WASHINGTON -- Two key legislators Wednesday urged the administration to negotiate a quick resolution of theeconomic disadvantages that Canada's new nationalistic energy policy poses for U.S. companies there.
House Democratic leader Jim Wright, D-Tex., and Rep. Clarence Brown, R-Ohio, asked for 'swift administrative and diplomatic efforts' in letters they sent to Secretary of State Alexander Haig, Energy Secretary James Edwards and Interior Secretary James Watt.
The congressmen complained that Canada's proposed National Energy Plan saddles U.S. firms with competitive handicaps in Canada that make the companies easy targets for takeover by Canadian competitors.
They cited Dome Petroleum Ltd.'s current attempts to buy up a big interest in Conoco, the 14th largest U.S. company, and Seagram's unsuccessful bid to take over St. Joe's Minerals.
Dome has indicated it wants 13 percent of Conoco stock to swap for Conoco's 53 percent ownership in Hudson's Bay Oil and Gas Co., a Canada-based firm. But Dome, much smaller than Conoco, has not ruled out an eventual takeover of the U.S. oil giant.
Conoco officials complain bitterly that Dome's offer would not have been possible without what it regards as the discriminatory features of the new Canadian energy plan.
The plan, designed in part to encourage Canadian ownership of Canada's U.S.-dominated energy industry, is not yet law. But its imminent enactment has had the effect of depressing the value of U.S.-owned oil and gas assets in Canada.
The plan calls for preferential treatment of Canadian firms in government exploration grants, access to federal lands, financing and marketing, Sen. Orrin Hatch, R-Utah, said in the Congressional Record of May 19.
Hatch said new Canadian taxes and pricing schemes have also depressed the market in Canadian oil and gas properties. He also warned that counter moves by the United States could curb access to U.S. public resources by Canadian firms.
Conoco fears its own access to federal leases could be hurt if Dome presses its $910 million tender offer for Conoco shares.
'What you're starting to see is a whole movement of Canadians coming down and buying U.S. energy assets,' one New York financial expert said. 'This Conoco deal is a huge deal. You'll get a backlash.'
In their letter, Brown and Wright called on the three cabinet secretaries 'to act promptly in protecting full reciprocity with our important trading partner and neighbor to the North.'
The letter said Canada's proposed restrictions on U.S. firms 'create an economic climate wherein Canadian investors and companies can bid -- almost exclusively -- for those assets under less than 'fair market value' circumstances.'
At the same time, Canada's Foreign Investment Review Agency can block proposed U.S. takeovers of Canadian firms.
