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It’s Drafty

Howdy all, I know many of us, especially here in Canada, have a rough go of it in April, but as the Timberlake dude says, don’t worry because tomorrow “It’s Gonna be May” and not a day too soon if I may say so myself. Which I will. April generally blows for many reasons, to layer in resurgent pandemic waves (I’m looking at you India, Ontario and Alberta), Tesla earnings and a pause in the energy rally just isn’t fair. Then the Kenney government decided to charge a user fee for fun. Come on guys!

 

From Chaucer (he dropped the iambic pentameter hammer on April showers) to folksy sayings (April showers bring May flowers (punch)) to the usual Calgary litany of freak snowstorms and patio weather (often in the same day!), April is quite often a bear of a month and this year, AGAIN, it has been compounded by pandemic lockdowns and the gradual elimination and cancellation of everything that is fun in the sun.

 

Fortunately, there are a few green shoots. For example, typically by this time, all Canadian teams have been eliminated from the NHL playoffs – not this year! And while it appears we are going to have to listen to Leafs fans predict an imminent Stanley Cup for at least two rounds in the playoffs (assuming Montreal plays the role of doormat they have been perfecting all season) and Connor McDavid does his playoff disappearing act again. Then of course they stop playing the Canadian teams and will get whacked by whichever American team they end up playing, which will be uplifting when it happens.

 

Meanwhile it is still dreary April.

 

However, out of this doom and gloom, like clockwork, a hero has emerged. And his name is Roger Goodell. That’s right, never one to let an exclusive marketing opportunity for the world’s most dominant sports brand go to waste, the NFL and the Commish elected to proceed with the annual meat market that is the NFL draft, this time in a vaccine-supported live event. In Cleveland of all places. And if the first round intrigue is anything to go one, it worked.

 

Yet another piece of narmal restored in an otherwise abnormal month.

 

So good on you NFL for refusing calls to cancel the draft and soldiering through. Last year’s draft was a trendsetting rallying-point for the other leagues to get their poop in a group and play. My guess is that the live nature of the draft and the hype and excitement is going to open more doors in more stadia and get fans back in seats. Not in Canada. Here we have to wait. Maybe a Stampede will happen to shake everyone out of their COVID lethargy. Meanwhile the Kentucky Derby is happening tomorrow.

 

Anyway, I digress. While I take a break between Round 1 withdrawal (the Cardinals pick is … and for the record I got the San Francisco pick right) and wait breathlessly for Round 2, I am going to cast off these April blahs, and, just like the NFL, I am going to hold a draft – like I do every year, except, as regular readers know, mine is a Global Energy League Draft.

 

So here goes.

 

The Global Energy League Draft of 2021.

 

OK, first the rules. For the purposes of this draft there are only 10 teams, the others are all in some minor league or other entity like a Soccer Super League. The draft will take place in typical inverse order, so if you had the weakest record in the last year, you get to pick first. This means the best picks last. Each participant has 10 minutes to make their pick, spawning the term “on the clock”.

 

Trades are allowed, encouraged and occasionally happen. As an analogy for global energy politics, it has to make at least a little bit of sense and clearly, if Russia isn’t portrayed as evil, then what’s the point?

 

Finally, just like in the NFL draft there has to be a last pick, in this case it is pick number 60 because this draft actually has 6 rounds. In the NFL this pick is called Mr. Irrelevant just to demean that poor kid a bit more, so we will go with that.

 

 

Alright, here comes honorary commissioner and noted candidate for YYC mayor Roger Baker to announce that the team with the number one pick in the Energy Draft is up and has ten minutes to make its pick.

 

 

“Ladies and gentlemen, Canada is officially on the clock and the draft is on”

 

 

Canada – first pick overall! Very exciting, right? Just like last season Canada has the first pick which means… They were the worst performer of everyone. Not a big reason to celebrate, right? Maybe if they pick the consensus number one, but if they screw it up…

 

Last Season. The last season for Canada was nothing short of hopeless on the energy front. The country started relatively strong but faded fast as the year went on. Expensive free agent TransMountain finally got on the field, but it was clear that after having to sit for two years while negotiating a new contract, it was going to be at least another season before any significant contribution. Another high profile draft-pick from prior years was Coastal Gas Link got on the field for a bit but weather and protests slowed its progress considerably. Negative oil prices and a low rig count joined forces with a raging pandemic to squash any breakout hopes the Canadian side had by midseason and notwithstanding a healthy rally in the last few games of the season, a career-ending injury to highly touted rookie KXL doomed the Canadian side.

 

Needs: Everything. Seriously. OK, maybe not that seriously but there are holes in this lineup that Coach Trudeau needs to address to attract more potential free agents. Probably needs a more focused GM, but that’s for another day.

 

The Pick. This one is really no surprise. The consensus number one pick in the draft has always been staring any team in Canada right in the face. They need to protect and get the best performance out of their most prized assets. With first pick in the draft, Canada picks LNG which should pay massive dividends and allow CGL to maximize its performance for years to come.

 

Pick Number 2 goes to the Russian team courtesy of a trade with Venezuela which was solidly in second to last place. Moving up from number 9, the Russians gave the Venezuelans some much needed foreign currency and a couple of bottles of vodka.

 

Last Season: Led by Vlad the Impaler Putin, the Russian Bears trampled roughshod over pretty much everyone they faced last season yet somehow still finished a distant second to Saudi Arabia. As always. Even their traditional cheating and intimidation did little to help.

 

Needs: It is hard to say what the Russians need at this point. Their energy team is very balanced and requires very little tinkering. In true Belichikian fashion they are said to have spies everywhere, able to manipulate teams and players to an unprecedented degree, belying their economic impact. If pressed, it would appear that Russia’s two biggest issues appear to be some cracks in team chemistry between Putin the Coach/GM/President and Chief Play Caller and the extremely well-paid minions/stars he has toiling away for him and the general disdain that the Russian team seems to have for the environment (they do spill a lot no matter where they go or how they get there).

 

Pick: To no one’s surprise, the Russians decided that they would cheat and pick up multiple players with their one and only draft pick. Then, unhappy with his picks, Putin executed all the draft picks and demanded that he get to pick again. This time he picked Donald Trump but he turned out to have bone-spurs and was declared ineligible for the draft. Frustrated, Vlad “settled” for Nord Stream 2, the pick he wanted all along, giving him the ability to dominate Europe for decades was a decent outcome.

 

Picks number 3 and 4 this year both go to Alberta, home to former league commissioner Jason Kenney. The number 3 pick is “earned” thanks to Alberta’s continued lousy record the past season while the number 4 overall pick is a compensatory pick from the United States for the cancellation of the Keystone XL pipeline project.

 

Last Season: Compounded by pipeline challenges, terrible commodity pricing and an ongoing conflict with Canada, last season was a bit of a mess for Alberta. Overloaded with rigid ideology and non-functioning strategies like the War Room, carbon tax battles and expensive free agent signings like KXL,  the Alberta team spent much of the year blaming everyone else for their poor performance instead of assessing their weaknesses and starting from scratch. After an incredibly tough year though, it appears that Alberta may have learned a valuable lesson in energy world realpolitik. The basics work. Have a strong ground game, play by the rules, keep your head down and don’t draw attention to yourselves and you will be competitive week after week. Start to muck around with the basics and think you are smarter than the opposition? You are done.

 

Needs: Many. With TransMountain on the Canada roster and KXL out of the league for good, Alberta needs to somehow match that pipeline strength with some of its own. It also needs to understand the division it competes in, having the powerhouse US as a perennial power and also contending with teams such as Mexico and Iraq. New coach and former league commissioner Jason Kenney has his hands full.

 

Pick #3: With this pick, Alberta went the safe route and chose to bulk up its offence, and who can blame them after the manhandling they have suffered the last few years. The pick is Petrochemicals. It’s a bold choice worth trying, especially with the lack of pipeline depth in the draft.

 

Pick #4: With this pick Alberta is faced with a conundrum. Do you take a flyer on an unproven pipeline like Energy East and hope it pans out? More infastructure? A Quebec emissary? Ultimately this pick came down to the wire and with time almost expiring to make the call, Alberta surprised everybody and embraced a new trend and went with utility scale solar. Even old dogs can learn new tricks I guess.

 

 

The 5th overall pick in this draft belongs to the United States, who finished in the middle of the pack, notwithstanding having one of the best teams in the league, on paper.

 

Needs: While they got steady production out of their core energy assets for much of the year, the US team suffered from a lack of cohesion and strategy leading to some pretty disappointing results. The problem of course stemmed from an ownership group that didn’t understand restraint or salary caps resulting in a lineup constantly filled with pricey free-agent acquisitions, divas and is a lot of flash over substance. Case in point is former #1 overall pick Permamia, easily sucking up 75% of the salary cap.

 

Needs: The media and analyst community is pretty much all in agreement that what the United States needs in this draft is production restraint, that maybe they can actually finally emerge victorious by slowing themselves down a bit.

 

The Pick. True to form, the United States ignores the advice of the punditocracy and instead doubles down on what they already have, selecting another Tight Oil charlatan from a mid-major, sure to be a salary cap and draft bust. Doesn’t matter, they can’t afford to pay him or his teammates anyway. It’s going to be a loooonnnngggg season.

 

 

 

The 6th overall pick in this draft belonged to Iran and for the longest time, it was radio silence as they searched for their scouting notes, a list of available choices and a video-feed that wasn’t in Russian.

 

Last Season: Iran was blacklisted for much of the season last year as perennial powers United States and Saudi Arabia did their best to sideline them and keep them out of the playoffs. It was one debacle after another as they found themselves hemmed in with nowhere to send their energy. With China supporting them and an insurgent group of fans from surrounding areas, they thought they had a chance to be relevant, but it didn’t last.

 

Needs: For Iran, it’s pretty simple. They have some of the best assets in the energy league outside of Saudi Arabia but no way to properly use them unless the US lets them.

 

Pick: In an inspired twist, the Iranians realized the fundamental flaw in their team model and suddenly decided to play nice with the rest of the world, then, when no one was looking, they submitted their pick to the commissioner. Benjamin Netanyahu. Genius sleeper pick. With the hawkish Israeli on their side, it should be easy street becoming relevant for the upcoming season.

 

The 7th overall pick this year belonged to China, a surprise leader last season, especially when one considers they are primarily a consumer and not producer of energy.

 

Last Season: Finishing fourth in the league last year was something of a major accomplishment for a talented and disciplined Chinese squad. They dominated the energy league by building up massive reserves, satisfying demand by being open to trades with anyone who had a viable option for them and not being intimidated by any team in the league. The lost early in the season to the Corona team but made a lot of roster moves to shore up their defence ahead of a late season rematch they won handily.

 

Needs: With strength at virtually every position, the Chinese entry has no glaring needs so they are free to draft strategically. In the current league incarnation, the real rivalry for the Chinese team is the United States, especially now that the US team has a new General Manager in Joe Biden who for the moment is a bit of a wildcard in his approach to the Chinese team.

 

Pick: In a bid to solidify their influence in the league and secure a leading competitive position for years to come before the US team gets its act back together on the foreign influence front, the Accordingly, the Chinese selected Bribes disguised as foreign aid. This will allow them to throw money around the world, particularly in energy and resource-rich but economically challenged areas such as Africa and South America. By pursuing this goal, the Chinese are gradually supplanting pretty much everyone as the go-to development partner and securing their energy and resource needs for years to come. Rumour has it they are even negotiating to buy a piece of the Saudi Arabia team.

 

The 8th overall pick went to second year Coronavirus who got a high draft pick last year in the expansion draft and parlayed that into a pretty successful season for everybody’s most hated pandemic.

 

Last Season: In their first season in the league this team had an outsized impact, utilizing both a stifling defense and fast-moving offense to confound opposing teams and sap their energy. Players came in waves and it took all that opposing teams could do to finish games.

 

Needs: The Corona team was pretty solid at every position, but could use some new variants especially since late in the season, a lot of teams were sdtaring to figure them out.

 

Pick: Last year this team picked 30 million barrels of oil and then plucked the best and brightest players from each team during the expansion draft. With the season almost cancelled as a result, most of the teams have now colluded in some form or another and developed doping mechanisms that allow them to overpower pretty much 95% of Coronas players. This year, they couldn’t decide who to pick and the clock expired marking the first time in draft history that a team missed their pick..

 

As you recall from earlier, Venezuela did the trade with Russia so they were to pick next at 9 but now with Corona missing their pick, Venezuela gets to pick 8th and 9th.

 

Last Season: This past season was an unmitigated disaster for Venezuela. They started weak and got weaker with production falling from beginning to end. The only thing that kept them from utter collapse was financial support from both Russia and China, a refusal to pay their players and a worse season by Canada

 

Needs: Everything. Up and down the board. They don’t even have a medical staff. What they do have is the deepest bench in the league – just no way to pay anyone.

 

The picks: No surprise here – narcomoney from Russia to meet payroll and gasoline imports from Iran. It’s the best they can do given the league has seized their bank accounts and blockaded their training facility.

 

The 10th and last pick of the draft belonged to Saudi Arabia, perennial favourite, founder of this and its onetime rival league OPEC.

 

Last season: As always, Saudi Arabia started out as the favourite, won the most games, dominated the headlines, the stat sheets, the press, talk radio, the playoffs – you name it. They won the season going away, crushed the spirit of any team they faced and easily locked down the championship. They are the perennial favourite and this coming year will be no different.  They don’t even have cheating scandals to hang around their necks. Plus they did pretty good against the corona team – as far as we are told.

 

Needs: Absolutely none. How do we know that? History. Plus Saudi Arabia has the bankroll and the cap space to wait anyone out – just ask the United States, or Russia, or Iran, or Venzuela.

 

The Pick. This one is interesting, because they really don’t need to make one. There is no weakness on their roster. Their farm teams are stacked, they have a massive cost advantage. In fact, there is only one area where they have previously elected not to compete with the rest of the league. So true to form, they drafted some LNG and incremental refining just for fun. Expect them to dominate this space soon. It’s just the way the Saudis operate.

 

OK, there you have it. An awkward energy draft.

 

Before I leave this flea-bitten, beaten to death analogy, I have to acknowledge the previously discussed Mr. Irrelevant.

 

So, with pick number #60, which based on how the draft order works typically falls to the #1 draft position team, Canada decided to pick, purely as a flyer, blue hydrogen. Seems like a wing and a prayer for sure, but at least it will use a lot of natural gas if it ever gets off the ground. Maybe it’ll stick. Not sure. Like all draft picks – you just have to wait and see.

 

 

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