AN ARTICLE BY A FREELANCE WRITER FROM SUSSEX!!!!

irving3, originally uploaded by Oldmaison.

Shipwrecking an industry Last year the federal government gave J..D. Irving Ltd. some $55-million to close down the Saint John Shipbuilding yard, one of the largest and most technologically advanced shipyards in Canada.


This yard still contains its equipment, its services and highly skilled workers are still available to build ships in this yard.

The problem is that as part of its deal with the government, J..D. Irving agreed not to build ships at the facility for 20 years.

A dummy's guide to energy in New Brunswick


If you're the Irvings, you make your profit at home in New Brunswick and spend it somewhere else! Why spend it at home? It's not as if New Brunswickers need jobs.




>by John Steeves
February 24, 2006

In the field of New Brunswick energy policy, it's more and more difficult to separate the good guys (if there are any) from the villains.

Take the case of the snafu involving the giant Coleson Cove electrical generating plant, just west of Saint John.

Coleson Cove was originally designed to burn Bunker C industrial grade petroleum. The main supplier of the Bunker C was Irving Oil.

Always in the search for cheaper ways to provide electricity to New Brunswickers, the good folks at NB Power came up with a plan. They spent millions of dollars refurbishing Coleson Cove with a new fuel supply in mind. Instead of using expensive Bunker C, the redesigned Coleson Cove would use a low-grade fuel called orimulsion, a fuel available only in Venezuela.

And while it's probable the orimulsion would still be delivered to New Brunswick in Irving-owned ships, Irving Oil would no longer be the actual supplier. NB Power officials personally went to Caracas, the capital of Venezuela, to work out the details of the supply contract.

Everything seemed idyllic until the refurbishment was almost complete.

Suddenly, Venezuela balked, saying there was no contract and the South American nation had no intention of supplying orimulsion to the New Brunswick power utility.

NB Power responded with threats of a billion dollar lawsuit, saying that, even without a signature, the deal was legally valid. NB Power also argued that a favourable court decision would be enforceable in the United States because Venezuelan assets, such as those owned by CITGO Corporation, could be seized.

More recently, NB Power realized that throwing more money into legal bills makes little sense and the Crown Corporation quietly dropped the suit.

So Venezuela seems to be the villain in the piece for not honouring the verbal deal. And in the scenario so far, NB Power seems to have naïvely based its plans on an unsigned contract.

Then, earlier this month, Irving Oil came back on the scene, playing the role of the “guy in the white hat.” Irving implied that it can supply Coleson Cove with a fuel that will, in fact, be cheaper than orimulsion. No details of what this fuel would be were released.

Everything would have fallen into place… bad Venezuela, naïve power corporation and good Irvings… except for a news release issued earlier this month by Irving Oil in the United States.

The release explains that Irving Oil and Venezuela are, in fact, business partners. On February 1, Irving purchased 55 per cent of the ownership of the marine terminal at South Portland, Maine from Venezuelan interests. The other 45 per cent of the terminal is still owned by the Venezuelan-controlled CITGO group.

This deal south of the border has led to some local speculation that the mystery fuel Irving can now supply is, in fact, a mixture of orimulsion from Venezuela and waste sludge from Irving's giant refinery in Saint John. After all, even though the Venezuelans were unwilling to honour a verbal contract with NB Power, they might be willing to supply the same product to Irving, a long-time buyer of that nation's petroleum and now a partner at the terminal in Maine.

Whatever the case, it raises the question of whether the Irvings are wearing the “white hats” after all.

There's another interesting feature to the news release.

For instance, it mentions that Irving terminals “are supplied by a modern fleet of double-hulled tankers including the MT New England 2006, the MT Great Eastern 2005, the MT Acadian 2005, the MT Nor'easter 2005 and the MT Irving Canada 1981.”

The four ships constructed in 2005 and 2006 are apparently “sister ships.” Only one, the Acadian, is registered with Transport Canada at the Port of Saint John. (At it turns out, all four are owned by a Dutch company, VROON, and are under permanent lease to Irving Oil. And, while the Acadian is registered in Canada, the other three carry the flag of the Marshall Islands, in the south Pacific). All four ships were built at the Hyundai dry dock, in South Korea.

So, whether technically owned by VROON or by Irving, these are Irving ships.

But wait a minute!

The Irvings just collected $55-million from the federal government as compensation for shutting down its own shipbuilding facilities in Saint John. If the company needed ships, why didn't they build them at home? After all, it's not because the ships were too large for the Saint John facility. The same Transport Canada data indicates that the Irving Canada was built in 1981 in Saint John even though that ship is slightly larger than the newer vessels.

In response to that question, one Irving apologist told me that the answer is simple: There was no way the ships could be built in Saint John as cheaply as in Korea.

So it was good business. Make your profit at home in New Brunswick and spend it somewhere else! Why spend it at home? It's not as if New Brunswickers need jobs. Or that the Irvings feel some sort of responsibility as good corporate citizens to buy locally.

John Steeves, a former Senior Program Editor with CBC National Radio News, is a freelance writer in Sussex, N.B.