Juno News - February 10, 2024The hidden costs of oil and gas divestment
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Summary
Aspenleaf Energy CEO Brian Gould joins me in this week's episode to talk about his vision for the future of the Canadian energy sector, the challenges faced by Canadian oil companies, and the benefits of investing in the energy sector.
Transcript
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i'm joined now by brian gould of aspenleaf energy brian it's good to talk to you and just
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set this landscape here how does aspenleaf fit into the canadian energy sector great
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yeah so we are a private oil company started about 10 years ago uh myself and and three colleagues uh
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former executives at shell uh and we saw a business opportunity to acquire companies and assets
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in western canada primarily alberta and produce uh crude oil so we produce 25 000 barrels a day
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like like crude oil now uh and we started the company with a vision of not just being profitable
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for our investors but we grew up with a mentality and a view of how a company should be run and so
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we're very passionate about our culture uh commitment to working respectfully with our employees with the
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communities which we operate uh being responsible in terms of environmental performance and we think
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they all fit together under one umbrella uh which i call just strong corporate governance so what are
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the barriers for you that you're finding in in the sector as an oil company that's obviously successful
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but is one of those giant players that tends to be the one that dominates the discussion of the industry
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in canada i i'd say probably access to capital and um investors appetite would be the wrong word uh we have
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investors that would like to stay invested in our company we're very profitable uh and yet the societal
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pressures on them to divest are overwhelming and overpowering and so we're currently going through a
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frankly restructuring where some of our investors are going to be forced to divest uh despite
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rational economic performance uh just to satisfy these what i'll call societal pressures i i i mean
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it sounds like you're putting a very charitable spin on it i mean these are very ideologically driven
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in many cases and i'm wondering why that's stronger than clearly a market-based motivation to invest and
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to remain investing if this is a sector that is doing as well as it is it's a great question uh all
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i can tell you is i deal with managers of large like college endowment funds and they've been
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particularly susceptible to these campaigns these orchestrated efforts yes and some of them are forced
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to divest some of them are in a situation where they're not forced to divest their current holdings but
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they're not allowed or permitted to invest in new opportunities and so i i put this all under the
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umbrella of access to capital and the industry is frankly being starved of this access to capital
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which is you know the like lifeblood of of a capital intensive industry and and yeah and i think that
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the important point here is that for capital canada is not in isolation here people can put their
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capital anywhere in the world so if they're seeing an environment in this country that doesn't seem like
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it's worth the hassle then they are putting that money elsewhere they're still investing in it it's
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just canadian companies are not the beneficiaries of it right um well in part it's canadian companies
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in part though uh i would say it's a global phenomenon uh many of our investors are uh based
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in the united states for example uh and they simply can't invest in the sector whether it's in canada
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or or elsewhere and the sad part of this for me is when i think about our investors you know people
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think about frankly so guys we're the fat cats and all this but but the people that are invested in
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my company are pensions so so i like to think that our profits pay pensions for retirees uh we have a
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very large investor who has a sizable medical institute i believe they funded something like
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over 20 nobel prize when he was just in the field of medicine uh we fund a major world famous art museum
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uh so so this isn't money going to you know fat cats smoking big cigars uh i like to think of it that
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the profits from our industry are paying it forward to society for education for retirement funds for
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medical research uh for medical treatment for the arts i mean these are all i think causes that we all
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agree are are very worth a lot well and the people you employ i mean that's the their life lead is
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this industry and when you hear the government talk about this so-called just transition they're really
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imagining and i think saying as a an inevitability that there is a future in which these people
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shouldn't have those jobs so that's a great question so you know although we're fairly modest in size
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uh when i look at our direct and indirect employment through you know uh contractors
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and such we probably employ about a thousand people uh these are very high paying jobs uh we have field
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operators many of whom these are people without college educations uh these are fantastic paying jobs for
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them uh and and i it boggles my mind to think that in this transition that there will be any kind of
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replacement for that kind of employment that quality of employment those number of jobs
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in it and and i even hesitate to use the word just transitioned that's that's a fallacy well it's the
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unjust i mean it's an unjust transition which is why we i've been using that language and and i will
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always caveat it with the so-called and not just for alberta i mean when alberta is booming this is
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attracting people from all across the country for those jobs 100 so this is of national interest this
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isn't calgary this isn't alberta this is of national importance and i would argue it's of importance
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to to the western for more fully uh and then just so so i i'd like to challenge two of your phrases
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please just and well they're not my let me clarify they're not my phrases i i i i'm quoting the those
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ones but yes carry on so in my view there's nothing just about this uh you know i believe in a in a free
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open market economy and if if if the broader economic forces decide that there's a better product
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than ours to supply energy that's great so be it but there's nothing just about an enforced
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transition and secondly there is no transition uh so this is a complete pipe dream the fact
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the the belief that the world will transition off of fossil fuels in any rational time frame is a pipe
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dream i you know the stats i heard this morning i believe that 84 of the world's energy still comes
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from fossil fuels uh after decades of transition that's maybe down a couple of percent and there
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are six to seven billion people in this world they're fundamentally short of of energy and the
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world will need all sources of energy including fossil fuels in my view for the foreseeable future and when
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i say for the foreseeable future i mean decades and decades beyond that so this concept that there will be a
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transition away from from this source of energy is frankly just uh a fairy tale you've heard what
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they want to achieve what would the real world implications of that be on on your company not
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just your industry but you your company and your employees if if they were to achieve what they want
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to achieve our our company simply would not exist uh we would not exist we would not be uh supplying
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these you know thousand jobs the taxes we pay uh we have in our short lifespan contributed well over
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a billion dollars to the economy and that would all be gone and that's as a and i don't mean this
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in a negative way but that's as a smaller company that's that's as a very small company so multiply
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that by many many orders of magnitude many factors when you think about the size and the breadth of the
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industry uh so i believe we're fundamental to the canadian economy and how it manifests itself it's
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everything from who pays for the social services that we all expect and what who pays for medical
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care what happens to the value of the canadian dollar when we don't this you know oil and gas is
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far and away our largest export uh good luck buying your fresh food and vegetables with a 30 set dollar so
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all of these things will cascade through the economy in into ways that every canadian will will
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relate to very directly this this will cause a reduction in our standard delivery full stop
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uh and not only that it will compromise our national security uh even and and these are
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fundamental very fundamental issues and the reason i'm not passionate about this topic for my company
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i'm passionate about these topics for our country well it's a very important note to end on and for
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people who aren't in the industry i think they can share that as well certainly when they hear it put
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how you have uh phrased it there so eloquently brian gould thank you very much thanks for having me
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these topics we want you to talk a lot about it thank you so much if they call it this all