What Do They Want?

When Ms Soapbox read the “open letter” to Canadians published by three oil executives she was reminded of Sigmund Freud.  Freud spent 30 years asking himself: what do women want?   

After 70 years of riding the boom/bust roller coaster with the energy industry Canadians are wondering the same thing:  what do they want?          

The answer is contained in the “open letter”. 

Here’s the letter as it appeared in 30 newspapers.  (Ms Soapbox’s comments appear in italics).          

What do they want?

The Open Letter  

We have big decisions to make as a country, and there is an opportunity for each of you to influence the outcome.  (How will you vote in the federal election?)

Canadians want to know what the energy sector is doing to address the global climate change challenge while working to strengthen our economy. (True).

As energy company leaders, we believe Canada is ideally positioned to do its part to both positively impact climate change and ensure a strong and vibrant economy for the future. (Good).

This is not an ‘either’ ‘or’ conversation, it’s an ‘and’ conversation.  (Got it).

The world needs more energy to sustain a growing global economy that is expected to lift three billion people out of poverty in the decades ahead. We need more wind, solar and hydro, but oil and natural gas remain a large part of the mix too. This is true in even the most optimistic scenarios for the worldwide adoption of renewable energy. (Lifting three billion people out of poverty involves geopolitical and macroeconomic issues as well as climate change, but okay).

The world also needs to significantly reduce greenhouse gas emissions. But shutting down Canada’s oil industry will have little impact on global targets. In fact, it could have the opposite effect, with higher carbon fuels replacing our lower emissions products.  (This is not an excuse for doing nothing, Canada can set an example.  It’s called moral leadership).   

A healthy Canadian oil and natural gas industry is vital in leading the way to a lower carbon future.  (Not if “healthy” means “profitable” and “profitable” means minimal GHG reduction).

Made-in-Canada technologies that reduce emissions at our oil and natural gas operations could be adapted for sharing with other industries worldwide. We are already making meaningful progress developing those solutions.  (True).

We’ve reduced the emissions intensity in the oil sands by about 30% over the past two decades, and a number of oil sands operations are producing oil with a smaller greenhouse gas impact than the global average. We’re working to get those numbers even lower. 

(Actually, Suncor says it’s reduced emissions by 50%.  Is Suncor sharing its technologies with you, if so, why are you at 30%?)

And Canada’s energy companies are the country’s single largest investors in clean tech. Through organizations such as Canada’s Oil Sands Innovation Alliance (COSIA), Petroleum Technology Alliance Canada (PTAC) and the Clean Resource Innovation Network (CRIN) we are continuing to work on – and share – breakthrough technologies.  (Good, but you don’t get brownie points for doing the right thing).

But we can’t do it alone.  (Here it comes…)  

And that’s why we are writing this letter.  (Wait for it…)  

As we head into the upcoming election, we are asking you to join us in urging Canada’s leaders of all political stripes to help our country thrive by supporting an innovative energy industry. One that can contribute to solving the global climate change challenge and play a significant role in creating future energy solutions by developing our resources in the cleanest most responsible way possible today. 

(So you want to elect a government that will support the industry.  According to 80% of the investors and industry executives who attended the 2019 ScotiaBank Conference, the biggest issue facing the industry is lack of egress/takeaway capacity—only 10% thought regulatory issues were the biggest challenge—the Trudeau Liberals bought Trans Mountain to fix the egress problem.  The holdup is Charter challenges in the courts.  A change of government won’t “fix” the courts. 

The Conservatives say they’ll repeal the carbon tax.  This will put more cash in your pocket.  How will you invest it?  85% of the ScotiaBank guys said they’d buy back shares or pay off debt (ie. give the money to shareholders or banks), 0% said they’d invest in growth (ie. more jobs).  So why should Canadians support the Conservatives?   

The choices we make will determine the quality of life we create for ourselves and future generations. These choices will impact our ability to fund schools, hospitals, parks and the social programs that we as Canadians so deeply value.  (Canadians also value the environment).

This isn’t about any particular pipeline, policy or province. This is about the future of Canada. 

(So let’s talk politics.  The ScotiaBank guys were asked who’d win in the fall election:  11% predicted a Conservative majority, 5% predicted a Liberal majority and 75% predicted a minority government of some sort.  A CBC poll showed 35% of Canadians support the Conservatives, 31% support the Liberals, 13% support the NDP and 11% support the Greens—this foreshadows a non-Conservative minority government).   

Signed by the Presidents of CNRL, Cenovus, MEG Energy 

(And not signed by the presidents of industry giants like Suncor, Husky and Imperial and mega pipelines like Enbridge and Trans Canada). 

Instead of publishing an open letter asking Canadians to elect a government that won’t push the industry on GHG emissions and supports less regulation, these three executives should have paid attention to economist Peter Tertzakian who told the ScotiaBank crowd in order to succeed the industry must: (1) lower its costs, (2) pay more attention to environmental, social and governance (ESG) issues and (3) do the best job it can to get the highest value markets because politics in Canada and the world are unpredictable.

To paraphrase Freud’s question:  What do these industry executives want?  Answer: a government that gives them everything.  

Is this what Canadians want?  We’ll find out in October.

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10 Responses to What Do They Want?

  1. Wow Ms. Susan, nailed it! Again.

    • Thanks Esme. I’ve had it up to here with businessmen who think we can’t see through them. It’s their job to take care of business. It’s government’s job to take care of the people. Nowhere in constitutional law is there a precedent for “government takes care of corporations, corporations take care of the people.” The minute you add corporations into the mix democracy goes sideways.

  2. Keith McClary says:

    There are different stories on emission reductions:

    “Between 1990 and 2011, oil sands GHG
    emissions per barrel were reduced by 26 percent. It is
    expected that emissions per barrel will continue to decline
    over the coming years.”
    https://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/energy/pdf/eneene/pubpub/pdf/12-0614-OS-GHG%20Emissions_eu-eng.pdf

    “The latest data on carbon emissions associated solely with oilsands extraction indicate little improvement over time. Industry likes to celebrate the changes it implemented to reduce emissions and waste, but the greatest of those were one-off advances in emissions intensity nearly 20 years ago. Since then, the emission intensity from oilsands extraction increased nine per cent between 2004 and 2015, as illustrated in Figure 3.
    In short, the emission intensity of mining operations increased by seven per cent between 2004 and 2015, and this trend will certainly continue as producers access deeper, lower quality bitumen and the distance from mines to processing facilities increases. Although in situ operations’ emission intensity decreased by eight per cent between 2004 and 2015, this production type still produces 58 per cent more greenhouse gas emissions than surface mining. Because in situ has become the dominant form of extraction and has a higher intensity than mining, the overall emissions intensity of the sector continues to grow.”
    https://www.pembina.org/blog/real-ghg-trend-oilsands

    • Keith, this is an extremely important point. Even the examples given by Suncor in an interview with Peter Tertzakian were site specific. Suncor did not provide an average emissions intensity reduction number for all of its operations. If the Conservatives are elected with a majority they will deregulate the industry further which means this data will become even more obscure and unreliable. This is not how we fight climate change.

  3. Dwayne says:

    Susan: Thanks for another great blog. With Postmedia, I don’t see them publishing anything that goes against their Conservative masters. The Conservatives, in Canada, ever since Peter Lougheed was not in power, always believed in letting oil and gas production go at an accelerated rate, with no accountability. We have witnessed problems associated with fracking, such as increased seismic activity, where it did not exist prior, contaminated water sheds, and with the oil industry big cleanup costs, such as what the Alberta PCs started in the early 1990s, resulting in a $260 billion bill to clean up orphaned oil wells, tailings ponds, and other oil industry messes. To attempt to cover their butts, for the cost of cleaning up the oil industry related mess, this cost was reduced. It was a clever way to whitewash, or downplay things. The cost is not less than $260 billion. At one point, many years after his rule, Peter Lougheed took a look at oilsands development in Alberta, and called Ft. McMurray a mess. Peter Lougheed had oil industry experience, long before he was a politician, and knew oil was a volatile commodity. He also favoured responsible oilsands development. The so called “war room” that Jason Kenney set up, omits these facts. You cannot have oil and gas development, while ignoring environmental concerns. The other thing this “war room” is incapable of dealing with is low oil prices, which Saudi Arabia and the United States have had caused. Oil prices took a sharp tumble in 2014, and triple digit oil prices are ancient history. There are other facts pertaining to the carbon tax, in Canada. The Alberta PCs, under premier Ed Stelmach, were first in North America to implement a carbon tax. The B.C Liberals (Conservatives), under premier Gordon Campbell, were second to put in a carbon tax. The most ultra right leaning politician in Canada, from the last 30 years, Preston Manning, is a strong carbon tax advocate. One time CPC leadership candidate, Michael Chong, supports a carbon tax. There were Ontario PC leaders who also supported the carbon tax. Andrew Scheer also supports a carbon tax. He does not want to call it that, but it is just that. Even Jason Kenney has mentioned that he does favour the carbon tax. It’s not actually gone in Alberta. Jason Kenney has mentioned that he agreed with the government buying the pipeline. When Justin Trudeau was not even in power, many years ago, the oil companies said they supported a carbon tax. They still support it. There are people who also think that environmentalists are killing the oil industry, as were the Alberta NDP, and the Liberals. This is totally false. Jason Kenney cannot change oil prices. Nor can he avoid the big bill to clean up oil industry related messes in Alberta. Also, there are people who think that oil will be the biggest concern. The biggest concern will be water, not oil.

    • Dwayne, you’ve provided some great information here. Thank you! I want to pick up on the point about Postmedia lacking the impartiality to accurately report any information that might taint the Conservatives’ brand. I think there’s a lot of truth to this. Last week we learned that Licia Corbella had been a member of the UCP and voted in the leadership race. Apparently her membership has since lapsed. This came as no surprise to anyone who’s read her full-throated support for Jason Kenney, Vivian Krause, et al. What did surprise me was the way the Calgary Herald handled it. They published a little statement confirming her UCP membership etc and said “the Postmedia Editorial Code of Conduct is clear that journalists should not place themselves in a conflict of interest situation by writing about people or organizations with whom they are involved and that the Calgary newsroom is taking measures to ensure all editorial staff are aware of the importance of avoiding potential conflicts of interest, particularly those involving political party memberships.”
      Two things come to mind. First, in the private sector a breach of a company’s Code of Conduct (especially when it violates the public trust) results in serious consequences; so the Herald’s remedy to take “measures” to ensure all editorial staff are aware, blah blah blah, is meaningless. Second, Corbella has been in the newspaper business for 25 years, she’s the Editorial Page Editor. If she’s not “aware of the importance of avoiding potential conflicts of interest” by now she never will be.
      These are difficult times, we need an impartial and objective press now more than ever. The Calgary Herald simply doesn’t cut it.

      • Dwayne says:

        Susan: If you see the Edmonton and Calgary Sun, you will see what is going on. The columnists are always pro Conservative. The Redwater bitumen upgrader came to light again, in certain media outlets. It was a $35 billion mistake from the Alberta PCs. The Sun never reported on it. If you see the letters that are written to The Sun, the vast majority of them a pro Conservative. Anything else that is written is usually edited. Recently, someone wrote a letter to the Edmonton Sun, which criticized one of their editorials, which blamed Rachel Notley and Justin Trudeau for Alberta’s energy problems. It was amusing to see how The Sun editorial staff tried to defend themselves, but did a poor job of it.

      • Dwayne says:

        Susan: It is blatantly obvious who Postmedia is linked to. Why else would we see the Edmonton Journal, the Edmonton Sun, the Calgary Herald, and the Calgary Sun being totally covered with an ad for Jason Kenney and the UCP, right before this past provincial election? I don’t know when we will return to a proper media, which is part of a healthy democracy. We don’t see columnists with the caliber of Mark Lisac anymore.

  4. Judy J. Johnson says:

    What a clever start to your last post, Susan! Freud did answer his nagging question: what do women want? A penis. Did he know that women already have one, albeit internally protected, of a different shape, and with greater governance than its male counterpart?
    I like your answer to your question: “What do they [oil executives] want? A government that gives them everything.” Yep, and here’s my suggestion: The oil industry should stop insisting the government meet their demands, and give itself everything it wants by using a good percentage of its profits and business acumen to invest in its own GHG alternatives. A profitable, moral undertaking and good governance of the environment. New Suncor slogan: Suncor saves the species! (A little too rich?)

  5. Judy, I loved your update on Freud’s thinking.
    With respect to what oil companies want, the second quarter results are coming in. They’re exactly what the ScotiaBank Conference said they’d be: companies are making more money and have increased cashflow but they’re putting this extra cash into share buy-backs, dividends and paying down debt. The newspapers are full of sad stories about drilling companies and oil service firms who can’t understand why the oil companies aren’t investing their extra cash in growth (ie. hiring them to do stuff). They say it’s “abnormal”, “unusual” and “it’s definitely something we haven’t seen in our business before.” The headline for the story in the Herald was: “Rising tide isn’t lifting all boats in the oilpatch.” Another way to put it is “How many times do you have to be told the trickle down economy does not work.”

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