as an official pronouncement about the dangers and proximity of peak oil.

But last year the U.S. military released a report raising warnings about a nearby oil supply crunch that would seriously affect military operations. “A severe energy crunch is inevitable without a massive expansion of production and refining capacity,” the report said. But even in the measured language of the report there can be no mistaking that there is concern about oil production peaking worldwide. “The world would need to add roughly the equivalent of Saudi Arabia’s current production every seven years” to meet expected oil demand in 2030. I sat next to the author of that report at a meeting last summer–a peak oil meeting.

The American military was not the only defense establishment that got interested in peak oil in 2010. The German military commissioned a report, leaked to the media, assessing the dangers of world peak oil production. Parts of the British government including the Ministry of Defense huddled in meetings last year about peak oil. The content of the meetings remains secret. But their existence sent a minor shock wave through the British public who had been consistently told by high government officials not to worry about peak oil.

A private report put together by some major industry players in Britain was also released last year. The group called itself the Industry Taskforce on Peak Oil and Energy Security. The message couldn’t have been more blunt: “Our message to government and businesses is clear. Act now.”

Even the solidly cornucopian U.S. Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy, saw a crack develop in its otherwise optimistic veneer. A presentation by an EIA employee unearthed by a French newspaper cast doubt on whether oil supplies could meet demand in this decade. The author was suddenly transferred away from his post–previously planned, the agency said–and the media was shut out from further contact with him.

Leading executives from the oil industry are also weighing in on peak oil. According to Thierry Desmarest, chairman of the French oil giant Total, “The problem of peak oil remains. In our opinion, it will be very difficult to raise oil production worldwide above 95 million barrels a day, which is 10 percent more than today.” He added that oil could peak in about 10 years.

Chevron executives haven’t been quite as explicit. At least since 2005, however, they’ve been saying that the era of cheap oil is over, and even translated that idea into an ongoing public relations campaign on television and elsewhere with the slogan “Will you join us?”

Former Talisman Energy CEO Jim Buckee has also been sounding the peak oil alarm for some time. A former Shell chairman, Lord Oxburgh, said in 2007 that he believes oil supplies will be tight in the long term and that a peak within 20 years would not surprise him.

I saw a presentation at the 2008 ASPO-USA peak oil conference by the consultant who models future oil supplies for Toyota. One would expect auto manufacturers to be perennially bullish on oil supplies. His conclusion: Peak between 2017 and 2023 (slide 46).

And, finally there has been for some time a peak oil caucus in the U.S. House of Representatives led by Roscoe Barlett (R-Maryland) that has been a bipartisan voice for concerns about peak oil.

No longer do peak oil activists stand alone on a stage when they deliver presentations about our unfolding energy difficulties. With all of these prominent voices and institutions behind them, activists can now confidently say, “You don’t have to take my word for it.” That simple phrase can be quite effective in helping to persuade the broad public when it is followed by the growing list of government and industry voices now talking about peak oil.

By. Kurt Cobb

Here’s hoping the project is a meaningful contributor to the local employment picture. Bakersfield could certainly use some good economic news.

Alon’s plans for the refinery will take operations into a direction different than the model used by previous owners, including Big West, which sold the plant out of bankruptcy last year. The company is overhauling the facility to process vacuum gas oil, a substance left over from its refinery in the Long Beach area.

That’s probably a disappointment for Kern County producers who would prefer to sell their crude locally. But to the many refinery professionals who’ve been out of work for two years, any activity is good activity, even if fewer positions are available. Processing gas oil will require fewer hired hands.

Alon wants to hire about 40 workers in the maintenance and engineering divisions, boosting the payroll to around 100. When Big West shut down the plant two years ago, 175 jobs were lost — a blow to the local economy.

Many former employees have moved on to different jobs, and others who want to return to refining will be turned away. That’s unfortunate. But in the larger picture, a humming refinery means tax revenue, consumer spending and a helping of positive economic activity for Kern.

Some industry observers have questioned Alon’s plan, which requires shipping the gas oil from Southern California, but the company says similar operations have been successful. We, too, hope the new plan translates into long-term stability.

Those are the conclusions of a survey that provides rare insight into the investment intentions of 1,377 Chinese small and medium enterprises made public in Vancouver Monday.

“Chinese enterprises have a favourable view of the investment environment in Canada, citing technology, U.S. market access, and a dynamic/diversified labour force as key attraction,” said Yuen Pau Woo, president and chief executive of the Asia Pacific Foundation of Canada, which prepared the survey with Beijing-based China Council for the Promotion of International Trade. “The question is whether Canadians will be receptive to Chinese capital.”

The results confirm a rising level of Chinese comfort with Canada on the heels of major investments in energy, such as Sinopec Corp.’s purchase of a stake in the Syncrude Canada Ltd.’s oil-sands project and PetroChina’s partnership with Athabasca Oil Sands Corp., which moved forward without Canadian antagonism.

They also show that interest in Canada goes beyond state-controlled enterprises and includes increasingly active private enterprises.

“It’s a good sign,” said Robert Mansell, academic director of the University of Calgary’s School of Public Policy. “We must be doing something right. China is a special case, they got huge reserves they are sitting on, which they can use to buy U.S. Treasuries or U.S. assets which maybe don’t look so good, since they have got so much of their money in those now and they are looking at other vehicles.”

The expanding relationship could help Canadian companies, particularly on the West Coast, break into new Asian markets and provides them with new sources of capital, Mr. Mansell said.

In the survey, the Chinese companies said they are interested in diversifying in Canada because of Chinese government support for outbound investment, to acquire first-rate technology or management experience, acquiring international well-known brands, avoiding overseas trade barriers, making use of preferential investment policies in the host country.

They also perceive Canada as among the economies most open to their money.

As for challenges, the Chinese are most worried about the concerns of North American about the safety and quality of Chinese goods, difficulty in finding business partners in North America, lack of understanding of North American legal system and market risks, lack of understanding of Chinese brands.

Of the companies that participated in the survey, 8% reported an intention to invest in Canada in the next three years. Of these, 50% are small or medium-sized enterprises and 23% are large companies.

The majority of those with investment interest in Canada plan to finance their deals using their own capital, while 23% plan to seek financing from Chinese state banks.

The majority plan to enter the Canadian market through their own channels, 14% are looking for a joint venture, 12% are planning mergers and acquisitions of assets or companies, 10% are planning to set up a wholly owned manufacturing company.

The survey is bound to stir further debate about whether the investment rush is in Canada’s interest. It also puts notice more so-called Canadian champions that they are vulnerable to deep-pocketed foreigners who may not have the same values.

But it also goes some ways to dealing with misconceptions. Kenny Zhang, senior project manager at the Asia Pacific Foundation, said the results were made public to show that Chinese intentions go far beyond state-owned oil companies looking for a piece of Canadian natural resources. Increasingly, there will be more, smaller players looking to expand in Canada. They are driven by the market, he said, just like their Canadian counterparts.

Read more: http://www.financialpost.com/news/Chinese+look+beyond+patch/4122431/story.html#ixzz1Bd5RKANL

“Should OPEC not increase production as global consumption grows, oil prices could be significantly higher than the baseline forecast,” the EIA said in a statement Thursday.

Unleaded gasoline averaged $3.11 nationally, according to the AAA, and $3.10 in Iowa. Unleaded gasoline blended with 10 percent ethanol sells at about $2.99 in central Iowa stations.

The average price for diesel, used by truckers and farmers, stood at $3.41 per gallon, up 54 cents per gallon from a year ago.

Unleaded gasoline prices have risen about 35 cents per gallon since October, as crude oil prices have risen from $70 per barrel in late summer to $90 at year end. Crude is down $2.24 per barrel Thursday on the New York Mercantile Exchange to $89.57.

The EIA said it expects unleaded gasoline to sell at retail for an average of $3.22 per gallon during the peak driving season of April through September.