Copyright of the Daily Oil Bulletin 2018
Enbridge CEO Challenges Canadians To Pursue Unifying Vision Of Energy
North America has the potential to be an “energy export juggernaut” but to do so it needs to move beyond the polarized debate about the role of energy in society, says the chief executive of Enbridge Inc.
“The time has come to develop pride in the role that the Canadian energy sector is playing,” Al Monaco, president and chief executive officer, said Thursday in Toronto in a speech at an Energy Council of Canada event at which he was named Canadian Energy Person of the Year. A text copy of his remarks can be accessed here.
“We need to acknowledge how energy fuels our quality of life. And, we need to be equally excited about the role that Canada can play in reducing global GHG emissions.” he said. “I believe this is a vision worth pursuing — a vision that unifies Canadians.”
It’s also a vision that acknowledges that energy and the environment can go hand in hand and in many ways Canada and North America have done a lot to prove that, said Monaco.
In his speech, he cited the opportunity that would be offered by a more affordable, abundant, efficient, sustainable and globally connected energy future.
However, new and timely infrastructure is needed to realize that competitive advantage and opposition to energy development –to pipelines in particular – is making that difficult, according to Monaco. One element in enabling a positive energy future, he suggested, is “building the public’s trust in what the energy sector does.”
“At Enbridge, we’re pushing ourselves — every day — to be truly world class on safety and environmental protection,” said the CEO. “We have changed the way we engage with landowners, communities, Indigenous peoples, environmental groups and governments.”
The company also is spending more time on the ground, not just “consulting” but acting on the input it receives, according to Monaco. “We’ve made building sustainable relationships with Indigenous communities a top priority.” That means working to find solutions that respect Indigenous peoples’ strong connections to the land and the natural environment and that involves shared economic growth.
“That is a tall order but I can see how the partnerships between energy companies and Indigenous communities will be a key to reconciliation between Canada and Indigenous peoples,” he said.
While the focus of energy used to be on supply, with the knowledge that the world isn’t running out of energy, the resource is now ruled by consumers who say they need low cost, efficient and sustainable energy, the audience heard. At the same time, the global demand for energy is growing rapidly in response to increased population growth.
“Those people are going to need energy — lots of it,” said Monaco. “And I believe that North America is developing a tremendous competitive advantage in providing the world with the low-cost energy it needs.”
Real and lasting cost reductions in energy supply
The energy future will be characterized by a permanent reduction in the cost of energy, he said, suggesting that not only are much of the cost reductions permanent but there is opportunity for more. “Technology has unleashed massive resources beyond anyone’s expectations,” said Monaco.
“Increased supply is putting downward pressure on prices, changing the economics of our industry and forming a new energy paradigm of ‘lower forever.’”
On the transportation side, Enbridge uses digitalization to maximize its capacity, conserve power and enhance reliability.
Greater energy efficiency
Aggressive fuel standards, efficiency measures and consumer behavior are driving down energy intensity, he said, noting that between 2000 and 2016, energy use per unit of economic output in the industrial sector fell by 20 per cent.
A more sustainable energy future
Lower emissions will drive a more sustainable energy future, according to Monaco. In the United States, for example, fuel switching from coal to natural gas has reduced emissions to below 1992 levels while the economy grew by 80 per cent. “And LNG will do the same thing globally—led by low-cost North American natural gas exports.”
On the oil side, he said, producers have reduced emissions intensity by up to 50 per cent since 1990. Suncor Energy Inc.’s new Fort Hills oilsands mining operation will deliver oil with a carbon intensity that is four per cent below that of the average bbl refined in North America.
“That kind of performance will give Canadians the confidence that we can meet local and global emissions reduction goals, while continuing to grow our economy.”
All sources of energy supply
While the cost of renewable energy has dropped dramatically and renewables will grow rapidly, conventional fuels will still account for 75 per cent to 80 per cent of global energy requirements in 2040, Monaco said. “Natural gas will see the highest growth given its low cost, efficiency, existing infrastructure, high reliability and lower emissions.”
There is no immediate zero carbon solution for air travel, shipping or heavy freight, he pointed out, nor are there any easy replacements for hydrocarbons that provide the energy intensity for heavy industry (steel, cement and chemical processes). “And while EVs (electric vehicles) are showing impressive growth, it will take a while to penetrate the market.”
Greater global energy connectivity
Monaco noted that while half of global energy growth through 2040 will be in non-OECD countries, including China and India, North America is developing an unparalleled competitive advantage in providing low-cost energy. “That synergy, between global demand and North American energy supply, is huge.”
Crude oil exports from the U.S. “have exploded” since lifting of the U.S. crude oil export ban while by 2025 North America is expected to be one of the largest exporters of natural gas, or LNG, globally, he noted.
North America has low-cost supply, cross-border infrastructure for electricity, oil and natural gas and deeply integrated supply chains and labour markets and technology to reduce greenhouse gas emissions, said Monaco.
“In short, we have the ability to fuel a thirsty, growing global economy,” he said. “We need to preserve that advantage and Canada is a big part of it.”