Thought Leaders Gather at the World Petroleum Congress: Hear from CAPP and API
The 24th World Petroleum Congress (WPC) will be held in Calgary from September 17 to 21, 2023. The conference takes place every three years and has been described as the world’s leading assembly for the petroleum industry. The organizers are expecting 15,000 visitors and 5,000 delegates from over 100 countries.
This week, we hear from Lisa Baiton, President and CEO of the Canadian Association of Petroleum Producers (CAPP), and Mike Sommers, President and CEO of the American Petroleum Institute (API). Both organizations will be at the WPC in Calgary.
Here are some of the questions Jackie and Peter asked: With Russia’s invasion of Ukraine, has energy security become a greater focus in North America? Does the United States still consider Canadian oil and gas foreign? With the recent run-up in oil prices, are you concerned about how consumers will react to higher prices for petroleum fuels? Is the oil and gas industry reducing GHG emissions? What is your response to people who want oil and gas consumption to end soon? Do you think greenfield oil or gas pipelines can be built between the United States and Canada? What is the outlook for LNG exports from the US and Canada?
Content referenced in this podcast:
- The World Petroleum Congress registration information: https://www.24wpc.com/
- The Canadian conventional oil and natural gas sector emissions fell 24 percent in the last decade (CAPP analysis).
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Episode 210 transcript.
Speaker 1:
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.
Speaker 2:
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, I’m looking at my phone, Jackie, which has oil prices on it, and oil prices are now back up into the high 80s, and they’ve risen fairly quickly above 80 over the last couple weeks. So, we’ve talked about it in our last podcast. Demand is back up. It’s up to a hundred, two million barrels per day. Inventories are low, and the US strategic petroleum reserve is not so strategic anymore because a lot of it was drawn upon during the pandemic and trying to keep the price down.
Jackie Forrest:
Well, and the big news that really pushed prices to the new level right after the September long weekend was the news that Saudi Arabia and Russia would continue with these cuts all the way to the end of the year. So that was definitely a catalyst for higher prices. So higher oil prices heading into a very important conference here in Calgary, the World Petroleum Congress was going to bring a lot of leaders from around the world from the oil and gas industry. I think they’re expecting something like 15,000 visitors from over 100 countries.
Peter Tertzakian:
No, it’s a big international conference. We’re lucky to have it here in Calgary, and we’re going to be talking about those issues. We’re going to be having a podcast from the World Petroleum Congress. We’re going to be talking to a lot of petroleum-based leaders, natural gas-based leaders, then we’re going to talk geopolitics, energy security, and of course, climate change and decarbonization.
Jackie Forrest:
And it’s not too late to get involved. I will put a link; you can still register. There’s a few options. There’s a fairly low-cost way of getting there just to see the exhibit hall or the full conference pass, which is quite expensive, but I think it’s a pretty unique opportunity to see these types of leaders from around the world.
Peter Tertzakian:
Well, and speaking of leaders, we’ve got two with us today in studio. One from this side of the border, and one from the other side of the border in the United States. Well, let’s start with our US guest first. Mike Sommers president and CEO of the American Petroleum Institute. Welcome, Mike.
Mike Sommers:
Great to be with you.
Peter Tertzakian:
Yeah. Great. And on this side of the border, Mike’s counterpart, Lisa Baiton, CEO of the Canadian Association of Petroleum Producers, otherwise known as CAPP. Welcome, Lisa.
Lisa Baiton:
Thanks Peter and Jackie for having me.
Jackie Forrest:
Good. Well, we’re looking forward to talking about your organizations, but let’s start right now. I think a lot of people might be familiar, but just for those that aren’t, maybe Mike, tell us a bit about API.
Mike Sommers:
Well, again, great to be with you, and thanks so much for hosting me today. I’m really excited about joining you at the World Petroleum Congress, but with our post organization CAPP, Lisa, it’s always great to see you and looking forward to seeing you in person at the WPC.
Lisa Baiton:
I’m too. Thanks, Mike.
Mike Sommers:
So, the American Petroleum Institute is the largest trade association in the world representing the oil and gas industry. We have over 600 members here in the United States. And the United States now is the largest producer of both oil, natural gas, and refined products. We’re really proud of the energy leadership that exists here in the United States. API is an advocacy organization. So, we advocate for the American oil and gas industry here in the United States, but in addition to that, we’re the lobal standards center for oil and gas throughout the world as well. So, we will be at WPC in both capacities. We’ll have a booth representing the API standards, the Global Industry Services division is what we have, is what we call it here in the United States, GIS. We’ll have a booth in the exhibition hall, and we’ll have a couple of people on panels throughout the week as well. So really excited to be in Calgary, and it’s going to be a great event.
Peter Tertzakian:
Yeah. Well, great. We look forward to your participation in seeing you there. And so, Lisa, tell us about CAPP as well for those in our audience who don’t know.
Lisa Baiton:
Sure. CAPP is Canada’s largest oil and gas industry association. Like the API, we advocate on behalf of the Canadian oil and natural gas conventional sector here in Canada. Our focus is on the conventional sector which runs coast to coast, including offshore. And what people might not know is 80% of Canada’s total oil and gas production is done by CAPP’s members. CAPP will be there in full form. Our members will be on site doing their own individual initiatives with their company. CAPP staff will be there in full force. We have an exhibition booth, and in the main exhibition hall, Mike and I are cohosting a reception for key officials and industry players. And we also have a couple panels on the agenda and a lot of other initiatives and bilaterals going on.
Peter Tertzakian:
Great.
Jackie Forrest:
Well, Lisa, that might be news to some of our listeners who think about CAPP as representing oil sands and conventional. You said you represent conventional, maybe explain that change.
Lisa Baiton:
Sure. The Canadian Association of Petroleum Producers or CAPP represents the conventional oil and natural gas producers in Canada. The Pathways Alliance is an advocacy organization, and they represent the oil sands producers. And there’s overlap in our membership all, but one of Pathways’ members is also a member of CAPP, and that’s because they’re large integrated energy producers operating in more than one sub-sector.
Jackie Forrest:
Well, let’s talk a little bit about what’s going on right now in the industry. And Mike, you said it, but I think it’s worth repeating, the US is the world’s largest producer of both gas and oil. I don’t think even for people that are coming to the show that they recognize that Canada’s important too, we’re the fifth largest producer of natural gas and the fourth largest producer of oil. So, you collectively represent about 30% of the world’s natural gas production and 25% of the world’s oil production if we put the two countries together.
And being that over the last year and a half we’ve learned how important it is for the Western countries to have supply from stable suppliers, i.e., not Russia, do you think that the narrative and the public awareness around our industry has changed and a better understanding of the importance of energy security over the last two years as a result of what’s happened in Russia and Europe?
Mike Sommers:
Yeah, Jackie, thanks again. And I do think that things have dramatically changed. I just completed my fifth year here at the American Petroleum Institute as CEO, and I will say that when I first came to API, the conversation was almost exclusively about the energy transition. And I think as a consequence of the Russia invasion of Ukraine and tight supplies of oil and gas throughout the world that have come as a consequence, I think what you’ve seen is a sincere dose of energy reality that has been recognized throughout the world. And American producers, and I know Canada stepped up to the plate as well, it really responded to the European energy crisis.
In fact, American producers almost completely filled the gap of what Europe lost when Russian gas came off the market. So, we’re proud of what American LNG producers in particular have done to help ensure energy security throughout the world. It’s very similar to what American producers did in the Allied War effort in World War II, for example, where over 90% of the oil that was used to win World War II came from Texas alone. So, we’re proud of what American producers have been able to do to ensure that Europe has remained well supplied. But Peter, you put a really fine point of it in your introduction.
At about the time of the Russian invasion of Ukraine and pre COVID, the world was using about a hundred million barrels of oil every single day. We’re now at about 102 million barrels of use every single day. And IEA projects that that number is going to go up to 106 million barrels of oil used just in the next five years. The truth of the matter is that we’re going to need more oil, we’re going to need more gas, even as this energy transition continues. I think, Jackie, your point that it is stable regimes like the United States and Canada that should be producing more to meet the needs of world consumers.
Peter Tertzakian:
Well, Lisa, do you sense the same sense of energy reality here in Canada? Like Mike, when I read the headlines in the US, certainly there’s this polarization in terms of renewables and clean energy versus old school fossil energy, and we’re going to come to that, but I do also sense in the United States that there is that sense of energy reality more than there is here, but that’s just my sense. What’s your sense, Lisa, in terms of how Canadians and the Canadian government and others think about this?
Lisa Baiton:
Well, I’ve only been in the role for about 18 months, and I can say that I can echo Mike’s perspective on that there has been a significant shift in awareness and understanding. When I came into the role, the focus was exclusively on climate change and I think now there’s a better understanding on the need for a better balance across three equally important policy goals, reducing EDHD and tackling climate change. But I think there’s increasingly awareness that we can’t be naive about where our energy comes from and people are aware now that, oh boy, energy security means national security or continental security, or Western alliance security and I think even in Canada. There’s been a wake-up call that we as G7 nation have obligations in that regard and that we can walk and chew gum at the same time. We can address climate change while we tackle energy security and while we also preserve the economic benefit for Canadians. But you talked about public awareness, so let me just touch on that. While there might be a shift with federal and provincial government decision makers on those dimensions, there’s less so at an individual Canadian level and some of the work that we need to do as CAPP as part of our mandate is to increase that awareness and understanding across Canada. Particularly in regions like Greater Toronto or Ottawa or lower mainland BC or Quebec, on the benefit that oil and natural gas provides to them.
Jackie Forrest:
Mike, a question for you. Canada exports 77% of our crude oil to the United States and 50% about of our natural gas production and so we’re a big part of the oil and gas supply and we’re a big part of the electricity supply to the US also. How much discussion is there in the US about what goes on in Canada and are we still considered foreign oil?
Mike Sommers:
Well, when I talk about the American energy system, I really try to talk about North American energy independence not about American energy independence. We know how dependent we are not just on Canada, but other parts of the world because we operate in a global system. Many American refineries for example, are really tooled to refine Canadian crude, not necessarily WTI here in the United States. The same is true of west coast refineries, they’re tooled to refine products from all over the world not necessarily those that are here in the United States. And one of the reasons is because the United States hasn’t built a new refinery since 1977. So, these refineries were built during a time of energy scarcity and oil scarcity in particular. So, until we can build a new refinery, our refineries are still going to be refining products from all over the world, but Canada in particular. Lisa, and I have talked a lot about the importance of this cross-border relationship, and I would love to figure out a way to get both of our governments to cooperate in a way so that we can build that North American energy powerhouse.
If we can figure out some of these key cross border issues, we can become the most important energy corridor in the world if we can get our two governments to align on certain policies.
Peter Tertzakian:
And where would you say the misalignment is?
Mike Sommers:
Well first of all, I think both of us have tremendous challenges particularly when it comes to permitting reform. In the United States we’ve been working on this for decades to try to get our permitting aligned with where the resources are. We need to build more pipelines, by the way we also need to be in a position where we can build more wind turbines and more solar farms. We’re an all of the above energy association, we’re going to need all sources of energy in the marketplace as energy needs continue to grow. So, if we can figure out both permitting reform here in the United States and in Canada and figure out some of these cross-border pipeline issues. We’ve dealt with this once already with the Keystone XL pipeline for example. There’re going to need to be more cross border pipelines built if we’re going to be able to build this powerhouse to compete with the rest of the world because we know that the world’s going to continue to demand these products both oil and gas.
Jackie Forrest:
I mean, do you think it’s realistic with the current politics that we would ever see another pipeline built between the two countries? I mean, I could see some expansions.
Mike Sommers:
No, I don’t unfortunately. I would hope that with different political philosophies potentially in both countries we could get that alignment again. But at this time, I certainly don’t see it particularly with the government in Canada and the United States right now. But I think that as energy reality has really come into the fore taking place of this climate only approach that we’ve seen from both of our governments. I think there’s a real possibility that we could get alignment as the American people and the Canadian people come to understand how important these resources are to our economic futures.
Jackie Forrest:
Lisa, I’d be interested in your view on if a pipeline would be possible.
Lisa Baiton:
I probably would share Mike’s view on that, but I want to echo Mike’s comments on the importance of the Canada, US bilateral relationship on energy. As a net energy exporter Canada is blessed to live in a very secure energy environment, and in large part that’s really due to a tightly integrated energy infrastructure system between Canada and the US and every day oil and natural gas and other products travel between our two countries to ensure that Canadians have the energy supply that they need. One of the priorities I had when I took over as CEO was to put CAPP on more of an international stage and reestablish key relationships with international governments, including in the US. That really included building stronger ties with Mike and with the API to work on a North American energy strategy too, as Mike said to get the right cross-border policies. I think if we work collaboratively and if we get the right policy environment, Canada and the US can be the most important energy bilateral in the world.
Peter Tertzakian:
Those are great comments on the supply side challenges here in North America, but let’s go to the demand side for a minute. We said at the opening that the price of oil is now creeping back up, it seems to want to go higher. We’re in the high 80s, the last time it touched 90 to 100 it started to create inflationary forces within the economy. Gasoline prices were going up, and they’re going up right now on top of housing prices, food prices. But when oil prices and gasoline prices go up, it really starts to cause a stir and I guess Mike maybe to you particularly in the United States you get a lot of… And the oil industry becomes a lightning rod for discontent the minute the gasoline price breaches I’m going to say four bucks a gallon or something like that. So what is the plan from an API perspective, from a producer perspective to mitigate the concerns of the consumer and this high price?
Mike Sommers:
Yeah. You really hit on something, Peter, which is that this is an economic indicator that people look at every single day when they drive by the filling stations here in the United States. They almost get a sense of how the economy is going just by looking at what the price of unleaded fuel here is in the United States and I’m sure it’s similar in Canada, and I do think that $4 mark tends to be a important demarcation for the American people in particular. So yeah, we’re very concerned about prices rising at this point but we do have a plan. We put out a plan both in 2022 and in 2023 that can be found at the API website api.org of 10 policies that we would really encourage government to adopt if we want to develop more supply here in the United States. Included in that would be permitting reform, for example. We need more pipelines, we need more refineries and we certainly need more productions particularly on federal land.
I will say that in the United States we have increased production just in the last year alone by over 1.3 million barrels a day. That’s a pretty incredible number when you put it in perspective. In fact, if you look at that number 1.3 million barrels a day of increased production just over the last year. That is more than any other country combined has put on the international marketplace in terms of increased oil production. So American producers are absolutely responding despite a very difficult policy environment that we’ve encountered with the Biden Administration.
Jackie Forrest:
Yeah, think about it. Most outlooks are for demand to be a bit over two million barrels a day in terms of demand growth this year. That’s more than half potentially coming from the US and without the US growth this year, boy, we’d really have a tight market. Lisa, what about Canadians? Do you hear complaints when gasoline prices go up and I think in Canada there’s some additional burdens here, like there’s carbon tax and we have this new Clean Fuel Regulation.
Lisa Baiton:
Well, I think if you look at any of the polls or research being done today on what keeps Canadians up at night, the economy, inflation and affordability top the list and that’s really no surprise. The challenge for our industry.
Lisa Baiton:
And that’s really no surprise. The challenge for our industry is it’s really hard to communicate that rising prices are caused by accumulation of dynamics. It’s taxes, it’s geopolitics, it’s supply chain, it’s inflation, it’s labor, just to name a few. And where we’re focusing our efforts is on redefining. What is the vision for Canada and what is the vision for our sector? And we should really be seizing the moment to leverage the abundant resources that we have in this country and our reputation for being among the cleanest, most responsibly produced oil and natural gas in the globe, and be developing a policy, federal and provincial policy environment that allows us to compete globally.
Jackie Forrest:
You said that Canada’s got a reputation for being clean. I actually think that’s not the case. People think of our oil as higher in its greenhouse gas emissions. So how do you respond when people say it’s not clean, it’s higher carbon?
Lisa Baiton:
We’re a democratic country. We have among the highest environmental standards in the world, the highest human rights standards in the world, and our industry is the largest clean tech investor in the country, and we are a global leader in reducing GHG emissions. I recently put out an analysis of stats from the National Inventory Report, not even our stats, and it demonstrated that in the last decade, our industry proactively reduced GHG emissions by 24% while concurrently increasing production by 21%. So we need to do a better job of telling our story, and I think going back to the World Petroleum Congress, we look forward to using that as a platform to getting that message to a broader audience.
Jackie Forrest:
Okay. We’ll put a link. You just did a press release. That was on the conventional oil side that we saw those reductions, so we’ll put a link to that in the show notes. I don’t think that’s well known that there’s been such a drop in absolute emissions on the conventional oil and gas side in Canada.
Peter Tertzakian:
Yeah. Well, this is taking us to a conversation now about reducing carbon emissions, climate change, and so on. It’s no secret now that we have had the hottest July and August on record. I think in the past week the UN has come out and said we’re witnessing a climate breakdown. And so there are many, Mike, to use your words from earlier, that are suggesting a sincere dose of energy reality, and that their sincere dose of energy reality means getting off oil and gas ASAP. So feeding off your website first, Mike, Climate Action Framework is on your website. Tell us a little bit about it and how your membership deals with the climate change.
Mike Sommers:
Yeah, we’re really excited about what we released. This is actually goes back to 2021. API released our Climate Action Framework, which is a five-point plan on how we believe we should be addressing the climate challenge. We know that climate change is real. We embrace this climate challenge. API member companies all understand how important it is that we deal with this challenge for all of our members and for our world populations. So, the framework that we put out a few years ago, there are a couple of things that we would recommend in terms of government action. One of them is doing an economy-wide price on carbon, which we have endorsed as an organization. The second thing that we prescribe the policymakers do is federally regulate methane emissions. And we’re working with the Biden administration right now on the methane regs that they are developing.
And we’re hopeful that when those regs come out, which I think will come out sometime in late fall, that we’ll be able to support that regulation. There are a lot of nuances when you’re regulating methane, of course, and we want to make sure that this new regulation in the United States is as flexible as possible. Not because we’re trying to avoid methane regulation, but because what we’re trying to do is make sure that new technologies are encapsulated in the regulation so you don’t have to go back to the regulators every time there’s a new technology that comes onto the market. The third thing that we’ve asked the government to do is really invest in carbon capture and utilization and storage technologies. I’m pleased to announce that the Inflation Reduction Act did that. There’s enhanced programming money for carbon capture via the what we call in the United States, the 45Q tax credit
As a consequence of that, you are seeing a lot of investment in the United States in carbon capture. I’ll give you one example. ExxonMobil, one of API’s largest member companies, is investing significantly in the State of Texas on carbon capture. In fact, they just bought a company, Denbury, which is the largest on a CO2 pipeline network in the United States. So that investment is real. Occidental Petroleum, another API member company, is investing significantly in direct air capture programs. Again, these investments wouldn’t be possible were it not for the CCS tax incentive via the Inflation Reduction Act. So we’re pleased that really two of the components of the API Climate Action Framework are actually being enacted right now. The other parts of the framework are what the industry is committed to do, one, which is to reduce our own methane emissions and also to reduce our emissions in the United States in the downstream as well.
Jackie Forrest:
Right. And one difference in the US is that you have that 45Q tax credit, and I think that is causing projects to move forward. Here in Canada though by comparison, I feel like things are moving much slower. What’s the hold up? How do we accelerate the investment and actually seeing some CCS facilities get constructed here?
Lisa Baiton:
Well, on CCS, let me just simply say that industry is working very constructively and collaboratively with federal and provincial governments on developing the right regulatory and fiscal frameworks to support CCUS investment. But the reality is, until those discussions come to a successful conclusion, there’s still too much regulatory and fiscal risk for those CCUS investments to proceed. So we’re hopeful we can catch up to the US.
I think maybe it’s worth stepping back and just talking about the importance of really getting climate and energy policy right when it comes to the conventional oil and gas sector. And that’s not an easy task. There are significant complexities inherent in the industry, and that needs to be fully considered by both federal and provincial governments.
First, I’d say that the upstream conventional sector is regionally diverse, and that includes hundreds of companies, tens of thousands of facilities, and over a hundred thousand producing wells. And that means you just can’t have a one size fits all approach to emissions targets or technologies. And second, the industry really needs to rely on external parties to reach climate targets. Electrification, as an example, is a real opportunity to decarbonize. But to do that, we have to rely on provincial utilities to green their grids and build transmission lines that reach where the actual production is.
And as Mike talked about, permitting reform, that really, it just can’t happen fast enough. The average time to plan, permit, construct and energize is currently eight to 16 years in Canada. And all of these things really need to be considered. And so we’re working feverishly with governments here in Canada with the goal of developing realistic climate targets that support emissions reduction, that preserves our economy and contributes to energy security.
Jackie Forrest:
Well, we see LNG export facilities growing in the US Gulf Coast, and we’re quite jealous about it, Mike, because we’ve been struggling here just to build one project. Although we do expect we will have one big project on our west coast by the mid-decade, but what should we expect going forward with respect to gas exports from Canada and the US? Maybe hear for both of you.
Mike Sommers:
Yeah, this is actually really, really exciting in the United States. When I started in the public policy world here in Washington DC about 25 years ago, the discussion was all about how do you import liquified natural gas, not how you export it. And really, because of the fracking revolution in the United States, the dawn of horizontal drilling, we’ve been able to absolutely produce more natural gas. In fact, in the state of Pennsylvania alone, there’s about 400 years of supply for American natural gas use just in the state of Pennsylvania. That doesn’t account for all the associated gas that comes from other drilling elsewhere throughout the United States.
So we have the supply, but we need to continue to export that supply to support other countries who need American natural gas as we did in Europe during their energy crisis. What’s really exciting is that we’re growing a lot in the American Gulf Coast, particularly in the state of Louisiana. I visited a couple of these LNG terminals. It is incredible. You fly a helicopter in the State of Louisiana, it’s almost every mile, there’s a new development occurring. So, it’s really exciting, and from an economic development perspective, what’s happening in the state of Louisiana and Texas as well. Where we can’t get them built is unfortunately on the American West Coast, because one of the ways that I think we can export American environmental progress is by developing a new LLG terminal on the West Coast and even the East Coast as well for easier transport to Europe, and on the West Coast for easier transport to our partners in Asia. Because if we can replace those coal-fired plants in Asia, it would have a tremendous economic and environmental benefit.
Jackie Forrest:
So Lisa, what about Canada? Now, we’re seeing some of the Canadian gas molecules make it to the Gulf Coast to go out that way, but should we expect to see more projects here in Canada beyond the LNG Canada phase one project?
Lisa Baiton:
We have number of really exciting LNG projects in the queue, including two LNG projects under development right now, which are being driven by indigenous leadership and ownership. I’d like to be more optimistic than I am. The reality is that we are behind the US. The contrast between Canada and the US in terms of the development of LNG export capacity couldn’t be more stark. And I think it really speaks volumes to Canada’s ability to get major projects completed. CAPP is currently working on a research report. We’ll have that out in a few weeks, but some preliminary findings are that Canada’s major project approval process is lagging behind our peers, not just the US, but Australia, the UK, Germany and Sweden.
If I can give you an example, Germany, it’s a nation with very aggressive climate targets, but Germany has expedited the approval process and completed the construction on three LNG terminals just since the beginning of 2022. Peers in the Western alliance are finding the way to fast-track major projects and take advantage of global opportunities to protect their national interests. And, as Mike said, exporting Canadian or US LNG to other parts of the globe and displacing coal is a really big part of GHG emissions reduction. So I want to be optimistic. We are working proactively with governments on this, but Canada’s behind and we have a lot of catching up to do.
Peter Tertzakian:
I’m just going to sort of key in on the phrase that you’ve been using. We’re going to need a lot more oil and gas going forward. We’re going to 106 million barrels per day, which is the number that the International Energy Agency is using right now. But people who are listening to this podcast, many of them are going to be very concerned with this kind of narrative. We thought we were peak oil demand, we’re rolling over, we need to do this, there’s a climate crisis going on, and now all of a sudden they’re trying to reconcile the fact that actually oil consumption is going up, not down. And indeed, many of the member companies and actually even agencies around the world saying, “No, it isn’t.” And so there’s this tension between, “Oh my God, is it going up? It should be going down. Why isn’t it going down?” How do you talk to people about that, Mike?
Mike Sommers:
Yeah. First of all, let’s put it into a historical perspective. The last so-called energy transition occurred in the 1960s when oil and gas overtook coal as the primary energy source in the world. But in 2022, the world consumed more coal than it has in the history of humanity, and in 2023, we’re going to beat the 2022 record. So very rarely in our history have we actually transitioned from one energy source to another. What it has been as we’ve added new sources to allow for new economies to emerge and seek their own energy position in the world. There are only about a billion people in the world right now, out of 8 billion, that consume energy the way that Americans and Canadians consume energy. Those other 7 billion people in the world want to consume energy as they grow as economies as well, and so that really is where that new demand is going to be coming from, from emerging markets, from markets that we’re not even aware of today. That’s where that energy demand is going to come from.
And if we’re going to provide for world security in a way that allows us to continue to grow and succeed, they’re going to need access to that energy. And I think Lisa and I would argue that it’s best for that energy to come from the United States and Canada rather than from regimes like Russia that are certainly hostile to the interests of our trading partners.
Peter Tertzakian:
I don’t think you’re going to get a lot of pushback from anybody in, I’ll call it the Western alliance, certainly not me, because I’ve articulated plenty of concern about the geopolitics of energy security. But maybe back to you, Lisa, and as we wrap up here, what do you say to people who point to our industry here in Canada and say, “You’re not moving fast enough. Come on, you got to get on with decarbonization. The oil consumption isn’t letting up, so there’s an imperative for you to spend more now, ASAP?” What do you say to people?
Lisa Baiton:
Well, I would say we’re already proactively moving in the absence of any regulation on us. I cited the analysis we put out last week where in the last decade our industry has reduced GHG emissions by 24%
while concurrently being able to increase production by 21%. And we reduced methane by 34%, so we’re already doing that. And again, our industry is one of the leading investors in clean technology. Collectively, that investment rivals that of any government or any other industry in the world. And we know we have a responsibility to ensure that the energy Canadians need to survive and thrive remains available and affordable, but we think we can walk and chew gum at the same time. We can grow production and we can lower emissions. For us, the path forward is driving down emissions in a way that creates economic opportunities for Canada as well as to thrive as a global supplier and be a partner to our allies on energy security. So we’re working on it, we’re investing in it. If we can get the right federal and provincial policies in place, we can make it happen.
Peter Tertzakian:
Well, it’s been a great discussion with both of you. I want to thank you both for coming onto the program. We’re going to be talking a lot more I know about geopolitics, energy security, climate change at the World Petroleum Congress. So again, for those of you who haven’t bought a ticket, I encourage you to do so. And when you do so, make sure you stop by the booths of the Canadian Association of Petroleum Producers and the American Petroleum Institute. Mike Sommers and Lisa Baiton, thank you so much for joining us.
Lisa Baiton:
It’s been a pleasure. Thanks for having me.
Mike Sommers:
Thank you all. It’s been great to be with you.
Jackie Forrest:
And to our listeners, thanks for listening to this podcast. If you like this podcast, please rate us on the app that you listen to and tell someone else about us.
Speaker 3:
For more ideas and insights, visit arcenergyinstitute.com.
