Regina 鈥� 鈥淭he world needs more Canada,鈥� Jason Skehar, president and CEO of Alberta-based Bonavista Energy Corporation told the Saskatchewan Chamber of Commerce on Sept. 4 in Regina.
Skehar was speaking there as part of Energy Week. He鈥檚 a Saskatchewan product, having grown up on a farm near Theodore and getting his mechanical engineering degree from the University of Saskatchewan.
He started out by saying, 鈥淥il and natural gas is Canada's top export with 22 per cent of all exports nationally, generating approximately $100 billion in revenue and $40 billion in capital investment annually. We are a big engine of this Canadian economy.鈥�
He went on, 鈥淭hrough our supply chain, this sector employs over half a million talented workers across the country through more than 10,000 business. Our industry generates billions in revenues for all orders of government, providing support for the programs Canadians value - health care, education, infrastructure, social services and more.聽
鈥淭his is truly 鈥楥anada鈥檚 industry鈥� 鈥� it doesn鈥檛 belong to any one province or region. It鈥檚 our Canadian entrepreneurial spirit and our innovative passion, but it鈥檚 also our manufacturing, our steel and our concrete that all contribute to make this a national industry.鈥�
鈥淭he world鈥檚 appetite for energy is not diminishing and oil and gas will be needed to energize the globe for many decades to come 鈥� and Canada can play a significant role, as fifth largest , in meeting global energy demand while addressing global environmental and social issues.鈥�
He pointed out, 鈥淧aris-based International Energy Agency, global energy demand is expected to grow by 27% by 2040 as China, India, Southeast Asia and other regions seek to grow their economies.聽All forms of energy will be needed but oil and natural gas will supply more than 50 per cent of that demand even as renewables increase by 400 per cent out to 2040. Specifically, the cleanest form of hydrocarbon energy, natural gas is forecasted to grow at a staggering rate, in excess of 40 per cent by 2040.鈥�
鈥淓nergy improves lives 鈥� it is literally transformative,鈥� Skehar said
He noted that the people of nations which used more energy per person had longer average lifespans, went to school longer, and had fewer deaths due to air pollution. At the other end of the scale, nations where the energy usage is just over one tenth of what developed nations use per person see much worse numbers, especially when it comes to deaths from air pollution.
鈥淎s access to energy increases, so do living conditions,鈥� he said.
Skehar pointed out an example of one of the largest critics of hydrocarbon energy, brazen in his hypocrisy. Skehar showed a slide of Leonardo DiCaprio鈥檚 鈥渦ber yacht鈥� at the World Cup in Brazil in 2014.
鈥淐anada operates with world leading standards for protection of air, water and land 鈥� over half of Canada鈥檚 investment in developing emissions-reduction technology today comes from our sector. Specifically, Canada spent $8.4 billion on environmental protection in 2016, the oil and gas sector was responsible for $3.7 billion, nearly 50 per cent,鈥� he said.
Exporting liquefied natural gas (LNG) could allow Canadian gas to displace coal in other parts of the world, lowering global emissions and earning Canada enough carbon credits, it done in enough volume, to meet our Paris Accord commitments. He said, 鈥淏y displacing more polluting forms of energy in the growing economies of Asia with Canadian energy, global emissions growth can be reduced by as much as Canada鈥檚 total emissions today.鈥�
On the innovation front, he said, 鈥淏onavista partnered with Petroleum Technology Alliance Canada, Baker Hughes, a GE company, and Environment and Climate Change Canada to create an in-field environment to test a methane sensing and analytics platform, a real-time technology which can be deployed across the sector to sense and correct methane emissions.鈥�
With regards to Indigenous prosperity, Skehar said, 鈥淭here are many misconceptions about the relationship between our industry and indigenous peoples 鈥� here are some facts. Six per cent of workers in our industry are indigenous, versus an average of 4 per cent for other industries. Oil and natural gas is also a huge contractor of Indigenous-owned businesses, spending billions annually with hundreds of firms. The oil sands companies alone purchased goods and services valued at $3.33 billion in 2015/2016, the same year the federal government, by contrast, spent only $63 million in indigenous procurement.鈥�
To realize this vision, Canada must increase its market access by building export pipelines, he noted.
鈥淚f Canada is truly to make a difference on the world stage, we need options. We need governments at all levels to actively support more export pipeline projects. Finding new markets for responsibly produced Canadian energy products will help to suppress carbon leakage, which occurs when other less responsible suppliers meet global energy demand without acknowledging and addressing the impact to our environment and our society.
鈥淚ncreasing market access is one issue we need to solve to play this critical role,鈥� Skehar said.
Canada is rapidly falling behind the United States due to our lack of regulatory efficiency, he noted. In particular, 鈥淩ight now, regulatory complexity in this country is undermining our ability to get projects done.鈥�
The United States is already exporting 7 billion cubic feet per day of natural gas by LNG, and Canada 鈥渉as yet to ship its first molecule of LNG鈥�
America is also outpacing us on competitiveness. He said, 鈥淲e need to create the right fiscal conditions to restore industry competitiveness.
鈥淓ven as recently as two years ago, Canada had a significant advantage over the U.S. in terms of our federal and provincial tax rates.
鈥淣ot anymore.
鈥淭he U.S. has carried out sweeping tax reforms recently, lowering the federal corporate income tax rate and allowing immediate expensing of capital investments. Canada has not kept pace. With our tax advantage gone, billions of dollars and over 100,000 jobs have left Canada for the U.S. and other countries.鈥�
Capital investment in oil and gas is down by more than half, from $81 billion in 2014 to $37 billion in 2019. Correspondingly, government revenues at all levels fell from $18 billion in 2013 to $7 billion in 2017.
Skehar said, 鈥淭hat means less money for schools, hospitals, roads, and social services across the country. It also means less investment to scale up environmental innovation and technologies that bend the curve on emissions intensity.
鈥淐anada is sending a strong message that it鈥檚 difficult to do business here.鈥�
He pointed out that while some Indigenous people are opposed to resource development, 鈥淢any want to see growth. Many Indigenous communities are seeking economic self-determination through responsible resource development and active participation in Canada鈥檚 oil and natural gas industry.鈥�
鈥淐leaner LNG can help to lower global greenhouse gas emissions when used to displace higher-emitting coal-fired electricity generation in China, India and Southeast Asia. With upstream electrification sourced with renewable and natural gas energy, emissions will be reduced in Canada. When you couple this initiative with internationally approved carbon credits as per Article 6 of the Paris Agreement, Canadian LNG would produce fewer greenhouse gas emissions per unit of energy than any other LNG sources around the world. That鈥檚 a solid reason to build more Canadian LNG facilities,鈥� he said.
Skehar said we need a strong, united, national voice. 鈥淲ith the right policies in place, we can ensure we build a strong energy future and strong economic prosperity across Canada.鈥�
He concluded saying, 鈥淎s Canadians, we must stand up for Canada by telling the entire story about our oil and natural gas industry and the role it can play around the globe to improve lives and the environment.
鈥淲hen it comes to Canadians oil and natural gas development, we have an economic opportunity in front of us which we have never seen in the past century.聽 We have plenty to be proud of and even more to offer.
鈥淭he world needs more Canada.鈥�
