Canada’s energy industry crucial to economic recovery

Canada’s premier energy conference, the annual Scotiabank CAPP Energy Symposium that connects Canada’s upstream producers with the investment community, took place April 7 and 8, 2020. Featuring keynote addresses by Alberta’s energy minister, premier, and presentations by many top executives from some of Canada’s largest oil and natural gas producers, the event attracted hundreds of investors eager to learn how Canada’s energy industry is managing through the current unprecedented market conditions. In compliance with social distancing requirements, the conference was conducted using a virtual webcast format.

Conference speakers all presented a very strong message: the upstream oil and natural gas industry is crucial to Canada’s post-pandemic economic recovery.

Difficult times, fundamental optimism

The conference kicked off with an address by Alberta energy minister Sonya Savage, who outlined many initiatives the provincial government is undertaking to help the industry navigate both a health pandemic and an economic emergency, and highlighted that she remains confident federal aid is coming to the industry. Provincial and federal ministers have been meeting frequently to design a support package that is likely to include money for reclamation of orphan wells, which will put people back to work especially in the oilfield services sector.

“I believe Canadians are more aware than ever of the energy sector’s importance,” she said. “As we observe social distancing during the pandemic, we are staying connected, heating our homes, grocery stores continue to receive shipments of food and supplies, hospitals continue to function. All these activities and services depend on the energy industry. Canadians recognize the industry is crucial to their wellbeing and to our country’s economy.”

The minister noted that federal and provincial economic measures are not a ‘bailout’ but rather short-term financial support to keep companies operational, saying, “Canada simply will not recover without a strong energy sector.”

In his remarks, Alberta premier Jason Kenney added, “Despite facing unprecedented challenges, the industry is resilient. In recent years the oil and natural gas industry has cut costs, improved efficiencies and taken significant steps to continue improving environmental performance — particularly emissions reductions — while managing through low commodity prices, a lack of pipeline capacity and other challenges relating to policies and regulations.”

The premier said he remains fundamentally optimistic about the industry’s future, a sentiment backed by many of the provincial and federal counterparts he’s spoken to across the country recently. “Our entire financial system in Canada is bound up with the future of the energy industry,” he noted. “We can’t afford to see the massive and permanent destruction of value in Canada’s energy sector, it’s too important. This must be a reliable, market-driven industry but governments must do their part to remove political and regulatory barriers to enable strong economics and energy security.”

A keynote presentation by Mac Van Wielingen, founder and partner, ARC Financial Corp and member of the Premier’s Economic Recovery Council gave an honest and hard-hitting assessment of current federal policy. He noted that Canada has been in a slow-moving economic decline and under-performance long before the pandemic brought a laser focus to the problems facing the energy industry.

However, he noted the significant opportunity that lies before Canada’s leaders to “reset national priorities with fair and effective policies based on realism and pragmatism. This does not mean an abandonment of our ongoing excellence in environmental performance. Instead, we need a holistic view of national priorities that embrace a culture of efficacy. This is a truly transformational opportunity.”