This week on the podcast, we discuss Peter’s recent articles in The Hub: “There’s a fortune to be made in Canada –  if only we’d seize the opportunity,” and “It’s going to take more than diplomacy and defense spending to secure Canada’s sovereignty.”

The podcast begins with a bit of history, looking back at a 1950s article on the potential to make a fortune in Canada. While the country is still endowed with vast natural resources, investing in Canadian resources has become more complex over the past few decades. The challenge is evidenced by an estimated $150+ billion in projects canceled, withdrawn, or denied and the $50 billion in foreign exits from the Canadian oil and gas industry over the past decade. Another example is the surge of LNG export capacity growth in the US, while in comparison Canada has had tepid investment.

Peter and Jackie then discuss some ideas for attracting investors based on conversations over the past month, sparked by President Trump’s threat of tariffs and annexation. These include ideas for fast-tracking Canadian trade-enabling infrastructure, including expediting projects that project proponents are already advancing.

Content referenced in this podcast:

• IPSOS poll showing Liberals have a lead (Feb 25, 2025)
• Politico article, the viciousness of Trump’s climate attacks stuns even his critics (Feb 22, 2025)
• S&P study on the economic impact of US LNG
• Macdonald-Laurier Institute (MLI) article on Germany’s LNG acceleration law by Heather Exner-Pirot (January 15, 2024)
• Financial Post article Northern Leg to Trans Mountain pipeline attracts interest amid brewing trade war (Feb 21, 2025)

Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/

Check us out on social media:

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LinkedIn: @ARC Energy Research Institute

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Episode 274 transcript

Disclosure:

The information and opinions presented in this ARC Energy Ideas podcast are provided for informational purposes only and are subject to the disclaimer link in the show notes.

Announcer:

This is the ARC Energy Ideas podcast, with Peter Tertzakian and Jackie Forrest, exploring trends that influence the energy business.

Jackie Forrest:

Welcome to the Arc Energy Ideas podcast. I’m Jackie Forrest.

Peter Tertzakian:

And I’m Peter Tertzakian. Welcome back. Well, what do you want to talk about, Jackie?

Jackie Forrest:

Peter, I heard you got a new coffee maker.

Peter Tertzakian:

I did, I did. I’m seriously getting into coffee. Well, I always was, but got a new espresso machine, and yeah, it’s pretty serious stuff.

Jackie Forrest:

Is it like the Nespresso with the little cartridges that go with it?

Peter Tertzakian:

No, no, no. No, no, no. No, no, no. That belongs in a toy store. No, this is serious stuff.

Jackie Forrest:

Oh, really?

Peter Tertzakian:

Yeah, no, it’s good.

Jackie Forrest:

So you have to clean it and-

Peter Tertzakian:

You’ll have to come over.

Jackie Forrest:

I’ll have to come over.

Peter Tertzakian:

I’ll make you a good espresso.

Jackie Forrest:

Well, I quit drinking coffee, but I’m a real downer, but…

Peter Tertzakian:

Well, I’ll tell you what, you’re good.

Jackie Forrest:

Maybe I’ll have to make an exception.

Peter Tertzakian:

I am going to need a coffee, because people who give us feedback on our podcast, and there are many, and thank you very much to our audience for all the support and the feedback, but they’ll stop in a plus 15 great podcast, and occasionally somebody will say, “Hey, do you prepare for that, or whatever?” And I say, “Yeah, we prepare, but it’s usually a brain dump in a Word Document, and then we come and we record it. And it’s just…” I mean, Jackie, you and I have worked together for over a decade, so it’s just-

Jackie Forrest:

It’s pretty rough.

Peter Tertzakian:

It’s kind of rough, and we just go with the flow with the subject matter. But I’m looking at it today, and I do need a coffee because this is like, I don’t don’t know how many pages we got to get through.

Jackie Forrest:

Oh, I think I got like 10 pages.

Peter Tertzakian:

Okay, we’ve got over 10-

Jackie Forrest:

Well, there’s so much to talk about. I can barely keep up.

Peter Tertzakian:

I did a dump, you did a dump, and we’ve got a lot, but we promise our audience that we will keep it within the bounds of our usual 40 minutes.

But let’s get going. What are we talking about?

Jackie Forrest:

Well, okay.

Peter Tertzakian:

What can we not?

Jackie Forrest:

Let’s talk about tariffs, the day-

Peter Tertzakian:

We have to talk about tariffs.

Jackie Forrest:

Yes, yeah. Well, we have to talk about Donald Trump.

Peter Tertzakian:

Can’t avoid that.

Jackie Forrest:

Can’t avoid that. That’s obviously shaping our energy future every day, including Canada’s future. We need to have that big hockey game. I know that’s a bit in the past, but that was exciting.

Peter Tertzakian:

That’s a bit in the past now. Yeah, that was exciting.

Jackie Forrest:

But yeah, back to this tariff threat. So we are recording this podcast February 27th, and it will be going live on March 4th, the day that these tariffs are scheduled to go into effect, and it’s still uncertain what’s going to happen. We’re getting some mixed signals the day before we record. We heard that there’d be a one-month delay, but then today we hear that they’re actually on, and I’m sure it’s going to be a bit of a yo-yo here. And I’m not sure what’s going to happen March 4th when you hear this, but I know one thing, if we don’t have tariffs, the threat will still be there.

Peter Tertzakian:

Well, I think that that’s it, is that I think if the tariffs don’t show up on Tuesday, March the 4th, my belief is they’ll still be somewhat hanging over our head. I think the probability that the tariff issue goes away altogether is probably zero, that there will be something targeted or something, or as the proverbial can will get kicked down the road again, creating all sorts of uncertainty, pending reviews, pending negotiations, pending whatever.

So March 4th is only a notional deadline in my opinion, but nevertheless, it is a marker in the calendar. And next time we meet to talk, we’ll do another 20 page dump of thoughts, and we’ll have more to talk about. But for now, I would just suggest that we move on.

Jackie Forrest:

Another change that’s really kind of been surprising on this side of the border is this big and rapid change in Canadian federal polling. So as of February 25th, and there’s lots of polls out there, but I’m looking at this Ipsos poll that has the Liberals ahead of the Conservative Party of Canada at 38% of the vote intention. Well, the Conservatives have 36. So what a rapid change.

If you go back to early-January, the Liberals were at like 20%, and they’ve picked up a lot of the vote intention from the NDP and the Bloc, but also a little bit from the Conservative.

Now, I’ve been noticing these polls. There’s definitely some error here. They’re not all the same, but directionally, they’re all kind of saying the same thing. Just in the last two, three weeks, rapid change in the vote intention for Liberals.

Peter Tertzakian:

Very rapid change. I mean, it wasn’t all that long ago where we asked any pollster or any politico-pundit about the probability that the Liberal Party would come back, and it was, ah, then it’s unprecedented, never come back from a 20-point deficit, so on and so forth. Well, here we are. All of which is to say we are in a day and age where nothing is impossible.

And I would also refer to… And we can put the link to this, to 338Canada, which is an aggregation of polls and also does prediction of seat counts across the country were the election to be held today, and I think the Conservative CPC federally is only showing a one or two seat majority, and the Liberals are potentially threatening a Conservative majority and maybe leapfrog ahead, but who knows? I mean…

Jackie Forrest:

Yeah, well, it’s going to be a real race. We know that.

Peter Tertzakian:

It’s going to be a real race.

Jackie Forrest:

We thought it was going to be a coordination here. It looks like it’s going to be a real race. And so that’ll keep us interested.

Peter Tertzakian:

That’ll have-

Jackie Forrest:

Assuming we have the election soon, which I think a lot of Canadians are hoping.

Peter Tertzakian:

I think it will be soon. So March 9th is the day of the Liberal leadership contest, and whomever comes out on top of that, which is likely to be Mr. Carney, and the word is probably that he would call an election soon, which I wouldn’t blame him given the trajectory of the polling.

Jackie Forrest:

All right. So let’s switch to the main topics for today. And they’re really based on some articles that you’ve written recently in The Hub, Peter. You’ve written two, so we’re getting behind. You’re writing so many things. You wrote an article in February 14th, Valentine’s Day; there’s a fortune to be made in Canada if only we’d seize the opportunity. And then today, the day we’re recording, you published another article; it’s going to take more than diplomacy and defense spending to secure Canada’s sovereignty. So give us a bit of the theme of these articles and what’s on your mind.

Peter Tertzakian:

Yeah, the theme of the articles, the first article was keying in on a magazine from the 1950s, 1955, an American publication that talked about the fortune that is to be made in Canada based on our mineral resources. And bearing in mind it was post-World War II and the economy is starting to boom in the ’50s, Americans look over their shoulder at Canada and say, “Wow, look at all these mineral resources. Canada’s a super attractive place.”

And by the way, thank you to the audience who also sent other articles from the 1950s, including from the New York Times and others that basically highlighted the same thing that Canada was a super attractive place to put your money.

And so what the article explores, and I’ll let people read it, but it explores, well, we used to be really attractive as a place to put our money. And what’s happened recently is it’s almost the other way around, there’s money leaving the economy and being invested elsewhere. Certainly as it relates to oil and gas, there are companies that basically pay dividend checks, and the investors take the money and put it in the United States. I mean, that’s capital leakage as opposed to taking the dividend check and putting it back into our economy, which used to be very commonplace up until a few years ago. So the question is, well, why is Canada not attractive anymore? And it explores that dynamic.

Jackie Forrest:

Okay. And I want to get into more of the kind of details on that because we’ve got some figures and data to support that.

Peter Tertzakian:

Yeah, we’ve got figures. Yeah.

Jackie Forrest:

But your second article, before we get into that, it’s kind of got a similar theme, a different take, but this idea that we’ve been not really supporting our energy industry, and in this new world order that’s evolving here, actually that might be one of our competitive advantages.

Peter Tertzakian:

Yeah, that’s right. So what this second article explores is the change in economic paradigm in the world. And we talked about it a little bit a couple of podcasts ago, but I want to sort of reiterate this idea that we are no longer living in a purely free market economy, that the emergence of China as a powerhouse, particularly over the last 15 years, and their geopolitical reach using their state-owned or state-endorsed companies to dominate things like everything from batteries to solar panels to cars to… I mean, you name it, is actually thematic of a return to more of a mercantilist era, and that it’s very akin also to a great scramble for mineral resources and geopolitical influence around the world.

The article explores, well, take a look at the United States and its behavior and its narrative, particularly in the Trump administration when it comes to Canada being 51st state, taking over Greenland, control our trade routes like Panama Canal. This is very much similar to China, and for example, its Belt and Road Initiative which now extends into 149 countries.

All of which is to say that the 200-year-old paradigm of Adam Smith and David Ricardo in terms of free market economics, competition between companies for market share of products around the world has shifted more to now competition between nations, and that large corporations, whether state-owned or state-endorsed within each of the countries, notably China and the United States, but not exclusively China and the United States, that state-owned or state-endorsed companies are actually extensions of government influence.

And so we have to recognize that, and we have to also make a choice to find our place in the world as they say in the article because we too have global powerhouses, particularly in our energy business, and we have to make some choices about how we maintain our relevance in this shifting global geo economic geopolitical paradigm.

Jackie Forrest:

[inaudible 00:10:02] other nations are nurturing their industrial giants and seeking out key resources like critical minerals, oil, and gas, and to have influence…

Peter Tertzakian:

Oh, for sure.

Jackie Forrest:

… Canada needs to be doing that as well.

Peter Tertzakian:

Yeah, and we’re going to talk about it in terms of the projects and project cancellations and whatever, but I mean, you look at the LNG development of the US Gulf Coast, it’s pretty staggering in terms of the influence that LNG has had in terms of pushing out, for example, the Russians in Europe as a consequence of the Russia-Ukraine conflict.

However, actually the development of the LNG capabilities in the US Gulf Coast predate actually the Russian invasion. And it was very much, in my opinion, sort of an extension of geopolitical influence because the terminology that the Trump administration used of energy dominance where the development of the Permian, the development of the natural gas and oil allowed the United States to go from very energy dependent to energy independent and then the narrative of energy dominance. This is very much in line with the sort of the corporate world actually exerting geopolitical influence globally alongside the nation-state. So it’s a form of statecraft, if you will.

Jackie Forrest:

Well, and they certainly are dominant as we talked about last week, right? World’s largest oil and gas producer by a large margin, big LNG exporters, largest in the world, and now basically really rolling back the climate policy and some of the things that maybe constrained that growth or made it more expensive.

So we’re going to talk about the competitive situation here and attracting capital in Canada, but we can’t lose sight of what’s going on in the US in terms of the investment environment and the costs that you have to face if you’re going to develop projects.

We will put, by the way, links to your two articles, but we will put…

Peter Tertzakian:

Thank you. Yeah.

Jackie Forrest:

… a link to this article too from Politico; the viciousness of Trump’s climate attack stuns even his critics, and just talking about there really gutting the EPA and the Department of Interior, that there’s holds on a lot of this money to support clean energy.

And we haven’t heard about the Inflation Reduction Act, these tax credits. They have put a hold on the grants and the loans, but there is expectation that changes will come maybe through this reconciliation budget that’s coming, and maybe that they need to come up with apparently trillions of dollars of savings to pay for Trump’s tax cuts, and that all things are on the chopping block, maybe even Medicare, but probably some parts of the IRA as well.

Peter Tertzakian:

And it’s not just the IRA, I mean, it’s just the whole Elon Musk DOGE initiative, and the cutting back of federal employees is hitting the EPA, the Environmental Protection Agency, very hard. So it’s not just climate policy, it’s all sorts of environmental regulatory policy. And this is actually, I mean, it’s like deer in the headlights stunning to people, actually the Republican and the Democratic side. And that’s what the article talks about in Politico, which I think is very good.

Jackie Forrest:

Yeah, it says the EPA is expected to release a list of regulations it plans to scrap, described as a vast and coordinated attack on US environmental policy.

So what does this mean? Well, I think it’ll call into question the ability to reduce emissions, but it also will be interesting to see what getting rid of these climate policies does to investment both green and fossil. It does create some uncertainty, you don’t even know what the rules are anymore. But at the same time, broadly, it should mean that for things like oil and gas investing, maybe there’s less costs than there would’ve been otherwise.

Peter Tertzakian:

Well, maybe. I tend to think that when you come in with a sledgehammer like this, it always has unintended consequences. So I’m not convinced that this is all good news, whether it’s oil and gas or whether it’s clean energy because it’s just if you gut the department and you try and phone to get a permit for something, even existing permits, there’s now going to be few people to answer the phone.

Jackie Forrest:

And also it’s like what are the rules and what do I have to do becomes less clear, and uncertainty is never good for investment. It just creates uncertainty.

Well, let’s switch to the Canadian context, so that gives us what’s going on over there. Well, let’s talk about Canada. First of all. I think none of our listeners need to be convinced of this, but over the last decade, Canada hasn’t been a great place for investing in oil and gas for sure.

And I have a project list here, and I came up with nine projects that were very far advanced that were either canceled, rejected, or shelved, and they total up to something like $150 billion of potential capital investment over the past 10 years.

Now, there’s actually a much longer list, but I took really credible projects, projects that had a ton of sunk costs. Some of these projects had $1 billion of sunk costs, $2.5 billion of sunk costs.

So these companies that wanted to spend the money had good intentions to build these projects. They spent hundreds of millions of dollars, if not $1 billion…

Peter Tertzakian:

Billion dollars.

Jackie Forrest:

… just in the regulatory review, but also other sunk costs, preparing, expecting that they were going to go forward and spending money on the project’s early stage.

And so to me, this is a pretty good indicator that it was very hard to invest in this country. And not all of these were rejected by the environmental review process. Sometimes the proponents, they canceled them or withdrew their projects.

What I actually think that most of them intended to build these projects, but because they expected that they would probably get a no at the end, they didn’t go forward with the projects. And so we’ve got a lot of work to do, I think, to convince these companies that Canada is a good place to invest, because the track record here is not great. And then even for the projects that did go forward, they tended to take a very long time and cost a lot more than people thought.

Peter Tertzakian:

Yes, I mean, it’s staggering enough that $150 billion in projects was axed because you can multiply GDP multipliers to that and all the employment and so on, but I’m not going to opine on whether these projects were good, bad, or indifferent. The problem is that the sunk cost part that you’re talking about, the money that was put in, then they get axed or rejected, and so the companies that are now asked to come back to help us with our energy security, to help us expand our trade relationships overseas and abroad, they’re not coming back. They say, “Okay, I’ve been burned once. I’ve put all this money in only to have it challenged or, say, even with legal challenges or political challenges or whatever challenge, and so why should I come back to this country when I can go somewhere else?”

Jackie Forrest:

Yeah, there’s a lot of work to do, I think, to rebuild trust that you could come here and not face that after the experience that companies have had.

I’m going to share another few examples, and then maybe we will come to the solutions. LNG is an example that is pretty stunning. If we go back, I think you and I visited Kitimat around 2014, and at that time, there was 10 or more projects that were being proposed in Canada. And the Americans were kind of in the same spot as us, a lot of proposed projects, nothing had been done. Today they just made a record this week, 16 Bcf per day of feed gas going to LNG export terminals. That’s equal to all of our production pretty much. I think we’re at 18 Bcf per day right now.

Peter Tertzakian:

In Canada.

Jackie Forrest:

In Canada.

Peter Tertzakian:

So just to be clear, the 16 Bcf per day is the US Gulf Coast send-out.

Jackie Forrest:

Well, it’s how much is going into those facilities.

Peter Tertzakian:

It’s going into those-

Jackie Forrest:

There’s a little bit of loss, so it’s a little bit less that it sends out. They expect that will grow to potentially 28 Bcf per day or in that range by 2030. Meanwhile, we are starting our LNG Canada project. There’s two other smaller projects. We’re going to hit about two and a half Bcf per day of send-out in the next, probably between now and 2028. But we’ve got LNG Canada this year.

Peter Tertzakian:

Well, the LNG Canada, well, I think it’s in May. Actually, the gas pipe’s been filled, and actually I think they’re going to start cooling here pretty soon.

Jackie Forrest:

Okay, so that one’s going. So that’s the majority. But there’s some smaller projects like Cedar LNG, who we’ve had on the show, that’ll come over the next few years.

But anyway, back to the Americans. S&P Global did a impact study that the American’s LNG industries contributed $400 billion to US GDP, hundreds of thousands of high paying jobs. And it is now, when you look at the exports from LNG, it’s larger than the corn and soybean exports combined, it’s two times larger than all the movie and TV exports, it’s half of the semiconductor exports. So anyway, we’ve really lost out on a massive opportunity for our industry. I know everyone that’s listening knows that.

Peter Tertzakian:

And we have a geographic advantage as well because we are much closer to the Asian markets than the US Gulf Coast, which has to go through the Panama Canal, which is limited by tanker size. So really the US Gulf Coast is much more tuned to competing in the Atlantic Basin and duking it out with the Russians and the Middle Eastern producers in the European market. So yeah, I mean, we still have the opportunity, but boy, we’ve got to get moving.

Jackie Forrest:

Yeah. And then one last thing, I don’t want to depress everyone, we’re going to get to the solutions, but the other indicator that I have that it’s not a great place to invest here just in terms of quantifying it is the amount of foreign exits we’ve had from our oil and gas sector. So I have…

Peter Tertzakian:

Yeah, here’s another list.

Jackie Forrest:

… a table here. Yeah, it’s basically from 2014 to 2024. I’ve calculated, there was about $54 billion of foreign exits from the oil and gas sector in Canada. And some people will say, “Oh, that was all the oil sands exits, and it was because people didn’t want those higher carbon assets.” But actually if you look of that 54 billion, 22% of those were actually conventional exits. So I would argue they were pretty low carbon, probably lower carbon than a lot of the American stuff that’s similar because we have more regulations and more methane rules and things like that. And then there’s some mixed ones where people sold oil sands and conventional assets.

So when you conclude that, that’s like 60% of that 54 billion of exits was not just oil sands. So it’s not just an oil sands story. I think these companies left because of the same reason that the companies withdraw. It’s just hard to get things done in this country.

Peter Tertzakian:

Yeah. Now, I’m going to put a positive spin on this table, Jackie, because there is a positive to this. A lot of the sales by multinationals, they sold to Canadian companies where the boardroom decisions are made here in Calgary in Canada.

So for example, many of the buyer… And CNRL has been a buyer, Cenovus has been a buyer, Suncor has been a buyer among others, Pembina Pipeline has been a buyer. So the positive side of this is actually that we repatriated the decision-making, we repatriated the boardroom capital allocation decision-making here. And this is really important because now if we can actually make the regulatory processes, harmonize them, and make it more conducive to investment, the boardroom decisions about where the capital goes are made domestically.

The fear is that things like tariffs combined with an unfavorable investment incentive in Canada actually devalues the share prices of these companies to the point where they actually become takeover targets. And then once again, we lose control of the investment making decisions at the boardroom tables to some other country, historically dominantly in the United States. And so that would be another way of thinking about losing sovereignty over our capital.

So we’ve got to be very careful about the situation we’re in now. We’re really at a crossroads where I think we need to think about how our governments interact with our companies and how to improve the investment climate.

And in part, that was part of my second article is that governments need to work more closely with our big corporate interests. And that’s not just energy. It can be in telecom, it could be in all sorts of other industries as well.

So we’re at a pivotal point. And I know looking at these numbers can be a real downer, but we also can flip it around and say, okay, we’ve got some pretty big companies here in this country. We’ve bought out all the multinational interests over the last 10, 15 years. We can really do some important work here and become relevant on the global stage once again.

Jackie Forrest:

Well, okay, so let’s see, so one of the questions that’s been asked to both of us over the last one is what can we do get to yes, to get companies to come here, to get people to build some of these projects we’re all wanting to talk about? And I don’t think all is lost. I think there are some real opportunities here. And the good news is we do, and we’ll get to it, we do have private companies that are advancing projects here. And yes, we’ve lost the 150 billion, but there’s still billions of dollars of potential projects that I think if we could fix the process, maybe we could get to yes in this country.

Now, I will say that this is a really complex topic, and I think that there’s a lot of great ideas. These are just a few ideas that we’ve had and we’ve talked to people about. But I think that that should be number one priority in this country is what do we need to do to get the capital back here?

But here’s some ideas. And I do want to point out, there’s learnings to be made here too. In Germany, and we talked about this on the podcast before, they went from building these LNG regasification terminals in five plus years to doing it in nine months, when Ukraine was invaded by Russia, and then there was a shortage of gas in Germany. And some of the ideas are taken from that as well. They did things like shorten the environmental process significantly, put out the environmental plan and give a very short time for public feedback and very limited time for public feedback, but they also still protected the environment.

Peter Tertzakian:

Look, yeah, it doesn’t have to come at the expense of being irresponsible. It can be done. And oftentimes when there is a call to national interest and indeed all the way to national security and sovereignty, then things take a much more urgent note. And I think as Canada, we’re sort of there, and hopefully we can react and do what the Germans did.

So do you think the Chinese could do it in nine weeks?

Jackie Forrest:

Probably. Yeah, I don’t know what the timelines for building in China, but they’ve got to be pretty fast with the amount of stuff they’re building. If you look at the amount of power projects that go up in a year, the amount of pipelines that get built, the amount of solar panels that get installed, they’re doing things at such a rapid pace. But I don’t know that we have the social license to do it like the Chinese.

I do think that Germans, they did some really innovative things. For example, a lot of times projects, if they affect the environment, they have to do an offset, protect that amount of land somewhere else. They were like, you can figure that out after. Go ahead build a project, and over the next two to three years, that’s when you have to figure out the offset thing. So I think there’s some kind of good ideas there.

But in terms of other ideas that we’ve had, I think one of the big issues in Canada is this political decision at the end of the review process. We’ve talked about this before, but you could go through a four or five year review process with the regulator, you could supply every environmental study that you’re required, you could go to every hearing, you could have all the open houses in the communities that even have hearings where public comes and other people or stakeholders around the process. And then depending on what’s going on with the political cycle in five years time, the politician could say, “I don’t want to approve this,” because the way it works in Canada, the very final decision is done by a politician. And we’ve seen it in the past where politicians have not approved projects based on political calculus, not based on the merit of the project. And I would say in this project list I have here, while some withdrew, I think it’s because they feared that that was what was going to happen to them.

So could we not have a yes or no right at the beginning from the politician? And so once you have that yes or no, it’s just a matter of what are the mitigating factors that you need to do and things like that. But the project is approved by the politician, and you don’t face that political risk.

Peter Tertzakian:

Yeah, the politician… We do have a regulatory process, and permits are granted or not at the end of that process. So let’s just say the permit is granted. We need to speed that whole process up, but when that regulator, provincial and/or federal, grants that permit, it’s granted, and that’s it, there’s no going back. That’s, I think, all the corporate world really wants in terms of certainly, and I agree with you, we don’t need, at the end of the process, the permit’s granted, and then a different government comes in and basically says, “No, you can’t build that. It’s done. It’s over.” And you’ve just lost $1 billion getting to this point. Like this is not acceptable.

Jackie Forrest:

Yeah. So I mean, to me, we could just get rid of the political decision. That, to me, would even be better, but.

Peter Tertzakian:

But there’s also, it’s not only political, there’s also the judicial challenges that come in. And I’m not suggesting here that we need to put into place an authoritarian state, which rubber stamps everything. No, but at the same time, we’re at the far other end of the spectrum where there’s just so much scrutiny, bureaucracy, and uncertainty, and time it takes to do that. That’s just made the whole investment proposition in any of these mega projects unpalatable. So the money just goes elsewhere.

Jackie Forrest:

Where it can invest faster. And I think the US, as you know, they’ve fast tracked something like 600 projects under this Executive Order to use emergency orders to move things quickly.

Here’s another idea, we’ve got to drastically shorten it. I really believe that political decision either needs to go away altogether or needs to be done right at the front-end, but we also need to shorten it.

Some examples of ideas people have put forward is we do a lot of studying of the environmental impact, even though we may have built the exact same thing before. So for example, you’re going to put in a new right-of-way. Well, it’s been studied many times the impacts that those right-of-ways do have in terms of the caribou and the different animals that might be impacted by creating a cut line in the bush. We don’t need to do another study in this particular instance because we’ve done five others, and they’ve come to the conclusion these are the issues and the mitigating things that need to be done. So we could just learn from past work.

Peter Tertzakian:

Well, so it’s like sharing of regulatory processes and having quicker approvals based on prior approvals and work that’s been done by other companies.

Jackie Forrest:

Right. And so we don’t have to do a three-year baseline study to come up with what needs to be done.

Another example that I heard recently, which is kind of surprising, but there’s a bit of a double standard sometimes for these projects. So we had Ian Anderson on talking about the Trans Mountain expansion, and he was talking about moving ant hills and having to stop construction because there were bird nests in the wrong time of the year where they couldn’t construct. Meanwhile, and renewable projects face that too, you could be like 5, 10 miles over, they’re logging out the forest. So why do we have double standards in this industry? I think we have to be rational about this project needs to be done in a certain time at a certain cost, and getting rid of some of these requirements where it’s just gone a bit too far.

Peter Tertzakian:

Well, it’s just even another… a condominium developer having to move an anthill and stop construction on their condo project in downtown or in a suburban or urban setting in a city. I agree with you, the standards have to be respected and consistent across all construction, whether it’s infrastructure or buildings or what have you.

Jackie Forrest:

Yeah. And they have to be made in a way that actually supports the economics of the project going forward.

And I do think, by the way, another unique issue to Canada is First Nations and their traditional land use. I do think these indigenous equity partnerships are a really great thing that has happened really in the past five years, and hopefully results in increasing the acceptance of the project and provides more benefits to these impacted communities.

Peter Tertzakian:

And we’ve had a few guests.

Jackie Forrest:

Yeah, for sure. We had Cedar LNG come on from Ontario. We had the Six Nations of the Grand River Development, and we also talked about when Enbridge sold off a chunk of their pipeline in the Alberta going up to the oil sands to an indigenous consortium. So we’re doing this, and actually if you look in BC, if these renewable projects that were just awarded, they also had indigenous partnerships.

So this exists, but we also need, by the way, to make sure we have funding. And there’s some concerns around the funding for some of that, but I do think that that’s helpful as well. And that’s one thing that we should continue to do and do it in a way that maybe accelerates the delivery because the indigenous equity partners are helping to socialize and educate people about the project, and we can accelerate maybe some of that stakeholder work that’s taken a very long time.

Peter Tertzakian:

Yeah, I mean, that would help a lot in terms of trying to start rebuilding confidence, whether it’s for building energy infrastructure, but critical minerals, all sorts of other things that we know are valuable and know that can help bring Canada back to some sense of relevance on the international stage.

Jackie Forrest:

So Peter, you started off with there’s a lost trust here. How hard is it going to be to convince companies that this is going to look very different and the risk… because really the risks associated with building projects here got too high. That’s why, for instance, the government had to buy the Trans Mountain pipeline. So how hard is it? Let’s say we create this process that we think is fast tracked and streamlined and less risk.

Peter Tertzakian:

Well, on the surface, it’s easy to be negative. On the other hand, I’ve seen in my career being in the financial industry, I’ve seen capital flows reverse pretty quickly. I think I’m more of an optimist than most people, but it’s going to depend a lot upon the positions of the next federal government that come in and whomever may form that government and how well they also exhibit leadership in bringing provinces along. And there’s all the inter-provincial issues.

The good news is that there’s a heightened awareness of the need to do this for the first time in probably 20 years. So that makes me optimistic that it’s doable, and it’s going to depend upon the leadership, and we’re going to need some true leadership from the next government in terms of getting the environment for investment more attractive than it has been in the past and more attractive than other countries in the world.

Jackie Forrest:

Will we need to have some government funding of some of these projects to prove that they can be done in a way that attracts capital? Because we’ve lost so much trust, it’ll be tough to get private capital here?

Peter Tertzakian:

Yeah, I’m not sure, but you need actual funding. I think backstops might be necessary. Backstop meaning that, okay, we’ll guarantee that your money won’t be lost. But if you create it attractive enough, then companies bring their capital and their investors’ capital to build out the infrastructure and do it well. Then there’s no need for any public money.

Jackie Forrest:

Okay. Well, and the good news is not all is lost. I think there are some opportunities here. The LNG projects beyond LNG Canada one, do you know there’s four Bcf per day of projects that have private capital behind them that are advancing through the regulatory process that could be sped up? So we’ve got LNG Canada phase two, we’ve got the Sallaum, that’s another LNG project north of Kitimat. There’s a smaller Tilbury LNG and Summit Lake LNG. All together, four Bcf per day, huge economic opportunity.

You think about the LNG Canada phase one, the upstream and downstream investment in that, including the pipeline and everything was $40 billion into our economy. And so now we’re talking about all together, these projects would be more than double LNG Canada. And so I think if we can prove to these private investors that there is a way to fast track these and de-risk them.

Peter Tertzakian:

I think that’s great, but I think we would be remiss to ignore the oil pipelines, and we would be also very remiss to ignore the electrification and the need for transmission lines to be able to go across provincial boundaries and to be able to power all this infrastructure that comes in, whether it’s LNG or otherwise, and even sites for critical minerals.

We also need to expand our port infrastructure if we’re going to send more goods, including agricultural goods to destinations and markets beyond the United States. So there’s a lot that needs to be done. It’s not just energy and energy infrastructure that needs these changes. I’m hearing whether you’re in the agriculture business and transportation to the ports, or whether you’re in the electrical power industry or whether in critical minerals or beyond, the issue of being able to fast track the regulatory process, which is incredibly slow and get more certainty on final decisions is just paramount to attracting the money needed to build these things out.

Jackie Forrest:

Now, I agree with you that we need interconnects in this country. If you actually start studying each of the provinces, because we have all these individual power markets, most of them are going to be short power. And I think interconnects between the different provinces, maybe it’s too grand to think a big east-west pipeline, but at least interconnect to allow more flow of electricity east to west. I think that needs to be done. However, there are no projects being proposed. I think that’s needs to be done. Maybe there’s some projects, but I think there’s a lot more opportunity to develop those projects.

Peter Tertzakian:

Yeah, because we’re in this paradigm in this country where we’re not supposed to trade between provinces. I mean, look at all the trade barriers and so on. But now all of a sudden we’re realizing, hey, we need to think more as a federation and view each province as contributing something positive to the collective good. And once we get there, then I think people will start thinking more about why we need to string transmission lines across the country, again, for the collective. It’s not just oil and gas, it’s all types of energy for the benefit of the secondary and tertiary industries that can be developed off of the resources in this country.

And that’s a whole other thing. I mean, we don’t just want to be producers of raw materials and raw resources. Certainly tremendous amount of value in that, but the real value add is when you take a raw material, whether it’s petroleum, whether it’s a critical mineral, and start making value-added products all the way to consumer products.

Jackie Forrest:

Yeah. Well, and I’m sure there are critical mineral mines that have been proposed. Maybe that’s another future podcast because we should get someone on that has their own list of projects.

Peter Tertzakian:

[inaudible 00:37:05].

Jackie Forrest:

I did want to point out, there was an article last weekend about the Trans Mountain, and it talked about that the original plan for the pipeline was to have a leg that went north about at Valemount, BC, and then would head to a deep water port. And that was the original plan in 2011. However, in 2013 when the official application was filed with the regulator, this northern leg was not part of the proposal.

So what would be good about this, assuming it was going to a deep water port, which I’m sure they didn’t talk about the location of the port, is it could have 2 million barrel a day ships loading up crude versus Burnaby, which only can load partially full Aframaxes, which are like 750,000 barrel a day kind of ships, and you can’t even load them fully.

And then I keep hearing about the Port of Vancouver. I’ve heard so many stories in the last few weeks about the Port of Vancouver that it is very bottlenecked, cannot be expanded because there’s no land there. It’s got a bridge that needs to be lifted, and when the bridge needs to be lifted, the rail can’t get to the port.

And so I’m like, we should be building another west coast…

Peter Tertzakian:

Port.

Jackie Forrest:

… port, and maybe this location could be that too.

So I’ve also been having a lot of people ask me about Hudson Bay at Churchill, and we actually have had someone reach out to us. So maybe we’ll talk to the developer…

Peter Tertzakian:

Yeah, we’re going to talk about that as well.

Jackie Forrest:

… that has a project there too. So what I like, back to the LNG projects, is that these are actually proposed projects ready to go, that can be fast tracked. Some projects we’re talking about Eastern Pipeline or Gateway, there’s not a project proponent putting those forward today. Even the TMX, if we could expand it, at least there’s an existing infrastructure there. So I do think that there’s lots of good things that could be accelerated in this country if we could create the right circumstances for investment.

Peter Tertzakian:

That’s right. So that there’s a fortune to be made in Canada as the magazine article said in 1955. And there is a fortune to be made in Canada, and we’ve all prospered from that. And we need to think about the future generations and how we can prosper by building all segments of our economy and being more independent in doing so.

Jackie Forrest:

Agreed. We’ve covered a lot today. So thank you to our listeners for following the podcast. If you liked this podcast, please rate us on the app that you listen to and tell someone else about us.

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