Canada’s sad march to energy industry oblivion

Canada’s sad march to energy industry oblivion

My belief in the importance of Canadian-headquartered companies goes back to the early 1970s when, as a young engineer, I joined the Canadian subsidiary of a Nebraska-based oil and gas company.

I yearned to work for a company where the decisions were made in Calgary, not Omaha. That opportunity came with a new startup called the Alberta Energy Co.

I joined AEC to head the building of the oil and gas division.

The company grew quickly. But five years later, the entire oil and gas industry was struck a huge blow by Prime Minister Pierre Trudeau’s National Energy Program.

After the Brian Mulroney-led Conservatives killed the Trudeau policies in 1985, AEC got back to the job of company building.

Not long after I became the company’s CEO in 1994, American takeovers of Canadian oil and gas companies began accelerating. Having grown AEC into one of the two local energy companies with the largest market value, rivalled only by PanCanadian Petroleum, we managed to avoid that fate.

But market intelligence revealed we were on the radar of the global multinational majors, the only players with the capacity to take us out. We knew that the best defence was to become an even larger, nationally important energy company.

On Jan. 28, 2002, Alberta Energy and PanCanadian announced a $27-billion merger of equals that would create the world’s largest publicly traded independent oil and gas producer.

Given my career-long belief in the importance of Canadian-controlled companies, it was important that the name of our new company symbolize its status as Canada’s flagship energy company. Hence, the name Encana, from the root words “energy” and “Canada.”

Employees of the two companies united in our mission of “energy for people.” When I retired four years later, Encana was our country’s largest energy company, and also the largest of all Canadian companies by stock market value. My dream of building a Canadian-headquartered energy company, invulnerable to takeover, had become a reality.

I could never have imagined that, a dozen years later, the company would decide to export itself.

Over the past three years, Encana has shifted much of its multibillon-dollar capital program to the United States. Then last May, Encana CEO Doug Suttles moved from Calgary to Denver. This month, came news of Encana’s $7.7-billion acquisition of U.S. producer Newfield Exploration. That will mean that Encana’s largest production region will now be the United States, not Canada.

The past few years have been a nightmare for the Canadian industry, where every light at the end of the tunnel has turned out to be a train driven by Prime Minister Justin Trudeau barrelling at us from the opposite direction.

Trudeau’s oil tanker ban in northern B.C. and his refusal to allow a pipeline in the “Great Bear Rainforest” killed Northern Gateway. And his introduction of a post-regulatory hearing requirement to consider upstream emissions forced TransCanada Corp. to abandon its nation-building Energy East pipeline, which would have replaced foreign oil.

That left the now-stymied Trans Mountain expansion as the only hope of getting Canadian oil to tidewater.

As if this weren’t enough to deter investment in Canada’s oil and gas industry, Bill C-69, the Impact Assessment Act, now before the Senate, will make the chances of accomplishing resource infrastructure projects seem near impossible to investors.

And then there are carbon taxes that will hit the industry particularly hard.

These are the disastrous actions that are killing what has long been Canada’s most economically important industry.

Gwyn Morgan is a retired Canadian business leader who has been a director of five global corporations.

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