Tidewater Midstream is coming apart at the seams

In many ways, a victim of B.C.'s progressive ideology

Tidewater Midstream (TWM.TO) had a nice little utility business going, operating the only refinery in B.C. and a natural gas processing and pipelines business which is a natural fit for a corporation domiciled in British Columbia.

But then the company thought it worthwhile to follow the leftist herd and squander capital on a “renewables” business exacerbated by relying on the sale of “carbon credits” based on the specious left wing theory that carbon dioxide emissions contribute to global warming. The company created a “renewable diesel and renewable hydrogen complex” entirely targeting “climate change” and hoping profits from the sale of what the company calls LCFS credits (essentially carbon credits) to third parties would pave a golden path to prosperity.

In the most recent quarterly release, the rubber hit the road. The company’s second quarter narrative tells the tale of woe:

Now what? As you might expect in leftist B.C., the company will turn to government for more money to discuss “needed changes within the low carbon fuel programs to better support a domestic renewable fuel industry”. Of course, the competitve pressure from imports of California (another leftist jurisdiction) LCFS credit caused the price to collapse in B.C. As yourself why a U.S. firm would dump its LCFS credits in B.C. Might it be that they can’t sell them to Californians any longer?

Tidewater Midstream shares have dropped from over a dollar a share with a decent dividend only a couple of years ago to $0.30 a share today with no dividend and no realistic chance of escaping an insolvency restructuring.

Since over $300 million of the consolidated debt is in the “renewables” subsidiary, a sensible strategy would be to abandon the subsidiary, let it go bankrupt, and operate the profitable refinery business. Will management do that?

Unlikely. Ideologues are wedded to their beliefs and their hopes and prayers are that taxpayers will come to the rescue for their silly decisions. I hope that does not happen but in NDP infested B.C. anything is possible as long as it keeps the “climate change” narrative alive and well.