Saturday Huddle: Let’s Speculate About Irving
The Saturday Huddle is a weekly column that features opinion, analysis, and reflections on Huddle stories, podcasts, and business news in the region. Trevor Nichols is Huddle’s editor.
New Brunswick’s most important private company dropped some bombshell news this week.
In a brief statement on June 7, Irving Oil said it would consider a new ownership structure, a “full or partial sale,” and changing its portfolio and assets as part of a strategic review of the business.
It was a shocking public announcement from a company that is woven into the fabric of the province and notorious for keeping its cards pressed tightly against its chest.
Irving, of course, didn’t clarify or elaborate on its brief statement – a fact that annoyed people like Saint John city councillor Brent Harris.
Harris told me he’s angry Irving won’t say more about its strategic review, considering how impactful it could potentially be for New Brunswick and how much the province has invested in the company.
“This is a private company that requires a ton of public money to keep going and we have no public discretion or view on what happens inside of it,” he said.
Whether or not you agree with him, there’s no question Irving left a giant informational vacuum with its bare-bones statement. And staring into that vacuum, the rest of us have no choice but to speculate.
Speculation is a surefire way to make yourself look like a fool, but it’s also kind of fun, so I’m going to engage in some today.
What many consider the disaster outcome of this strategic review is Irving picking up and moving from the province altogether.
This feels very unlikely. The company is a major employer in New Brunswick and has, to put it incredibly mildly, a cozy relationship with lawmakers here; more than a few of New Brunswick and Saint John’s laws have been bent around Irving’s best interest.
Considering the mythos and history of Irving in New Brunswick, I can’t imagine the company getting better treatment anywhere else in the world.
What seems more likely, and what economist and UNB professor Dr. Rob Moir told me when I spoke to him this week, is that Irving is looking at ways to transition out of the fossil fuel business, perhaps selling some of its fossil-fuel assets in the process.
Moir argued climate change will fundamentally change Irving’s business model no matter what the company does so of course it will try to get ahead of that. That might mean selling its Saint John refinery, pivoting heavily into “greener” hydrogen, or any number of other things.
Already, the Atlantic Provinces Economic Council says most of the major new projects in Atlantic Canada are tied to green energy. Irving will be left behind if it doesn’t get on board.
Then, of course, there’s the much more cynical take that all Irving is doing by publicizing its strategic review is trying to gain leverage.
Any successful company as big as Irving goes through an essentially constant process of reflection and evaluation (although strategic reviews like this can signal bigger moves). But the famously tight-lipped Irving making this one public surprised a lot of people.
But there is a larger context here that might make the news less surprising.
Next month marks the start of federal clean fuel regulations that will force companies like Irving to make their fuel cleaner. Making those changes will come with a big cost.
However, the Government of New Brunswick has changed its laws to foist those costs onto average New Brunswickers, instead. That angered the federal government, which wants industry to pay for its cleaner fuel, not consumers.
Shortly after news of Irving’s strategic review broke, Premier Blaine Higgs (a former Irving director) used the news to criticize the federal government over its clean fuel regulations.
“I am very concerned about the rules and regulations that are being imposed upon this business at a time when we are trying to manage commodity pricing [and] people’s cost of living,” he said.
I’m not smart enough to connect these dots, but it certainly feels like more than a coincidence that Irving is making an uncharacteristic public announcement just as laws that might significantly impact its bottom line are set to begin.
Who knows if any of the above theories are right. But unless Irving suddenly decides to become transparent, theories are all we have.
I and many others will be watching closely to see how the review unfolds. Hopefully, when we learn more, my speculations don’t make me look like too much of a fool.
More importantly, though, I hope whatever happens doesn’t hurt average New Brunswickers too much. There’s enough going on already without an Irving-centred economic upheaval thrown into the mix.