S2 E6 Rethinking Canada’s energy story

Rethinking Canada’s energy story.

Canada’s energy sector is poised for a shakeup—it’s time to break the mold, outpace the competition, and seize the moment for climate leadership and prosperity. Join Edward Greenspon, co-chair of the Future of Canada Centre, with guests Susannah Pierce, Former President and Country Chair, Shell Canada & Andrew Swart, Managing Partner, Energy, Resources & Industrials, Deloitte Canada as we challenge the status quo and chart Canada’s path to global energy leadership. 
 
Disclaimer: Opinions expressed are genuine and reflect the guest's views; the guest is also a client of Deloitte Canada.  

A French transcript of this episode can be read here: https://deloi.tt/3UCeYOp

 

 

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Repensons l’histoire énergétique du Canada.

Episode Transcript

Welcome to Full Circle (00:00):
The Leapfrog series.
I'm your host, Edward Greenspon, andI am quite excited today to be talking
with two very prominent people in theworld of energy at a, at a very key
moment in Canada's quest to increaseour prosperity and strengthen our
Sovereignty. On June 30th, as we allprepare to celebrate our 158th

(00:25):
birthday,
economic history was being madein the Northwest corner of the
Country. A ship called the GasLog Glasgow
slipped out of harbor andKitimat, British Columbia escorted
through the Douglas Channel by a pair ofbattery powered tugboats, jointly owned
and I note, by the Haisla Nation.
By the highs of nation, the ship carriedThe first cargo of Canadian liquified

(00:49):
natural gas ever to leave the continent.
Until June 30th, Canada could onlyexport our abundant gas supplies
over the border to the United States.
We were, captive suppliers and we paid aprice quite literally, because we didn't
have very many options of who to sell to.
Now with the completion of the$40 billion LNG Canada facility,

(01:13):
we have joined the global market.
We are a global player, nota continental player alone.
In many ways, the timing couldn'tbe better, just as Canada is looking
to diversify our exports beyonda less dependable United States,
along comes LNG. Then again, it's takena long, long time to get to this point.

(01:33):
The US and Canada began kicking thetires on LNG about 20 years ago,
but their first shipment left portnearly a decade ago and ours just.
Last month, our two guests today havelived and breathed all this Susannah
Pierce, former president and countrychairperson at Shell Canada, which is the
operating partner of LNG Canada. And AndrewSwart, managing partner Energy, Resources

(01:58):
and Industrials at Deloitte Canada.
Now as regular listeners know, we haveat this critical time for Canada turedn
Deloitte's Full Circle podcast over towhat we are calling The Leapfrog series.
The idea is to explore how[AM1] we canactually turn Canada's considerable
geopolitical stresses and strains intoa new era of greater competitiveness,

(02:21):
sovereignty, and prosperity
to leapfrog, in other words
and LNG, it has a lot of bounce.
So, let's get at it,
Welcome to the podcast,Susannah and Andrew.
Thank you very much, Ed.
It's great to be here.
Likewise.
I'm, uh, super excitedabout the conversation.
Well,
great to have you both here.
Susannah, I wanna start with you and Iwanna go, you know, you've lived LNG

(02:44):
for a long time and, uh, June 30th, Iimagine must have been a very special
moment in this, uh, in this journey.
So maybe just,
talk to me a little bit about whatthat day, watching a ship leave
Kitimat eventually arrive in Korea,
what that meant to you.
Well, thank you for the, uh, for theremembrance and, and honoring the day.
Listen, that, that day was a culminationof so many people's efforts and, you

(03:08):
know, I was one person in that effort.
And so, when that day came and as theship was leaving and seeing the pictures
and the photos and seeing all of thecommentary, yeah, I think it was a, a
day of, of deep thought, remembrance,
Some pride in there too for the peoplein Kitimat that actually were there
as the ship sailed away and as theysaw safely, it was carrying the

(03:30):
First significant cargo overseas.
To this day, when I run intopeople to think about, oh yes,
I remember when. And I thought abouthow many Premiers, you know, there
were in BC of course you had ChristyClark, then you had John Horgan.
Now you have Premier Eby
You think about how many mayors, weactually had two different mayors
in Kitimat, and now Phil Germuth.
You had, uh, you know, how many CEOs ofLNG Canada at the time, at least four.

(03:54):
You just know how much time and effortit went into seeing that that actually
happen, and, and I still have asmile on my face by thinking about it.
Where were you?
Were you, were you uh,home in Vancouver or?
I
was actually in Vancouver, yeah.
Because I was not on the projectand because Shell as the shell or
it is a shell operated venture,doesn't mean that I am part of
the LNG Canada project anymore.

(04:15):
In fact, it has its own CEO,it has its own leadership team.
And so I was not actually eventhere as the cargo sales way.
Yeah.
It's interesting 'cause when yousay that I, I can, I can recall
I was um, um, the global managingeditor for Energy for Bloomberg
when
the first shipment left,um, Louisiana, left [inaudible]
And um, and that could have been our,uh, could have been and, and should

(04:39):
have been ours. But interestingly, youknow, and I was struck by this Susannah
on that day, on June 30th, you know,uh, we heard everyone, the mayor of
Kitimat, the chief counselor of the HaislaNation, Premier Eby, Prime Minister
Carney praised this project united
this was an important development.
Where the heck did all thispolitical consensus come from?

(05:00):
Suddenly?
Isn't that amazing?
You know, in the development of, ofthis industry and this project and,
and something I, I think it's worthnoting, you know, they gave the United
States a bit of a head start is UnitedStates already has a lot of pipelines.
They actually already wereimporting natural gas.
And then of course Shell gas came aroundand then they realized they have more
gas than they need, they can startexporting out of those import terminals.

(05:21):
And they already had pipelinesconnecting, you know, the basins all
the way down to the, the coastlines.
We in Canada didn't really have that.
We had to connect basins in thenortheast part of BC and Alberta all
the way through to the western coast.
So we had to build infrastructure,we had to build ports.
Whereas I think the United States,uh, had a bit of a head start
just from that perspective.
But indeed, I mean, I, you know, whenI joined the LNG Canada project

(05:44):
back in 2013, it was still just a, thedevelopment of a project amongst others.
Mm-hmm.
Um, and of course, Christy Clark wasvery bullish at the time for LNG
and had a list of projectsthat we're trying to figure out
whether or not they could passa final investment decision.
But it was still early days.
It was still a, a work and aneffort to prove that, yeah, this
industry could be competitive.

(06:05):
You could build it greenfield, brownfield,uh, you could actually get a pipeline
constructed across the Rockies in thecoastal mountains at cost that could
be competitive as you shipped gas.
So we were still very muchin the development phase.
We still had to helppeople understand what is
liquified natural gas?
What do you mean you chill it andthen it farms a gas and what do you
mean you can put it on carriers?
This is a new concept for BritishColumbia and so, and Canada.

(06:28):
And so part of it washelping to tell the story.
It was also telling the story, asI mentioned, across all the various
different communities and indigenousgroups all the way from where you would
bring the gas through to the coast.
It was new.
One of the advantages I would sayover time, uh, was the fact that
liquified natural gas,especially if you would carry

(06:49):
it over water was not like oil.
And, and that meant that there werelots of, of, of, you know, memories or
images of an oil spill, very less soof an LNG spill because it's very rare.
And even if, if LNG were to be spilledbecause it's so cold, it evaporates.
You know, at, at temper, attemperatures, you know, that are normal.
So for us it was a little bit of adifferent conversation from a safety

(07:11):
and environmental impact perspective,but there's still quite a lot of work
to do to, to help people understandwhy, why should I take the time
and the effort to understand this?
And one of the other things thatI think was an advantage, at
least to the LNG Canada project
which was, I think one of the otherreasons why, uh, we were successful,
it was not just, you know,about the relationships that we

(07:32):
developed on the ground withineach of the communities, which is
absolutely table stakes and crucial,
we front-end loaded that, which is wisein my view, not just the technical design,
but also the, the work with communitiesand First Nations and Indigenous groups.
But it was also the fact that youhad the producers of the gas who
would then become the shippers alongthe pipeline, who would then become

(07:52):
the, the, essentially the entitieswhich would then produce the LNG at
LNG Canada, they were each of thefive joint venture participants.
And then they would market the gas.
So you had an end to end value chainwhere you didn't have to go figure
out, well, who's gonna sell my gas?
Well, I guess what we are or whocan consume some of our, our,
our, our partners at the timewere also consumers of this gas
so you actually were able to

(08:13):
bolt end to end the entire valuechain, which I think reduced risk and
also helped to understand the fullrisk, uh, cost profile and competitive
profile of the entire venture.
Which again, was another reason whyI think that particular project was
successful when, when others weren't
Just stick with the FirstNations there for a moment.
And I know along the Coastal Gas linkthere's, there were about 20, but I

(08:34):
wanna focus particularly on the Haisla.
They've run with this, I mean, youknow, they're gonna be the owner of
their own LNG facility in short order.
Was that the
way
it was at the beginning?
No, of course not.
It wasn't, and in fact, the better personto tell the story is probably Ellis Ross,
who was the chief elected counselor.
And, and he would, you know, if hewere here, he would, he would laugh and

(08:54):
say, ah, we told em to get outta here .
You know, and we were not the onlyproject in town, Chevron Honda Project
at the, at the time of the channel.
Uh, but it took a lot of sitting together.
Understanding shared interests.
I, I call it shared value.
How do you actually look at howwe can build something together
that meets the individualinterests of all parties together,
First Nations? How can you build trust?

(09:16):
You know, one of the thingsthat sometimes, you know, when
you're far away from projects youforget, is that there's a lot of
communities on the ground that don't havetrust for big industry because they have
been bypassed, or in some cases have beenignored or have not been participants
or don't even know who the people are,who are building in their backyard.
So part of it was building therelationships and a common expression

(09:36):
we used at the time was buildingrelationships before we built the project.
And so, you know, people like Andy Calitz at the time who was CEO was,
was fantastic at this sort of thing.
And the entire project worked in thatkind of an environment where there was
an expectation that we worked togetherwith all stakeholders and First Nations
so that we could understand wherewe found areas of mutual agreement,

(09:58):
where we found areas that we couldn't,where we might have to deviate from
the original design to recognize thatthis is an area that you cannot go.
Whether we look at how do we raisevarious different pieces of infrastructure
to avoid various, you know, placeswhere there were trap lines or any
kind of historical, um, importance.
Lots of different things thatwe took in very early on so that

(10:19):
when we were developing it andeven going through regulatory and
environmental process, this is key,
It was not combative, it wasinclusive and collaborative.
And we used traditional knowledgeas part of that as well.
So we developed a very closerelationship with the community
and you were there on the ground.
And that's one of the reasons I moved toBritish Columbia because I felt that if
you're going to build in British Columbia,you should be in British Columbia.

(10:42):
I used to have this joke, and you'llget this Ed having worked in a
newspaper that when you woke up inVancouver and you read the newspaper
you heard about how horrible the oiland gas industry was, whereas when you
woke up in Calgary and you read thenewspaper, you heard how misunderstood
the oil and gas industry was.
Why don't people understand us?
So it was really important for me.
What, what, what, what was itlike when you woke up in Kitimat?

(11:02):
In Kitimat it was, it was still alittle bit of a what's this all about?
And uh, but, but Kitimat was also afantastic community to work with, and
I really, really enjoyed the time thatI could spend there with the community.
It, uh, it still continues to bea very special place in my heart
and I don't get to go there as muchanymore, but Kitmattans were fantastic.
Andrew, I want, I want both of youto, uh, to take a shot of this.

(11:25):
I'll start with you, Andrew.
You know, as we're nowmoving into a period of national
interest projects that is the
policy of the government of Canada,Bill-C5 to move forward there.
What are the lessons that you thinkwe can draw off LNG Canada that will
be applicable that, you know, willhelp move things along moving forward?
Yeah, so I mean, I'll cut it at, uh,cut into this in a, in a few ways.

(11:47):
I think one is, I'll almost just go backto the question, just you earlier asked,
uh, Susannah around why at this momentin time, June 30th, you sort of see, um
a lot of the politicalworld coming together.
Right.
And I think one of the key reasonsfor that, um, is that there's been
a, a real shift in the dialogue overthe last sort of couple of years.

(12:08):
And so, you know, in, in terms ofyeah, like net zero targets that, uh,
the country has kind of committed tothe reality has also set in over the
last few years that you're dealingwith this issue of energy security.
You're dealing with energy, affordability,and now most recently sovereignty, right?
And so I think there's nothinglike a crisis that begins to

(12:29):
coalesce people around this.
And so there is a certain moment intime that, that we are at right now,
which begins to define what that energy
infrastructure going forward actuallybegins to look like, and I think this
gets to the heart of your sort of secondquestion, right, which is around what
do we take away from that LNG project?

(12:50):
And I think for me there are,there are a few things that,
um, that, uh, that stand out.
I mean, I think one is
as Susannah has sort of spoken about theparticipation of indigenous communities
and First Nations in those projects.And it's not just about consultation.
I think we've moved into an era of, right,real participation, real partnership.

(13:10):
Right.
And I think that begins to createa, a framework, a blueprint of what
that might look like going forward,not just for energy projects, but for
resource projects sort of overall.
The second key thing that Iwould just say is that it
goes back to my sort of introhere around being able to sort of
coalesce around a particular idea.
And I think it's really important forany of these projects, which are, which

(13:34):
span like, you know, decades, right?
Um, and it actually transcend.
Political governments and political terms.
And I think it's really important toget that, um, alignment across the
aisle on the importance for theseparticular projects and how they play
into things like energy security, energysovereignty, um, energy affordability.

(13:57):
Right?
And so I think there's a, it's that sortof coalescing that we sort of need around,
around these big projects going forward.
So I, I, some of those points I wanna comeback to, uh, in a moment, energy security,
our role in the world, et cetera.
But, um, but as I turn to you on thisquestion, Susannah, I I want you to build

(14:17):
on a little bit what you've said in anumber of, uh, speeches in recent times.
Uh, you've quoted Tip O'Neillsaying all politics is local.
And I guess all projects are local too.
Are they?
Yeah.
And it is.
It's true.
I, it's a principle that, uh, somehowover time I, I've been involved in a
number of big projects and I've alwaysfelt that building relationships
on the ground, understanding thoseinterests is absolutely crucial.

(14:40):
'cause we can try to build it remotely.
But then typically, uh, projectshave been hung up because of local
concerns and local interests.
So for me, and I think it's, it's, it'sjust a principle by which every project,
linear or non-linear needs to abide byis understanding community interest.
Well, just for people who don't know
Yeah.
You were involved with theKeystone XL Project and

(15:00):
the Keystone Project, not the XL one.
The one that got built?
Yeah,
the original, the one that got built.
Okay, and did you learn that lesson then?
I learned that lesson then, but I alsolearned that lesson before on some
LNG projects that were for import.
Um, and this was, this was way back when,when I was actually with TC Energy, which
was Trans Canada Pipelines at the time.

(15:21):
And we had been proposing a projectwith Shell called Broadwater, which
was to import LNG into New York.
Um.
Right into the middleof Long Island South.
But there was a lot of front end, uh,community work there that I really,
uh, I think cut my teeth on and reallylearned a lot about the necessity
of getting local stakeholder buy-in,which then gets to the next layer,

(15:41):
which gets more to the state level,which then gets to the federal level.
I can, and that project called Broadwater,LNG, I mean, you're dealing.
You know, senators at the time, ChuckSchumer, Hillary Clinton, you're
dealing with governors in New York.
You're dealing MayorBloomberg at the time.
Like there's, this was a hotbed ofmedia, like where, where else is
you have like global media focus.
So I, I learned a lot.
Then I also learned a lot, strangelyenough, when I was in graduate school and

(16:04):
I worked on a sabbatical down in SantiagoChile, uh, and I actually did some
uh, engagement, uh, on the gasAndes pipeline, which was to bring
gas from Argentina into Chile sothey could actually begin to feed
the first combined cycle gas plant.
But that's a long story.
Long ago, I, I learned it that people wantto be able to understand why you're there

(16:25):
and they want to be able to know that
whatever you're trying to build is intheir interest and, and that, that rolls
all the way up to the top of the House. As Tip
O'Neill, former speaker of thehouse said, all politics is local.
Project development needs tobe grounded in local issues,
concerns, and opportunities.
And then also you can go back topeople like Michael Porter who
wrote about shared, shared value.

(16:47):
The concept around, I mightbe quoting this wrong, but uh
companies will profit ifcommunities prosper, essentially.
Which is to say that when you createrelationships where you can demonstrate
that it its shared interests, you thenhave the grounding by which you can then
build up and build further relationships.
And that really worked onthe LNG Canada project.
And so that was a level of effortthat we had and we were also willing

(17:10):
to, to be held accountable for it.
And propose, well, this is how we'llcontinue to monitor and share, uh,
concerns within communities so that alllevels of government can understand that.
Um, so, so yeah, itwas absolutely crucial.
And to this day, I don't think there's anyproject that can never be successful if
they don't start with it, if they don'tcontinue it over the life of any project,
including when the project may shut down.

(17:31):
This is also another really hard thingbecause we've seen in many communities
when projects and industries disappear.
We can't forget that either.
You've built communities around that.
And that's also something that reallyneeds to be, you need to be mindful
about as you look at project development.
Okay.
Um, Andrew?
Yeah, no, I was just gonna pickup on that, which is, I think one
of the important things to thinkabout as we think about like big

(17:54):
projects getting implemented in, inthe country, is their ability to be
able to catalyze economic growth
beyond the project itself, right?
And as, as you've said, it's like you,you're putting in, um, infrastructure,
which is gonna span multiple generations.
And you know, like resourceprojects, a lot of them like
ultimately come to an end, right?
The resource runs out andthen you, you need to move on.

(18:16):
And so, but when you move on,you decimate those communities.
And so you have this opportunity whenyou put these projects in to be thinking
beyond the life of the project, right?
If you're putting in a power line or youputting in rail or those sorts of things.
And maybe it's geared towardssupporting energy or it's geared
towards supporting mining or whateverthe case may be, but how could you

(18:38):
use that infrastructure longer termto also be thinking about things like
manufacturing, um, agriculture, et cetera?
And so it's sort of a catalystfor broader, broader economic
growth.
Right.
And you know, you refer to MichaelPorter and you know, my sort of previous
firm was owned by Michael Porter,and so I'm Yeah, very well-schooled.
That sort of thinking.
But I

(18:58):
was gonna say, I was gonna say, when,when, when you said, you know, I
hope I'm saying this right, as I wasgonna say, Andrew couldn't tell us.
No, but you know, at the heartof it is you beginning to talk
about cluster theory, right?
Yeah.
And, and how are you creatingthese, these broader clusters
of economic activity, right?
Which might have an anchor tenant inthe form of a, of a major, you know,
LNG project or a major energy resourceproject, whatever the case may be.

(19:21):
But it's ability to be able tocatalyze broader growth is, is key.
Yeah, and, and you know what,you're bringing me to the concept
around Seven Generations, right?
And so, again, that is somethingthat we need to be very
forward thinking on, I think.
But I even just witnessed it when wewere looking at construction into actual
operations of a facility, or even lookingat a certain skilled labor moving into

(19:42):
a different level of skilled labor.
Well, what happened to the front
you know, development opportunity? Like,so basically the, the less skilled labor
when that job was done, where did they go?
So we really have to bethoughtful about these things.
And part of I think a community, uh,any kind of sponsor of a project,
and this is what we did as well, isyou need to look across the entire
development of the project overtime and make sure that you're being

(20:02):
mindful working with governments ofhow do we make sure that this is a
sustainable opportunity for, for all.
Well, I wonder at the particular momentwe find ourselves in time, and, and
I think there's two aspects to this Iwanna probe because, uh, I believe, you

(20:24):
know, you've alluded in, in, in someother comments about the need to be, if
I could use the word inclusive about
both these projects, not just with thecommunities in there, but Canada is being
called upon by its allies in the world.
Canada needs to diversify.
But one of the points you made that Ifound quite interesting is, you know,
we have a weak economy and we have, uh,stagnant incomes and we have a lot of

(20:45):
young people who feel in an affordabilitycrisis and feel left out by the economy.
How do we connect this
to them and their, um, theiranxieties and their aspirations?
Yeah.
This is a really hard challenge forus, I think, and I think we can look at
it from the perspective that you need
governments really workingtogether on this challenge.

(21:06):
Um.
So part of it is recognizing, I thinkin Canada that resource revenues can
actually help deliver some of theindirect jobs that are associated with
resource development, but they canalso help to fund future opportunities
in future industries where we mighthave a comparative advantage where
we might be able, with the rightfiscal policy and the right industrial
policy and economic policy start tobuild new opportunities and new jobs.

(21:30):
But all of it has to work together.
And this is, I think, thechallenge that we've got. Resource
revenue in and of itself,
great royalties, tax revenue's, fantastic,
good for the industry, goodfor those associated with the
industry directly and indirectly
but what else can it help us do?
What are some of thosetangential industries that
can develop alongside of it?
Look at technology Sometimes I feltlike a lot of the energy industry

(21:51):
are really technology companies,'cause we're constantly looking at
new tech, look at the applicationof artificial intelligence as well.
That's another opportunity for us toactually demonstrate how AI can be
applied to the industry, but then alsocould be applied to other industries.
We can incubate associated with theprimary industry to grow new ones.
But that takes a lot of forward thinking.
It takes a lot of planning.

(22:12):
It's not something that we're used to,especially in the cycles that we face
here, where we have people gettingelected every two to four years.
So.
It's a problem, but it does requirewe start to think longer term.
It does require that we startto really get our hands on our
deficit spending and our debt.
We do need to look at whatprograms are truly necessary.
How are we incentivizing the rightinvestments through those programs?

(22:36):
How are we matching publicdollars, that private dollars
driving investment into Canada?
We really have to havea hard look at that.
We really have to have a hard look at
all of the extra spending and whetheror not we can make some cuts to
really focus on investment that canhelp generate longer term prosperity.
Well, I wanna focus on investment over thenext, over the next couple of minutes in
that way, because obviously if we're gonnadevelop projects, if we're gonna develop

(22:57):
national interest projects, we need peoplewho wanna put their money into Canada.
Um, how are we gonna do that?
How are we gonna persuade them thatCanada is a good destination now?
I think, uh, first and foremostit's around regulatory uncertainty
or providing certainty andremoving the uncertainty, right?
And so I think again, because theseare, uh, you know, multi-decade

(23:22):
type projects and you are
sinking in huge amounts of capital.
I think you know what investors look foris that, is that certainty that's going
to like span multiple governments, right?
So I think that's, that's one key thing.
But then I think you begin tolook at the enabling factors
that like go into these projects.
Talent, like we justtouched on talent and

(23:43):
the industry,
and I think as a country, we have tobe able to tell that energy story,
which ignites the possibilities inamongst the youth to choose this as
an industry that they wanna work in.
Right?
And so you need to be able todevelop those kinds of, um, uh,
of, of talent models and skillsin those particular regions.
Um, you know, I think along with

(24:04):
that though it's not justthe, the physical bodies.
Right.
But I think it's also what's the skillsetthat you're gonna be looking for, um,
and how's that gonna change over time?
Um, we are
you know, constrained from atalent perspective right now
within many parts of the industry.
And so I think we haveto think creatively.
We've gotta think creatively abouthow you skill people up and is it the

(24:26):
traditional educational model for, doyou need to be looking at things like,
you know, micro skilling as an example?
Um, as a, as a different mechanism.
So anyway, I mean, I thinkthere is, there's something
around regulatory certainty.
There's probably something aroundtalent would be two key levers
that I would be thinking about.
That's just, again, that's just in, inthe natural resources industry, which
a hundred percent agree with, you know,regulatory certainty has been crucial

(24:48):
and, and, and the complexity of multiplelayers of regulatory policy, whether
it's federal and then provincial andthen you throw in some more federal
and how am I supposed to figure it?
So that is complex and, and you're right,the certainty of, so it stops changing
and you know, what you can actuallystart to understand your economic model
around really makes a lot of sense.
But Canada's also
been the home of some major tech,uh, fantastic tech, um, companies.

(25:13):
You look at Shopify, you look at [inaudible], wecan look at, you know, what's happening,
you know, Sanctuary AI in Vancouver.
Let's, I'm, I'm basicallyjust scraping the top of this.
We, we know that we have theability, especially right now
to develop some prettyglobal, fantastic companies.
We need to learn from those companieswhat worked, what needs to change.

(25:33):
I think there's tax policy, I thinkthere's R&D policy in addition to
the regulatory policy, just focusedon the natural resources sector.
I think we need to take a broaderview because on the one hand, we are a
natural resource-based economy today,but just as we had in this conversation
already, that will be for the nextfour or five decades, maybe longer.
But what happens next?

(25:53):
We need to start incubating andbuilding the enterprises, the
services companies of tomorrow
today we need to be forward thinking.
We need to think about the revenueswe're generating now to invest
in, while continuing to makesure the competitive conditions
are right for those investments.
So it's recycling essentially,but it also means we need to
get our fiscal house in order.
We need to run our our country,almost as sharp as we would run,

(26:17):
Candidly, a company, we need tounderstand our balance sheet.
What revenues are regeneratingand what are we spending?
We continue to generate lessrevenues but spend more.
We need to look at revenue generation,which is why I think in part you
now have a government saying,let's generate some revenues.
'Cause we can't afford this anymore.
So that's good because it hasn'talways been, let's look at the
revenue generation side today.

(26:39):
We are, and that's been crucial.
I think that's a crucialchange in the dialogue.
I think you elicit from me the need todo a commercial message on Deloitte's
Future of Canada Center because wewill have coming out, uh, in the fall
of report, um, you know, which istentatively called Winning Globally.
And, and Winning Globally talksto a bunch of companies as well.

(27:00):
And some of them are traditionalmultinationals and some of them are
only interested in North America.
But there's a whole cohort of companiesof the sort that you, uh, described
that are kind of native global.
They just
they're global in theirhead, uh, to start with.
And, and I think those are theones we've gotta nurture, right?
And I don't know what nurturing means.
It might be getting outta their way, itmight be helping them, you know, that

(27:20):
that's, uh, that's a policy question.
But there's an, it's an interestingshift I think of, of, of mindset
from a generation that's just
important to think globally.
Well, and I think again, it comesback, back down to almost every policy
that government's gonna be facedwith, including immigration policy.
Like it all needs to feed towardstoday, but also future Canada.
How are we creating the competitiveconditions to grow Canada into the future?

(27:42):
Um, how do we attract the right people?
How do we attract the right investments?
Because yeah, I. I'man optimist for Canada.
We've got so many wonderful endowments.
We have so much opportunityin front of us. Now
It's really about working together tomake sure that it happens over time.
But we've got a lot of excellence.
We've got a lot of experienceto suggest it can happen.

(28:02):
Nurture, replicate,continue, all on that path.
It's gonna be crucial.
So I'm gonna be listening to your series.
Susannah,if I can justbuild on what you've said.
I mean, you know, one of the ways thatI've always sort of thought about this
topic of competitiveness is that, youknow, the role of government is to
put the conditions in place by whichcompanies are going to compete, right?
It sets the rules of the game.

(28:22):
And so, you know, at theheart of this is like you
to, to your point, like you've gottathink about the industries that you
want, the vision of what you want overthe next couple of years, and how is
that playing field that you're creatingnow, those conditions that you're
playing now, going to create the impetusfor capital to come into this country
and go into these kinds of projects?

(28:43):
Yeah, and I, I gotta say,sometimes I wonder because we
haven't had a good record onthis, and because the reputation of
Canada as a destination, uh,for investment has, uh, has
diminished over over recent years.
I wonder if we need some signatureattention grabbing policies in
the way that perhaps the Irishdid, you know, uh, a generation

(29:03):
ago with, uh, certain tax changes.
And I don't know what those are,but I think, you know, maybe.
You know, you've lived in amultinational until very recently.
Are, you know, do you think thatwe need to track their attention
in, in a very particular way?
100%
And, and absolutely.
And, and my mind was going to thefact that, you know, investors have
a choice, especially multinationals,of where they can put their

(29:23):
money, their capital investments.
So regulatory certainty is.
Part of that regulatory certaintyand predictability fiscal policy is
what does the tax regime look like?
How can I make sure that I knowthat I'm getting a return on my
investment compared to other places?
All those things matter.
So if you look at five differentindustries, I do a comparison with
the other countries we're competingwith and say, what are they doing?
Why are they attracting more investmentin their jurisdictions versus me?

(29:45):
And then you have some choice.
Then you have some ability tosay, well, this is, why can I
change this? If I change this
What,
what happens?
What happens to other industries?
So we have to have that kind of mapping.
We need to look at where we havesome comparative advantages.
I mean, we have a huge country.
Natural resources typically have been,but we have other areas where we can
have comparative advantages attached toperhaps that natural resources industry.

(30:06):
Look at carbon capturesequestration as a technology.
I mean, we've been doing that herein Alberta for a long, long time and
we've demonstrated the technologythrough projects like Quest, which
was a, a Shell facility at the time.
So we can build out,you know, I think new.
Sectors and industries attached tothe legacy and the older sectors
and industries with focus andattention, and by integrating

(30:28):
across all policies, fiscal policy,immigration policy, r and d policy,
et cetera, et cetera. We need a plan.
We need a vision.
We need an integrated strategy.
So let's circle back to LNGCanada and LNG Canada too.

(30:50):
So, uh, you know, for listeners whodon't know, there's already approval.
There's been approval in place fora long time to double the capacity.
Uh, of, of this plant.
But that's an investment decisionthat has to be made by the
companies who are involved
f I understand thatcorrectly. What will it take,
you know, what needs to happenfor both the policy makers and the

(31:12):
people who are investing the capitalto say, okay, we're moving ahead,
we're gonna double the capacity,
we're gonna really, you know, to turnCanada into big LNG power and other
projects that might follow as well
I'm gonna just preface that by sayingI'm not in the LNG project anymore
and I'm, I'm not, uh, at Shell,
but what I would say is that, yes,the, the project, when we first went

(31:32):
through the environmental approvals,we got approvals for both phases,
phase one and phase two, which is todouble the capacity of the facility.
So.
At this point, you know, knowing how themines, you know, at least of one company
would work in making a final investmentdecision is, is they would be looking
across the variety of different choicesthey have in their portfolio, which would
be Canada, LNG, Canada, which could beother parts of the world, and saying for

(31:54):
this point in time when this decisionneeds to be made, are there alternatives
where I could put my capital? And theywill measure that against these other
alternatives on the basis of do I havesome form of certainty in terms of that
return, in terms of its ability to bebuilt on time in terms of its ability
to feed my portfolio when I need it.
So those are the decisions I wouldexpect that a company would be making.
From a government's perspective,

(32:15):
again, I'm not in government,but I would imagine that I would
be looking at, well, what is in.
What is in my interest as a country forthis project is second phase to proceed.
And you know, I remember JohnHorgan at the time on the provincial
level, Premier Horgan wouldsay, you need four conditions
you need to meet, at least you knowfrom the premier's perspective, is
that it has to be jobs for BC ers,revenues for BC ers partnership

(32:36):
with First Nations and Indigenousgroups, and that you are consistent
with our environmental policies.
Those are the four conditions that youhad to, to pass in order for his support.
So from a government lens perspective,both at the provincial and the federal
level, you know, they probably arelooking at, well, what is it that I
need to see for this project to proceed?
How does this help me returnvalue to Canadians or to be BC ers?

(32:56):
That's the decision making thatany policymaker's probably making.
Andrew, what do you thinkthose governments do need to
see and and what they need tosee that they can get as well?
You know, I, I would agree witha lot of those conditions that
Susannah has sort of mentioned.
I mean, I think from, like anygovernment's gonna be first and foremost
orientated around, you know, job creation,job growth, and ultimately, you know,

(33:19):
that's what wins and loses, um, uh,elections at, at the ballot box, right?
And so, um.
But I also think that this iswhere governments do need to be
thinking over a longer timeframe.
Right.
And I think this notion that I mentionedearlier of looking at a, a project not

(33:39):
just in isolation, but its ability tobe able to catalyze broader economic
development, border economic growth.
Um, and I think that requires foresight.
It requires to be able to lookat the art of the possible, shall
I say, which is beyond, let'ssay a project and an industry.
Um, and look at what could,
what that could generateover the next 10, 15 years.

(34:00):
If you brought in laid in manufacturing,you laid in services, you laid it
in technology, et cetera, et cetera.
And then how does that sort of realizea, a broader vision for, for a province
or, or a sub region, et cetera?
So that's sort of how I wouldbe thinking about it, both the,
the short-term opportunity, butthen the long-term possibility.
And maybe if I could just jump init, because I think we, we, we've

(34:21):
mentioned in the beginning, butenergy security is something which
is front and of mind of government
and I think we've heard them speakto that very publicly and, and that
certainly became more important whenwe started to see that there were
risks of tariffs south of the borderon Canadian products, including energy.
So that, I think that wasthe wakeup call that, hey.
We do have really one large customer,and if that one large customer

(34:41):
changes their mind about us orthey become self-sufficient with
the United States generally hasbeen over time, then what do we do?
What happens next?
So that's why there was so much moremomentum behind LNG, 'cause it was a
project that was just about to export and,oh great, look, we're already doing it.
So I, I imagine energy securityand foreign policy, candidly, in my
view, trade policy has unfortunatelyplayed in the subtext when it needs

(35:02):
to be playing in bold letters.
I think for Canada, I've been feelingthat for a long, long time, and
part of that I think is, you know, somefeedback anecdotally that many of our,
uh, our, our partners internationallydon't know who Canada is and are really
looking for Canada to show who they are.
And so I think foreign policy, tradepolicy is absolutely crucial, and

(35:23):
I think that has also been broughtto the frontline as a result of
what we've been experiencing.
Yeah, I, I, I have a sense thatthe balance of probabilities
has shifted in a lot of ways.
So two years ago I think we were talking,we'd be talking about something that
I think should still be a goal, but,but, um, not necessarily a showstopper,
which is electrification of the project.
So that would be one ofthe great advantages.

(35:44):
We know that Canada's gas is,is considerably cleaner than
anybody else's gas to start with,but with electrification, you
know, uh, it's like a shutout.
But I don't think that hasthe same pressure today, uh,
that it did a few years ago,
does it?
Not to my knowledge and notfrom my ability to observe it.
I mean, what I would say is that.

(36:05):
There's a demand for clean electronsfor every industry, candidly.
And, you know, policy makers need tomake a choice as to which industry can
the electrons one be produced for andget to 'cause transmission matters.
So not, yeah, I, I'm notseeing it as the same push.
And you've even seen the Minister,um, Minister Dick's comment
on, on things like that for LNGprojects that you can electrify

(36:26):
when the electrons are available.
Um, so not so much, but again,
we know we need cleanpower, more clean power.
At least that is thedemand that we're seeing.
The challenge is goingto be to produce it.
I mean, just to make this real, um, sortof, you know, I guess beyond just sort
of LNG, but you look at like the riseof AI data centers as an example, right?

(36:48):
So we're seeing a lot of, um, alot of pressure right around the
world in the build out of these, ofthese data and AI, uh, AI centers.
That's gonna take power, right?
It's gonna take a lot ofpower to build this out.
And even if you sort of build inthe, sort of the natural technology
efficiencies you're gonna get withchip design, um, the, the power

(37:09):
requirements are gonna be significant and
I'd say if you went back, let's say five,this was five years ago, the pressure for
those AI data centers to be powered by,you know, clean power would be immense.
But right now, the pace at whichthese things are being built out,
like people need to leverage thefull energy spectrum and in all

(37:29):
energy sources in order to do that.
And so, I mean, that also createslong-term opportunity for, for
Canada as an example. Where youutilizing, let's say, you know,
captive gas sources or stranded gas
resources that you can't getto Tidewater as an example.
Right?
And so I think that there are, um.
I think the environment has sortof changed, um, around that.

(37:50):
And for me, AI data centersare just a little bit of a,
um, a view of what's actuallyhappening in the market right now.
Can I just jump in here though, too?
But I think the policy in CanadaStill, with the clean electricity
regulation makes it reallychallenging to look at putting
money into natural gas-fired power.
As much as that might be the answer, aswe certainly seeing in the United States.

(38:12):
Under the CERI, I can't imagineanybody putting money for a plant that
won agreed run more than 10 years.
So I think we're in a real,this is my, this is the sticky
position that we're in right now.
And nuclear, we know is great ifyou're a nuclear energy supporter,
but long timelines, and very expensive.
So, and here's the challenge too, on, on
data centers in AI, the common, mostof us don't even know how much power

(38:35):
we're demanding with that prompt.
We actually need as consumers as users.
True.
We need to actuallybetter understand that.
So I, I would, I would expectour Minister of AI has some ideas
on this, but you know, again,this is sort of the new era of.
Once people have it, we know how muchvalue there is from asking the right
prompts and getting information.
It blows our minds and howmore efficient life can become.

(38:57):
But we haven't looked at the full lifecycle challenges associated with it, and
now we're just coming up against that.
So yeah, stay tuned, I think.
I hate to do this to you, but I wannaask one more geeky issue question.
The geekiest of all, ask it toAndrew interview to get this geeky.
You think you point to Andrewfor the geeky question. And it's
particularly an LNG related question.

(39:19):
Um.
There is a contradiction,
I guess I, I might say in Marxian economicterms, there's some, there's some form
of contradiction between Canada achievingits Paris targets, which we're not talking
about as much anymore, but still exist,
and I think Canadians are stillcommitted to the idea of decarbonizing

(39:41):
while having strong economy, uh,along the way, and global emissions.
So the export of LNG. It creates thisparadox that, uh, that we might actually
bring down emissions in the world
but we will, in so doing, bringthem up in Canada. How are
we gonna square that circle?

(40:02):
Do we have to square that circle?
I mean, my simple answer here, Ed, isthat, um, I think at the end of the day,
sort of, you know, emissions aren't
bound by, you know, particularterritorial borders, right,
they're a, they're a global issue.
And, and so I think the nature ofgovernments and the nature of policies

(40:22):
and I think how, um, you know,the Paris Agreement was structured
ultimately, you know, brings usdown at a kind of a country level.
But this is a global problem.
And so I do think that there is abroader dialogue as a country that
we need to get comfortable with, thatwe have the opportunity if we can
get energy to market in order to makea global impact, um, on this issue.

(40:45):
And if we can utilize natural gas inorder to wean particular countries off,
um, you know, higher, higher, highersources of, of emission fuels, like
we should absolutely be doing that.
Right?
And I think we're at a point now whereI think we have to look at this from
a global perspective and not justfrom a country level perspective.

(41:06):
How do we do that, Susan?
Well, and, and, and just jumping Yeah.
On top of what you, you shared, Andrew.
I agree.
I think that this is an opportunity andthe Paris agreement did have Article 6,
which I'm sure many of yourlisteners have heard about, which is
the ability to actually trade mm-hmm.
Internationally transfermitigation outcomes.
Um, and I looked at those early days
when, uh, I was with the project. Thechallenge is actually establishing the

(41:28):
agreements between two countries to trade.
So you would like to tradewith a country that has excess.
You know, a biller has moreemissions credits to get back
than we have to, to gather.
So carbon markets are acomponent of that, but they don't
just have to be under Paris.
I mean, we could start to look atvarious different trades, you know,
under the energy emissions tradingsystems with, for example, the EU.
or other like to like countries.

(41:49):
The challenge is going to be how youestablish those traits, and I even look
at it from the Canadian perspective.
This is something that frustrated mea little bit when I was looking at
Paris, was that we can't even tradeemissions or credits across provincial
borders. When we talk about removingborders between our provinces
Carbon markets are another componentof that, whereas via Mid and British
Columbia to support an LNG industry, howcome I cannot offset or get a credit

(42:12):
in Alberta? If I can actually capturea ton and put it in the ground in
Alberta, based on the fact thatwe've done CCS for a long time,
we have opportunity to do more.
So I think we have to really unpack one.
Yes.
I think we know on the basis that ifLNG produced in Canada is shipped over.
To China or to Korea and canactually back up coal-fired power.
I think you can make a very goodargument to say that it's lowering

(42:34):
emissions, but you have to be ableto demonstrate that that's additive.
It wouldn't otherwise happen.
It gets complex.
So I think we just basically haveto look at, yes, we know that,
it should go forward, but by the sametoken, we should over time make sure
that we're being held accountablefor it and so that we can actually
begin to demonstrate over time,yes, we're seeing emissions go down.
Yes, we're seeing it's actually havingan impact because otherwise people will

(42:55):
probably argue, well, that's just talk.
So establishing as you say that it'sadditive, perhaps not beyond a shadow
of doubt, but to a reasonable, youknow, like a reasonableness test
as opposed to a shadow of doubttest probably makes good sense.
We do flirt with the
potential perversity that Japan,Korea, Germany, you know, countries

(43:16):
that want our gas for energy securityreasons, for reasons I've heard from
Ukrainians in a way, you know, ifyou could sell more gas to Japan and
Korea, they would buy less from Russia,and Russia would have less money to
finance its war machine against us.
You know, the world is, isconnected in, in strange ways.
Can you imagine Canada just
doing that unilaterally or other,or exporting, you know, in concert

(43:40):
with other exporting nations?
Exporting more gas just so that wecould actually back out Russia or?
Well, no counting, sort ofsaying on our national totals.
That's a, that's potentially anotherway of looking at it, that this is
amount of, of gas or energy that'sbeing produced specifically for export.
So we're going to accountfor it differently.
Yeah, I've, I've heard someconversations around that.
Yes, you can look at that and thentherefore our NDCs are just gonna be that

(44:03):
which we use for domestic consumption.
That would be a way of separating it andthen looking at that differently, you
could start to parse it out that way.
Okay, so let me end on this,
let's say, on a scale of one to 10, howconfident are, are you when it comes to
a resource like LNG or quite frankly,others of Canada's resources that we will
have the vision, the optimism, thecourage, the tenacity, the cleverness

(44:26):
to, to actually be a leapfrog nation? Toyou know, really change in light of the?
I'm probably gonna put it at around
somewhere between a sevenand an eight probably.
So I think by nature I'm anoptimist and I, I do believe that.
I think we're in a particularmoment in time where I think you've

(44:47):
got the, a lot of political will.
I think you've got, um, a.Uh, a lot of will, uh, across
different political parties.
Uh, I think as a country we've begun togalvanize, um, around some of these sort
of key issues, and I think people arerecognizing the importance of energy.
Um.

(45:07):
But I think we'll have to seehow the dialogue plays out
over the next couple of months.
But to me, I think you, youhave to be an optimist in this,
in this sort of situation.
Uh, and I think being able to seeand articulate what the possibility
is and what needs to be done to getthere, I think that's a sort of
dialogue that we need and howyou begin to galvanize and, and

(45:29):
energize people, no pun intended.
Mm. It's, it's a, it's a difficultquestion to answer honestly.
I mean, I think for the LNGprojects that are already
well underway, which is I thinkthe remainder of LNG projects
we will see.
I, I think they'll proceed.
And so I think that we're already in agood space to see more LNG on the basis
of the momentum, which I see today. Forany new major piece of infrastructure

(45:52):
that needs to go across multiplejurisdictions, whether it's provinces or
First Nations and Indigenous communities
I can't say that we can leapfrog and,and I've mentioned this before because
there's still things that we need todo on the basis of the communities that
we just discussed at the beginning atthis time that we need to get right.
So if we can be very forward thinkingand we can make sure that we are engaging

(46:15):
at the right level in local communities,including Indigenous communities.
Openly recognizing the opportunityfor shared value, recognizing that it
will not go as fast as we might wantif we're just looking at our watches.
But if we can recognize the uniqueCanadian circumstances, then it's
a huge opportunity not only just toleapfrog, to bring more commodities to
market, but to actually do somethingwhich might not otherwise happen in

(46:39):
many Indigenous communities, whichis to build economic reconciliation,
in a way that Canadahas never seen before.
Now that would be incrediblypowerful, but that won't be easy.
But if we can do that, yeah, I thinkthat that would be not only an economic
leapfrog, I think that would be anincredible leapfrog for all communities,
including our Indigenous communities.
I think this lovely vision, and Iwanna thank you both for your judicious

(47:02):
blend of optimism and realism.
Uh, you know, we'llsee how this turns out.
I hope we'll have a chance to talk aboutit further as the country develops on
these questions over the next year or two.
Fantastic.
Thanks for the opportunity, Ed.
Well, Andrew, we covered a, a lotof territory there, didn't we?

(47:25):
We did.
I think, uh, I think we've, uh, givena roadmap for the country, but it's
important, you know, to figure out in thedifferent age that we're in, what, what
is the appropriate role for government?
'cause obviously there's arole for government and what
is that role to your thinking?
This is something that I, I thinkabout all the time, and, you know,

(47:47):
by nature, my whole career I'vebeen a, a free marketer, right.
And I, I, I inherently don't reallybelieve that government should
be picking winners or losers.
Um, you know, I think, and thisis not a, uh, a slight on Canada,
but I think it's sort of globally.
I think governments havegenerally not been great at like

(48:08):
picking, like winning, winning projects.
And I think ultimately, as I saidon the podcast, I think for me
the, the role of government isto put the conditions in place.
Uh, the rules of the game set therules of the game by which companies
are going to compete, right?
Um.
But I also think, and this is theother part of my brain, which is

(48:30):
we're at a certain point in time,right, for the issues that we spoke
about, energy security, uh, energyaffordability, um, sovereignty, right?
Uh, frankly the futureprosperity of this country where
if you're just putting the rules of thegame in place and you're defining those
rules of competitiveness, like will thoseprojects naturally emerge and will they

(48:55):
emerge at the pace at which we need them?
Right.
And so I think we're at a, at acertain moment in time where as much
as the free market side of me likedoesn't like the idea of picking
winners and losers, I think we kindof at that point where we have to.
Right.
And so I think the questionthen for me becomes is, okay,
well how do you begin to

(49:15):
tilt the odds in favor that you'regonna make the, the right choices around
some of those particular projects.
And, and I think in order todo that requires you to look a
little bit in the future, right?
Requires government to have abit of a vision of what you,
you could and want to be able to create,not in the next two to three years, but,

(49:39):
you know, in the next couple of decades.
Um, and for that, I might, I mightalmost refer to it as a bit of a,
a bifocal view of the world, right?
So, you know, um, and so what are theseprojects gonna be able to do for you
short term or the short term needsthat they're gonna be able to address?
But what is the long termopportunity that they can
potentially capitalize or catalyze?

(50:01):
I think maybe winners and losersmight be the old way of looking at it.
I think in, you know, perhapswe need to think about it,
and, you know, you've, you've, youknow, you've described this, you know,
already, but I think the way we have tolook at it, if we're in a geopolitical
age where economic security and, andnational security have fused in many

(50:23):
ways, then there's a big societalinterest in, in, in what we're developing
that will give us economic security
against forces that arebigger than the market.
And so, you know, it's kind offlipped on its head in some ways.
It's not just what can the market,what can corporations promote and do?

(50:43):
There's also the question,well, what do we need for our
physical and economic security?
And, and so the question's alittle bit different now, isn't it?
I, I completely agree.
Right.
And, and that's why I said likewe are at a particular moment in
time where I think areas like
sovereignty, national security aretrumping some of those other factors.
Right?
And so, yeah, like we're at that momentin time where we do need to, you know,

(51:08):
maybe you don't call them wins and losers,maybe you're saying, well, we're gonna
have to put some bets down, um, on
where we think, you know, value is gonnabe realized and what are the things that
are gonna be able to, um, give us the bestodds for success in reaching the kind of
vision that we wanna be able to create?
Okay.
Well look, thank you so muchfor your time, your insights.

(51:29):
This is, uh, this is great.
This is what you get to do everyday, which gives you one of the
fun jobs in, uh, in the countryand in, uh, and in Deloitte.
And, you know, I appreciate you takingthe time to share your thoughts with us.
Excellent.
My pleasure.
Okay, so that was a very richconversation today, and I thank
all of you for listening as well.
Canada's energy sector is aglobal powerhouse in transition.

(51:53):
There's, uh, the variables that areplaying are greater than they've ever been
before, and we have to look at it, but,you know, we've just had a great success.
It's taken a long time to havethe success, but LNG Canada is
operating, we are exporting gas.
We are also exporting oil off thiscontinent for the first time, ever.
And you know, that's growing our economy.

(52:15):
Uh, some estimates say that's almost 1%of GDP just by itself, those
two project, and there's more to come.

So on Full Circle (52:22):
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