Panel says 'politics' holding back investment into Canada's energy industry
RD News Now
February 16, 2018
Dozens of local business leaders gathered at the Radisson Hotel in Red Deer on Thursday to take in a panel discussion on the future of the energy industry in Canada and the outlook for 2018.
The event was hosted by the Red Deer and District Chamber of Commerce, with representatives from the Business Development Bank of Canada (BDC), Canadian Association of Oilwell Drilling Contractors (CAODC) and Canadian Association of Petroleum Producers (CAPP) all part of the panel.
CAODC President Mark Scholz says he wanted to bring the message that the energy industry is constantly developing new innovations and technologies that have made Canada’s energy the cleanest in the world.
However, his outlook for the next year is modest despite some stability that has returned to the industry.
“I think we’re going to see a fairly muted, tempered activity for 2018,” says Scholz. “No different than what we saw in 2017. I still see Canada really struggling to find a place within the oil and gas market with a lot of regulatory uncertainty and really our largest competitor really taking us on in terms of attracting capital, that being the United States in ways that we really haven’t seen for some time.”
Scholz hopes the economic issues of getting pipelines built will eventually outweigh the political issues holding back investment into Canada’s energy industry, which he says drives the entire country’s economy.
“We’re behind the game on this, we’re seeing competition from other global jurisdictions that are hungry for investment and they want to see their oil and gas industry succeed,” states Scholz. “Until we start recognizing that Canada is a high cost producer that has lack of infrastructure and pipeline capacity and start addressing those issues, we have some long-term challenges ahead of us that if we don’t address now, we’re going to be in a world of pain down the road.”
Jeff Gaulin, Vice President of Communications with the Canadian Association of Petroleum Producers says it’s important for the country to signal to the rest of the world that Canada is open for investment.
“We need to work with governments so that their decisions stick, so that we can build infrastructure, we can build pipelines, we can build oil and gas,” says Gaulin. “By adding more costs and more rules, we’re scaring away investment. If we don’t export Canadian energy, then we’re exporting Canadian jobs.”
Gaulin touched on three main areas of focus during his address to the Chamber audience; Investment, Infrastructure and Innovation. He warns Canada is currently falling behind the U.S. and other nations as government uncertainty is driving away investment.
“If we can invest, we can build infrastructure and we can innovate then Canada will win and become the energy of tomorrow,” he explains. “The greatest concern that we have right now is that time is on our side. Just because we have wonderful and world-class energy resources, that over time, we’ll develop it. We are rapidly falling behind and Canada needs to get in the game and get building the energy sector again.”
Gaulin continued by saying we need to take the politics out of pipelines in order to make any progress.
“Right now, that is what’s holding this country back and as governments across the country squabble about who’s got the right authority to make decisions, investors are going and putting their money in the United States or other parts around the world and Canada is falling behind because of it.”
Aron Bacon, Assistant Vice President, Credit Risk Management at BDC anticipates a steady-as-she-goes year for 2018.
“2018 is going to be quite similar to 2017,” says Bacon. “Capital spending is going to be relatively flat, so it’s going to be more of the same. Understand that if you’re not constantly innovating, improving, becoming more efficient, investing in technology, you’re going to fall behind those who are.”
Reg Warkentin, Policy and Advocacy Manger at the Red Deer and District Chamber of Commerce says it was important for them to host such an event at this time.
“The timing is extraordinarily important just with what’s happening with the Trans Mountain Pipeline and the hold up in B.C.,” explains Warkentin. ”We really wanted to have a frank discussion about the importance the energy industry plays to the regional economy and to the national economy.”
Warkentin concludes the current state of the energy industry really emphasizes the need for continued advocacy.
“It’s something that we’ve always done but we need to just redouble our efforts because there does seem to be a lack of political will to take firm action to ensure that we do get pipeline access and that measures are taken by all levels of government to ensure our businesses remain competitive.”
Story: RD News Now