As always, the Global Energy Show is a great gathering of industry stakeholders from CEOs to young professionals for a robust exhibition, events and technical and strategic conferences and kudos go out to Nick Samain Senior Vice President – North America at DMG Events for producing another great show. The strategic conference in particular did not disappoint.
In his ministerial address to open the strategic conference, the Honorable Jim Reiter, Minister of Energy and Resources, Government of Saskatchewan had reassuring comments to make as he advised that there is currently less concern over access to capital for energy companies as institutional investors refuse to exclude oil and gas and obtain lower returns.
“I’ve had the privilege of serving as the Minister of Energy and Resources in Saskatchewan for the last couple of years and over the last number of months I’ve noticed a distinct change in tone. The first year what I noticed as I met with oil and gas companies is that there were three major concerns that continuously got brought up in my meetings – federal government overreach, access to labor, and access to capital. Over the last while, there’s still concerns about federal overreach, there’s still concerns about access to labor, but I’ve heard less concerns about access to capital and I think there’s a few reasons for that. Institutional investors look at rates of return and realize that when they exclude the energy sector, they’re damaging their own rates of return.”
Reiter announced a collaboration between the Saskatchewan government and Teine Energy to develop new oil and gas high school courses not only to further awareness of the vital role that oil and gas industries play in the economy but also just stimulate interest in post-secondary education, training and work in the sector.
Nik Nanos, Founder and Chief Data Scientist at Nanos Research delivered an analysis of his polling data and public opinion research on energy and Canadian views, unpacking his Energy Report Card, on how Canadians feel about the job that we’re doing on the energy file.
“If there’s one thing that I want you to remember from my chat today is that Canadians are pragmatic, that Canadians are realistic, that Canadians are reasonable,” Nanos said.“ When we ask Canadians about the job that we’ve done with energy projects and infrastructure, you can see that we score poorly at 5.4 out of 10 on making sure that we build the energy infrastructure that we’re going to need, 5.5 on approving new energy projects, 5.6 on making sure that we have the transportation infrastructure like roads, rail that will lead in the future.”
In the results of testing on assuring that energy is affordable, or even just meeting climate change targets- Nanos reported that Canadians rate the job that the federal government is doing on affordability as an outright fail 4.5 out of 10 adding…” The other thing that’s quite striking about a lot of these numbers, especially the affordability numbers is that young people are more likely to score the federal government even lower than everyone else.”
Nanos has been tracking views on the importance of the oil and gas sector to the Canadian economy over the last four years and reported that compared to November 2020 there’s an increasing proportion of Canadians that believe that the sector is absolutely important to Canada’s current economy. The view has increased from 65% to 74% of the population or three out of every four Canadians. He pointed out that the fact that 74% of Canadians agree on anything, is quite striking. When polling the importance of oil and gas to Canada’s future economy, a majority of Canadians- 53% – believe that the oil and gas sector will be important to the future of the economy.
“So what does this mean in terms of the path forward?” Nanos asked. “What realistically is Canada’s competitive advantage when we’re looking at attracting investment? …It’s basically as simple as making sure that we have some sort of long-term energy plan. We need to reintroduce the narrative of the sector as vibrant and exciting. We heard from the Minister about educational opportunities in Saskatchewan to train young people in high school. We have to do more of that in order to renew the narrative that Canada is an energy superpower.”
Alberta Premier Danielle Smith gave an inspiring summation of all of the advantages to Alberta’s oil, gas and new energy resources in her address with a nod to the natural partnerships with the Tech industry- even referring to a growing interest in data centers, something that was a topic of high interest at the ARMA Information governance conference a week prior.
The rapid growth of AI and the need for data centers came up again in discussion in a following session on the importance of grid stability during extreme climate events with panellists: Jakub Brogowski, CFO Kiwetinohk Energy Corp, Marie-France Samaroden, VP Grid Reliability Operations AESO, Emma Coyle, Director Commercial Capital Power and Emily McClain, VP N. America Gas & LNG Markets, Rystad Energy. The winter events that affected the entire northwest Pacific grid and the April Alberta grid outage were top of mind in the discussion as was the instability of the Texas ERCOT grid.
Moderator Emma Coyle referenced Michael Cembalest, Chairman of Market and Investment Strategy JP Morgan Asset Management and author of the 14th annual energy paper which predicts that due to the retirement of dispatchable power generation nuclear, coal and gas and underinvestment in pipelines, gas storage and winterization, major U.S. cities will face electricity outages, and/or natural gas outages. The report, titled “Electravision – the complicated journey to an electrified future” which Cembalest sums up as “the electrification of everything” also comments that the rise of AI is certain to delay electrification timelines and increase cost saying:
“Our Electravision scenario assumes that total US energy needs will not change much over the next two decades. The rise of AI might change that. One illustrative example: the PJM (mid-Atlantic) region has made sharp increases to projections of future power demand for Dominion Resources, a utility serving 6 million customers in 15 states. These increases are entirely due to an increase in data centers which serve advanced computing/AI needs. Constellation Energy estimates that the AI revolution could require more power in the US than the future electric vehicle fleet.”
Jakub Brogowski saw opportunity in the rise of AI, noting that along with the electrification of industrial sectors, for which there will be huge demand, there’s an opportunity to expand a new industry in Alberta – data centers.
“We’ve talked about getting energy to the coast. What if we brought data centers here (to Alberta) bringing a whole other lift in demand? But to get that we’re going to need grid reliability, stability, and we need those signals.”
Brogowksi went on to say that Alberta has an advantage and the ability to concentrate electrical infrastructure and then place a data center at that location.
“So I think if we want to create that opportunity, where you have a behind-the-fence set up, that’s where we need to clarify those rules, remove the fuzziness and make it clear. Because all of these companies are going to have the same conditions. They’re going to look for low-cost power. So to incentivize that low-cost power, we need to be able to move quickly and then have a functioning market where they can connect. If we can create that opportunity, then that new power will feed directly into the data center, and it won’t have to be reliant on a growing market in Alberta.”
Maureen McCall is an energy professional who writes about issues affecting the energy industry.