Varcoe: CEO Enbridge sees future growth in Canada’s energy

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The world has fallen into an energy crisis, requiring additional supplies and opening windows for building new liquefied natural gas developments, said Enbridge CEO Armonaco.

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In this turmoil, Canada can “play an extraordinary role” in the future of global energy, but it is a regulatory challenge to enable countries to provide the world with low-carbon, safe and affordable energy. Need to be removed.

These were some of the key messages delivered Wednesday by the head of Canada’s largest pipeline company during a speech on the future of energy to the Toronto Club in Canada.

“We have just crossed a major turning point in the energy market and are certainly in an energy crisis,” Monaco told the audience.

“The bottom line is that it’s time to rethink Canada’s role in the world’s energy transformation. Responsibility and opportunities are (here) today — and we just have to chase it.”

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Global energy prices have skyrocketed this year after Russia, the world’s largest exporter of oil and gas, invaded Ukraine.

Despite continued lack of investment in oil and gas production, energy demand is recovering from the initial pandemic lows. The European Union’s commitment to shift off from Russian fossil fuels by 2027 has already added to the complexities.

West Texas Intermediate crude oil prices closed at $ 107.04 a barrel on Wednesday, and benchmark US natural gas rose more than 120% from the beginning of January, ending the day at $ 8.37 per million units of UK calorie.

As European and Asian consumers demand more supply, the Trudeau government has promised Canada to produce another 300,000 barrels of oil by the end of the year.

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The federal government is also discussing with European countries what role Canada, the world’s fifth-largest producer of natural gas, can play in providing LNG in the future.

Western Canada has large natural gas reserves in the Montney Formation, and more than 12 LNG developments have been proposed on the British Columbia coast over the last decade. Only the Shell-led LNG Canada Mega Project is under construction.

Southward, the United States will become the world’s largest LNG exporter this year, while other countries such as Qatar are aggressively planning to expand.

“Canada missed the first LNG window,” Monaco told the audience. “We’re late, no doubt about it, but we can catch up. That’s good news.”

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With growing concerns about supply safety, Enbridge’s manager said the world needs more energy to act as a kind of “supply buffer” and more diversified sources. I said I would need it.

Canada can fill part of this gap. However, the ability to attract investment is essential for advancing major energy projects.

It requires some degree of regulatory certainty.

Enbridge, which operates on both sides of the border, already supplies four American LNG plants with approximately 2 billion cubic feet (bcf) of natural gas per day.

Monaco said Canada’s energy can provide a “whole package” with a focus on large resource bases, low operating costs, emission reductions and efforts to build relationships with indigenous communities. rice field.

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But the long time it takes to get a project working can be daunting.

The cost of going through the regulatory process can exceed hundreds of millions of dollars, but it could still be reduced, as Enbridge saw in the Northern Gateway Pipeline proposal in 2016.

“The current issue is when it comes to the initial conception, regulatory approval, and finally cabinet approval,” Monaco said in an interview.

“It’s an uncertain timeline, and you have to worry about this timing in order to invest your capital.”

Jeffrey Can, a LNG expert at Mad Can, Alberta, said developing a Greenfield LNG project typically takes four to seven years, including the permitting process, community consultation, and building development. ..

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“If Canada wants to compete, we have to take action, and our country is now chronically impossible to mobilize very large energy infrastructure projects,” Kang said. Said.

“I don’t think there will be an LNG boom in Canada. I’m not optimistic.”

Federal Natural Resources Minister Jonathan Wilkinson said Canada has set up a working group with Germany and the EU to explore the possibility of helping LNG in the country meet demand.

The federal government is also in talks with supporters of LNG development that may supply Europe from the Atlantic coast, including Pieridae Energy’s Goldboro project and initiatives at New Brunswick, including Repsol.

“We are discussing with them what they need to be able to actually make those investments,” Wilkinson said in an interview this week.

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Alfred Sorensen, CEO of Pierida Energy, said Wednesday that the company’s LNG project, which was put on hold last June, will solve all transportation problems so that natural gas from western Canada can be transported to Nova Scotia. He said he needed to see.

“Who knows if there is a change in the air and if it lasts for a very long time? But there is no doubt that the government is now very focused on accomplishing something, and Europe. It is seen as helping to get a new supply to the Union, “Sorensen said.

“I’m pretty optimistic.”

So is Monaco.

“There are many checkmarks for our industry to serve the global market,” he said.

“Now is the time to do it.”

Chris Varcoe is a Calgary Herald columnist.

cvarcoe@postmedia.com