Timothy Egan, President and CEO, Canadian Gas Association:
This is the first time there has been a dedicated Minister for the natural gas sector. Why was it important to the Government of Alberta that there be a Minister focused on this specific industry?
Hon. Dale Nally: We have an abundance of natural gas in Alberta, but we unfortunately also have an industry that has been in absolute turmoil for quite some time. Many of our natural gas producers, specifically dry and shallow gas, had been hemorrhaging cash for years when I first came into this role. The price of AECO, at its lowest over the summer, was -$0.10. We had companies on the verge of bankruptcy and nobody was watching out for them. Because of this, the industry actually came out with their own roadmap for recovery1 that included a number of recommendations they thought could save Alberta producers. They provided this report to the previous government, who ignored it. Premier Kenney in his wisdom saw that our natural gas sector had great potential for our province and that was going to stay an important asset for Albertans and Canadians. Creating the position of the Associate Minister of Natural Gas was critical to ensuring the recommendations in the Roadmap would be implemented. Energy is such a big portfolio in our province and natural gas has not traditionally received the attention it deserves.
Egan: On the delivery side, we are seeing customer growth rates more than double the population growth rates in Canada – our sense is that Canadians want more access to natural gas. And yet, many policy makers – in other jurisdictions – are very critical of the product and the industry. What more do you think industry should do to engage those policy makers?
Nally: I ask myself, my advisors, and my department this question daily. This is an uphill battle: we are up against an organized, well-funded opposition, not “grassroots” movements, and it’s important that we are all prepared to advocate for our natural gas industry. Here in Alberta, we have an opposition that is aligned with extreme environmental groups like Extinction Rebellion, where MLAs advocate incorporating these types of perspectives into our classrooms. It’s frustrating as the Minister who is responsible for natural gas to see willful ignorance of facts, because there are so many reasons why natural gas is great – not only for Canada’s economy, but for global emissions reduction as well. The single greatest thing we can do to reduce global emissions is to get our natural gas to international markets and transition coal-fired power plants to natural gas. So, we encourage industry and industry advocates to be strong in their communication that we must have a global focus on climate change if we want to encourage meaningful impact on the environment.
Egan: Do you think industry is doing enough to get that message out?
Nally: I’ve seen the industry do a tremendous amount in recent months on producing communications materials that state, “we are going to stop apologizing for the great work we do”. It’s a wonderful step in the right direction but I do think we need to do more. There needs to be collective advocacy amongst upstream, midstream, and downstream players on promoting Alberta’s resources.
Egan: Part of the challenge facing the industry of late is the push to ban new natural gas connections. Several municipalities across North America have passed bans. Recently, Arizona’s Governor signed into law a “ban on bans” – using state authority to prevent municipalities to enact bans. Provinces have similar authority to stop such municipal bans. Is this something you would consider?
Nally: At this point I would say that’s unnecessary in Alberta as the vast majority of Albertans recognize that responsible energy development is vital for our province. Albertans embrace the fact that responsible energy development as represented by natural gas is part of the solution, not the problem. But let me just say that if it did become necessary, this government would most certainly act. We were elected on a campaign of standing up and fighting for Alberta’s energy industry and we intend on keeping our promise.
Tim: Are you monitoring what other provinces are doing on this? Do you have allies across the country you feel are like-minded?
Nally: Absolutely. The message I have received from global investors has been that we need to be aligned in our messaging. We need to be aligned as provinces, and the federal government needs to be aligned with us. And, I am happy to say that governments – provincially across the country and at the federal level – embrace natural gas. They support getting natural gas to tidewater and getting our LNG to global markets.
Egan: As you have noted, Canada has a significant opportunity with LNG. Aside from the global export opportunities LNG can bring, CGA members are also advancing LNG opportunities for domestic opportunities like the bunkering of vessels. Can you discuss what more industry like ours and governments can do to keep advancing Canadian LNG, both domestically and internationally?
Nally: Anything we can do to promote LNG is going to be a good thing because you’re right – we typically think of getting our natural gas to tidewater but we do also have the technology to develop small scale liquefaction units that would allow us to truck LNG to remote communities. Of course, we would prefer to see pipelines being built into these communities, but I am always encouraged by the innovation industry continues to demonstrate when facing various hurdles.
Egan: The natural gas industry is working on advancing innovation across the value chain through our Natural Gas Innovation Fund (NGIF). This includes new technologies in extraction, processing, transportation and end-use. It also includes development of renewable gases such as renewable natural gas and hydrogen. What is your opinion on the innovation agenda and what more should we do on it?
Nally: One of my messages when speaking to global investors is that we have done a phenomenal job of making our clean energy even cleaner. LNG that is being exported off the West Coast is already among the cleanest in the world, and, I am a firm believer that the last drop of LNG used on this planet should come from right here in Alberta, because it will be the cleanest. Environmental technologies are developed in western-democracies like Canada, and we must continue to encourage industry to invest in those technologies and programs like the NGIF so we can continue to make our energy products even cleaner.
Egan: You have children and you have a Master’s in Education, both of which give you a perspective on literacy. What are your thoughts on energy literacy in Canada, particularly with youth but also adults? Do you think there needs to be a stronger focus on energy literacy and how do you think this affects the energy and environment conversations we are currently having?
Nally: Well when we look at what happened with Coastal Gaslink, many of the protesters didn’t even understand what they were blockading so yes, there absolutely needs to be a stronger focus on energy literacy, particularly within our school system. We need to educate our youth on the important role that natural gas and responsible energy development plays in our day-to-day lives, both at home but also globally. Most Canadian kids now-a-days, I don’t think they appreciate the important role that Albertans play in responsible energy development, making positive impacts to combat climate change, and reducing energy poverty around the world. Curriculum and education are definitely a big part of it. It’s a big part of the advocacy.
Egan: You have been in this role for almost one year (Nally was sworn in on April 30, 2019.) – any reflections on the job so far, what you have learned and where you might adjust your focus going forward?
Nally: It’s been an absolute whirlwind at a hundred miles an hour, but I’m so proud of the team we have in place and the tremendous things we’ve been able to accomplish. We’ve taken a very collaborative approach with industry to bring stability to AECO and also provide much-needed tax relief to dry gas producers, with thanks to my colleague Minister Madu (Minister of Municipal Affairs). Looking forward, we are going to continue focusing not just on infrastructure in Alberta, but also on getting our natural gas to tidewater. Petrochemicals are also going to play a significant role within the natural gas portfolio. Petrochemicals are the largest manufacturing sector in Alberta right now, which most people don’t realize, so we will continue to promote Alberta as a destination for world-class petchem facilities and look at how we can continue to add to the natural gas value-chain.
Egan: Minister, one of the conversations around all hydrocarbons is what alternatives might exist and how the energy sector might play a role in some of those alternatives. Two of those that are part of our conversations are renewable natural gas and hydrogen. Research is underway in Alberta on hydrogen and of course a key source of it could be natural gas. Any thoughts you might want to share on either of those?
“Natural gas out of the Western Canadian Basin – has the ability to reduce global greenhouse gas emissions and energy poverty in a very real way.”
Nally: We recognize that hydrogen is going to play an important role as we look to the future. Energy transition takes time but we absolutely see hydrogen being an important part of that transition. This government supports Alberta’s energy industry, which means all responsibly developed energy.
Egan: We appreciate you taking the time to speak with us – is there anything in particular you’d like to add that we didn’t discuss – anything in relation to your role as Associate Minister of Natural Gas or our role as the voice of the natural gas delivery industry in Canada?
Nally: The message I’d like to leave you with is this: Natural gas out of the Western Canadian Basin is clean, secure, and ethically sourced. It has the ability to reduce global greenhouse gas emissions and energy poverty in a very real way, and we need the help of industry and industry advocates to help promote this message, whether it be locally, across Canada, or abroad.
Note: Following this interview, on March 24, 2020, electricity was added to Hon. Dale Nally’s portfolio and he was sworn in as the Associate Minister of Natural Gas and Electricity for the Province of Alberta.