Juno News - February 10, 2024


The hidden costs of oil and gas divestment


Episode Stats

Length

9 minutes

Words per Minute

167.28664

Word Count

1,619

Sentence Count

1


Summary


Transcript

00:00:00.000 i'm joined now by brian gould of aspenleaf energy brian it's good to talk to you and just
00:00:17.440 set this landscape here how does aspenleaf fit into the canadian energy sector great
00:00:22.400 yeah so we are a private oil company started about 10 years ago uh myself and and three colleagues uh
00:00:31.680 former executives at shell uh and we saw a business opportunity to acquire companies and assets
00:00:40.480 in western canada primarily alberta and produce uh crude oil so we produce 25 000 barrels a day
00:00:48.320 like like crude oil now uh and we started the company with a vision of not just being profitable
00:00:57.120 for our investors but we grew up with a mentality and a view of how a company should be run and so
00:01:04.160 we're very passionate about our culture uh commitment to working respectfully with our employees with the
00:01:11.920 communities which we operate uh being responsible in terms of environmental performance and we think
00:01:18.880 they all fit together under one umbrella uh which i call just strong corporate governance so what are
00:01:26.640 the barriers for you that you're finding in in the sector as an oil company that's obviously successful
00:01:31.920 but is one of those giant players that tends to be the one that dominates the discussion of the industry
00:01:36.640 in canada i i'd say probably access to capital and um investors appetite would be the wrong word uh we have
00:01:50.720 investors that would like to stay invested in our company we're very profitable uh and yet the societal
00:01:59.520 pressures on them to divest are overwhelming and overpowering and so we're currently going through a
00:02:05.920 frankly restructuring where some of our investors are going to be forced to divest uh despite
00:02:12.320 rational economic performance uh just to satisfy these what i'll call societal pressures i i i mean
00:02:20.240 it sounds like you're putting a very charitable spin on it i mean these are very ideologically driven
00:02:24.720 in many cases and i'm wondering why that's stronger than clearly a market-based motivation to invest and
00:02:31.440 to remain investing if this is a sector that is doing as well as it is it's a great question uh all
00:02:38.720 i can tell you is i deal with managers of large like college endowment funds and they've been
00:02:47.520 particularly susceptible to these campaigns these orchestrated efforts yes and some of them are forced
00:02:53.520 to divest some of them are in a situation where they're not forced to divest their current holdings but
00:03:00.000 they're not allowed or permitted to invest in new opportunities and so i i put this all under the
00:03:05.680 umbrella of access to capital and the industry is frankly being starved of this access to capital
00:03:12.240 which is you know the like lifeblood of of a capital intensive industry and and yeah and i think that
00:03:17.120 the important point here is that for capital canada is not in isolation here people can put their
00:03:21.920 capital anywhere in the world so if they're seeing an environment in this country that doesn't seem like
00:03:27.200 it's worth the hassle then they are putting that money elsewhere they're still investing in it it's
00:03:31.600 just canadian companies are not the beneficiaries of it right um well in part it's canadian companies
00:03:36.400 in part though uh i would say it's a global phenomenon uh many of our investors are uh based
00:03:44.000 in the united states for example uh and they simply can't invest in the sector whether it's in canada
00:03:49.280 or or elsewhere and the sad part of this for me is when i think about our investors you know people
00:03:55.280 think about frankly so guys we're the fat cats and all this but but the people that are invested in
00:04:01.440 my company are pensions so so i like to think that our profits pay pensions for retirees uh we have a
00:04:10.720 very large investor who has a sizable medical institute i believe they funded something like
00:04:17.920 over 20 nobel prize when he was just in the field of medicine uh we fund a major world famous art museum
00:04:26.000 uh so so this isn't money going to you know fat cats smoking big cigars uh i like to think of it that
00:04:33.120 the profits from our industry are paying it forward to society for education for retirement funds for
00:04:39.920 medical research uh for medical treatment for the arts i mean these are all i think causes that we all
00:04:46.080 agree are are very worth a lot well and the people you employ i mean that's the their life lead is
00:04:52.320 this industry and when you hear the government talk about this so-called just transition they're really
00:04:57.200 imagining and i think saying as a an inevitability that there is a future in which these people
00:05:02.880 shouldn't have those jobs so that's a great question so you know although we're fairly modest in size
00:05:08.880 uh when i look at our direct and indirect employment through you know uh contractors
00:05:16.160 and such we probably employ about a thousand people uh these are very high paying jobs uh we have field
00:05:24.560 operators many of whom these are people without college educations uh these are fantastic paying jobs for
00:05:31.600 them uh and and i it boggles my mind to think that in this transition that there will be any kind of
00:05:38.800 replacement for that kind of employment that quality of employment those number of jobs
00:05:43.840 in it and and i even hesitate to use the word just transitioned that's that's a fallacy well it's the
00:05:49.760 unjust i mean it's an unjust transition which is why we i've been using that language and and i will
00:05:54.160 always caveat it with the so-called and not just for alberta i mean when alberta is booming this is
00:05:59.120 attracting people from all across the country for those jobs 100 so this is of national interest this
00:06:03.840 isn't calgary this isn't alberta this is of national importance and i would argue it's of importance
00:06:08.640 to to the western for more fully uh and then just so so i i'd like to challenge two of your phrases
00:06:15.040 please just and well they're not my let me clarify they're not my phrases i i i i'm quoting the those
00:06:21.840 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
00:06:28.080 open market economy and if if if the broader economic forces decide that there's a better product
00:06:35.360 than ours to supply energy that's great so be it but there's nothing just about an enforced
00:06:42.480 transition and secondly there is no transition uh so this is a complete pipe dream the fact
00:06:49.280 the the belief that the world will transition off of fossil fuels in any rational time frame is a pipe
00:06:56.320 dream i you know the stats i heard this morning i believe that 84 of the world's energy still comes
00:07:01.280 from fossil fuels uh after decades of transition that's maybe down a couple of percent and there
00:07:08.160 are six to seven billion people in this world they're fundamentally short of of energy and the
00:07:13.360 world will need all sources of energy including fossil fuels in my view for the foreseeable future and when
00:07:20.240 i say for the foreseeable future i mean decades and decades beyond that so this concept that there will be a
00:07:26.400 transition away from from this source of energy is frankly just uh a fairy tale you've heard what
00:07:34.400 they want to achieve what would the real world implications of that be on on your company not
00:07:39.120 just your industry but you your company and your employees if if they were to achieve what they want
00:07:45.120 to achieve our our company simply would not exist uh we would not exist we would not be uh supplying
00:07:51.600 these you know thousand jobs the taxes we pay uh we have in our short lifespan contributed well over
00:07:58.960 a billion dollars to the economy and that would all be gone and that's as a and i don't mean this
00:08:03.680 in a negative way but that's as a smaller company that's that's as a very small company so multiply
00:08:08.800 that by many many orders of magnitude many factors when you think about the size and the breadth of the
00:08:13.680 industry uh so i believe we're fundamental to the canadian economy and how it manifests itself it's
00:08:20.320 everything from who pays for the social services that we all expect and what who pays for medical
00:08:25.760 care what happens to the value of the canadian dollar when we don't this you know oil and gas is
00:08:30.320 far and away our largest export uh good luck buying your fresh food and vegetables with a 30 set dollar so
00:08:36.240 all of these things will cascade through the economy in into ways that every canadian will will
00:08:42.640 relate to very directly this this will cause a reduction in our standard delivery full stop
00:08:48.400 uh and not only that it will compromise our national security uh even and and these are
00:08:54.800 fundamental very fundamental issues and the reason i'm not passionate about this topic for my company
00:09:00.320 i'm passionate about these topics for our country well it's a very important note to end on and for
00:09:06.400 people who aren't in the industry i think they can share that as well certainly when they hear it put
00:09:11.200 how you have uh phrased it there so eloquently brian gould thank you very much thanks for having me
00:09:15.840 these topics we want you to talk a lot about it thank you so much if they call it this all
00:09:19.360 on um
00:09:22.000 but
00:09:24.800 we're going to have an anthball
00:09:27.440 a million
00:09:28.160 so
00:09:30.000 to
00:09:32.320 you
00:09:32.480 more
00:09:34.480 uh
00:09:36.960 i
00:09:38.480 we're going to have
00:09:40.160 you