Oil and gas industry support sought

By Geoff Lee

January 7, 2016 10:37 AM

Left: About 200 people showed at the Wildrose Pavillion to hear CAPP president and CEO, Tim McMillan (right) talk about the need for grassroots support of the oil and gas industry.

If you’re a supporter of Canada’s oil and gas industry raise your hand.
The Canadian Association of Petroleum Producers is looking to recruit more so-called energy citizens to help it create a more balanced discussion about energy, the economy and the environment.
Energy citizens are like-minded Canadians who are willing to proclaim their support for the oil and gas industry through Facebook, Twitter or around the dinner table, said CAPP president and CEO, Tim McMillan, who spoke at the Jan. 4 technical luncheon of the Lloydminster Society of Petroleum Engineers.
“I would like everybody here today to sign up and become an energy citizen,” said McMillan, who noted this time last year there were about 500 energy citizens
“Today we have over 50,000 that we can reach out to.”
Industry supporters can sign up to become an energy citizen at CAPP’s energycitizens.ca website where they can learn how the industry benefits every province and territory.
McMillan told an audience at the Wild Rose Pavilion he hoped to double the 150 energy citizens from Lloydminster by the end of his one day visit to the city.
“When people like David Suzuki claim the oil and gas industry is the equivalent of slavery, that drives people to become a Canadian energy citizen,” he said.
McMillan noted polls show 42 per cent of Canadians identify themselves as industry supporters, while industry opponents are three times as likely to speak out against it.
McMillan said education without action is just trivia.
“My ask of this group today and every group I talk to is we all have a stake in this,” he said.
He noted the industry can’t just leave it up to CAPP to run ad campaigns to be successful.
“All of us need to be talking to our friends, our families, we need to be on Facebook and Twitter and be unapologetically proud of our industry,” he said.
Canada’s energy industry employs more than 550,000 people and it contributes $18 billion to governments across the nation to fund services such as public education, healthcare and social programs.
In Alberta, the industry has contributed more than $105 million to the provincial government during the past 10 years.
In Saskatchewan, the energy industry generated 38,000 direct and indirect jobs in 2014 alone.
“It’s a very important industry to our country,” said McMillan.
“It has some big challenges ahead of it, but ones that I think as an industry and a nation we’re up for.”
McMillan noted the oil and gas industry is heading into 2016 with an over supply of oil, low commodity prices and low cash flows.
He said the volume of oil in storage in North America and around the world is almost at record levels — and that’s reflected in low global prices for oil.
He said this obviously is a very challenging time for the upstream industry that CAPP represents, but he added the industry has been through low price cycles before.
Historically, McMillan said, producers come out of them stronger than going into them.
“Today we are seeing 2016 starting off with the low price of commodities and some challenges on market access (pipelines) which aren’t going away without a lot of work,” he said.
Outstanding issues include an ongoing royalty review in Alberta and dealing with a variety of increased costs that need to be resolved for success in the long term.
McMillan said the industry will need to look at how it can be efficient, more effective and utilize new and better technology and partner with service providers.
“I think there should be no rock that should be left unturned at this point if we want to be successful in the long term,” he said.
He noted the industry had challenges at $90 a barrel for oil that were left unresolved.
“At $40 or $37 where it is today, we cannot afford to leave these challenges unresolved,” he said.
He said market access is one to easily recognize and understand — getting pipelines to new markets adding there are many other ways in which the industry needs to address our role in the Candian economy.
He said issues in Alberta such as corporate income tax hikes, the royalty review and the carbon file have all led to higher costs for Canadian producers.
McMillan spoke as an energy citizen himself about the impact of dealing with climate change on the industry.
“In Canada we have had some of the most stringent regulatory frameworks in the world” he said.
“We have been leaders on the climate file over all of our competitors.”
He cited evolving regulations on venting and flaring as an example.
“We see that position being incrementally increased,” he said.
“My hope would be Canada is not doing this on its own.”
McMillan noted Canada produces just two per cent of global emissions of which just a fraction come from the oil and gas industry.
Alberta’s new carbon pricing approach will cover 78 to 90 per cent of emissions in the province.
A carbon price will be applied across all sectors, starting at $20 per tonne on Jan. 1, 2017 and moving to $30 per tonne on Jan. 1, 2018.
McMillan said the U.S. is not putting a carbon price on their producers.
“They’re not putting on the stringent regulations we have,” he said.
McMillan said he attended the recent Paris climate change discussions to ensure Canada was appropriately represented.

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