Calgary·Opinion

Canadian energy takes back seat at Houston oil conference

Canada is barely making a wave as the annual energy conference in Houston gets underway, while tech ranks high on the agenda.

The CERAweek energy conference is all about tech

Mohammed Sanusi Barkindo, Secretary General of OPEC, speaks at CERAweek in Houston on March 11th, 2019 (IHS Markit)

It was 11:40 a.m. Monday when Canada was finally mentioned during a panel discussion at the annual CERAWeek energy conference in Houston — and even then, it was lumped together with a list of other countries.

The context was liquefied natural gas (LNG). Not the oilsands, or the need for a pipeline to get Canada's oil to market.

That's a marked contrast from last year's event, when Canada was mentioned in the opening press conference held by the International Energy Agency (IEA) as being an important contributor in the growth of oil production by non-OPEC producers.

The reason for Canada's absence this year surfaced during the question and answer session at Monday's IEA session where it released its five-year outlook; it goes back to the lack of certainty on pipeline infrastructure, which has compromised investment.

The fact that Canada, with the third largest oil reserves in the world, will rank behind countries including Brazil, Guyana, Iraq and Libya in terms of oil production growth is more than troubling.

And the picture is not more encouraging on the LNG front.

While LNG Canada — a $40 billion project in northern B.C. led by Royal Dutch Shell — is going ahead. there are signs that Canada's role in the global LNG market is unlikely to be significant as LNG exports grow south of the border and from Australia and Qatar.

As Jack Fusco of Houston-based Cheniere pointed out on Monday, growth in LNG has surpassed all expectations. It has arguably become a global commodity within a much shorter time frame than anyone would have anticipated even three years ago, with France's TOTAL S.A. estimating the LNG market will grow by five per cent a year from now until 2040.

Much emphasis was made on the importance of natural gas — and LNG — in addressing carbon emissions, in addition to other conversations throughout the day on the integral role of technology and innovation in the context of achieving a low carbon energy pivot and addressing the sector's environmental footprint.

The presence of this Formula-E (E for electric) racing car helps send a fairly strong message that the energy sector of even five years ago is not the energy sector of today, Yedlin writes. (Kyle Bakx/CBC)

The shift to tech in the energy sector

One could say this year's conference is one intended to demonstrate that energy, the economy and the environment are not mutually exclusive.

As testament to the importance of technology in boosting production, and in decreasing both costs and carbon emissions, this year's CERAWeek has a much larger representation of the major technology and software companies, as well as many start-ups. The schedule includes upwards of 150 presentations by those companies and their customers.

The presence of a hipster coffee bar greeting the delegates as they come into the tech space — along with a Formula-E (E for electric) racing car — sends a fairly strong message that the energy sector of even five years ago is not the energy sector of today.

That is certainly being underscored by the number of sessions that have been — and will be devoted to — the issue of responsible and sustainable energy development.

It surfaced during a panel discussion between OPEC secretary general Mohammad Sanusi Barkindo and IEA executive director Fatih Birol, and formed the basis of a session that included Suncor's incoming chief executive officer, Mark Little, and former U.S. energy secretary Ernest Moniz.

There was more than a bit of irony with both Little and Moniz on the stage together, because Moniz was a member of the Obama administration that denied the Keystone XL permit.

Mark Little, incoming CEO of Suncor, speaks at Houston's CERAweek energy conference on Monday. (CERAweek by IHS Markit)

But when it came to the issue of emissions and the economy, there didn't appear to be any disagreement.

Little talked of the importance of collaborating to find creative solutions addressing the climate change and carbon challenges — and highlighted the success of Canada's Oil Sands Innovation Alliance (COSIA) as an example of where meaningful industry collaboration is working.

Moniz spoke of needing to address emissions more broadly, in the context of pricing and the choice of fuel sources for electricity generation.

The challenges of reducing emissions

And that really speaks to the demand side of the equation.

While switching from coal to natural gas, and including renewables in the electrical grid is important from an emissions perspective, it's the fixed transportation elements that are part of life every day around the world — trucks, trains, ships and planes — that are much more challenging to address.

The electrification of these transportation options, as Birol pointed out, is much more difficult to do compared with cars. And even then, he said, until the electricity generated to charge the car isn't sourced from a coal-fired facility, choosing an electric vehicle will not make an impact.

That the conversation even happened on the opening day of the conference, with energy-sector heavyweights, is a example of the different feel at this year's conference.

The larger tech-related cohort, the number of delegates attending its presentations, and the fact that climate change and emissions are being discussed more openly suggests an industry that is no longer defensive, but rather one that is determined to shape the new energy future.

  • This column is an opinion. For more information about our commentary section, please read this editor's blog and our FAQ.

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