Canada’s petroleum sector will reinvent, not fold, and the world will be better for it
The petroleum sector is, to put it mildly, used to wild swings in its circumstances. Not just swings in price, but changes in market demand, or new play types, or the advent of new technology such as horizontal multistage fracking – rolling with the punches and innovating is part of the game.
In the current environment though, it really is different this time – the industry simply can’t get product to market. Canada is nearly paralyzed in an ocean of red tape and handwringing, bizarrely worried about our global reputation to the point that self-sacrifice is part of the government’s strategy, and is in the process of passing legislation that will seize things entirely (when a project has to spend more than half a second discussing “man camps”, you know it is doomed).
The oil pipeline battle is beyond well-documented, and the cost to the country every single day is incredible. Fewer are aware of the dumpster the natural gas business is in though, for similar reasons – a lack of market access. True, part of the natural gas problem lies with the antics of the near monopoly gas transporter. TransCanada Pipelines, or, what did they change their name to… NotCanadian Pipelines? Oh yes, TC Energy (10,000 shipping crates full of “TransCanada” logo-ed golf shirts heading for Africa, as we speak). Anyway, the elephant that is trying to hide by pulling a shrub over itself, via a name change that excludes the word “Canada”, is running the country’s natural gas pipeline system like the Soviet Union used to manage the potato harvest, with random trainloads getting through and just as many left to rot in some remote rail siding.
So while the world is asking the petroleum industry to change directions, to get more environmentally friendly, and also to, well, kill it off outright, the Canadian energy industry’s ability to reinvent itself is being hamstrung by the abolishment of its cash flow. It’s not pretty.
In ordinary circumstances – such as when product can actually reach hungry markets – reinvention is somewhat easier. Shell is doing a considerable job of it, pushing a progressive agenda along with continuing to ensure a strong production base. But they are global, and are demonstrating these new visions pretty much anywhere in the world except here.
Canada’s petroleum industry is in for more of a challenge, given that it has to fight its own government, but that doesn’t mean reinvention is not happening. Amid the gloom of the empty office towers, the old can-do attitude is reappearing here and there like a plucky flower through a crack in the concrete.
Some of the reinvention is simply overdue processes, such as the firm that is recycling plastic liners from frack water tanks (Rundle Eco Services). Their vision is, like the best of the industry, a vision based on the principle that these initiatives need to be profitable and not supported by government largesse.
Others are more complex and technically challenging, but with absolutely monster potential payoffs. Stantec, the big engineering firm that is not SNC Lavalin, worked with Alberta Innovates on a “Bitumen Beyond Combustion” project that outlined potential uses for bitumen including use in carbon fiber, asphalt, and batteries of all things. Initiatives like this are game-changers, because, if they get off the ground, are indications that we have moved beyond the “haul your commodity to market and see what it gets” mentality. Canada has an abundance of raw materials; it is imperative that we find new ways to use them.
Critics of the industry are quick to throw rocks because the industry isn’t moving fast enough or doing enough. These critics, while a diverse group, have one near universal thing in common – they’ve never built anything. Or, put another way, they’ve never been responsible for developing, funding, planning, and executing major projects, reasonably on time and budget, under a bewilderingly difficult and time consuming regulatory process, and then making a profit at them. To them I offer a sincere STFU until they have.
On top of that, the world is beginning to see just how hard it is to change energy courses. After more than $4 trillion in renewable investment, the world’s energy sources remain stubbornly above 80% reliant on fossil fuels – a number unchanged in 30 years. As such, the middle ground of Canada, the 80% that is open to rational energy discussions, will realize that Canada’s petroleum sector is a well-run industry that will and should be at the forefront of any energy transition plan.
Rational energy education is vital to our future, and it can be a hell of a lot better discussion than the garbage discussed here today. Pick up a copy of “The End of Fossil Fuel Insanity” at Amazon.ca, Indigo.ca, or Amazon.com