Have you ever heard the phrase “talking your book”? It’s a phrase that’s used to discredit a comment, saying in essence that the speaker has a vested interest in an outcome, and speaks in an authoritative way to present something as factual when it just may be to support that position. The phrase often refers to someone owning a stock or trading position, then flogging data/info that will help that trade work out.
The phrase is bigger than that though; people “talk their book” all the time for a variety of reasons – promoting their business, promoting their ideology, whatever. Some annoying clowns literally talk their book, as in, talking about their book, trying to get you to buy it.
However, there is a big danger when we get too cynical about what people say to the point that we discount opinions because they seem to be nothing but vested interests. Sometimes they just happen to know what they’re talking about. A great example is the “energy transition”.
The energy transition topic, in terms of popularity, is one of the media’s excruciating handful of focal points. It seems a foregone conclusion that energy will “transition”, and out of that certitude flies a billion blackbirds, each voicing an opinion on what it means, and when it will happen. One end of the spectrum says it will happen quickly, because “people are demanding it” and “there is an emergency”. At the other end of the spectrum are those who envision a much more lengthy process that is not tied to demands or emergencies, but to cold hard realities – the challenges of actually changing the most mega of mega-systems.
Some of us have been shouting into the void that this will be a very long process regardless of how quickly people want it; critics generally accuse such people of talking their book. “Oh, you work in the petroleum industry? Of course you’d say that.” To be fair, that perspective is understandable for minds pickled in the putrid brine of social media, where true wisdom stands little chance against bots and zealots, and constructive dialogue is about as common as goats with guns.
While it may not sway the quick-transition people, more open minds will be interested in what Enbridge had to say in its most recent quarterly results conference call. Enbridge, you may recall, is freaking huge. They have their finger in pretty much every energy pie in North America, and some in Europe (the company notes it has 40 sources of cash flow). One significant reason for listening is that the question of exactly what Enbridge’s book actually is, is beginning to blur, for those that must place entities in philosophical buckets. Their motives are neither purely petroleum nor are they specifically promoting (or resisting) any particular timeline. They’re dabbling in every form of energy on the map, and few entities on earth participate in the breadth of energy segments that these bespoke-suited (pre-Covid; now, presumably jacket/tie/sweatpants) energy people do.
Enbridge is at the epicenter of energy infrastructure, touching all aspects. In the conference call, they gleefully describe the money-making wonders of everything from the oil sands to offshore wind, from diluted bitumen pipelines to solar fields to renewable natural gas to hydrogen. They are playing in every sandbox. And it’s not flavour-of-the-month stuff either; Enbridge built their first onshore wind project nearly two decades ago.
Enbridge is at the heart of any energy transition, but it is a business (as opposed to an ideology), and is acting like one. Their abundant bosom of capital will nourish any energy enterprise with earnings potential. The company, for example, is dabbling in hydrogen, and not just reading up on government reports and research papers – Enbridge is tinkering with hydrogen production, and looking to inject hydrogen into the natural gas streams of potentially hundreds of thousands of customers. The company is also dabbling in what seems to be the most sensible hydrogen development on the table presently. They have piloted a power to gas facility that captures off-peak renewable power to convert water to hydrogen. Enbridge is constructing renewable natural gas facilities at landfills and government institutions where manure can be sourced perpetually, in vast quantities (the latter may be unsupported speculation on my part).
Enbridge is building onshore wind projects, offshore wind projects, solar projects, and anything else that pumps up the E in ESG (and of course they’re not ignoring the S and the G, which are often now seem subordinated to the E part). They are tackling Scope 1 and Scope 2 emissions aggressively, and even taking on the mind-bender that is Scope 3 (offsetting end-use emissions of the products transported, or some subset thereof, which, if carried out to its logical outcome, will have a company representative knocking on your door every time you turn the thermostat above some societally-approved temperature and telling you to knock it off, or following your pickup truck around in some sort of EV and shouting at you with a megaphone every time you accelerate too fast).
Regarding the energy transition then, few entities are as fit to comment as Enbridge, and few are as agnostic in terms of energy source – they are pursuing them all (except, of course, the big dirty old C-word). And here is what an executive had to say about the energy transition: “Our outlook is based on three unassailable facts. First, global energy demand will rise in the next two decades, driven by population growth and increase in the middle class and urbanization…second, the return of economic growth will depend on affordable and reliable energy…and third, no matter what future demand looks like, what kind of energy we’re talking about, we need existing infrastructure, replacements and new build….it’s clear to us that the energy transition will be gradual.” Later on in the call, the impeccably dressed torso continues, “We’re even more convinced today though, that natural gas will dominate global energy and some people call this the bridge, but it’s going to be, in our view, an awful long bridge.”
Oh, and in case you’re suspicious, thinking I’m bootlicking some fraternal petroleum brother and talking my book with respect to Enbridge, they would probably just as soon see me floating face down in the river for things like this: Their desire to contract their mainline oil pipelines under firm service is a potential disaster for western Canadian producers. The rationale for doing so is explained in the conference call, and makes sense from the perspective of an infrastructure god that defines the backbone of North American energy: the company views oil sands production as huge, stable, and multi-decade, and it flows through the veins of many Enbridge pipelines in the US and directly to huge, stable, refineries. The idea then is that, because the production is so stable, as is refinery demand (generally), a long term fixed transportation contract makes sense. But the market is not a free one, and there is little hope of anyone building oil transportation alternatives to meet the needs of non-oil sands producers. As such, the oafish-giant view of the situation is going to step on a great many smaller entities that are in no position to sign long term take or pay contracts. When the bulk of transport space becomes locked up and the little guys have to fight for the bit of remaining space, the province(s) will be among the many losers as oil gets discounted and middlemen with great big tanks reap the difference.
But that’s another story for another day. If there’s a point worth remembering here, it’s this, and it’s of vital importance to the shell-shocked hydrocarbon sector here in western Canada: Enbridge, one of the world’s largest energy infrastructure companies, has signed on to be net-zero by 2050, a goal right up there with the most progressive nations/companies; they have a finger in every energy pie including the most cutting-edge green; and, they say an energy transition is going to take a very long time. Meaning, Canada’s hydrocarbon sector is going to be around for a very long time. Of all the opinions out there, theirs should rank among the very highest for credibility.