Danny Williams is quickly learning that staring down Paul Martin’s hapless minority government was far easier than beating up on fat-cat oil companies.

In April, Newfoundland and Labrador’s premier — whose confrontational style had previously won the province major concessions from Ottawa on sharing offshore petroleum royalties — was tersely dismissed by the consortium that controls the Hebron-Ben Nevis oilfield.

An agreement between the province and the consortium on developing Newfoundland and Labrador’s fourth oil project seemed close when the companies let Williams’ early April deadline expire. According to the government, one member of the consortium, ExxonMobil Corp., refused to give in to the government’s key condition that the province assume a 5% equity share of the project.

Williams — who learned of the consortium’s decision during an excursion to Calgary, where he chided provincial Tories for their treatment of Alberta Premier Ralph Klein — responded by lashing out at the oil companies. First, he darkly warned of “taking out” ExxonMobil. When pressed for details, Williams threatened to set a deadline for developing Hebron-Ben Nevis and punishing the companies by expropriating the oilfield should they fail to comply.

However, unlike the confrontation with Ottawa over the Atlantic Accord last year, Williams’ bullying tactics did not force the oil companies to their knees. Instead, project leader Chevron Canada Resources criticized the province for changing the ground rules and announced the redeployment of staff from St. John’s to offices in Western Canada.

The hollowness of Williams’ threat was subsequently demonstrated when the federal government — which shares jurisdiction over the offshore petroleum sector with the provinces — refused to join Williams in his crusade. In fact, during a visit to Newfoundland, Prime Minister Stephen Harper said he opposed introducing “use it or lose it” legislation for the Hebron-Ben Nevis project.

Williams then suggested that the province might purchase ExxonMobil’s 38% share of Hebron-Ben Nevis, thus becoming the largest owner of the oil project. It is perhaps fortunate for Newfoundland and Labrador that ExxonMobil declined the premier’s generous offer. That’s because Hebron-Ben Nevis is considered to be the riskiest offshore venture of the four commercial oil discoveries; with its heavy oil and highly fractured source rock, developing the field is proportionally more expensive than the neighbouring Hibernia, Terra Nova and Whiterose projects.

And if Saudi Arabia or Iran were to decide to open the taps and force oil prices through the floor, Newfoundland and Labrador would soon find itself neck-deep in debt. Put simply, there are sound business reasons for leaving development of Hebron-Ben Nevis for the last.

Many observers, including much of the province’s business community, are now quietly expressing dissatisfaction with Williams over his handling of this issue. The man with the proverbial golden touch is now being accused of overplaying his hand. They point out that even though previous governments may have signed bad agreements concerning Terra Nova, Whiterose and Hebron-Ben Nevis, Williams has little leverage to unilaterally make changes.

Now, the provincial Liberals, who had been searching in vain for an issue on which to attack the governing Tories, have found something tangible. They are arguing that Williams built his reputation for achieving results on sheer luck alone: amendments to the Atlantic Accord occurred during the tenure of a weak federal minority government, which agreed to the changes only because of sustained political pressure from both the federal Conservatives and the NDP.

Williams’ failure to achieve a deal on Hebron-Ben Nevis is fuelling growing doubts about the much-vaunted effectiveness of his government. The provincial Liberals are now pointing to the Stephenville paper mill shutdown, Fishery Products International Ltd. plant closures, a looming crisis in the vital crab and shrimp fisheries and the Hebron-Ben Nevis ordeal as failures in the premier’s ability to solve economic problems afflicting the private sector. IE