Alberta Energy- Unifying the Voice of Industry
This post covers the two days I spent in the Alberta One Voice meetings hosted in Calgary, Alberta. It was a great opportunity for me to refine a lot of the thoughts and concerns I have about the fate of the energy industry in Alberta. The meeting included reps from all the majors (Shell, Suncor, Imperial, CEPA, CAPP, Enbridge, ATCO, MEG, etc.) plus the Conservative MP's for Alberta (and a guest from Quebec). The intent was to begin the process of forming cohesive messaging and strategy to combat the immense volume of misinformation being broadcast by the anti-oil (and anti-Alberta-anything) movement. We need to continue discussing these important issues in our networks. Straight to the point, my lessons (and opinions) from these two days:
Death by delegation is a reality; taking accountability for earning a share of voice in the public, private, and government realms needs to be a central focus of all players in Alberta energy. Industry cannot continue to (disproportionally) lean on associations or affiliations when the anti-oil movement has such a broad, grassroots reach.
"Pulling" from other provinces will multiply the impact of any Alberta-based efforts to correct the mistruths and increase the level of unity supporting the forward energy strategy.
Global financial markets do not view Canada as "investment friendly" (duh). We need immediate increases in capital investment in the oil and gas energy space in Alberta to facilitate "green" energy projects in the country. Traditional oil and gas companies in Alberta hold the largest share of green energy projects in the country. Canadians are making the transition to lower intensity energy more difficult by choking the engine that facilitates so much of the organic innovation (via oil and gas dollars) that we desperately need.
Alberta Conservative MP's have been the first to put all the energy majors in one room to openly discuss issues and solutions for Alberta energy. Think about this… almost three years of absolute shit in the energy industry and this was the FIRST time that all parties were seated in one room to discuss how to overcome barriers and help Alberta achieve its full potential. This stuff needs to happen more often, but I'll give them points for being the first to orchestrate this effort.
Uncertainty (policy and investment) has become the new norm across all segments. As voters, we should be looking for representatives who have a history of consistently executing campaign promises. This behaviour produces more effective local and international business decision making, without which Alberta will continue to lag in capital investment.
death by delegation
Industry associations are out-gunned, and burnt out, period. This may not be the exact message that was conveyed by CEPA, CAPP, Canada Action, etc. but it is glaringly obvious. Speaking only from experience, the majority of companies in the pipeline industry (all segments) have been remiss at sharing their stories, entirely handing their voices to the associations that they belong to. No one, including myself, would disagree that associations serve an important function in ensuring policy, investment, and communications align with what their stakeholders want, but they simply cannot bear the full burden of correcting the misinformation in the public, communicating the impact of the work of tens of thousands of people, and bridging the East/West divide.
how to lose friends and influence a (foreign investment) exodus
The long, and growing, list of energy development failures in Canada (and more specifically Alberta) has become so bad that a leading portfolio manager with 27 years in oil and gas banking and investment experience (who will remain unnamed) spent a full hour painting the doom and gloom picture of our future abilities to address the strong global demand. In his view, Canada is being perceived as a lost cause. There are other stats that support this (Canada 2nd most difficult place in the world to execute a major energy development project next to Denmark!? Like WTF!?) but they've been beaten to death. I mean, if you want to sit through a truly depressing seminar (as an oil and gas professional) I will point you to where you can find this presenter so he can walk you through how Canada dropped dramatically through several positions in the energy life cycle immediately following election, in contrast to the US who is already passed the rungs of debt-restructuring, M&A uptick, large-cap company growth and is now pursuing new equity market opportunities. Obviously, as a finance guy so the equity market piece is what he deems the essential ingredient before the return to health of service companies, junior/private companies and then eventually… a return of international investors who are always last to the table.
In February 2015, Shell withdrew an application for a new oilsands mine
In December 2016, Statoil sold its Canadian Thermal Oil assets to Athabasca Oil Corp for $582 million
(courtesy BOE Report)
In the last four years we have watched Canada mishandle their international suitors. We became not only a "challenging" place to develop energy infrastructure, but earned ourselves the label of being a "risky" investment. At a time when global commodity prices were already creating a challenge, I truly believe industry turned inwards on themselves, tried to weather the storm, and stopped focusing on righting the misinformation or taking an opportunity to be transparent with Albertans (and Canadians) about how truly responsible our energy projects are. Our abilities to attract foreign investment will be undermined unless we return to a sense of individual accountability: for the average citizen this means informed decision making, for the small business this means active participation in initiatives beyond holding passive membership at industry associations, and for the government bringing together industry more than once every 3 years for a "state of the industry" type discussion.
