Bud Bird compares Alward government to Venezuela

A well-known Progressive Conservative is comparing Premier David Alward’s government to Venezuelan President Hugo Chavez's socialist regime after controversial changes to the N.B. government’s contract with Enbridge Gas.

Bud Bird, a former provincial cabinet minister, federal MP and mayor of Fredericton, wrote a scathing letter on Friday, denouncing the Alward government’s changes to the Oil and Gas Act that broke several parts of its agreement with Enbridge Gas.

Bird, who was a founding investor with Enbridge Gas, called the changes "devious" in his letter.

"Like in this case, the means do not justify the ends. This is unbridled use of government power. It's legislation that you'd think would be coming from Venezuela," Bird said in an interview.

Bird was an early investor in Enbridge Gas New Brunswick but he sold his stake last year and will not be affected financially by the new law. He said Alward should rescind the new law and negotiate a new deal with Enbridge.

He is still a director with the company.

The changes were introduced after talks between the provincial government and Enbridge failed to result in a new agreement.

Under the reforms, Enbridge’s rate categories were changed. It also outlines several key dates on when the company must have its new rates approved by the Energy and Utilities Board.

Current rates are fixed until Sept. 30. Enbridge must make a new application to the EUB under the new rules by May 31.

The Alward government has said the changes were necessary to bring down the cost of natural gas in the province.

N.B.'s Venezuela connection

In Venezuela, the Chavez government has taken over several key industries, including in the oil and gas sector. The leftist leader of the South American country is a critic of U.S.-style capitalism.

Chavez completed a process of nationalizing his country’s oil fields in 2007.

The companies that were affected by Chavez’s nationalization process included BP PLC, ConocoPhillips, Exxon Mobil Corp., Chevron Corp., France's Total SA and Norway's Statoil ASA.

Venezuela had threatened any company that disagreed with its policy that it could expropriate the company’s assets. New Brunswick has had its own history with the Chavez government’s oil and gas policies.

NB Power had a solid history of purchasing Orimulsion, a cheap water-and-bitumen mixed fuel, from Petroleos de Venezuela, S.A. (PDVSA), the state-owned oil company.

NB Power made a fateful decision to start the $747-million refurbishment of the Coleson Cove Generating Station before having a signed agreement with PDVSA.

The Venezuelan government then decided it would halt Orimulsion supply unless a company had a contract, which PDVSA argued NB Power did not.

The dispute led the former Bernard Lord government to replace the president and chief executive officer of NB Power. The Lord government also called for a set of special legislative hearings to look into the fiasco.

In 2007, NB Power and PDVSA announced it had reached an out-of-court settlement, with Venezuela agreeing to pay NB Power $338 million.

Even though NB Power received a settlement in the Orimulsion dispute, the refurbished Coleson Cove station is rarely used because it is too expensive.

NB Power has explored the option of burning natural gas at the facility.