Canada’s energy sector: ‘We need to start telling our story’

Jocelyn Scherer, NFP Canada’s vice president of energy and senior account executive, said: “The energy sector contributes to Canada’s national success, and those of us who are in or support the industry are truly proud of it.”

The energy sector, despite being a key contributor to Canada’s economy, receives a lot of negative press. The energy sector has been publicly stigmatized as a “dirty” industry amid mounting pressures around the world on climate change, sustainability and environmental, social and governance (ESG) issues, but people fails to capture the full picture.

“For too long, the energy sector has let other people talk about it, and it has hurt the industry,” Scherrer said. “But I think there was a little wake-up call and realization that we needed to start telling our own story, for good reason.”

Canada is a net exporter of most energy commodities and a significant producer of natural gas, hydroelectric power, crude oil, and other liquids. Although most of Canada’s energy exports are destined for the United States, international exports (mainly oil via the US Gulf Coast) have grown strongly in recent years.

According to Trading Economics, Canada’s oil exports will hit a record $13.85 billion in June 2022, bringing the total to over $72.46 billion in the first half of the year. In addition, Canada’s oil sands operations contribute hundreds of billions of dollars in state and federal taxes each decade, contributing significantly to the nation’s economy. These are the types of statistics that the industry has not been able to use to its advantage.

Read the following: The energy industry has an ‘unfair reputation’ – NFP expert

Then there are the ESG pressures. In recent years, the energy sector has come under scrutiny through his ESG agenda, with a particular focus on the environmental part and everything related to carbon emissions.

“I don’t think anyone, even those deeply involved in Alberta’s energy sector, doesn’t think the environmental part of ESG is important,” Scherer told Insurance Business. “There is a general perception that it is important to reduce carbon emissions. Canada is moving away from carbon emissions, but as a country we need to support the energy sector and its role in the transition. Because the energy sector is funding R&D and technological progress in the direction we want it to be, and if we don’t support this sector that underpins the energy transition of the future, we really can’t plan. I think I lost it.”

As of January 2022, Canada has 168 billion barrels of proven oil reserves, according to the Oil & Gas Journal, making it the world’s fourth largest after Venezuela, Saudi Arabia and Iran. This means Canada can contribute to the world’s future energy needs if the sector receives the support it needs.

Importantly, Canada is also a world leader in ESG. The RobecoSAM Country Sustainability Rankings (Summer 2021) rank Canada among the top 13 countries in the world with an ESG score of 8.0 or higher, and this energy-intensive economy is ahead of countries such as Sweden, Finland, Norway and Denmark. It is close to the Nordic sustainability leaders. .

“With the world population expected to grow to about 9 billion by 2040 and global energy demand expected to grow by 30% over the same period, oil will be the largest contributor to meeting that demand. , and is expected to be around 27%,” Scherrer said. “In short, the industry is not going away, and Canada’s strengths from an ESG perspective are very attractive among countries with oil reserves.”

Energy companies don’t just need to change their narrative for the world at large. We also need to convince the insurance market. Scherer said insurance companies are under “a lot of pressure” from boards, investors, activists, colleagues and friends to “say no!” into oil. As such, she has seen $1 billion of capacity disappear from the energy insurance market since 2018.

“There is still capacity, but I think everyone realizes that if it is, we are all collectively and independently looking for solutions. [capacity exodus] continue,” she said. “A wonderful silver lining is the opportunity for clients and brokers to truly partner with the insurance market that still exists and leverage those partnerships to develop long-term, sustainable and differentiated risk her solutions. .”

read more: Canada’s oil and gas industry is ‘leading the way’ in reducing carbon emissions

Brokers can also play a key role in helping clients tell their stories. and opportunities and can support them.

“I think that’s our role, and do some of these companies have good stories to tell?” says Scherer. “Some clients are exceptional. For example, we work with a large oil and gas company in northern Alberta, which provides more financial and social support to the local community than the federal and provincial governments combined. It is these stories that are not told, and we must give our clients the opportunity to tell them.

“For clients who may not have found their way yet, the good thing about being a broker is that they understand ESG best practices and what the insurance industry is looking for to unlock capacity that would otherwise not be possible. We can help them get on that path It doesn’t matter where they are on the scale The important thing is that they are all making progress is.”

As a Canadian citizen and energy insurance broker, Scherrer said he was “thrilled” and “proud” to share the good news of Canada’s energy sector and its ability to help meet the world’s energy needs.

“There are so many people in the world who want to live like we live in North America, and they need energy to do that,” she said. For me, I am proud and excited about this sector and as a broker there are always new and exciting challenges.”