Dahlseide Calls For An ‘Adult Conversation’ Around Tradeoffs As We Enter The Energy Transition
In the DOB’s Engaging with our Future leadership series, Bill Whitelaw, managing director of Sustainability and Strategy at geoLOGIC systems ltd., sits down with some of the best and brightest CEOs in the industry to unpack the issues surrounding the energy transition and what kind of leadership is needed.
Today, Bill’s conversation with Tyler Dahlseide, president of Ferus.
Tyler Dahlseide believes there’s an important leadership linkage between a successful energy transition and critical energy choices.
For that linkage to work, he believes there must be constructive conversations around tradeoffs. As the oil and gas industry shifts into a new era of stability within a transitioning world, the importance of balancing expectations against realities will be central to success. Indeed, the Ferus president (see company sidebar) believes the idea of tradeoff-based dialogue will be welcome outside the industry — and it will be tradeoff dynamics that lead to innovation and energy choice opportunities.
Cast in a leadership context that also means the sector itself must rethink its approach to connecting with stakeholders — connecting in ways that are better at “winning hearts and minds.”
It will also be leadership framing that continues to position Canada as a responsible energy producer in a global context, with a specific focus on the country’s ability to consistently reduce GHG intensity, he notes.
Question: Can you reflect on how leadership might figure into some of our industry’s current challenges and opportunities?
Answer: “Even before COVID our industry was fighting some serious headwinds … and now, the winds have shifted. We are coming out of a deep freeze we’ve been in for a number of years and having to meet the call for rising energy requirements. We’re doing that while making the mindset shift of protecting what we have, to expanding and growing at a time when there are supply chain issues.
We continue to have political headwinds and we’re trying to get out of the mindset that’s trapped Calgary, and our businesses, for the last number of years. We need to get back into a growth mindset, to a paradigm that has shifted to energy becoming topical and relevant. There’s an opportunity to be prosperous within it, but it requires us to get back to playing on offense, yet without the bad habits that put our industry in the penalty box for a while.”
Q: Can you reflect on how leadership should drive industry dialogue externally and internally?
A: “External to the industry, we’re coming to a time where there is going to be a welcome conversation about tradeoffs. I think that’s been the missing piece in the energy conversation — that while many things are possible, they come with tradeoffs, and we need to have the adult conversation about reliability versus price versus emissions.
We have to quit deluding ourselves and our stakeholders into thinking that everything’s possible simultaneously. As Canadian energy industry leaders, we tend to want to give in and say, ‘Yes, everything is possible; look at all this innovation,’ but we don’t want to acknowledge the real-world constraints that exist. Physics gets a vote here. And I think for us to be taken seriously as leaders with public policy-makers, with citizens, with our employees, we can’t pretend that there aren’t tradeoffs, and we have to quit going along to get along and start having that conversation even if uncomfortable.”
Q: In the context of communicative leadership, have we been coherent and co-ordinated as a sector? Do we have an opportunity to change?
A: “I think there is. And my observation is (that) we are an industry dominated by left-brain logical accountants and engineers, and we are so hard set on communicating the strict facts that we haven’t acknowledged the strategy isn’t working. Now, the activist environmental crowd, they’re very good at narratives and stories and for our engineering-accounting led industry that doesn’t come easy.
There is an opportunity for associations and industry-at-large to change the narrative and embrace that storytelling side of our industry. I don’t think we’re winning hearts and minds with a new whizzy set of charts and so we have to take those facts and relay (them) in a way people can care about and wrap their heads around. Then, they can get a sense of the tradeoffs and what they mean in the real world. I think that’s the opportunity.”
Q: Can we lead as a sector through improved ways of amplifying our environmental performance?
A: “I think the facts would say that we have come a long way. Look at GHG intensity per barrel and water usage per barrel, etc. You can go down the list of things we’ve done well and have improved on. But when I reflect, maybe there’s certain assumptions we make, and certain metrics that mean something to us in industry, but to the average community member it’s meaningless.
So, I ask how reasonable is it for us to expect other Canadians to be well versed in energy policy and what we’ve been doing and why should they care? The ‘What’s in it for me’ piece, I think, is the piece that’s missing. And, you know, I could go down the list of other important sectors in the economy and if I’m being honest with myself, I don’t know the state of affairs in a wide variety of sectors. When I look at that, why do I expect other Canadians to care about our industry’s performance record if we don’t connect it to them in a meaningful way?”
Q: How does the Ferus team think about leadership across the organization?
A: “We’ve got a remarkable group of people here at Ferus who have been together for a long time. This is a 20-year-old company and most people have been here for 15-plus years. We have an incredible group of people that just take ownership of what they do and they lead themselves and their teams in that way. We are an independent-minded group and somewhat surprisingly perhaps because the last year has required people to be very disciplined themselves and be leaders of themselves. I’m kind of spoiled as a leader where I have this long-tenured team that is independent and cohesive. I just get to be the front-facing piece of that.”
Q: How do you think about leadership in the context of working across commercial partnerships, in a global LNG framework?
A: “I like what the Pacific Canbriam (Energy) folks are doing by certifying their natural gas and owning the concept of ethically sourced gas. This is trying to distinguish the underlying resource and the process by which it is harvested. This takes advantage of our geography and where we sit in relation to Asian markets and European markets. We have a competitive advantage compared to other jurisdictions but first we need wide acknowledgement that Canadian gas going into global markets is a net reduction in GHG intensity. That must be the premise of all discussions.
We really must drive that point home that Canadian LNG results in a net reduction globally. So, if we can get that to be appreciated and understood, that’s the first domino that has to fall. Then everything else underneath that we’re doing well — from our safety records to our good governance and diversity and inclusion — all those things start to matter after you have knocked over that first domino. We have got a great story to tell and we are doing it in bits and pieces and maybe finally finding our footing…. I think a lot of people — policy-makers, corporate leaders and government leaders — now understand that we missed the last LNG window and you know we need to have learned the lessons and make sure we don’t miss the next one.”
Q: Does leadership have a role in ensuring we have a steady stream of committed employees?
A: “I’m probably an outlier in this one because I think a lot of people are looking for the qualitative side of our business to attract young people and tell our good story. I tend to believe people of all generations know how to sniff out opportunity. And when capital flows back into our industry, when we restore the prosperity of our sector, and it becomes … advantageous to build a career in the energy space, people will find ways to migrate back into the market.
I say that because we’re not devoid of good stories; we're doing good things and doing them well. We just haven’t been able to present people with a compelling economic opportunity to join our industry. When we can get back into a place where we are offering people attractive economic opportunities that they maybe can’t obtain elsewhere I’m confident we will get those people back.”
Q: Everyone is talking ESG these days. Frame that in terms of leadership?
A: “It is my goal to quietly do the right things behind the scenes and record it in a format where people who need to see it, can see it. But I think there is a virtue-signalling side of the ESG equation that’s really off-putting. The danger with ESG is you can get so wound up in certain metrics that maybe you’re doing something a little bit more efficiently but if the underlying activity itself is inherently not in society’s interest, then what are we talking about?
Ferus wants to be a fast follower in the ESG space. We are cognizant of the size of the business we are and it’s a little too easy to get out ahead of where industry is going. To some extent, we’re looking for our customers to land on where they want to be and we will follow fast. We’re keeping an eye on it to try to understand things, but not at the very forefront of that. We need to just make sure we’re following closely enough that we can move quickly when the time comes in terms of agreed-upon standards. But I just don’t sense that we’re there yet as a sector.”
Q: Your top three leadership priorities?
A: “I'll start by coming back to my theme around tradeoffs. Maybe it comes across as gloomy or cynical, but I don’t think we can have the fantasy conversation of all things cheap, reliable and clean tomorrow. Simply saying we will innovate doesn’t cut it. I just don’t think that’s a conversation that is honest leadership. That’s a road to nowhere. I think our sector needs to wrestle with the fact that there are tradeoffs in all things … there are no panaceas. And I think when we have the energy conversation over the coming years, we have to understand that everything is possible in the context of making tradeoffs.
My second theme is honesty. It sounds silly, but that’s missing from the conversation. Making promises 50 years into the future that you don’t have to fulfil is a dishonest move in my books. I can’t do that in my business of making promises that my successor is going to have to deliver on. That’s just fundamentally dishonest. I think it distracts from serious issues that need to be wrestled with.
Third, I think we need to demand good faith in our discussions from business leaders, from government leaders, (and) from public policy think-tanks. We have to be able to change the conversation where the rules of the game are such that people have to be able to call time out when we’re having dishonest conversations. And I think we have to have the backbone to be able to disagree without being disagreeable as an industry. We have to be able to simultaneously have a backbone and not take the bait every single time somebody trolls the industry … we have to find that balance.”