Canada's post-COVID energy sector - Creating a sustainable path forward

Canada's post-COVID energy sector: Creating a sustainable path forward

David: ... the industry. Now before COVID-19 set in our oil and gas sector was facing serious challenges. Relating particularly around climate change concerns and also getting its products to market, both domestically and internationally, with delays or cancellations of pipeline projects. Then along came the COVID epidemic which has disrupted our daily lives and hurt our economy. Now perhaps that could be looked on as a blessing in disguise since it is forcing us, even more to consider deeply, where Canada should go in managing its abundant energy sector. Now we have an excellent panel together of speakers with Pan-Canadian experience in energy. We are particularly honoured to have with us Canada's Minister of Natural Resources, the Honourable Seamus O'Regan. Now the format is quite simple. I will ask each of the panelists to make introductory remarks of up to 5 minutes and then we will go to a round table discussion. The Minister will speak last and we'll respond to the thoughts presented as well as giving his own insights into where we are going in the natural resource sector in Canada. So that's the plan. Our first speaker will be Marth Hall Findlay. Martha was recently appointed the Chief Sustainability Officer at Suncor Energy, after serving for a number of years as the President of CEO of the Canada West Foundation. A lawyer by profession, Martha worked as a legal counsel and then as a senior executive in company's in the telecom sector, in both Canada and in Europe. She also has the distinction of having served for two terms as a Member of Parliament for a riding just North of Toronto. Martha certainly brings to our panel today a trans-Canadian viewpoint to our topic. Over to you, Martha.

Martha: That's great. Thanks so much, Dave. Thanks so much Ian and Gowlings for hosting this and thanks for the invitation to be a part of it and I'm really looking forward to the discussion. There's no question COVID has been dramatic for everybody. But it has been particularly challenging from an economic perspective for the oil industry, not just because of the dramatic reduction and demand for oil and oil related products like gasoline and jet fuel, but also because, some of your listeners may remember right at the beginning there was a little bit of a spat between the Saudis and the Russians on supply, and so we faced a double whammy of dramatically reduced demand and dramatic oversupply to the point where we almost got to storage capacity being full. But more importantly, I think now, is that COVID has provided, I hope in a positive way, a really important reminder of how interconnected the environment and our social and economic systems are. Indeed, one of the things that I've been seeing is a reminder of what sustainability really means. In the last number of years we've really come to focus on sustainability as being almost synonymous with greenhouse gas emissions, and there's no question climate change is a huge problem, we get that. But I go back to the United Nations, the heart in some ways of the sustainability discussion and sustainable development goals, the UN 2030 Sustainability Agenda actually refers to itself, and the agenda, as a focus on people, planet and prosperity. The 3 P's. The prosperity piece is something that COVID has really, really hit. This has been devasting for people who have lost their jobs, who've lost their ability to provide for their families, of course people who've gotten sick and the many people who've died. The economic consequences have been really, really stark and will continue. Energy is key to prosperity. We see that around the world. Energy is a key element to bringing people out of poverty which is a big part of the sustainability development goals. When you talk about energy and prosperity it's even more stark when you see the number of people around the world who don't have access to affordable and easily accessible energy, of any kind. We know that demand will come back. We're already seeing it start to come back. Demand for easily accessible and affordable oil will continue. That may not make everybody happy, but there's no question, 30 years ago the mix of energy used in the world was 80%25 fossil fuels. The mix today, before COVID happened, it's still 80%25 fossil fuels. That's including the dramatic increase in renewables. The fact that renewables are becoming so much less expensive. All of that speaks to the fact that oil continues to be affordable and readily accessible for so many demands, including agriculture, including all sorts of manufacturing, including all sorts of services that we come to rely on; health, education in so many ways, that simply can't stop tomorrow. In fact, COVID in that, ironically, has shown that we can't just stop it. We can't just producing the stuff because the consequence would be in effect what we've seen COVID happen, and dramatic reduction in economic activity with all of those very difficult consequences for so many people and their families. As we look forward key is transforming is not to deny the fact that's the reality we have today. The key is transforming the worlds mix of energy demand, combined with transforming the nature of the energy that we are able to supply, all to lower or no carbon options. I'm really excited. I've only been at Suncor for a few months. Yes, it has been an interesting introduction, but convinced the only reason I joined the company was the firm belief that Suncor, and indeed the energy industry, the oil industry, has to be a huge part of the solution. COVID-19 has highlighted, if anything for us, that we can't do that alone. We can do investments. We can transform our energy supply mix but, fundamentally, COVID has really shown that the solutions lie in collaboration, and Minister O'Regan, it's not lost on me that you're on the panel, the importance of business, of society, of governments all working and collaborating together to address these really serious problems while recognizing the realities of the energy demand that we need and that the globe needs today. So, looking forward to the discussion. Thanks, David.

David: Thank you very much, Martha. Our next speaker is Gary Mar who, interestingly enough, is Martha's successor as the President and CEO of the Canada West Foundation. A position which he just assumed in April. Now prior to joining the Foundation, Gary served as the President and CEO of the Petroleum Services Association of Canada. Like Martha, Gary has experience in elected office. He was a member of the Alberta Legislative Assembly for some 14 years. During that time he held a number of cabinet portfolios including health, environment and international and intergovernmental relations. Over to you, Gary.

Gary: Thanks, David, and thanks to Gowlings for putting together this webinar. I feel very fortunate to be involved in a panel of such distinguished Canadians. I'm going to start by talking about COVID in the broadest sense. Some commentators have talked about how COVID-19 has really changed the course of history but I actually want to suggest and say that COVID-19 has accelerated the course of history. If you look at some of the things that have changed, and they were already trends that were in place, the rise of e-commerce, the digitization of the economy, how we work, where we work, people working from home, how we deliver education, how we deliver health care. One of the transitions that it has accelerated is, the International Energy Agency projected last fall that the demand for oil might go from 100 million barrels of oil a day to 70 million barrels of oil a day by the year 2050, but that transition didn't happen in a span of 3 decades, it happened in a span of 3 weeks. As Martha correctly pointed out, some of that demand is coming back up as the economies start to open up again, particularly in China. You'll see recent reports coming out of the Canadian Embassy that Chinese demand for oil is back to about 90%25 of what it is in the pre-COVID period. Jim Burkhard from IHS Markit has made the same comments and recorded the same way. Let me say this about, just picking up on some of what Martha was talking about, there was a time 30 years ago, when I first started following policy, when the policy silos of energy and economic development and the environment where really three different areas of public policy. Today, more than ever if you're thinking about it in terms of a Venn diagram, those silos now overlap each other. You cannot look at one area of public policy without considering the other two areas. We know that you cannot have economic development without affordable, reliable energy. You cannot develop any kind of energy, including renewables, without having some impact on the environment. So energy development and economic development and the environment are all inextricably linked together and it's finding the public policy where these three areas overlap that will be really, really important for us to come to. One of the important lessons from COVID-19 is that demand has gone down, but when we track what has happened with GHG emissions, they have not gone down in a way that would come even close to meeting our Paris targets for GHG emissions. What it yields is the conclusion that we could never tolerate the sacrifices that will be necessary to eliminating the use of fossil fuels to the kinds of levels that would be required to meet our Paris targets. What it suggests is that we really need to be thinking hard about what the public policy looks like in terms of being able to come out into some form of recovery, and I've certainly heard both Minister O'Regan as well as the Prime Minister and Minister Morneau, talk about how what we have and public policy will determine the kind of recovery that we have. So I'd like to propose that because the pandemic has yielded that we can't simply get to our Paris targets by eliminating the use of fossil fuels, we need to think about transitions. We need to think about natural gas as being essential. That it will help reduce reliance upon more heavy emitting sources of energy. We need to look at nuclear power as a serious option. Yes, renewables have their benefits, but they're not a magic bullet either. Their advantages have to be weighed against their own environmental impact. Clean hydro, for example, does result in the damming of rivers which has it's own ecological impact. I'm looking forward to this panel. I want to say that it's a pleasure to be here with Minister O'Regan and he's got a lot of ideas that I've heard him talk about, recently, that suggest that we can go in the right direction in terms of public policy that will yield a great outcome for Canada.

David: Thank you very much. Very ..., Gary. Our next speaker will be Marty Proctor who is the President and CEO of Seven Generations Energy. Prior to joining Seven Generations in 2014 Marty served as COO of Baytex Energy. Earlier in his career he worked with production exploration companies in Canada, the United States, Kazakhstan, Russia, China and Norway. Must have had a lot of travel points going to all those spots. But Marty brings to our panel a wealth of energy experience, both domestically and internationally. Over to you, Marty.

Marty: Thank you, David. It's an honour to participate on this panel with all of these of distinguished guests. Our company name, Seven Generations Energy, is an ecological concept which originated with the Great Law of the Iroquois and states that it's appropriate to consider the impacts of decisions made today on the seventh generation in the future into the future. Next slide, please. Seven Generations was founded with the guiding principal we exist to serve the needs of our stakeholders. Which include governments who are the elected representatives of the owners of the resource, communities where we work, including indigenous communities, suppliers and service providers, employers and our capital providers. We recognize that our stakeholders care about environment, social and governance, or ESG, greenhouse gas emissions, job creation and strong financial performance. To be successful we must serve all stakeholders well. Next slide, please. Seven Generations energy is a specialized and focused Montney resource developer. The Montney is a huge hydro carbon resource that straddles Northeast British Columbia and Northwest Alberta. It's estimated to contain about 90 billion barrels equivalent of marketable resources. 7G has released about 800 sections, or about 500,000 acres, of Montney rights about 100 kilometers South of Grand Prairie, where the natural gas is rich with ethane, propane, butane and condensate. We have invested about $10 billion dollars over the last 6 years to drill, complete, process and transport liquids rich Montney natural gas. Our production grew from less than 800,000 barrels equivalent to 2013 to about 200,000 barrels equivalent in 2018. We've paid about half a billion dollars in royalties which support health care, education and infrastructure. We provide a direct employment to 1,000 to 1,500 contractors and employees at our work sites and, indirectly employed about 5,000 people including workers that manufacture pipe in Sioux St. Marie, workers that manufacture compressor skids in Central Alberta, railway workers and so on. Our rapid growth was facilitated by stakeholders support including the capital provided by first, having equity about 10 years ago, and later by public markets beginning in 2014. 7G has worked hard to minimize our environmental footprint and reduce our greenhouse gas emissions. We have one of the lowest carbon intensities in the energy business. 7G and other Canadian companies are committed to develop Canada's resources responsibly and we are open and transparent about our work. We think Canadians should embrace the opportunity to obtain the hydro carbons they need from the most responsible developers in the world, which happens to be Canadian energy developers. 7G is proud of a natural gas supply agreement which we recently executed with Energir, the largest gas distributer in Quebec. Energir's customers want responsibly developed gas for their domestic and commercial needs. So 7G collaborated with Equitable Origin and the Pembina Institute and welcomed their thorough audit and review of our ESG performance and the way we work with our stakeholders. 7G became the first North American energy company to earn Equitable Origin's EO100 Responsible Developer Certification, which facilitated the gas supply agreement with Energir, to bridge Canada with Alberta gas supplied to consumers in Quebec. I think this natural gas supply agreement can serve as a model for the future of Canadian energy. We need pipelines that bridge Canada to delivering responsibly developed energy from the Provinces with the resources to the consumers that need the resources. This will ensure that Canadians have energy security while supporting the Canadian economy. This same approach should be considered for delivering Canada's abundant resources to the world. Canadian oil and LNG can reduce global energy priority and reduce global greenhouse gas emissions. Canada is a nation that is rich with natural resources. Historically we've been proud to deliver our resources to the world while strengthening our Canadian economy. Together we can develop a team Canada approach that balances energy, environment and economics. Back to you, David.

David: Thank you very much, Marty. Our next speaker will be Al Reid. Al is the Executive Vice-President, stakeholder engagement, safety, legal and general counsel of Cenovus Energy. Al has more than 20 years experience in the oil and gas industry. He started his career as a regulatory lawyer. In 1999 he joined Cenovus's predecessor company and over the years has had developmental and operational management roles in the company's oil sands projects. Alan, over to you.

Al: Thanks, David, and thanks very much to Gowling for hosting today and for everyone for being online. I'm really excited to be here and be part of the discussion today because we think it's a very timely and important topic. I put just a couple of slides in and the first one just talks a little bit about Cenovus for people who don't know us. We don't participate in the retail space. So we're primarily known as an oil sands company. We produce in the Athabasca oil sands. We are a SAGD producer and but we also have conventional oil and natural gas production in Western Alberta and Northeastern BC, as you can see on the map. In addition we also have a 50%25 ownership, non-operated ownership, in two US refineries and owned accrued by rail loading facility in Bruderheim, Alberta which is, as you can see on the map, is just East of Edmonton. We have 7 billion barrels of oil equivalent of reserves on our books. We have always been focused on sustainable. Sustainability and sustainable production is core to what we do. I'd like to take a minute to just go to the next slide and talk a little bit about our sustainability. As a company we've always been focused on sustainability because of the size of the resource that we have and it's focused nature in the oil sands and in the deep basin. But last year, we really took the time to do a materiality assessment and ask ourselves, what are the most important things that we should be focused on from an ESG perspective. What we did with that was we identified the four areas you see on the screen and we set targets for each of those. Each of these targets are things that we'll achieve between now and 2030. I won't go through each of them in detail but I did want to touch on a couple of them. So the first one is that we'll reduce our GHG emissions intensity by a further 30%25 and hold absolute emissions flat between 2019 and 2020. That's on top of the 30%25 emissions intensity reduction that we've already achieved over the last 15 years, which is a very important indicator of how your performing in the GHG space. The other thing you'll see on the screen is that we have an ambition to reach net zero emissions by 2050. The reason that we have a target for 2030 is because we know how we'll do that. We have the technology and an understanding of what that will look like. But the 2050 ambition, and this is something I'll come back to in my talk, is because it will rely on technologies that aren't today widely commercial. So, that's an important thing that we always highlight with this. The other one that we thought was really, really important to highlight is that we have a history of doing business with indigenous companies. Since we started as a company in 2009, a long string of predecessors before that, but as we started in 2009 we've spent about $3 billion dollars with indigenous businesses in and around our operating areas, and we're committed to spending an additional $1.5 over the next 10 years. That's a really important of economic reconciliation and involving local people and the opportunities that are available. The other thing that we announced in January was something a little different as well. One of the things that we've known for years is that the housing situation in indigenous communities in Canada is not something that we can all be proud of. We saw it first hand in the indigenous communities near where we operate. So we also have announced an major initiative to spend $50 million dollars over the next 5 years, to build much needed new homes in six First Nations and Metis communities in and around our operating areas, just to try and improve that situation as well. As you can see we've also set targets for reclaiming wells and as well as Cariboo habitat restoration and fresh water intensity target is aimed to keep us industry leading, in terms of our fresh water use as we produce our oil and gas. I think where I start is that many of you will already know that the energy sector is Canada's largest contributor to GDP. For many years, I don't know that we'll be able to say that this year, it was the largest private sector capital investor in the country. So know, more than ever, our country needs a strong and prosperous energy sector to help lead a post-pandemic economic recovery and certainly, I think everyone's starting to recognize that the economy is going to need a lot of work as we go forward. Just as the energy sector was able to lead the recovery after the 2008/2009 difficulties, we think it can do that again. To facilitate that Canada, needs to implement policies that encourage investment in Canadian oil and gas operations, while positioning our industry to be an integral part of a transition to a lower carbon future. There's some positive ways the government is already doing that. Certainly the programs that have been rolled out by the Federal government, in terms of helping with methane emission reductions and dealing with some of the orphan well situations that have developed because of poor economics in some parts of our business, are important to getting people back to work and starting the economy going on, particularly in Alberta and Saskatchewan. The governments also have a very important role to play in the development of technology to deal with environmental challenges. That's probably most stark in the area of GHG emissions. This can be done through funding partnerships ,as well as introducing policies that encourage not only technology development but technology commercialization, while also ensuring the competitiveness of our industry globally. And being competitive is a key concern for participants in our industry. The development commercialization, emissions reduction technologies and, particularly carbon capture technologies, are expensive and it poses a significant barrier to Canadian companies, when the vast majority of international oil producers don't operate in a jurisdiction that has a carbon tax, and they don't have to add those to the costs of abating CO² emissions to their cost of their operations. That's not something that we complain about but that is something that we think we need to make sure that we make it economic for oil and gas production to continue in Canada. Government Ministry can work together to help us remain competitive, and maximize the global value of our oil and gas products, all while we reduce GHG emissions. This is where I think government's support is vital if Canada is to move ahead of the rest of the world and maintain its position as the most responsible producer of oil and natural gas in the world. We would support two key policy recommendations that will help us do that. The first one is that for Canada to adopt, and this is where I go back to the 2050 ambition of net zero emissions because the technology is not there today, really key to that is carbon capture utilization and storage. In the US they have developed something called a 45Q tax credit that creates an economic incentive for the capture and sequestration of CO², and we think that's a key part to Canada for Canadian oil and gas to continue to develop, as we move forward with a cleaner economy. Secondly, there's an opportunity and certainly when it comes to infrastructure we need to be looking at can government participate with something like expansion of the Alberta Carbon Trunk Line into the oil sands area. Certainly the timing for policy that further supports innovation in the Canadian oil and gas industry has never been better. Canada has a tremendous opportunity to have the energy industry lead the recovery of the economy right now. We have the world's third largest reserves. We're the fourth largest oil producing jurisdiction which presents an incredible opportunity and we believe that as oil production increases that it really should come from Canada. So I'll leave it there.

David: Thank you very much, Al. We now head back across Canada to the East for our next speaker. James Scongack is the Executive Vice-President, Corporate Affairs and Operational Service at Bruce Power, which operates the largest nuclear plant in the world on the beautiful shores of Lake Ontario. Lake Huron, pardon me. Over his years with Bruce Power, James has focused on environmental and waste management, indigenous and community relations and corporate social responsibility. Outside of Bruce Power, James is the Vice-Chair of the Independent Electricity System Operators Stakeholder, Advisory Committee. James.

James: Thanks very much, David, and you didn't want to get it wrong. Lake Ontario is beautiful but it doesn't even compare to Lake Huron. I always like to say Bruce County is one of the most beautiful places in Canada 8 months of the year, and maybe the Minister has a similar comment in the Province he's from, but I won't preempt him. Look, I really appreciate the opportunity to be a part of this today and I know we're short on time. There's really, I think, three or four key items from a Bruce Power central Canadian perspective that I really want to share with people today. The first is it goes without saying we're in unprecedented times and we all recognize how much COVID, how quickly it really hit us, and how dramatically impacts were on our society, on our organizations and really are, frankly, our confidence and our view of the future. Before I sort of get into the energy sector piece, I'm an eternal optimist by nature, I think that one of the unique opportunities that COVID has presented to us and we're still not through COVID yet, we have a long way to go, but it's a tremendous example that I think we will look back at decades later and say, we were able to tackle COVID-19 in a way that we came together and we did very amazing things. Especially if you look at how Canada's responded, the Province responded and many businesses have responded; communities, health care. We have a lot to be proud of. I think the reason why that ties in with the energy sector is we've been stuck in the mud for a long time in terms of this debate around the environment and the economy. It has been a which side wins and which side loses. Frankly, I think what that has done has led to a lot of instability for projects. It's led to a lack of investment and, frankly, I think that the net result of that has been bad economic outcomes and also bad environmental outcomes. So neither side has won so to speak. Fundamentally, there's going to be a lot of conversation on recovery. I think we can all agree that Canada's economic recovery is going to involve energy, it's going to involve infrastructure and it has to involve innovation. From a Bruce Power perspective, I'm just going to share with you how COVID hit us. As David mentioned we're the worlds largest operating nuclear facility so there's an expectation that we are providing electricity to Ontario families and businesses. We generate about a third of the Provinces electricity. That wasn't the case 20 years ago. 20 years ago when Bruce Power was formed, we were providing about 15%25 of Ontario's electricity. We have returned aged assets to service. We've been able to optimize our units and now we're generating over 30%25 of Ontario's electricity. Really what that has meant is that we contributed to about 70%25 of the energy needed to phase out coal in Ontario. It's great that you have a lot of these countries around the world talking a real good game on climate change. If you want to look at one weekend during the COVID-19 pandemic, Ontario was the most de-carbonized electricity system in the world and that was enabled through the phase out coal, the increase of nuclear, the increase of hydro, the appropriate use of natural gas and the introduction of renewables. You can debate how successful different pieces were. At the end of the day the results speak for themselves. We are all full in Ontario. I really think that's were innovation comes in. You know we always used to have a saying in nuclear power that we were a sole electricity provider and we always used to say the elephant can't dance. That was the old terminology of our previous CEO, Duncan Hawthorne, and when the Ontario government decided to move down the coal phase out route we challenged our team to say, "What innovation can we do to get the elephant up on its tippy toes and dance. Now, 10 years later, we provide 1/3 of our output flexible. It's as flexible as coal ever was. It goes to show you that innovation can work. The other key innovation is, and this is really outside of energy, but we've been able to do work in our asset to produce medical isotopes. During the COVID-19 pandemic we shook enough Cobalt-60 with the world's largest supplier of Cobalt-60 from the Bruce site to sterilize 13 billion pairs of medical gloves. So as we think of strategic supply chains and we think of the role of the energy sector, we need to look at the energy sector as an intellectual horse power, technological horse power that if it's healthy and it's supply chain is healthy we can use it for other things. Isotopes in the nuclear business is a real good example where we're very strongly positioned on that. I do want to save some time for questions but in terms of policy recommendations, Minister, I know you'll be speaking next and everybody's sewing up your to do list with takeaway items, we as Canada's largest private sector infrastructure project, we're not looking for government funding. We have great investors and owner's infrastructure, our unions and TC Energy, but what I do think is a priority is how do we strengthen our supply chains? How do we strengthen our supply chains and our networks? I look at nuclear as an advanced manufacturing supply chain and I think we have real opportunities looking forward with organizations, like Canada Infrastructure Bank, that were set up to deal with projects that would not be economically viable pre-COVID and saying, "How do we use those existing policy tools to strengthen and enhance projects, supply chains from projects that were viable?" So those supply chains are equipped to do other things. Also, we can have a healthy debate about carbon taxes, but at the end of the day we have a carbon tax in Canada. I believe the core, the easiest way to reduce emissions, still remains through our electricity sector. A de-carbonized electricity sector that can be leveraged for other things. I think we need to recognize there's an extra cost that goes into de-carbonizing, and whether that means new infrastructure, new technologies, and I really think we need to have an honest debate in this country about not whether or not we should have a carbon tax, I think that has really been decided, it's really about how could we really direct carbon tax revenues to electricity consumers so we can continue to ensure that Provincial jurisdictions are investing in clean electricity infrastructure, which is an absolute enabler to everything else. We can have a debate about how much is needed on the oil sands but we've proven here in Ontario that phasing out coal is your best bang for your buck. If we can make that a national priority, as I think we had, and be open to all the technologies needed to do that, I really think we'd move the ball up the field. I really think in an environment like this, that's as good as it gets and we got to be practical. As we like to say, don't let the perfect be the enemy of good. So, David, I'll stop there and I look forward to the discussion.

David: Thank you very much, James. Well, now we're going to head further East. From the shores of Lake Huron to Newfoundland. We're joined now by our special guest panelist, the Honourable Seamus O'Regan, Canada's Minister of Natural Resources. A native of Newfoundland, the Minister became well known coast to coast as the co-host of Canada AM, where he came into our kitchens and our dining rooms for breakfast for over 10 years. He was first elected to the Canadian Parliament in 2015 and was re-elected in the 2019 Federal election. He was appointed a cabinet in 2017 as the Minister of Veterans Affairs and then was made the Minister of Indigenous Services in early 2019. Following last years Federal general election the Prime Minister appointed the Minister as the Minister of Natural Resources. Welcome, Minister.

Minister: Thank you, David. Much appreciated. To the shores of the North Atlantic. Not to be mistaken for Lake Huron or Lake Ontario, I guarantee you. President of ExxonMobil Canada reminds me that this, our offshore jurisdiction here, is the harshest environment in which he works in, in the world. It's a tough spot to extract oil. We manage to do it. I want to commend all the other speakers, I want to commend Gowling on this opportunity. I will try my best to keep to time because I want to keep as much time open for questions as possible. I'd go back to an experience that actually Martha and I shared. We both attended two events in 2 days back in early February. One being GLOBE, which is the biggest cleantech conference in North America. It takes place in Vancouver every year. I gave a speech there in which, amongst other things, my real point was to reiterate that first of all our government is committed to net zero emissions by 2050. I should just mention, actually I just got word that the government of Newfoundland and Labrador, their legislature here has just passed, unanimously, a commitment to net zero here. As an oil producing Province in this country that's big news. But what I said was there is no getting the net zero, in Canada, without our oil producing regions. There's no getting the net zero without a Alberta, Saskatchewan and Newfoundland and Labrador. There's no getting around it. You can game it out whatever way you want. We all have to be on board for this. The next day we went to Calgary for an innovation summit. It was a smaller audience but the table, Martha was there, some of the biggest players in energy R&D in the country, for oil and gas particularly. In speaking to them it was clear at that point how investments in Canadian oil and gas was changing. It's huge to mention that because it's something that was in play before COVID hit. What Mark Tierney had been saying was happening. This is before Norway, an oil competitor of ours most particularly Newfoundland, they're sovereign fund pulled out investment, Sweden sustained for black rock, and a number of big players. As somebody once said to me, "Follow the money." Investment dollars were moving, moving in a different direction, and as it's been put to me we did not want, and we do not want, Canadian oil and gas to be the box to check. By that I mean you don't want people who are making investment decisions to ask other analysts and people, whether they're in Zurich or London or New York, what are we doing about climate change, and have somebody say, "We're not investing in Canadian oil and gas." and have that as the box to check. That's what we have to avoid. If you look on the other side of the ledger, what I said then was, "What is increasingly becoming the box to check on the other side of the ledger. A marker that a jurisdiction is taking climate change seriously. Lowering emissions, seriously, is net zero." So while it's 2050, and while some people are cynical about it, it's the moon shot. You say you're going to go to the moon and then you figure out how to get there. But there's something psychologically to doing this. There's something psychologically, the legislature here just moments ago, doing that here in Newfoundland and Labrador. The other thing I always mention when I speak just to, I do with a great deal of pride, is that Canada is the fourth largest producer of oil in the world. With some audiences you really have to let that sit with them because it's not a way that we identify ourselves. Certainly not the way that other countries, who produce less oil than us and export less oil than us, identify themselves. Who see it as a strategic national imperative. We don't to the same extent. But we've got to think that way. We have to because not only do I say it of pride, because I think it's remarkable what we've done in Alberta, Saskatchewan, and what we've done in the harshest climate that ExxonMobile operates in off of Newfoundland, but if there's a responsibility to it so that if we do want to lower our emissions which most Canadians do, and we do want to become a leader in this and the world is watching us. We have to take this very seriously. We can't dodge it. We have to tackle it head on. I'm reminded of that every time I attend an International Energy Agency meeting, as I have repeatedly, from my den. Used to be able to fly to some very lovely places as my predecessors did. I have not enjoyed that luxury. Canada's always asked to speak in the first round. I think what I can say here too amongst this group is we also make the first page on the Zoom call of hundreds of people. So there's a hierarchy in Zoom. We're always on the first page. Recognize that, because we're the fourth largest producer of oil in the world. That's why we're there and why I'm asked to speak, it's because that's what I represent, and the world is watching us and they recognize us as being the fourth largest producer of oil in the world. They also recognize us as the second largest hydro electric producer in the world. They recognize us as a tier 1 nuclear energy producer. They recognize us for our solar, our wind capacity, our storage capacity. So, I would just say that as we move forward there's going to be tectonic shifts, because the thing about net zero, the key word there is net. Non-renewables will be a part of this. It is a matter of the mix that we enjoy in this country between renewables and non-renewables. We have to commit ourselves, I think, to a few things as we move forward. We have to make sure that as we come up with a plan for net zero as a country that it's a smart plan. That we demonstrate the ingenuity that we've shown off the shores of Newfoundland, and as we've shown in Alberta and Saskatchewan, in our ability to extract oil and to do it well. We have to be thorough in how we're going to about net zero because there's all sorts of answers that are sometimes obvious and sometimes not. Things that incrementally accumulate. One of the best things we could do is retro fit houses and retro fit government buildings. The amount of energy saved by doing that is absolutely remarkable. We have to be very thoughtful about how we go through this transition. I know this as a resident and citizen of an oil and producing Province in this Country we cannot leave regions behind. We cannot leave workers behind or their families. Much praise to Alan and his initiatives with indigenous groups. We cannot leave indigenous people behind. So we have to go forward together. Jim Prentice, I have his book on my desk, all the time actually. I use as friends. It's called 'Triple Crown' which I recommend. It's a very thoughtful read on Triple Crown being indigenous environment and oil and gas. Jim says and realizes there's no other democracy in the world that has the bounty of natural resources that we do. No other democracy. It's important that we bring everybody along. We do our best to bring a critical mass of Canadians along on this because if we don't, if the change is too much and if they don't buy in, in a democracy they will elect somebody who won't. Who won't make those changes. Who won't achieve net zero and perhaps I would argue not achieve the prosperity for industry that we need. Not provide them with that stability and a clear direction. There is an urgency now, I would say, in these past few weeks over COVID but looking at Black Lives Matter, and any of you who have children of teenage years and in their 20's, going home and speaking to them in the evening, I can tell you my Cabinet colleagues are. After a long hard day coming home and being challenged on these issues. Canadians are going to be demanding prosperity, but I think more equitable and shared prosperity, and how we square that with climate change and net zero, unfortunately I think it's part of mandate letter. It's something that we're all going to have to do together. That is our national mission. That is our national mission right now. So, thank you, David.

David: Well, thank you very much, Minister. You have beautifully summarized the challenges our country is facing but also how important energy is to this country, and the whole sweep of energy, from oil and gas to nuclear, our renewable capabilities and so on. I think that's what this panel has also done. First, let me see if there are questions. I can start asking questions. I've got a lot of them but I think what I would better do is if everyone could turn on their video, so the Minister might be able to see who else is on here, and what we could then do is any questions for the Minister or comments about what results have gone on already. Anybody want to raise anything in particular?

Martha: David?

David: Yes, Martha.

Martha: I would love to chime in. Kudos to the Minister because there's no question, messaging from government has been interesting over the last few years, and it's just incredibly welcome to hear that my last comment was, if anything COVID has shown is the importance of collaboration between governments and business and society, and it's just wonderful to hear Minister O'Regan speak in that vein and act in that vein and so there's just a big thank you for that. But Suncor is Canada's largest innovative energy company. We operate and our incredibly proud of our electric highway where you can drive cross our Petro-Canada stations. You can drive across the country with over 50 stations where you can charge with no more than 250 kilometers apart. We can drive an electric vehicle coast to coast. What that does is that that actually allows people to get over their range anxiety when they're wanting to buy electric vehicles. Right up there with getting off of coal is getting people out of they're old clunker cars, especially the old ones, even the newer gas combustion ones are much better. So if we can actually encourage that kind of behaviour that's a fantastic thing. But there's an elephant theme I wrote down and now I love James's comment about the elephant can dance. Because the elephant in the room is that for all of this stuff we emit an awful lot of greenhouse gases and we particularly do in the oil sands. We're just not going to solve that problem tomorrow or next week. I then turn to yeah, you look at greenhouse gas emissions, the oil sands are a really big part of that problem. We are therefore a really big part of the solution. I love the comment that the elephant can dance because there's a much greater recognition that those of us engaged in that activity, the ability to invest in some of these new technologies, for example, is key to actually getting that dance to happen. I just wanted to say thank you to the Minister. Thank you to my colleagues for all of this. It's a really, really big challenge and we need to make sure that we address it head on.

David: Thank you, Martha. Other comments? Let me throw out an idea to you. James talked about nuclear and there has been, over the years, some discussion of using small modular nuclear plants in the oil sands and elsewhere in the oil and gas sector. Nuclear energy basically doesn't go West of Ontario, effectively. We mine nuclear and we mine uranium in Saskatchewan but we don't have any nuclear power West of Ontario. The question is can the elephant dance in Alberta? I just throw that one out. I mean, is there a possibility that as the new nuclear technologies come on stream that it could be a part of this answer?

Minister: Well, maybe I'll chime in and, James, you may want to speak although James knows. I spoke fairly emphatically about this at the Canadian Nuclear Association's AGM. We've gained it up and there's no way we'll achieve net zero without nuclear. I made that speech very deliberately just to see what kind of reaction it would get but obviously it got a very good reaction from those involved in the nuclear industry. The response in terms of a critical response was very muted. I think Canadians understand now the importance of the nuclear industry and critically, I think, in Ontario that it doesn't emit. You know? And the SMR models that we're looking at, one of the key things it that it actually recycles, reuses, nuclear waste. So small modular reactors, for people who don't know, are just highly mobile. Much smaller nuclear reactors that have all sorts of good use, assuming we'll probably begin a first SMR on Brownfield sites. But there's a notion that it could be used in more isolated areas in the North. The Russians are a bit ahead of us on this. They have a floating SMR in the Artic. Canada enjoys a real leg up on this. Not only because of the already uranium resources you pointed out, David, in Northern Saskatchewan. I've been there, Scar Lake. But also our regulatory environment really gives us a leg up. People trust Canadians and trust our regulatory paradigm. It's something that's tested. People trust this country and trust our industry. So there's a whole lot of potential. It ties in with our critical minerals strategy which we're fomenting and we're working the Americans on as well. But SMR's is a real potential and a really export potential as well. A great potential for this country. I don't know if James want to weigh in on it. I'm sure he does.

James: Yeah, no, Minister. I think you hit the nail on the head and all I can really say here is three powers to this working movement. The Minister mentioned the first one. The Canadian Nuclear Safety Commission, as a quasi judicial independent regulator, I can tell you that I've been to the IAEA in Vienna. In the scene I see is a highly respected international regulator. We're very proud of our nuclear industry here in Canada, but we are relatively small compared to the US or China or UK. But the scene I see punches way about its weight. Not only domestic it's international. We talk a lot about regulatory certainty as on operator to make investments as we need. I agree with the Minister as to the scene I see. It also lands with we're creating a foundation in Canada between New Brunswick and the refurbishments and life extensions at Darlington and Bruce. These are very stable nuclear supply chain. With that now you can scale it to other things. I believe the future of nuclear is going to be with three areas. It's going to be the foundation we have of our existing assets. I actually still believe in a future for Cando. The Cando technology and where that can apply. Small modulars definitely because we have the manufacturing capability. But we also have to tell the nuclear story a little bit more broadly. The World Energy Council has a really good line. It says we shouldn't idolize or demonize any energy source. Part of the problem we have with this debate is we make it sound like this is a bunch of binary choices. Let's be honest with ourselves. Every form of technology has its pros and cons. We need to kind of put that together the best we can. I can think the Minister hit the nail on the head.

David: Gary, did you have a point? I wasn't sure if I saw your hand up or not.

Gary: Yeah, my speaker was off. I want to say that the Minister referred to the International Energy Agency and they were recently, Doctor Birol was recently on BNN and talking about urging the world to use clean energy planning in stimulus packages, but he made a clear point, Canada is a leader in providing energy and a leader in clean energy. He talked about carbon pricing. He talked about CCS. He talked about efficiency. He talked about most of our electricity is from non-emitting sources. We've got something to build on. In Canada we've got a great story to tell about all of the above. I really like what James had to say. That we should neither demonize or idolize any particular source of energy but we should be looking at all of them, and Canada can be doing a great job and this will be an important part of our economic recovery, if we get the right kinds of policies put in place to ensure that we continue on this track.

Minister: It's a really important point, Gary. I agree with you. The point is to target the emissions. Not the source of the emissions. If you're going to demonize anything, demonize the emissions. Once you start in that place things become a little clearer.

Martha: And recognizing that the emissions, 80%25, even if it's oil, 80%25 of emissions happen when people use it. Any of the efforts, any of the investments in technologies that can address the energy, the affordable and accessible energy that people need around the world. That energy, in the use of it by people around the world, we need to figure out how that can be either low or no carbon emissions. It's the whole cycle that is critically important in all of this.

David: Great, Al. I'm going to give you the last word.

Al: Okay. Sure. I was just going to say that I think when we think about technology, and there's lots of talk about technologies and promising technologies, I kind of think of the oil sands experience. Alberta had a situation where they new that 80%25 of the resource couldn't be extracted. So they came up with a site D technology. So you had the technology but who was going to be the first one to go out there and spend a sizeable chunk of money and risk their company in doing so. Then there was a fiscal package that came along with it to help commercialize it. Over time those fiscal measures that helped commercialize it as the industry got established, pulled away, and now today you have industry that's up and running. So technology is important. Technology development's important but there's also that commercial aspect. Where you put in place a situation where someone's willing to take the risk, to risk capital, to go out and invest that way. I think things like small modular reactors are going to require some of those types of things, and there's other, carbon captured storage is one I mentioned. But I think there's a number that are going to require both the technology, the innovation to get the technology in place, and then getting a system in place where someone will take the risk to commercialize it.

David: Now the Minister will understand, I'm getting indications from the control room that our time has expired.

Minister: I've got to go Cabinet Committee. I apologize.

David: I'll let you go too. Okay, so, it is 4 o'clock in Ontario. It's 2 o'clock in Calgary and it is 5:30 in St. John's, Newfoundland.

Minister: Indeed it is.

David: At this point I'm afraid I have to call the day here and thank everybody. I thought we covered the issues very frankly, honestly, from a number of points of view. It's clear that as Canadians we should be proud of our energy sector and but we need to invest in it. We need to support it and we need to find ways to deal with the kind of challenges we're facing in terms of oil and gas transmission, distribution and so on and so forth. Thank you, Minister, and thank you all the members who've been on the panel. I've enjoyed it and I hope the 400 and some odd people who are listening in have enjoyed it as well.

Minister: Indeed.

David: Now over to you, Ian, I think to give the benediction as we head off on our various activities. Ian.

Ian: Wow. David's already thanked everyone. Thank you so much to all of our speakers and to David for your deft coordination and Minister O'Regan for taking the time and sharing your thoughts. We'll be posting this webinar for those in our audience who want to review it, for those of their friends and colleagues who didn't have a chance to join us who want to view it. I do know there were audience questions coming in. I'm sorry we couldn't entertain those but as you see we had a very full hour packed with comments, and indeed, more could come but we're out of time. Thank you for joining us. Please, everyone watching, keep thinking and talking about this issues of critical national importance. That was the point of today and, again, really appreciate our speakers for contributing to and encouraging that and stay well everyone. Thank you very much and have a wonderful day, evening, afternoon depending on where you are.

Minister: Thank you.

David: Thank you everyone.

Martha: Thanks everybody.