The Agenda with Steve Paikin (Audio) - Should Canada Rethink Its Relationship to Oil?

Episode Date: April 11, 2025

It's not an understatement to say the oil sector plays a significant role in the Canadian economy and has dominated life on this planet for the last century. But with Canada's emissions reduction goals, and Donald Trump's global tariffs, what's in store for this natural resource? And will it be an issue in our federal election campaign? Heather Exner-Pirot, Senior Fellow and Director of Natural Resources, Energy, and Environment for the Macdonald-Laurier Institute; Rory Johnston, oil market researcher and founder of Commodity Context; Rachel Doran, President and Executive Director at Clean Energy Canada; and Don Gillmor, journalist, former roughneck, and author of "On Oil," join Steve Paikin to discuss the future of oil.See omnystudio.com/listener for privacy information.

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make a first-time donation and continue to discover your 2-point TDO. It is not an understatement to say the oil sector plays a significant role in the Canadian economy and has dominated life on this planet for the last century. But with Canada's emissions reduction goals and Donald Trump's global tariffs, what's in store for this commodity? And will it be an issue in our federal election campaign? Let's ask. In Calgary, Alberta, Heather Exner-Perot, senior fellow and director of Natural Resources, Energy and Environment for the MacDonald-Laurier Institute. And with us here in studio, Rory Johnston, oil market researcher and founder of commoditycontext.com.

Rachel Doran, president and executive director at Clean Energy Canada. And to start our conversation off tonight, we welcome Don Gilmore, journalist and former Roughneck, who has written a book about his experience in the oil patch, it's called On Oil. And it's really good, Don, well done. This was a terrific read, really enjoyed it. I'm gonna ask the other three guests just to sit tight because Don and I are gonna talk about his book

a little bit off the top here and then we'll get everybody else engaged in our conversation. But I gotta start with this. What the heck is an English major in the 1970s doing as an Alberta roughneck working on the oil patch? Good question, but I had just moved to Alberta from Winnipeg, and I was looking for a summer job,

and everyone said that money's in oil. And so a friend of mine and myself went around all the oil companies and dropped off our very slender CVs, and finally a secretary said, you two idiots are never gonna find a job this way. went around all the oil companies and dropped off our very slender CVs and finally a secretary said you two idiots are never gonna find a job this way. She said if you want to get a job get in your car drive the medicine hat and drive up to the rigs because the turnover is so high. So we did and you can see the

Derrick's from you know 30 kilometers away and we drove up to the first Derrick and there was a sign that said this rig rig has worked zero accident-free days, and there was a guy sitting on a 40 gallon drum with his hand wrapped in gauze and blood staining his jeans, and so we thought, well, there's a job opening here. That's the first thing we thought of, as opposed to turning the car around. Yeah, but he didn't hire us because we had no experience,

and we drove around for three days to all these rigs, and finally we got to one where the crew hadn't shown up and the driller looked at us and this was the 70s and we had jeans and long hair and he said, well I guess you girls will have to do. And that was the beginning of my career as a roughneck. How did you not get scared away by the sight of the blood and the fact that you knew nothing about this business

and could easily have been crippled or killed or something in it. Well, it wasn't a great introduction, but you know, the money was so tempting, and you know, I wanted to ski in the winter, and which is an expensive sport for a student, and so this was the kind of the best route to that. Was oil as important to Canada back then, we're talking 50-plus years ago, as it is today? the best route to that. Was oil as important to Canada back then,

we're talking 50 plus years ago, as it is today? You know, I don't know that it was. It was certainly critical to Alberta at the time. And I think that was the moment where it was really kind of the provincial zeitgeist. And there was a tremendous energy around Calgary, especially. You could sort of feel this, you know, all the money that was coming in and all the people that were coming in.

And so you had this feeling that you were sort of at the center of something. The city was on steroids at the time, wasn't it? It was on steroids. Just booming. Yeah. And what was that line that they said after the, there was a huge boom, lots of revenue, then came the bust, and what did they say?

Oh, the bumper sticker appeared that, you know, please Lord send us another oil boom and we promise not to piss this one away. Have they made good by that? No, I mean I think that's the nature of the boom that, you know, when it comes you just enjoy it in the moment and, you know, we yet again don't really plan for the future. Let's do an excerpt from the book. This is from On Oil by Don Gilmore. Canada's oil landscape is equally Byzantine. for the future. Let's do an excerpt from the book. This is from On Oil by Don Gilmore.

Canada's oil landscape is equally Byzantine. Canadian pipelines tend to run south rather than east. So Ontario and Quebec get their oil from an evolving patchwork of sources that shifts depending on economics and politics. Oil has a pulse. It evolves and migrates, transforming cities and governments, entire countries. It fueled economic growth and triggered recessions and gave us the romance of the open road. It powered our lives. We are hydrocarbon man, homo oleum.

Yet it remains unseen, the ghost in the machine. What did you discover about this sector, this business, that makes it so utterly complex? Well, the fact that it's so relentlessly international in terms of whether it's investment or shipping. And when you look at, I mean, the US in particular, where you see that they're exporting to more than 100 countries. And despite the fact that they produce more oil than they consume, They still are importing, you know, eight and a half million barrels a day. So the complexities of it in terms of, you know, refining capabilities and capacities and it's just extraordinarily complex.

And, you know, we have Mr. Trump to the South saying that they want to have oil dominance, but I think it's energy dominance through fossil fuels. And I just don't think it's possible because of the nature of that beast, that it is so complex and it's so entwined internationally that there isn't any way to dominate it. You got hold of a, or at least you referenced a document that came out of Exxon in 1979 that warned about the future. Way back in 1979, what

did it say? Well, they warned that there would be, in fact, warming. It would be the logical result of the drilling activity. And you saw warnings from other people, and either they didn't make an impression at the time, or else if they were by the companies, they got buried in some cases. And so we had inklings about this, you know, decades ago.

But I think in the moment, you know, as I said, it was this sort of nonstop party in terms of the oil business in Calgary, but it's not something you stop and think about at the time. Oil has been associated with some of the most corrupt regimes in the world. Tell me we're not that bad. No, I mean we're at the top of the list.

The bottom would be Equatorial Guinea probably and Nigeria is not far behind. Certainly in Canada, and I know this is a complaint that we may hear from Rory later on that there is too much regulation and too much environmental oversight in Canada. Certainly it has among the best in the world. And so on that front, we're in pretty good shape. But it's a pretty low bar in a lot of the other countries, I have to say. But this notion of ethical oil,

we can sort of trumpet that a little bit? Yeah, I think so. I mean, I guess it's defined in different ways, but for the most part, I think we probably can. Okay. Let's broaden our discussion here. Thank you for setting the table for the discussion to come. Sheldon, I'm going to ask you to bring up that graphic, and we'll go through some more background here and get everybody else involved in this conversation. Here we go. By December 2022, Canada had more than 163 billion barrels in its remaining established reserves. We rank fourth in the world for oil production, including natural gas liquids.

Canada sends 97% of its crude oil exports to the U.S. Ninety-seven percent. We may want to rethink sending so much to one customer. Petroleum products directly account for 6.1% of Canada's GDP. That's a lot. 97% of Canada's proven oil reserves are in the oil sands. Hello, Western Canada. Okay, let's get into this.

Rachel, you first. How, in your view, has Donald Trump's second term changed the narrative on the oil industry in our country? Well, I think one of the things it's done is that we're all talking about the oil industry here, and we're talking about pipelines, we're talking about exports, and I think the risk is we're letting it suck up some of the oxygen in the room. And the way that we're saying all of a sudden as a country realizing, you know, having all of our eggs in the basket of the United States is a big risk,

having all of our conversation about our economic future and potential around fossil fuels is a big risk. Having all of our conversation about our economic future and potential around fossil fuels is a big risk. We are sitting today in a very different place than we were in the 1970s. We've seen reductions of up to 90% in cost on renewable energy, on batteries, and we're seeing, for economic reasons, like climate change aside, there is a massive movement towards more efficiently powered

transportation, industry, energy through electrification. And while Canada sits here in this moment thinking about who do we want to be when we look back 50 years from now, looking to those opportunities as places we need to be putting our investment dollars and our energy in lieu of an industry which is inherently volatile and very much you know proven to be in decline although I'm sure we'll have debate about how quickly and how much. Well let's have that debate but before we get there Heather why don't you weigh in on that issue of Trump's second term and how it's changed the conversation around this sector. Yeah I mean for most of us the conversation changed before when Russia invaded Ukraine

And we really started to think about energy security before that I think climate policy was dominating European discussions or the American discussions And then we started to think you know energy is not a subset of common policy It is the most important thing to our economy. I don't mean oil to Cannes economy I mean the availability of affordable energy for any economy, for manufacturing, for transportation, for, you know, living, all those things. And so the conversation for me changed two or three years ago, and we've seen a little bit of the green lash. And I think that's kind of what propelled Trump and that's propelled a lot of right wing governments to be elected in Europe is as a reaction to, you know, this kind of monolithic focus on climate policy. And so I think what the Trump discussion now has done is a lot more Canadians are literate

about the importance of oil and gas to our economy, to our exports, to our trade ballots, and looking at what is the lowest-hanging fruit for us to diversify to get other trading corners to enhance our productivity. That is still oil and gas. Rory, what say you? I generally agree with Heather's point here. I obviously think that there is room to invest in a whole bunch of different aspects of the

energy system. But I think that when you look at our comparative advantage as a country, we have some of the largest oil reserves in the world. We have the largest oil reserves within the Western Alliance, within the OECD. We have just gobs of potential. And it's really about using that in the most responsible way to finance all the other things that we want to do. So I think that Canada can both continue to green its domestic economy, while also supporting and facilitating the expansion of the oil sands in particular as a booming export economy.

And we're talking about reliance in the United States. Part of the challenge here is that it's always been easier and cheaper to build pipelines to the United States. The industry has co-evolved together. The refineries are perfectly geared to produce our grades of heavier, sour, or crude. But when we're talking about kind of forcibly diversifying away from that, and I think that is a major and obvious now political and diplomatic risk for the sector. Now what we have seen is that Trump despite repeatedly and falsely saying that the United States doesn't need our oil or our timber or our cars or whatever. They're just buying all that stuff because they like us.

Yeah, they're just being nice about it, right? But what we have seen is that both in the Canada-Mexico tariffs, we have now seen oil across the board exempted under the USMCA compliance exemption, and even with these latest reciprocal tariffs, which aren't actually reciprocal, but we'll leave that for now, that were announced on Liberation Day also explicitly excluded energy. So despite Trump's kind of bravado around kind

of the United States being energy dominant, enough voices within his orbit still recognize that they need broad energy imports and oil imports with specifically Canadian imports. Don, to the extent this has come up in the Canadian election campaign over the last few weeks, there have been some good discussions, I think among the candidates, on whether we need to build more pipelines east-west in this country and whether we need to have our own refining capacity in this country rather than sending everything down south. How do you regard that question?

Well, I think the issue there is, you know, I think it would have been a brilliant idea in 1980 to build the pipelines. I think it would have been a viable idea 25 years ago. My fear right now is, you know is because of the cost of that infrastructure and because of the timeline, if we look at 12 years and 34 billion for the Trans Mountain, and here we have a longer pipeline, we'd be doing 1,600 kilometers of new pipeline, I think 3,000 of retrofitting existing

pipelines. So who knows what the price is? But if it was 50 billion and 15 years, you know, what does the energy landscape look like in 2040? And I just think, you know, we could be sending, I think that the medium and long term risk is just is too great. Heather, can I get you to weigh in on that? Yeah, I mean, I totally disagree. And that's because we've always been a society for hundreds of years, for thousands of years of energy addition.

As long as the global population is going to grow, that population is going to need more energy. And so I don't see, you know, until population peaks globally, maybe in the 2050s, I think energy consumption will go up with it, and the need for oil. And this is, you know, in terms of the risk benefit, people talk about stranded assets. And I promise you, you'd rather have stranded assets than an energy crisis.

And you point out the fact that Canada has, you know, these world's fourth largest reserves. We are the only democracy on that list. And probably this year, Norway's oil and gas production will peak. And probably this year, American crude oil production will peak certainly at these prices. And you better hope that in 20 years there is a democratic provider of oil and not thought

to be Canada. So let those companies build, let them do the risk analysis, let them figure out there's a business case. Don't use policy to stop them from doing it. And if in 25 years their investment doesn't provide greater returns, that's them problem, that's not us problem. Rachel, your view. So 5% of global GDP literally goes up in smoke because of the inefficiencies of using fossil fuels for energy.

The reason that electrification is taking off is, as I said, is partly just due to its efficiency. And so I think, you know, when we're looking at something that was already raised around European reaction to the Russia-Ukraine conflict, you know, I think we anticipated an even larger consumption of fossil fuels in Europe. And what happened was a massive build out around renewable energy. And I think that's due to the economic potential of it. And so I just think when we're talking about public dollars,

when we're talking about where we're going as a country, looking at that kind of risk that we're talking about, about will there be markets out there in 12 years that wants to take this. We're seeing countries around the world maybe kind of rising to the occasion and competing each other to try to get things like LNG on the market but we're anticipating a

supply glut to come out in the 2030s so does Canada want to risk putting all its eggs in that basket or do we want to be trying to make a play today to use our innovation to be able to scale up innovative companies like some of Canada or some of the world's top clean tech companies with that kind of money and time. Rory says we should do both. We can both exploit what's going on. We can exploit the the resources we have in the ground today while they are still useful to us and to the rest of the world while at the same time going greener. Doable? I mean, I think like it's always nice to say both but there's only a finite number of

kind of dollars out there for governments to spend and energy and attention. So at the end of the day, are we going to be talking about carbon capture in the oil sands or are we going to be putting those billions of dollars into financing and scale up for other industries? So apparently you can't do both. It's a shame really. But what I will say is I think there's two different ways that we can look at this.

When we're looking at, I think Heather's absolutely right that we should make it absolutely easier for private companies to put their own dollars at risk. I think when it's never typically a good idea for the government to talk about business cases, because that's not their job, to assess business cases. So clear the ground to let private sector actors put private capital at risk. But I think that what we're currently dealing with

in the conversation around the United States, I think part of the challenge is that when you look at only the business case, when you look at only the economically optimal solution, which is what business is going to do, that brings us right back to the United States. The reason that those pipelines go south is because that makes the most economic sense. But if you look back all the way back to like Sir John A. McDonald and the building of the Trans-Canada Railway, there were arguments at the time that that railway should have gone south through Chicago

because that made more economic sense to do so. But Macdonald at the time said, no, there is a national incentive, a national mandate. A nation building exercise. A nation building exercise. So we're talking about, for instance, Ontario gets the majority of its crude oil from Alberta, but it has to travel through the Enbridge main line and Lakehead system that brings it through the upper Midwest and back up into Ontario. So we're talking about what the government's role can be here.

I think one, if we're looking at kind of building a pipeline like Energy East, and it might not actually be that pipeline because natural gas issues have also changed, but if there was an eastbound pipeline, I think the government would have to be involved in. But I think you have to look at it beyond just the economics of the oil sands. It's about kind of energy security for Eastern Canada, both Ontario, Quebec, into the Maritimes. But also in terms of our contribution to NATO

and the Western Alliance, we can obviously all of a sudden put a bunch more oil into the Atlantic basin, which right now we're entirely basically faced either in the United States or the Pacific. And then finally, what I will say is when we're talking about, you know, the comparative advantage of the Canadian economy and where we can put these investment dollars in terms of, you know, either or, I think the challenge that when we're looking at, let's say, putting $50 billion into a battery plant, we are competing with Washington, Brussels, and Beijing in a subsidy race. And we're just not going to win that race. It's not what we do.

It's not what we're compared advantage. But when we're looking at spending that same amount of dollars, say building a pipeline to enhance market access or even investing in carbon capture and sequestration, kind of putting more federal dollars towards, say the Pathways Alliance project out at West, I think that can help us do the thing that we have a comparative advantage in doing

and do it better. I want to bring you, Don, back to the election campaign that we're in the midst of right now. The NDP leader, Jagmeet Singh, made an announcement the other day in which he announced he was going to spend billions upon billions for new housing programs and a variety of other social programs that he would like to bring forward. And when they asked him how they're going to pay for it, he said, we spend billions on tax breaks for the oil and gas industry,

and we're gonna get rid of those if I'm in a position to make a decision about that. Is he right? Oh, that's a great question. I'm sure we'll get lots of different opinions here, but you know, the span, if you talk to John McKenzie, the CEO of Senevice, said that there's no subsidies whatsoever, that there's not a single subsidy in the oil sands.

And the IMF came out and said Canada spent $81 billion on oil subsidies in 2020. And between those two extremes, there's $4.5 billion, there's $14 billion, and $18 billion from various different sources. So in terms of how you define a subsidy and what is a subsidy, certainly there are subsidies. I don't know that you can take those subsidies and turn them into housing. That's a lovely thought.

I don't know that it'll happen. I think what's going to happen with all the political leaders, certainly it's going to happen with Pierre Pauliap, where he's going to say, this is a nation-building exercise. This is kind of the transcontinental railway redux and we're gonna have some version of Donald Smith driving in that last spike, it'll be the last weld happening in Sarnia maybe.

And so I think there's going to be this appeal to patriotism, but I think for the most part it's kind of the, you know, patriotism is the last refuge of the scandal. I don't think that there is national motives attached from the perspective of the oil companies or from Premier Daniel Smith. Okay, let me, we could go around the horn on this one, but I want to focus on something else at the moment.

We won't get bogged down on the discussion about that. Heather, back to you in Calgary. Mark Carney's done away with the consumer carbon tax. He's presented clean energy such as nuclear as part of his platform. He has made some positive remarks. I don't want to exaggerate them, but he's made some positive remarks about getting oil from West to Eastern markets. Overall, do you like what you're hearing from him? Well, I do like that the Canadian conversations evolved. Obviously, the public opinion is pushing this conversation to this direction of looking

at energy and resource development. Almost every week a new poll comes out that somewhere around 80% of Canadians support development in pipelines. Regulatory reform has become popular even. And so I'm glad that the conversation is all to what I think is a much more pragmatic kind of discussion. Two things that I think are non-starters

and the CEOs of the 14 biggest oil and gas companies made their views very clear on what they need to invest more in this country in production and infrastructure. And on that list, two things that I need to hear more about is the Impact Assessment Act, C-69, we like to call it. How about it be reformed? And I think industry is pretty unanimous on wanting to see reform of that. I'd also be emissions cap. But I want to point out that those two things are likely both in their current form unconstitutional. And so to go out and want to continue policies

that will be challenged by the provinces, certainly by Alberta, will probably be found unconstitutional, the impact assessment now for the second time. I don't think is the right way to start off on a new foot for government. And in a way that we're saying we want to expand our trade partners and improve our productivity

and grow our economy. It won't be through that path. Rachel, I wonder whether you are disappointed that Mr. Carney has left the door somewhat ajar for future pipeline development and or exploitation of oil and gas resources. So you know, I don't think that we're actually sitting that far apart in terms of, you know, I don't think any major political party today is saying let's shut up the taps on the oil sands. There are LNG projects that are approved and are just awaiting kind of commercial decisions as to when and how they'll go forward. So

I think the questions that we need to be talking about are, you know, what further efforts are kind of going to happen from the public sector and is that de-risking capital? Again, my point would be that de-risking capital can also be well invested in projects elsewhere that really need that government boost to kind of lift them up. Is it directs investment? Is it helping purchase infrastructure? And so from my perspective, it's really about what more are we doing to try to sweeten the pot? And so for things like the emissions cap that was referenced, again, I don't think anyone in this country is talking about capping production. We're talking about should our oil and gas, like many other products, be thinking about a world where lower carbon goods are going to be kind of bought at a premium?

And are there inefficiencies identified in the past by the fossil fuel sector that could be done to kind of address those and is that a lower emissions production possible? In which case, let me ask, we've talked about Singh, we've talked about Carney, I want to ask you about Pierre Poliev who has been quite open about his desire for a national energy corridor, fast tracking approvals for transmission lines, railwaysways pipelines, etc. to transport resources across the country. What do you think of that direction? Well, I think it's the only direction he can go.

I mean, I think, you know, most of his political career, he was a very effective counterpuncher. And, you know, up until both the carbon tax disappeared and Justin disappeared, he was still essentially counterpunching. And now he has, I think, the first really viable plank in his campaign. Viable, meaning public opinion is with him? I don't think the majority is with him, but I think it's something he can sell. And it's something, you know, there is a marketable edge to this where you can say this is an issue of sovereignty.

This is an issue of national energy security. So he's got something he can sell finally. This is an issue of sovereignty. This is an issue of national energy security. So he's got something he can sell finally. I don't know that it's going to be bought by the rest of the country. Okay. Speaking of the rest of the country, let me delicately raise this issue. And Heather, we sort of, we touched on this just before we actually began to record our segment here.

And that was, you know, Premier Danielle Smith is doing her thing on oil and gas, and people in the rest of the country are taking note. Preston Manning did that op-ed the other day in the Globe and Mail in which he said, essentially, if you don't vote conservative, you're contributing to the breakup of the country. Is national unity dependent on how we deal with this sector right now?

I wouldn't go that far. You know, and the polarity is clear. The vast majority of Albertans are proud Canadians, much remain in Canada. There was a majority support for independence. And I think probably in the last few months, most Canadians and most Albertans, you know, have experienced more Canadian pride. Winning hockey games certainly helps with that too. But to be fair, what Preston Manning's op-ed does is provide you a window into what a significant amount of Albertans are thinking, and I would extend that to Saskatchewan residents also,

quite a fair amount there, that they don't feel as though, you know, federal policy in this country has been supportive of their primary industries, obviously oil and gas, you could extend that to, you know, canola, mining, some other things. And so I do hope that we do look, you know, that the next government does look at some of the concerns arising out of the West. An easy one, as we often say, is stay in your lane. Respect the Constitution. Respect Section 92.8, allowable provinces to control their resources, and don't put barriers in front of them from developing it. So I don't think most Canadians are even opposed to that, and so I would, you know, hate to see a

federal government run or something that I don't think will be helpful for the entire country, let alone over in Saskatchewan. Rory, I can tell you the column by Preston Manning landed with a thud in central Canada, and I suspect Atlantic Canada as well, and maybe even Quebec. The notion that if you don't vote for the party that I think you should vote for, you're going to contribute to the breakup of a country

is a bit of a... Well, I won't characterize it. Let's just say there are a lot of people who were not too happy with that. Has oil become inextricably linked with national unity in this campaign? I think, I mean, I would echo a lot of what Heather just said, but I would say that, like, for instance, we were just talking about the emissions cap, which I think technically, yes, is not a production cap, but the way it is currently constructed

would have a major deleterious effect on production and particularly relative to an opportunity where you didn't have the emissions cap in place. But I think it's a great example of I think, the way Ottawa can approach the Western Canadian oil industry with like a stick and carrot, which is right now, the emissions cap is a stick.

It's basically saying you have to reduce your emissions on your own by this date, or we're gonna basically force a throttling back of production, versus something like, since like RIR was arguing earlier, additional money towards pathways, where you can basically say,

this is something that we can give you to green and clean up the emissions in the upstream, rather than kind of creating this very obvious and inherently artificial kind of political cleavage that various actors that do have interests in kind of cleaving at that national unity, it just provides an obvious target for them. Okay, Rachel, can I get you on the issue? Well what do you think of what you're hearing out of Premier Smith and Preston Manning these

days? Well, I mean I think we're in this moment in time. I mean, yes, it's a federal election, which causes a lot of maybe diversity of views. But we're also in this moment where we're seeing a lot of alignment between Canadians and a real like energy behind buy Canadians, support other Canadians. At the end of the day, what I would hope is that Canadians in every part of the country are looking at what will provide the greatest affordability for households, what will provide the greatest future for our economy, and, you know, trying to find ways to meet that collectively for the benefit of all.

And I guess for me, Alberta is maybe just one case, a risk case in point, because their provincial budget is built around an oil price of $68 a barrel. And so when it goes below that, that results in a deficit in the Albertan budget. And at the same time, they left $33 billion of investments in new renewables because Alberta was an amazing place across Canada and real leader in terms of renewable development by putting a pause on renewable development.

So I think it's just an example of like to meet those objectives. Let's look at a diversified portfolio in a way that will benefit all Canadians in all parts of the country. How do you see oil playing out in this election campaign in terms of national unity? You know, I don't think it is. I don't think it's going to do much for national unity. I mean, I think right now what's doing the most for it is President Trump. And I think oil will play a part of that.

I think one of the issues is the timeline, because in terms of, insofar as you can have energy security exclusively through fossil fuels, which I'm not sure you can, that it would happen in such a 10 or 15, 10 or 15 years from now at the earliest. And I think it then becomes an abstraction. So I don't think it's going to be as big an issue here as it will be, say, in Alberta. Oh, for sure. At the risk of using a terrible pun here, Heather, the renewed interest in the East-West line,

do you think it's ever actually going to get built or is that just a pipe dream? I love it. I love a good pipe pun. You know we've talked a lot about east of west to east pipelines and to Rory's point you know the main motivation for that would be energy security to keep Canada fully energy independent and you can debate the merits of that and what you want to do. I think from you know a perspective about West, we're looking for West to West pipelines. We're looking to reach those Asian markets. We are looking to diversify. You know we're trading part of the way from the United States and towards Asia which has four and a half billion people, lower levels moving from low income to middle income and is obviously the

biggest and the biggest growing energy market in the world. So when we do look at, you know, what is the demand gonna be in 20 or 30 years, we know it will be in Asia. And so obviously Trans Mountain has been a huge boom. As we're, you know, wrote a few weeks ago, it's really narrowed the differential. So the discount that we are getting from selling

to one market in the United States with their monopsony. And so we would like to see more of that. Right now we have LNG Canada starting up in a couple of months. Finally, we'll have two pipelines to the West, two Asian markets, increasing our prices, getting more revenues. BCs, you know, they have a fiscal issue.

Speaking of fiscal issues and dependence on oil and gas, but their natural resource revenues, royalties from gas will be double next year once LND Canada goes up from about 600 million to 1.2 billion. So more of that, we like churns amount, we like coastal gas line. Wait till you hear about Northern Gateway and Prince Edward gas transmission.

Dawn, I want to get you on Norway, because you talk about Norway in your book, somebody referenced it here earlier in our discussion. And I wonder whether Canada should be more like Norway in as much as, what have they got, 1.7 trillion in their sovereign wealth fund? And what have they got in the Alberta Heritage Fund? Maybe-

I think it's 21 at this point. A few billion, 21 billion? I mean, well, I won't get into what it should be, but should we be more like them? Well, I mean, we should have been more like them, I think. I don't think we can be like them now. When I left Alberta, I think the fund was at $11 billion. Now it's at $21 billion decades later.

And I think the biggest difference is that they recognized this was a finite resort right from the get-go, and behaved accordingly. The Norwegians did. Norwegians did, and I think in Alberta, it was kind of like a multi-decade keg party, and you end up with kind of roaring fun and then crippling hangovers,

and at some point searing regret. So I think we should have been more like them. Now it's gonna be very hard to kind of turn that corner and become like them. Rory, what do you think? Too late to become more like them, now it's gonna be very hard to kind of turn that corner and become like them. Rory, what do you think? Too late to become more like Norway, which is just dripping in all of the wealth that they have sagely taken care of over the years

in this sovereign wealth fund. I think the important thing to remember in these conversations is that it's not like the money just disappeared that came from Alberta, it was invested in schools, it was invested in infrastructure, it was invested in the broader Canadian economy, It was invested in schools, invested in infrastructure. It was invested in the broader Canadian economy. It was invested in equalization payments to the rest of the provinces.

Like the money didn't disappear. So I think it's easy to say that like, yes, I would also love a $1.7 trillion fund that we control. That would be awesome. But I think it's a very different economy. Norway is much smaller, and I think the North Sea was known to be a much smaller inherent resource than the oil sands, which at this stage, the oil sands are functionally limitless. The real impeding, the real kind of limiting factor is how long demand keeps up.

And I think that is a question that is more existential now than it was in the 70s. But I think there was never really the same kind of supply scarcity concern in Canada there was in Norway. Heather, can I get you on that as well? Yeah, I'll see. You know, there's a reason Norway never joined the European Union. You know, it's off when it's on with it's about five million people and can enjoy all the resource wealth from there.

Alberta, I think, is part of a federation happy to be and a lot of that oil wealth was distributed across the country. And so if you took, you know, all the equalization payments in the last 40 years and you put it into a sovereign oil fund, I think Alberta would probably be pretty close to what Norway has right now. But instead, it's been able to benefit the entire country. We're a G7 nation. We're more important on the world stage than Norway. And so that was the choice that was made. Now, you know, we can get into the specifics, but the oil sands was a huge upfront investment. We really only capitalized that about 10 years ago.

We're starting now to get into the space where royalties are going up, where a sufficient amount of that infrastructure has been paid out, that companies now pay higher royalty rates, we call it post-poit payout. And so I do expect in the next 20 years that Alberta will have a very unbeatable fiscal position as those investments that were made in the

Royals Town start to paint evidence. Just a few minutes to go here and let me try getting one last touchy-feely issue on the table here and Rachel that is presumably we have an opportunity, we Canadians have an opportunity right now to show some and define this however you want, moral leadership as it relates to stick handling these complicated trade-offs into the future. What should we do? I think it's moral but I also think it comes back to Norway. Like we want people to look back 50 years from now and say we want to be more like Canada. We want to use the approach that Canada took in this important time where it was looking forward

to say, where's the areas of growth? Like, we have critical minerals. How are we scaling up innovation? We have 13 of the world's top clean tech companies. How are we building out those opportunities of tomorrow so that people can look back and say, we wish we would have been like Canada, and we can now reap the economic benefits

of what we sowed in this period. So let's build out those future industries. Don, I'll give you the last word on this as the author of the book on this. What role can Canada play internationally right now in showing people here's the way to go? I think one of the things we could do would be, you know, we see so much where in the States

oil is really kind of a tribal issue. For oil, it's like masculine and Republican and Christian, and renewables are essentially woke and socialist. And I think we should be the country that could bring those, and best equipped country, to bring those two together and make sense of both of them. It's funny that you mention the Christian angle here, because you do start your book

with this notion that there were politicians in Alberta, including Preston Manning's father, who believed God put the oil in the ground for us to exploit and enjoy its benefits. Right on? That's true, Ed. In Texas, you still have those people. What do you think of them? Well, I mean, there's a one of the Texas oil billionaires believes that his oil is 4,000 years old That so I think they're probably on the wrong track. How much money is he worth?

Several billion. So maybe he's right Just gonna say maybe he's not so crazy. I want to thank all of you for appearing on our program tonight Heather Exner Perot from the McDonald Laurier Institute in Calgary, Alberta. Appreciate you being on the line for us from out west and here in our studio, Don Gilmore, Rachel Doran, Rory Johnston, and we are happy to recommend On Oil. Only 137 pages. Easy to get through and lots of good wisdom in that book. Thanks everybody.