Notice how happy the guy in the top left is? He’s the chancellor of Germany. He can to Canada in August, seeking liquifed natural gas, and Prime Minister Justin Trudeau, top right, said there was no business case. Markus Schafer, member of the Board of Management of Mercedes-Benz Group AG, Chief Technology Officer, Development & Procurement (bottom left) and François-Philippe Champagne Minister of Innovation, Science and Industry (bottom right) sign an agreement as Canadian Prime Minister Justin Trudeau (top right) and Chancellor of Germany, Olaf Scholz look on, at an event hosted by the Canadian-German Chamber of Industry and Commerce. in Toronto on Tuesday, August 23, 2022. THE CANADIAN PRESS/Chris Young
Editor’s note: This is Ken From’s first column for Pipeline Online. From retired from the position of president and CEO of SaskEnergy in April 2022, a position he held since 2017. From 2014 to 2016, he was CEO of the Petroleum Technology Research Centre (PTRC). For the years 2010 to 2012, From was CEO of TSASK, the Technical Safety Authority of Saskatchewan, taking on that role just after it was formed and thus molding its early days. As an oilman, he was officer and director of Raven Oil Corporation from 2012-2016, and president of Prairie Hunter Energy Corporation from 2007-2010. And before all that, From worked with SaskEnergy from 1981 to 2007, where he was senior vice president of gas supply/business development.
If that isn’t enough, as a professional engineer, From served as president of the Association of Professional Engineers and Geoscientists of Saskatchewan (APEGS) from 2003-2004. He also served as a director of Engineers Canada for six years. From was the inaugural Saskatchewan recipient of the Fellow of Engineers Canada designation.
Suffice it to say, he might know a thing or two about energy.
Ken From
By Ken From
We have thrown out the phrase “energy transition” almost automatically and without much thought in the past year. By definition the word “transition” means to go from one state to another clearly defined state. That simple phrase and the way it is portrayed at large, I would argue, causes confusion as it implies the pathway to success has been picked – electrify everything – as opposed to continue to de-carbonize our energy systems.
I would suggest that a more accurate depiction of our global goals would be the continued evolution of energy systems such that we develop multiple pathways to reduce emissions, taking into account sectoral differences such as transportation, buildings and heavy industry.
One of the greatest risks we have as a country going forward is the dominate mindset of politicians and of activists. For politicians to message the voting public, they need a very simplistic narrative – such as “fossil fuels are bad, so let’s stop using them.” Most activist organizations are single purpose, with very narrow and rigid perspectives. The best example I can personally recall happened about 12 years ago, when the private sector was willing to build an LNG facility on the West Coast – mainly for export to Asia. Interest groups fought hard to stop the project – believing that any investment in a fossil fuel project prevents real climate action. Fast forward to today – we have lost a decade of natural gas-powered electric generation that would have offset coal-fired generation in many of those Asian economies. Real GHG reductions were prevented by uninformed narrow ideological perspectives.
Government intervention in the energy space is currently heavy handed and that will likely continue to grow. While the 80’s and 90’s were all about getting government out, (i.e., the establishment of trade agreements meant less government) now, after 40 years of a more market-based economy, we are seeing more government policy and more regulation. A seismic shift is accelerating with little debate and analysis of the impact of certain policies. It should come as no surprise when certain industries cannot build, as an example, a pipeline, that investment in energy projects does not keep up. Supply problems in the form of shortages should not come as a surprise.
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After 20 years of low inflation across a number of sectors and commodities, we are now seeing energy costs, and in particular electricity costs, up by an order of magnitude with Europe feeling the brunt. We have seen in some countries an uprising with people pointing to politicians for change. This creates a fractious government with policy reversals a likely outcome – and that uncertainty is very damaging to industry and investment. Governments and regulators need to be sensitive to that fact and work towards integrated approvals.
We have all seen that Germany was concerned over natural gas shortages amid the cut in Russian supplies. The Financial Times on November 15, 2022, reported that Germany built an LNG import terminal in just 200 days. German Economy Minister Robert Habeck pointed out this was a major achievement for a country where construction projects can drag on for years. “Germany can be fast and advance infrastructure projects with great determination when the federal and regional governments, together with the project participants, all pull together,” he said.
Canada – what is our resolve? I’d note that when the German chancellor came to Canada two months ago, he was looking for LNG, not for blue hydrogen ten years down the road. That was the most ridiculous spectacle I saw during the visit, when it was clear the Chancellor wanted an LNG terminal on the East Coast for quick delivery, and instead got a promise of blue hydrogen from windmills in Newfoundland, which will NEVER happen.
I recently attended a workshop in Stavanger Norway (joint oil and gas technologies and enhanced oil recovery) where we pragmatically discussed fossil fuel energy systems in the context of reducing overall GHG emissions. Very quickly the discussions went to trying to solve the Tri-lema of energy systems. – that is Affordability, Security and Sustainability. The conversations recognized that all together we need to have complementary proposals based on the strengths of each. The discussions from that workshop will form a series of commentaries here, on Pipeline Online.
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