The Year of the Black Water Dragon brings a new province to China….Canada!

The value of Western Canadian crude is depressed for two reasons - so much oilsands production was being moved into the U.S. Midwest it forced down prices compared to WTI and the Keystone XL is the Spruce Goose of the 21^st Century splashed down for good. This "double discount" from world prices is costing oil companies and governments in Canada billions annually.

So goes the news for Canadian Natural Gas and shale gas.  On the convention al side FD&A costs more than $12/boe will make you unprofitable for the next decade and not to mention the creeping environmental litigation that will manifest itself as workers exposed to conditions the Canadian government didn’t protect them from produces its generation of early onset cancers and other terminal illnesses.  The forecast for natural gas for the next decade is likely to hold between USD $ 3-4 mmbtu (we’re at about USD $2.54 mmbtu).

Public discord over Drilling's fractured future is mounting an offensive: Growing hydraulic fracturing (fracking) erupted in 2011 with moratoriums now in place in Quebec and jurisdictions around the world. Using high-pressured, chemicallaced water and sand boosted North American gas production so much it's driven prices to uneconomic levels. Calgary's Encana Corp. found itself caught up in the issue late in the year when the U.S. Environmental Protection Agency linked fracking to water issues in one Wyoming village.

Enter China's resourcefulness in Canada: China's state oil companies are buying up Canadian oil, natural gas and pipeline assets like never before. It's provided greater impetus for better oil and gas pipeline links to the Pacific Rim. Regulators approved a project by Athabasca Oil Sands Inc., which is controlled by PetroChina, whose $5.4-billion deal with Encana in the Horn River Basin collapsed earlier in the year. In October, Sinopec added to a position in Syncrude Canada, paying $2.2 billion for Daylight Energy. There are billions more invested in companies like OPTI, MEG Energy and Penn West Energy from a variety of firms ultimately accountable to the Beijing government. 

Canadian Bad business ethics will bring forward more of the corrupt to trial shortly: The dollars were bigger when Niko Resources was fined $9.5 million in June for paying bribes to a government official in Bangladesh in 2005, but Alberta Securities Commission's rulings against two Calgary investment firms, Concrete Equities Inc. and Wealthstreet Inc. this fall was signally the fate for many during 2012! The ASC ruled four principals with Concrete Equities "illegitimately" raised nearly $120 million from investors in 2009. One of the four, David Jones, who promoted investments regularly on local TV and radio, was also ruled to have illegally traded securities through Wealthstreet and was levied a $1.5-million penalty. Penalties in the case of Concrete, described by the ASC as "an accident waiting to happen," haven't yet been announced.

Suncor Energy: Two years after creating Canada's biggest oil and gas company with the takeover of Petro-Canada, Suncor Energy found itself caught up in the violence of the Arab Spring more than any other Calgary company. Suncor had to write down $514 million in Libya early in the year given the uprising that brought down dictator Moammar Gadhafi before returning in December just as it pulled out of Syria amid growing violence against the Assad regime. In addition, if the geopolitical challenges weren't enough, CEO Rick George announced his retirement.

TransAlta admitted in November it manipulated electricity prices a year earlier. After approving the Heartland power line, a critical decision is looming on whether to proceed with one or both controversial north-south power lines to be funded by billions of ratepayer dollars.

A lot of strong stories - notably the battle on the board of directors at both Canadian Pacific and grain-handler Viterra Inc. - didn't make the list and will largely play out this year.