Podcast: Tim McMillan on the state of Canada’s oil and gas industry

Outgoing president and CEO reflects on seven years at the helm of CAPP, and what the future looks like for Canada’s oil and natural gas industry .

Tim McMillan, President and CEO of the Canadian Association of Petroleum Producers (CAPP) is stepping down. McMillan reflects on the changes and challenges he’s seen over his 7-year tenure leading Canada’s main oil and natural gas industry association, what work still needs to be done, and why he’s optimistic for the industry’s future.

Full Transcript

Leighton: Hello and welcome to another edition of the Energy Examined podcast, the podcast that discusses the issues facing Canada’s oil and natural gas sector with the insiders in the know. I’m Leighton Klassen. Today, we’re taking a bit of a different approach to pay tribute to our outgoing president and CEO, Tim McMillan. Tim’s been in his role here at the Canadian Association of Petroleum Producers for about seven and a half years. He’s been advocating for the industry through some of the highest oil prices, the lowest in recent history, along with different provincial and federal governments that he’s worked with throughout his time here. Tim, welcome to the show.

Tim: Thank you.

Leighton: Alright. Well, for our listeners who may not know, what is CAPP and what does it do?

Tim: So, at CAPP, we represent the oil and gas industry, the upstream. About 80 per cent of the oil and gas produced in Canada is produced by our members. We represent them when it comes to pipelines, when it comes to working with governments, both provincial and federal, and we represent them increasingly as we engage with the public in ensuring that the public understands our industry, knows what our values are, knows what’s important to us as we’re making large public policy decisions around Canada’s most important industry.

Leighton: Now I know you’ve done a lot within that role here, so we’ll get to that a little bit later. But I know you’ve enjoyed your time at CAPP here. So, why are you leaving?

Tim: Well, it’s been seven and a half years, which I think in this role feels like it’s dog years –so, times that by another seven. But no, I feel like I’ve seen most of a cycle from really relatively high prices through some of the most difficult times for seven years. And now we’re back, coming back into that relatively good price period.

The industry is on an upswing. I think it’s also a job that requires somebody to be fresh. And if you’re starting to feel it in your bones a little bit, it’s probably the right time to step away. And you know, as we’re coming out of the COVID crisis, I’m feeling it in my bones a little bit. So, I think it’s time for a refresh for the organization at the president level.

Leighton: OK, now you steered CAPP through some very challenging times in the oil and gas industry, including a downturn in 2014; difficulties getting approval for pipelines as you know; the price war of 2020. Is Canada’s oil and natural gas industry in better shape or in worse shape than when you started?

Tim: So, I think there’s a couple of pieces to that. Globally, the global demand and supply dynamics are way better today than when I took over. At that point, though the price was still in the $90 a barrel range, there were stockpiles building up to very high levels, the shale revolution was in full swing, and we’ll remember that the OPEC nations pushed back and flooded the market, which drove prices down and ultimately led to the long [downturn] period. But for Canada, it’s not quite as optimistic.

At that point, we were attracting about 10 per cent of global investment. We were trying to get major infrastructure built. Some of it, we have succeeded to get built or is still in construction. A lot of projects have fallen by the wayside that were high-quality projects, and that’s tough to see as somebody who’s passionate about this industry and this country. But at the end of the day, we’ve got world-class resources.

Our companies are stronger and more stable today than maybe ever and they’re ready for the year ahead. So, you know, I think a lot of work left to be done, but I feel good about where we are, but a lot of work to be done now.

Leighton: Now with that, you have accomplished a lot. So, this might be a little bit difficult, but what would you pin as your, what are your number one wins or accomplishments here at CAPP?

Tim: You know, I think that our industry was one that felt very good about the role they played in Canada, about how we produce, our environmental performance. I don’t know if we always understood how to talk to Canadians about that. And I think it’s still a work in progress.

But over the last seven years, we have built a capacity to engage through multiple types of media, a lot of new media, Facebook, Twitter. We have a large Energy Citizens nation that’s passionate about these issues. So, I think as I look at what has really moved the needle and positioned us for success across a lot of different areas, it’s our ability to engage quickly, directly, honestly with Canadians.

Leighton: OK, now some have called the oil and natural gas industry a sunset industry, with activists suggesting we need to get off of fossil fuels as soon as possible. I know you have strong feelings on this, so how do you respond to these kinds of attitudes?

Tim: You know, I think the first thing is to always acknowledge is that when we produce our commodities, like any other producer in Canada — be it agriculture or mining — we need to do it in a way that’s environmentally responsible and sustainable. I think the premise you put forward; I hear it often. It is one that confuses the environmental challenge with the fuel. And the reality is that having access to energy is what pulls people out of poverty. It is the link to our standard of living in every country in the world that has made a transition to higher standards of living, it is their ability to have reliable, sustainable energy.

Those that are positioning oil and gas as something that is yesterday’s fuel is really not being honest with the public or with themselves: that oil and gas has increased in demand every year for decades. Only the COVID health crisis and economic lockdown saw that actually decrease for a short period time, and then it has roared back to record levels again. International Energy [Agency] expects oil and gas to increase in demand globally for the next 20, 30 years, and that means less people in poverty, people with better standards of living. So, I would be very circumspect of anyone who is selling simple solutions to challenging and complex problems, especially ones that are the basis of our very standard of living.

Leighton: Now you mentioned, there’s still a lot more work to do when you leave CAPP. So, what would you say are some of the biggest challenges for your successor and for CAPP moving forward?

Tim: You know, I don’t think these challenges ever go away. I think with every industry, you need to continually engage with the public and with government. There are continuous policy changes that are needed to ensure that your industry is competitive and responsible. So, you know, I don’t think there’s an endpoint. It’s just more work and it’s good work. So, big challenges around infrastructure, as I have noted many times, Canada has been falling behind in its competitiveness. We’re seeing more oil and gas investment going to nations that don’t have our high standards.

We need to position ourselves for success where it’s the highest quality oil and highest quality gas, that is the preferred barrel, not the one that gets to the second tier of investment or third tier where it seems like we’ve gone in the last few years.

Leighton: Any regrets?

Tim: No, I have no regrets. I feel blessed to have had the opportunity to serve in this role, to be close to the big policy issues that we’ve grappled with as a nation, as a province. And I, you know, I regret that I won’t be here to continue the fight in this role, but I’m pretty sure I’m going to be close to it one way or another.

Leighton: OK, now a lot of your job was spent advocating for oil and natural gas, and to some extent, you know, trying to change the perceptions about the industry. Having spent more than half a decade working alongside the people who work in the industry, what would you say how perceptions have changed?

Tim: So, I think, you know, I’ve been in this role for over half a decade, but really I’ve spent most of my life in and around this industry. And in the early days it was, you know, I worked at my uncle’s service rig in the oil fields around Lloydminster. And when I was in government, I got to serve on the regulator side and was the Minister of Energy.

So, you know, I feel at this point in my career, I’ve had a pretty thorough view from the wellhead to the industry association. It is an industry full of thoughtful, hardworking people from one side to the other that are willing to continuously improve on what they do and how they do it. And that’s what’s made us successful. So, you know, my perceptions maybe have changed a little bit, but that core value, the values that drive the people in this industry are consistent with Canadian values and that makes me very proud to be part of it.

Leighton: Now let’s go to the lighter side of things, you know, outside of the many difficult conversations that you’ve had with policymakers, all the interviews, media interviews you’ve done. What are some of the most memorable moments at CAPP outside of all of those really challenging and tough things of the day-to-day grind?

Tim: You know, I think there’s a lot of humour and light moments that, you know, even in some of the most challenging days. You see how things come in or how different players in this space act or react. We have a real team culture here at CAPP, and it’s great just to be part of it. And you know, things that could be super stressful or challenging are a lot better handled with a team, and that’s been really gratifying.

Outside of the work here with the organization, you know, I got to have some pretty surreal experiences in Washington, D.C., walking with senators through the tunnels as they’re going into the House [of Representatives] and finally just being stopped by the security guards before the senator walks out on the floor. Like ‘you’re not going in,’ obviously. So, you know, there’s just been some fun experiences that you have no idea you’re going to get into until you’re in it. And you think, ‘how did that just happen?’

Leighton: Yeah, I can imagine. So, the big question here is, what advice would you give to the person stepping into your role?

Tim: You know, a few things. It’s fast-paced there. There’s a lot of information coming in, a lot of stakeholders and you have to move quickly. I think another is, the work’s never done and you have to build a big team both within the CAPP team but also within the members and with governments to be successful. And I think you have to listen to a lot of people. And that’s part of building a big team. But your role at CAPP is to set a direction for your industry, to be clear and to put some stakes in the ground and push for them. So, that can be challenging. But that’s your role as CAPP, as an industry association.

Leighton: OK. Any last thoughts for our listeners?

Tim: Yeah. You know, I’m obviously very grateful that I got this opportunity. I’m thankful to the Board that they let me continue to do this work for seven and a half years. Thankful to the staff that has made some of the most challenging days, something that was very fulfilling and never, never an issue that we shied away from, and I think that speaks to the team that we have here. So, as I leave, I’m leaving on great terms with a lot of great memories and looking forward to keeping those relationships for the long-term.

Leighton: Well, thanks very much, Tim. Thanks for being on the show. And I will say, it’s been a pleasure working alongside you.

Tim: Terrific. Thanks for the opportunity to share this today.

Leighton: This has been our interview with outgoing CAPP president and CEO, Tim McMillan. For more interviews and information on the oil and natural gas sector, check out our website: context.capp.ca. Thanks, and see you next time.