Lethbridge Herald, The (Newspaper) - November 4, 1974, Lethbridge, Alberta
LETHBRIDGE Newfoundland battles for control of oil By Rob Bull, Herald Quebec commentator Milk prices, milk value Milk prices are up again. Milk is con- sidered an essential food: Those families that most need it are usually those that can least afford to pay more for it. But that is not the whole story. Dairying is a demanding business. It takes heavy capital, which is at a premium, and a lot of labor, which is growing scarcer. There's no law requir- ing anyone to stay in dairying. He'll do so only if it is worth his while. The quickest way to acute milk shortages, which is the last thing the community or country wants, is to make milk production un- profitable. Secondly, milk prices are controlled in most communities. Boards usually set prices, and their goal is usually the best possible compromise in the long term interests of both the producer and the consumer. The current price increases are the result of removal of subsidies. Thirdly, milk has not increased in price as much as most other foodstuffs. Fourthly, the natural butterfat is probably the least essential of the in- gredients in milk, and skimmed or par- tially skimmed milk is nearly as good and somewhat cheaper. Milk powder, where it can be obtained, if often an even better buy. And lastly, price is not so important as value. At its new prices milk is only half the price of beer, and a great deal more work went into its production. It is much less costly than soft drinks, which nutritionally are only harmful. Many families who say they cannot afford milk can afford potato chips or other nuisance foods, or liquor or cigarettes. Mostly it's a matter of values. U.S. elections ST. JOHN'S-Two recent events have added drama to talks scheduled this week between Newfoundland and Ottawa on off shore oil. The first is the announce- ment of two natural gas dis- coveries off the coast of the province, one 80 miles from shore and the other 55 miles from shore. There is a good possibility oil may be found nearby. Newfoundland Energy Minister Leo Barry estimates that as a result of these finds, development and further ex- ploration work should begin to have an impact on the province's economy within three years. The second event occurred during Prime Minister Trudeau's visit to Paris, dur- ing which he discussed energy matters. The French govern- ment is heavily involved in financing behind both gas dis- coveries. Officials here are confident that petroleum technology be- ing developed in the North Sea and the Beaufort Sea, for ex- ample, will have an effect on solving problems currently faced by oil companies operating off the Labrador coast. The province's energy department has produced studies showing that these reserves, only half as far from the Montreal market as western Canadian fields, could be delivered to central Canada at a cheaper rate than those from the Mackenzie Valley. This could relieve pressure on western reserves and benefit not only the needy east coast economy but all of Canada. Oil companies dislike political uncertainties, whether in the Middle East or on the Prairies, and there are such uncertainties sur- rounding the east coast off shore fields. Newfoundland wants to ad- minister these fields subject to federal veto. The province feels it has a solid con- stitutional argument for doing so and made its views known to the federal government a year ago. Ottawa has so far not responded to these proposals in a positive or detailed way. The province is certain enough of its legal grounds to be willing to take its case before the Supreme Court of Canada to clarify the matter if no political solution can be reached. This could lead to a certain wariness on the part of the oil companies. A basic reason behind New- foundland's stand is a feeling that the federal government has to date botched the job of regulating off shore oil and gas exploration and development. Premier Frank Moores told the federal provincial energy conference in January that federal "regulations show no evidence of any thought hav- ing been given to maximizing the economic rent from these resources." Describing current federal regulations as a "mammoth one official here said Canada would get only a fraction of the rent being paid by oil companies to develop similar fields off the British or Norwegian coasts. Mr. Barry said in an inter- view "the only control a province has over its economic future is the way its resources are managed. All we're saying is that off shore resources should not be any different from on shore ones. "This development could have a dramatic effect on pop- ulation trends upset the balance between rural and urban society, and draw man- power away from traditional industries to new ones. "Who should be calling the shots the people on the scene who have to answer directly to the people com- mitted to the province or some bureaucrat in Newfoundland has a case 'for legislating unilaterally in In the U.S. general elections tomorrow general interest will be focused on how the Republican congressional candidates fare across the country, with the expec- tation that they will do poorly. Albertans should be particularly interested in two gubernatorial races in Rocky Mountain states where a main issue has been resource development. In Colorado, the incumbent Republican governor is pushing oil-shale develop- ment and strip coal mining as great op- portunities for the state and quoting his wife, whose name might be Martha and who apparently once said, "What difference does it make if they move that god-forsaken earth around? It couldn't look worse anyway." His Democratic opponent, leading in the polls, is the conservationist who led the successful referendum fight to forbid state funding of the winter Olympics and thus led to their being shifted from Denver to Innsbruck, Austria. In Wyoming, the same sort of battle is taking place between a Democratic can- didate who opposes a plan to build a coal- slurry pipeline because it would take too much water and a Republican candidate who favors the plan. The outcome of these two races may have a direct bear- ing on Alberta. If the Democrats win and mining interests face the setback this would represent, it may put greater pressure on Alberta's coal and may possibly boost interest in the oil sands. At the same time, such victories are like- ly to encourage environmental interests here, which have largely been concerned with coal. THE CASSEROLE the area of off shore oil and gas if it wants to. The right of nations to regulate the mineral develop- ment of their continental shelf was claimed in the 1940's by the United States and Great Britain. This was accepted at the time by Canada and later by the International Court of Justice. Newfoundland entered Confederation at a different stage of its political develop- ment from such other provinces as British Columbia and Prince Edward Island and therefore the contract of un- ion had different including the right to regulate off shore mineral development. "So Mr. Barry said, "the only public proposal the federal government has made is to split the revenue 50-50 between Ottawa and the provincial governments concerned. "That's no problem. It's likely an arrangement that could be made fairly easily on the division of revenue. The big problem is that Ottawa seems to be totally unwilling to give the province any management control. "But the opportunity to develop an industrial base in this province from off shore oil and gas activity is too great to pass up. We feel it will only be seized if the rate of exploitation is controlled by the province. "Without it, we will not only be faced with the traditional resource pattern of boom, then bust, but we will be left with nothing but a serious dis- location of our economy and our society." A medical conference in Ontario was told that many health problems are directly traceable to affluence, that provides so much money to be spent on tobacco, alcohol and convenience foods. A hospital administrator reported that smoking contributed to the ill ness of 15 to 25 per cent of his patients. Another doctor informed delegates that On- tario's alcohol-health problems require at least the same number of hospital beds. Add in the cases attributable to poor nutrition and more than half the hospital admissions in On- tario are accounted for. Figures for other Canadian provinces are not markedly different. live use of water that's the difference between the water it will take from the Saskatchewan River and what it will put back be gallons a "minute. Calgary Power is building a pipeline to stock a cooling pond at its Sundance plant that will consume gallons a minute, and if its thermal plant at Dodd's materializes, the additional consumptive use will exceed gallons a minute. To get those modest-sounding figures into perspective, the entire city of Edmon- ton's consumptive use of water is just over 100 gallons a minute. Canadian-American talks cover many issues By Frank Rutter, Herald Washington commentator Dow Chemical is planning a new ethylene plant at Fort Saskatchewan and it's consump- Cartoonist Sneyd recently published a dilly. It shows a parent education class, with the instructor saying, "First, I'd like to welcome all those who flunked our birth control course." ERIC NICOL On sharing A big station wagon full of people parks in front of my house. The driver a complete stranger to me gets out, takes a look at my property, comes to the front door and walks in without knocking. "I'm he says. "Make room." "I'm I say, having joined him in the front hall. "I'm afraid I don't understand." "I like this place. I've decided to live here. Me and my family." "You're going to live in my "We'll try it. If we don't like it. we'll go back to California." "But none of the house is I protest. "The rooms are all occupied. I have a wife and three children "No says the stranger. "To be frank with you, it's the location I like, more than the house. What we'll do is slap on another storey and subdivide the bedrooms." The stranger's family is moving through the house, the mother rearranging the fur- niture, the boy's minibike churning ruts in the back lawn. "Wait a goldarn I cry. "What gives you the right to move into my house, creating overcrowding and worsening pollution, crime and the ring around the 'Your exdaims the stranger. "Just because you happened to be here first, and had the money to buy the house, you think that you can exclude other people? You think you can get away with that I'm all right. Jack' This place is for Even as he speaks, another station wagon pulls up in front of my our house This elaborate parable is presented in order to dramatize my thesis. No city has an obligation to provide housing for everybody who wants to live in it On the contrary. The city has a duty to itself to say to congestive housing sponsored by higher levels of government that like to watch things bulge. If and when our city becomes too Manhat- tanized to be livable, it will be because its citizens have lost their sense of collective property. This sense of ownership of a shared habitat was sustained by the walled city of old, in which the only high-rise permitted was the castle of the town's Mr. Big. The medieval suburbs, being outside the walls, were the less vantageous neighborhood, unless the resident really en- joyed a dash of sack and rape with his outdoor barbecue. But the city inside the walls retain- ed its integrity. Not many cities remain walled there are still a few in France and Spain yet they convey even today the feeling of enclave, of a settlement belonging to its inhabitants, that is fatally absent in Los Angeles. What has happened is that the ramparts have been replaced by a wailing file of realtors and developers, whose breastbeating for more housing is heard by city fathers prone to march to the wrong drum. Our municipal authorities need instruction in the simple truth that the city is an exten- sion of the private home, one which its residents have a right to preserve from the surfeit of people that will destroy the very amenities that have made the city attractive. Just as there are lonesome householders who wouldn't mind finding someone nice un- der the bed, there are cities new towns, small towns eager for more people and domiciles to shelter them. But for those of us who have a full house, as urban creatures, isn't it time we stopped feeling guilty about giving the seeker of accommodation the name of a good hotel? WASHINGTON Cana- dian American relations are currently in a state of rather flux because of per- sonalities as well as issues. The issues cover a wide range in trade, the en- vironment, the economy and energy. The personalities involve new faces in key positions on both sides of the border. During the last couple of months there has been greater contact, relatively, than in re- cent years and it will reach a climax on Dec. 4 when Cana- dian Prime Minister Pierre Trudeau comes here to meet United States President Gerald Ford, the first top- level contact in more than two years and the first for the new president. All the issues have been explored at a. ministerial level during the last two months in meetings involving Finance Minister John Turner, Energy Minister Donald MacDonald, and Ex- ternal Affairs Minister Allan MacEachen with their U.S. Cabinet counterparts, Treasury Secretary William Simon, Interior Secretary Rogers Morton and State Secretary Henry Kissinger. Other recent visitors to Washington were Health Minister Marc Lalonde and Solicitor-General Warren Allmand, although only All- mand met with top U.S. of- ficials, including Attorney- General William Saxbe. There could be some signifi- cance in the scheduling of talks on a potential pipeline treaty ahead of Trudeau's visit, although the meeting in Ottawa last week was billed as only a first, quick get- together to line up the agenda. The two countries are clear- ly thinking in parallel, however, and agreement in principle could be swift since the concept of a treaty, with all the implied benefits for future development of northern oil and gas re- sources, has been endorsed at a high level on both sides. There remain some niggling questions, though, on more specific energy matters such as continued Canadian supply and price at a time when the U.S. is reviewing its own energy price structure and considering the possibility of some kind of import limita- tion to encourage self- sufficiency. Although the amounts in- volved are far from large in the over-all context, probably the bitterest issue currently unresolved is trade in livestock and meat. After holding a public hear- ing on the possibility of retaliation against Canadian beef and cattle import quotas, President Ford appears to be postponing any immediate ac- tion. There is strong pressure from some agricultural groups, particularly cattlemen in the midwest, for retaliatory quotas, but Ford on Wednesday told farm representatives at a White House meeting that he would "not rush into anything." He seemed to maintain that line in a speech Thursday in Sioux City, Iowa, where he said that he would act if the general problem (which involves Japan and the European Common Market as well) got out of line next year and in- dicated he would not take such action before his visit to Japan later in November. There has been some differ- ence of opinion between Turner and Simon on economic and fiscal matters, including how to cope with the enormous impact of Arab oil prices and whether domestic fiscal restraint is the best weapon against stagflation. However the U.S. went along with the idea of putting Turner in charge of the Inter- national Monetary Fund's special committee on world economic problems and Cana- dian reaction to Ford's domestic economic program was quite favorable. (Indeed it was rather reminiscent of the sort of program practised by Canadian finance ministers.) Little has moved lately on such environmental issues as the Skagit Valley, oil tankers and west coast protective measures. On the former, everyone is waiting for the B.C. government to make a move: on the others, negotiations are expected to resume next year. Contacts between the two governments on a diplomatic and day-by-day basis will un- dergo something of a change because of the retirement of the most experienced "Canada hand" in the U.S. government, Rufus Smith, deputy assistant state secretary for Canadian af- fairs. Smith's low-key but sen- sitive approach to bi-lateral problems has been a key fac- tor in relations for many years, but especially since the beginning of 1973, when Canada was "promoted" to the sub-Cabinet secretary level in Washington. His successor, starting on an acting basis and ex- pected to be confirmed shortly, is Richard Vine, who has been director of western European affairs in the state department and is an ex- perienced career officer. It will be Vine who prepares the administration for Trudeau's meeting with Ford next month, a meeting which, despite symbolism, could have an important bearing on the course of relations in the next two years. Consumers should be thankful for beef price drop By Bruce Whitestone, syndicated commentator Dig that driveway By Doug Walker As a provider, rny family seems to think I leavr- to he desired We have lived at our location for year? and they flill haven't got a fence Also, we lark a ce- rnrnt driveway and have to put up with a paVh of gravel instead Ordinarily the gravel driveway doesn 1 get rmxh attention H is certainly being ignored these days as patrons of the Sportsplex park their car5; throughout the area One evening, as yet another car was block- ing our driveway FJspeth suggested that I should put up a sign drawing attention to the drivewav Good idea, said .Judi, it could read. This REALLY is a dnvewav" The average price of beef has fallen dramatically over the past year. Beef cattle prices at auctions have been collapsing, but consumers have hardly noticed the difference. Farmers, who for months have been calling on governments to introduce some form (any of market floor system to pre- vent the relentless downward movement in their prices, particularly of calves, are becoming desperate. Theoretically, there is nothing to prevent the market continu- ing downwards. Recently, there was a photograph on the front pages of many new- spapers of a farmer shooting his young calves as a protest against government inaction. Meanwhile, the provincial governments of Alberta and Manitoba have provided interest free loans of and respectively per head of cattle, to help this industry. Producers, unwilling or un- able to keep so many beef animals through the winter because of a lack of feed or cash to buy feed, are marketing large numbers of cattle Many nations, particularly m the European Economic Community put a floor into their beef market by operating intervention buying as prices fall below predeter- mined levels. What is puzzling many producers, and even more housewives, is the fact that, despite the big drop in livestock prices, retail beef prices have not been reduced drastically, on average, not more than five to 10 cents per pound. The reasons behind this ap- parent contradiction are numerous, say the retailers and wholesalers. To begin with, the average livestock price which has fallen sharply, masks a great many variations in quality and price. Over the past few months cattle prices have declined from per hundred weight to about now. The biggest catastrophe occured in young cattle, those weighing less than 400 pounds, where prices have fallen from 65 cents to 20 to 25 cents per pound. The so called exotic cattle (imported breeds) re- main at very high prices. Generally, packers try to buy the good quality animals which will yield plen- ty of lean meat, and these are still at prices way above the average There is a shortage of high quality, heavy weight cattle, yet fanners are unwill- ing or unable to afford to keep cattle to maturity in view of high maintenance costs. Further, young cattle, whose price has fallen the most, are not suitable for slaughtering for meat. These low calf prices reflect the cost price squeeze which is leading many feed lot operators to abandon their operations entirely. When it comes down to simply a question of supply and demand, housewives have a preference for the easier to cook, better quality, scarce cuts, for which demand remains good and prices firm. Meanwhile, costs of retailers have been climbing sharply. This September meat cutters received big increases: In the most junior category, hourly rates climb- ed from to while the senior meat cutters received an 18 per cent increase, from to per hour. Last winter retailers were paying more for boneless beef than the selling prices of hamburger meal, as a type of "loss leader" to appease angry consumer groups Even today, boneless beef prices permit little profit to the retailer. The decline in cattle prices, if it continues. will only permit retailers to make up for earlier losses. Even with the recent decline in boneless beef, therefore, retail prices will not decline much further. In an inflationary en- vironment, generally all costs rise faster than selling prices. Depreciation, higher interest payments, wages, taxes, all entail a squeeze on retailers so they must attempt to recapture some of their costs on each major item, including, naturally, meat. Like the retailers, wholesalers face steep cost increases this year: par- ticularly in wage bills and in transportation charges. Long supplies have meant bad headaches: earlier this year in many parts of North America the rush of cattle through the markets caused a backlog of animals awaiting slaughter, and the wholesalers had to pay for the upkeep of their animals. Also, like retailers, wholesalers argue that, for farmers expecting even more reductions in retail meat prices, consumers should be thankful for the cuts that have been made. Costs have risen so sharply in the past few months, they say. that it has been more a question of lower, farm gate prices preventing further increases rather than reducing prices. The Lethbridge Herald 7th St S Lelhbndge. Alberta LETHBRIDGE HERALD CO LTD Proprietors and Second Class Mail Registration No 0012 CLEO MOWERS. ElMor rma Publisher -DON M PILLING Managing Editor DONALD R DORAM General Manager ROY F MILES Advertising Manager DOUGLAS K WALKER Edrtorial Page Editor ROBERT M FENTON Circulation Manager KENNETH E 8ARNETT Business Manager "THE HERALD SERVES THE SOUTH"