Newfoundland signals it won't give up fight for control of offshore oil

Development of Canada's offshore Atlantic oil may be delayed further as a result of Newfoundland's April 6 election. The island province voted overwhelmingly to continue its fight for provincial jurisdiction over offshore resources.

Newfoundland Premier Brian Peckford was returned to office with a stunning majority in an election he intended as a test of support for his staunch provincial-rights position.

''The people of Newfoundland have spoken out strongly and effectively,'' said a jubilant Mr. Peckford. He said Newfoundland now has ''a mandate to be strong'' in its longstanding dispute with the federal government on the issue of offshore rights.

''Newfoundland cries out for an equal place in the Canadian confederation family,'' he declared. ''We want the rest of Canada and the federal government in particular to recognize that we must have something to be responsible for.''

Peckford's Progressive Conservative Party captured 44 of the 52 seats in the Newfoundland legislature. The opposition Liberal Party won only eight seats, and the left-leaning New Democratic Party was shut out in all 23 electoral districts in which it fielded candidates. Going into the election last month the Conservatives held 34 seats and the Liberals 17. One seat had been vacant.

Mr. Peckford, who had two years left in his previous five-year term in office , called the election after negotiations on offshore resource jurisdiction with the central government in Ottawa broke down.

Newfoundland, a rocky island province off the east coast that has long led the country in unemployment, sees a chance for prosperity in offshore oil riches.

The Canadian government traditionally has the constitutional right to control offshore oil, but Mr. Peckford maintains that Newfoundland, which joined Canada only in 1949, did not sign away any of its powers as a sovereign state at that time. Therefore, he argues, Newfoundland is entitled to the expected billions of dollars of revenue from the Hibernia oil field 180 miles east of the island underneath the Atlantic.

Hibernia promises to be a bonanza that could rival some of Mexico's lucrative oil finds. Many Canadian analysts say it contains at least 2 billion barrels of oil, equal to more than one-third of Canada's existing onshore reserves.

Situated in an area of the North Atlantic that is plagued by storms and icebergs, Hibernia will cost billions and take half a decade to develop. The effort has been stalled by the dispute between Ottawa and Newfoundland. It now appears the oil companies active in the region will face even longer delays.

The federal government had previously offered Newfoundland a deal under which the two governments would jointly manage Hibernia's development. Newfoundland would receive the lion's share of oil revenues until such a time, probably by the end of the century, that the province reached a prescribed level of prosperity.

Mr. Peckford rejected the deal, saying his province has no intention of sharing jurisdiction with the federal government. Now Ottawa, which won a similar, precedent-setting case before the Canadian Supreme Court in 1967, says it will not budge.

Federal Energy Minister Marc Lalonde said April 6, ''Our principles remain the same. We have no new proposals to put forward.'' The federal government, Mr. Lalonde went on, intends to see Hibernia developed in a way that is ''good for Canada as a whole, including the people of Newfoundland.''

But the election clearly stepped up pressure on the government of Prime Minister Pierre Trudeau to compromise with Newfoundland. Joe Clark, leader of the Conservatives and a former prime minister, said, ''I think it's very clear that there has been a message expressed by the people of Newfoundland on this issue that Ottawa will not be able to ignore.''

You've read  of  free articles. Subscribe to continue.
QR Code to Newfoundland signals it won't give up fight for control of offshore oil
Read this article in
QR Code to Subscription page
Start your subscription today