Reforming Canada's regulatory system to get products to markets
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Summary
In this episode of the Energy Matters podcast, I sit down with the CEO of ResourceWorks, a BC-based group that focuses on energy issues across the country, including LNG, mining, and natural resource development. We talk about the need for natural resource-based economic growth, the benefits of natural resources, and the challenges we face when it comes to developing them.
Transcript
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LNG, so I mean, we'll start though, just giving a little background on yourself. You're with
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ResourceWorks. It's a BC-based group, though you talk about energy issues across the country and
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particularly LNG lately. What else is your focus, I guess, would you say?
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LNG is a big part of it because gas, whether it's produced in Saskatchewan, Alberta, or BC,
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gets to markets and influences our way of life in lots of positive ways. It creates a huge amount
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of income for governments to support social programs, and that is a profitable thing for
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businesses to engage in. It creates a lot of employment, so that's a good thing. We also
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work for better awareness of mining opportunities. Pretty much every politician right now is talking
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about critical minerals, which is great because that's the EV, the electrification future. We need
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those, but you know what? We also need the more traditional, old-fashioned, if you will, minerals
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that have been used for thousands of years. Minerals like coal, like copper, molybdenum,
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silver, gold, all of these things are a huge part of the Canadian economy, so the problem
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right now is that it takes often decades to build a new mine, and at the pace that humanity
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is looking for solutions to the need for everything in their lives, we need to produce those, and
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right now the regulatory system is not creating conditions for new projects to be advanced. Same
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thing in forestry, we see that too. Here's a renewable, almost the ultimate renewable building
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product, if you're building a house or we're using products made of paper, we're not allowed to have
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plastic straws anymore, they have to be paper. Well, that paper comes from trees, right, and those have to be
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grown and harvested and managed and then processed into the things we use in life. We also look at the
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coasts, things like aquaculture and fishing, so all these things, you put it together, you say that's
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a natural resource economy, and 10 years ago we started for the purpose of building awareness of
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how these are, first of all, fundamental even today in the way of life that we enjoy, whether you're
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working up close or you live in a city, it doesn't matter, you're just as dependent, and we've had
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economic studies galore that have proven this on having that economy. Hey, it's not always glamorous or
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the dazzle that some people want, and that's fair, but you know what, it's still fundamental to our way
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of life. Yeah, so with resources, I'm glad you said that, you know, it's a broader thing, the one we're
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hearing the most about in the west in general though, and it's I think one of the even speaking on
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particularly this time around, but every resource development area is suffering from that regulatory
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regime and some ideological challenges going on, so the liquid natural gas, that's a really growing
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world industry right now, and Canada is really well placed. I mean, we have a lot of resources,
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but boy, we're having a hell of a time trying to get a, you know, infrastructure in place so that
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we can take advantage of that and export it. I mean, is that, that's part of what you've been
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explaining over in Ottawa this week, right? Yeah, that's right, and I just listened to the CEO of
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Enbridge, Greg Liebel, tell the room of policy makers and people who pay attention to these things
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that it's not a question of building things, you know, if we want to build infrastructure,
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he said that a pipeline to the east coast could be built in 18 months, it's not a question of
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whether we have the ability, of course we have that, Alberta above all has that, it's whether we have the
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regulatory certainty to attract investment and get those decisions made, that's what's tying us up and
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leaving us in knots as a country. Yeah, well, something that's been difficult, I wrote on that
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recently too, I believe there was 18 or 15 proposed LNG terminals over the last 10 or 12 years and
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only one is really under full construction, at least thankfully, that one looks like it's going
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to be going. The ones all on the east end have all been shut down and the others people have basically
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backed away, not for lack of a market, but they just can't feel confident that they'll get a return
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on their investment. How are things going though with the CGL line? I mean, that's something I think
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any potential investors are watching carefully, like can this even get completed? If we can't even get
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that done, I can't see any future ones being constructed. Yeah, I don't think there's too
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much question as to whether it will get done. We did see today in the news that TransCanada has
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announced some additional cost overruns on that. It's now I think 10.6 billion US that we saw this
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morning. That may have some impact on investment intentions in regards to owning the stock and what
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that means. In terms of will that asset be completed? Yeah, for sure it will be completed. It's
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probably 80% done and now they're in a phase where they're building sort of the more difficult stuff.
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The terrain there is unbelievable. You go from that run that there's the final leg down to
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Kinemat. You know, you're talking about high mountain passes. There's even an aerial tramway
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like you see at a ski resort, but I'm sure built for the incredible weight of pipeline components that had
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to be constructed to position some of these pieces. That's what we're talking about in this terrain.
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The costs, you know, one can only guess given the price escalation. It's more expensive to feed people.
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You know, any family knows that. Well, imagine you're feeding 5,000 people at a work camp somewhere
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on the CGL line or at LNG Canada. All that has to be paid for and no one anticipated this. So costs are going
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up, sure, but so is every family's cost. So I don't think that is the big thing. It really does come
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back to the regulatory certainty. You know, we also don't need to debate the idea that this is a useful
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commodity. We don't need to debate whether the world is going to pay a premium for it because long-term
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contracts, 20-year contracts are being signed. If that wasn't happening, we could debate that. But there is
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commercial interest in securing these molecules. So all that's left really is for politicians to
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say, okay, I can do this. And we saw some good news today from a pollster. We had abacus pollsters who
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are kind of well-regarded in Ottawa for being able to put things together in a way that, you know,
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reads the political times we're in. And I thought the top line number for me was that the impressions of
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LNG among a coast-to-coast sample that was a, you know, a very solid polling method that no one would
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challenge, I don't think, they said that the impressions of LNG among Canadian residents are 43%
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positive and only 34% neutral and then a small number like 9% negative. You know, very few people
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in this country are against it. So if you're seeing in social media, in your feeds, you're seeing, you know,
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things come up, don't do this, don't do that, or this horrible, toxic polling. No, that does not
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reflect what Canadians think. Yeah, so beyond what the, you know, our common Canadians think,
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how's your reception been with the political class in Ottawa this week? I mean, as you've been
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explaining this, does it sound like some pragmatism might be finally kind of sinking in for some people
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and then realizing that they've got to change the regulatory scheme? Well, I think there's always
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been plenty of people in Ottawa, just not the right ones who are in, you know, holding the stick to
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get things done. And looking across a room of 100 or so policy walks today at lunch, I thought there
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was a really good cross-section of that world. You know, most Canadians, the vast majority of Canadians
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vote either Liberal or Conservative. That's 80% of, you know, MPs. That's most of the country. So if you look
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at that group, you know, they're in the room. And the problem is, I think, for the, you know, Trudeau PMO
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that, you know, love them or hate them, they're in their way trying to figure things out politically so that
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they can, you know, accomplish whatever it is they're trying to accomplish. And I think it's really important for them to
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know that when you look at the numbers and what Canadians think, that you can not lose votes today by supporting LNG.
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That's what we heard from the pollster who explained this. You could pass all the regulations needed to
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get pipelines built and LNG plants approved, and that's not going to cost you power. That's really
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important for politicians, not just federally, but also in BC. That's where a lot of really important
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decisions are going to affect a next wave of decisions. You know, we've had 10 years, Corey, 10 years
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of inaction. You go back, you talked about the 15 projects that, you know, most of which never came
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about. A couple more of those can go forward. So that we don't have a second lost decade. I mean,
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that would be the tragedy that having seen what can happen, or not happen, I should say in 10 years,
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we go into another decade and come to the same result. That would be a true travesty and loss for
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for Canada. So, I mean, one of the areas that opponents to hydrocarbon development like putting
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out, and I see that your group, Resorts Works, put out a good report on that is subsidies and
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incentives. I mean, people like saying, oh, oil companies are just pulling in all these subsidies,
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and it's costing Canadians a fortune to keep maintaining hydrocarbon development and these
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things. But I mean, there's a lot of misinformation kind of going on when people talk about what's a
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subsidy or what isn't, or how much is actually going into the energy sector, if at all, in some
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cases. I mean, it's tax deferrals and things like that, but it's kind of a complicated area for people.
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Well, let's simplify it. If you're seeing that message coming at you, just ask the question,
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is someone trying to affect me by making me hate big business? Are they trying to take things away
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from personal responsibility? Because you could equally say of these things, oh, it's, you know,
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Joe and Jane down the street, they're causing this problem because they want to have a warm house.
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They want to have a car that can take their kids to school. Those people are evil. You could equally
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say that. But instead, we have the lobbyists who are pursuing the, you know, extermination of Canadian
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opportunity, who are saying big, big business is trying to get something for nothing so they can,
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you know, get all these profits. Well, I think anyone, whether you don't have to be a small business
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owner or a manager and company, you just have to manage a household budget. I mean, it's we,
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everyone who, who plugs in that way knows this. If you're just pointing the finger at someone else
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and saying it's on them right away, we can be suspicious of that. It's about personal
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responsibility. So when I see these subsidy arguments, it's not about subsidies. Actually,
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the Ministry of Finance in Ottawa has gone through all the so-called subsidies, and they've,
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they've removed them, they'll tell you that. What they have, though, are incentives. And
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in public policy, without getting into the weeds on this, you know, it's an instrument of every
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government to encourage people to do things that the government prefers them to do, and not do things
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that government would rather they don't do. And that's how taxes are used. That's how all kinds of
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policy instruments are used. And that's normal. But what's happened is the anti fossil fuel activists are
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taking instruments like that and pretending that they are subsidies. They're painting them as these
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sort of free handouts when really they're anything but. And that's, I think, important to understand
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if you're hearing this stuff. It just doesn't add up, this argument.
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No, we hear it a lot. And it's just a hard one to counter because it's easy to throw it out there
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and just cause the doubt. And it takes a little while to explain to somebody, you know, putting off taxes
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when they're putting in a heavy capital investment on something like an oil sands mine doesn't mean
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you're giving them a check or cutting them money. It just means that you're not taking from them
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until they start bringing a return in on their funds. But the disingenuous way that they paint
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that as a subsidy causes a lot of mistrust with a lot of our energy sector industries, unfortunately.
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Yeah. Well, next door to Alberta and BC, there's a spending spree going on
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on the social priorities of the new premier, Premier Eby. He will be going to the polls,
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no doubt, at some point to get his own mandate to run a government. For now, he is obviously
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seeking to make his mark by spending on housing and health care and all kinds of social programs.
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You might ask, well, where's he got the money? Well, it turns out he's got a ton of money because
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high natural gas prices have produced a bounty of revenue for the BC government and he's spending it.
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So, you know, for someone in David Eby's position, and he hasn't become famous or influential or
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powerful by being seen supportive of industry. He's more with the kind of social, environmental,
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urban crowd that got him in. I think someone like that, you know, if you're running a Canadian
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province, any Canadian province, at some point you need to be practical and pragmatic about things
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because it's about the people. It's not about the politics. And to serve the people of British
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Columbia, any premier will have to recognize that you need to have the money coming in so you can
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spend it on whatever it is, your priorities are. If that's housing, affordability, then do that.
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But you need to acknowledge where it comes from. Yeah. Well, reality always sinks in
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in the end, one way or another, but it'd be better to have foresight rather than, you know,
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So before I let you go back to the land of the Ottawa crowds over there and making the case,
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is there more you'd like to share with our viewers today before I let you go?
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Yeah. You know, I think we have in Alberta an enormous amount of gas and opportunity to be part
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of that. I think that if someone's listening, you know, call your MP's office. You know, that's what a
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lot of pressure groups do, whether they're organized or unorganized and tell them something
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because the staff, you know, take that down and they may not, you know, put it in the hands of
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the MP right away, but they, you know, it's their job to do that. We might feel like we're just
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individuals and can't influence anything, but you know, we can call our MPs and tell them what we
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think about things and try to have some, you know, some notes about what you want to say and make sure it
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makes sense and do that. Just take a minute or so to do that or write them a letter or send them an
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email. Great. No, I appreciate that. Yeah. When there are electoral butts on the line, it's amazing
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how receptive they can get. I mean, the reality is they do follow public opinion. We just have to
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let them know what we want to see. So, and your website, it's resourceworks that you're at. Is that
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resourceworks.ca? I'm sorry. I don't know. It's resourceworks.com and thanks for showing it on the
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screen there. What you see there is a little clip of my recent presentation, again, here in Ottawa.
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I come here quite a bit nowadays at the Standing Committee on Natural Resources, where I talked about
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a number of things, including a little country of Qatar. At that time, the World Cup was on.
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I noted that this country was basically able to pay the $220 billion tab for hosting the World Cup
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because of natural gas exports. Most of it is LNG. And, you know, we could be just as competitive.
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We could be a superpower of energy like Qatar is, but we've chosen not to be, which is,
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you know, a lost opportunity. And we can change that.
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Absolutely. All right. Well, thanks for coming on today, Stuart. And I'll let you carry on with
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