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Europe’s energy crisis has Canada weighing future of oil and gas industry – Global News



At 76 years old, Gwyn Morgan is not one to sit still.

The former oil executive, recipient of the Order of Canada and self-described “outdoors guy” remains a long-distance runner and led Global News on a jog through side streets and forest paths of Vancouver Island during an interview about his career — itself something of a marathon.

He says he got used to early mornings working alongside his father at a “hardscrabble” farm in Alberta. An engineer by trade, he made his career in the province’s oil and gas industry from the 1970s to the ’90s. He would found EnCana, known today as Ovintiv, and reigned at the helm of the gas giant when it overtook Royal Bank of Canada as the country’s most valuable company in 2005.

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It was around that time Maclean’s magazine dubbed him “the most powerful man in Canada’s oil patch.”

“It was a golden time for the oil and gas industry,” he recalls in an interview from the dock of his home near Victoria, B.C., where he has easy access to the beauty of Canada’s west coast.

Gwyn Morgan, president and CEO of EnCana Corp., smiles before addressing investors at the company’s annual meeting in Calgary, Wednesday, April 27, 2005.

(CP PHOTO/Jeff McIntosh)

The retired oil patch veteran tells Global News he considers himself an “environmentalist” — he even has a compostable toilet at his estate.

Yet Morgan has been among the loudest voices chiding the Liberal government for not doing more to build new pipelines to get Canadian oil and gas to new markets.

He’s called Prime Minister Justin Trudeau’s policies towards Canada’s economically vital oil and gas industry a “fiasco” and has gone as far as to say that the decline of the sector has left him “ashamed” to be a Canadian in recent months.

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When it comes to climate change, Morgan says he’s “not a denier” and supports decarbonization efforts.

“There’s being an environmentally-aware and concerned person and understanding, also, what the realities are,” he says. “It doesn’t mean we shouldn’t be trying, but we have to do it strategically.”

Morgan’s views might be at odds with climate activists and growing investor sentiment against fossil fuel production, but experts caution against undervaluing the importance of Canada’s oil and gas sector to not only the domestic economy, but to global energy security.

European energy crisis puts Canada in the hot seat

The devastating impacts of climate change and the dire timelines to control greenhouse gas emissions have long driven efforts to decarbonize and set clean energy transition goals.

But Russia’s war in Ukraine has put the world’s energy crisis in sharp focus.

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The world is reliant on oil. The war in Ukraine could change that

Europe is bracing for a lean winter as Russia — the European Union’s primary provider of gas used to heat homes — stymies energy deliveries.

While Russia cites maintenance of the Nord Stream 1 gas pipeline as the primary cause for delay, the west has accused President Vladimir Putin of crafting an energy war in an attempt to weaken support for Ukraine.

And if Russia is indeed using its vast resources as a weapon in the war on Ukraine, critics such as Morgan charge Canada with loading the gun for Putin.

Experts including commodities analyst Rory Johnston say Canada is not currently in a position to meaningfully offset reduced oil and gas shipments from Russia.

While allies such as Germany have floated Canadian energy as a reliable replacement for Russian liquefied natural gas (LNG), a project to get those resources overseas has not been approved and would not be ready in time to heat European homes this winter, Johnston says.

That limitation butts up against political assurances that Canada will support Europe through their crisis.

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“We have a political responsibility to do whatever we can to help them with this energy crisis that they are going through,” said Deputy Prime Minister and Finance Minister Chrystia Freeland on Aug. 25.

“They know that Canada is there, and we are working on all the practical ways that we can support Europe.”

But had Canada continued with pipeline-building policies forged under former prime minister Stephen Harper, Morgan argues the country would be in a position to help.

“Our oil production would be at a level right now where Russia doesn’t have any power. … They wouldn’t be the swing producer. There’s no doubt about that,” he says.

Pipeline building ‘extraordinarily’ slow in Canada

Canada’s pipeline progress in recent years has faced intense scrutiny.

The federal government purchased an expansion to the Trans Mountain pipeline in 2018 for $4.5 billion in an effort to get the project to completion after Kinder Morgan threatened to kill it amid environmentalist opposition. But it continues to face hurdles.

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The Keystone XL pipeline, meanwhile, faced back-and-forth approvals and blocks from successive U.S. regimes before President Joe Biden put a kibosh on the plan shortly after taking office.

Johnston tells Global News that even if Keystone XL were approved today, it would take half a decade of investment and construction before a meaningful amount of Canadian resources made land in Europe.

“Unfortunately, part of the stability of our industry comes from the fact that we move extraordinarily slowly,” he says.

But Johnston notes that even after the war in Ukraine ends, European allies will likely never again be comfortable relying on Russian energy to the degree they did before — opening an opportunity for Canadian oil and gas to play a role in global energy security in years to come.

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“I think it’s important not to think about, always, what we can do immediately, but how we can prepare for the next crisis. Because this will not be the last one,” he says.

Canada’s status as a resource-rich but increasingly difficult place to get pipelines built has not only affected the country’s reputation as a key energy supplier but as a trusted ally on the global stage, Morgan says.

“Canada became well-known as a place where you simply can’t get anything done. That is probably the worst kind of reputation you could have,” he says.

“Right now, we’ve got people dying and a war going on. And that is when I said, ‘I am ashamed to be a Canadian.’”

Oil and gas still the ‘backbone’ of Canadian economy

Despite setbacks in Canadian pipeline building, the oil-and-gas sector remains a “backbone” of Canada’s economy, says Tu Nguyen, economist and director of environmental, social and governance at RSM Canada.

At just under 10 per cent of Canada’s annual GDP, oil and gas is “one of the largest contributors” to the national economy, she says.

Much of this output revolves around the Albertan oil sands, the fourth-largest reserve of oil in the world and the largest such source outside of the powerful Organization of the Petroleum Exporting Countries (OPEC).

The oil-and-gas sector usually makes Alberta an outsized contributor to the Canadian economy — it feeds more into the federal budget than it receives, in other words. This had been the case since the mid-1960s until the COVID-19 pandemic saw Albertans receive more from the feds than usual due to emergency response benefits in 2021, per a report from the National Post.

Alberta seems to have bounced back to form in 2022, however, with a ranking of the 30 top-performing companies on the Toronto Stock Exchange released this week showing half were headquartered in the province and the oil and gas sector comprising the bulk of the list.

But investments in the oil sands — a particularly high-emissions source of fuel — have waned in recent years.

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Nguyen says that oil extraction projects have lost favour in both the court of public opinion and the investment community in the past five or so years as investors realized that economic development would have to shift away from fossil fuels to foster a “liveable” future.

“That leads to hesitation in investing in the oil and gas industry,” she says.

Many Canadians who live outside Alberta may not realize the impact the oil sands have on their daily lives, says Johnston.

Prices soaring past $2-a-litre at gas pumps across Canada earlier this year could mark a wake-up call for many Canadians previously unconcerned about investment in the oil sands.

A gas station sign is seen in front of a wall mural as gas prices surpass $2 a litre Monday, May 9, 2022 in Montreal.


The Canadian dollar has historically performed well when gas prices rise, giving consumers a “safety blanket” that protects their purchasing power and mitigates pain at the pumps, Johnston says.

But a lack of investment in the oil sands has “weakened the relationship between oil prices and the Canadian dollar,” he says. Canada’s dollar value did not experience traditional highs even as a tight supply of gas worldwide sent prices soaring this past spring and early summer.

“That’s the issue that a lot of Canadians don’t fully understand, is that just because they’re not personally affected by the changes in investment out west, they’re still fundamentally, very personally affected by the changed relationship between the price of oil and the Canadian dollar,” Johnston says.

Governments, industry players and markets worldwide have recognized “the existential importance of decarbonizing our economies,” Johnston says, and have adopted emissions targets and policies to accelerate transitions to renewables and technology like electric vehicles.

But fossil fuel use could prove sticky because of the enormous role it plays in sectors such as transportation — long-haul trucking and air travel are two major sources of oil demand that will be “much harder to replace,” he says.

With increasing attention paid to global carbon emissions, pressure will be intense on oil sands producers in the next few years to clean up and reduce emissions tied to fossil fuel extraction, he says.

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Canada’s status as a politically-reliable source of fuel makes it an attractive target for investment to meet future energy needs, Johnston says, even as he projects global oil demand could peak around 2030.

“This is not going to be a smooth transition. It’s going to be bumpy,” Johnston says.

“While I do believe that governments and policymakers should continue to press down on reducing demand for these fuels, this entire kind of connected suite of crises are highlighting how important it is to have a reliable supply when you need it.”

Where to go with oil and gas?

Climate scientists could not be clearer that the status quo on greenhouse gas emissions is not good enough. Current policies have Canada on a trajectory for hundreds of billions of dollars in damages tied to wildfires on the west coast and lost revenue from reduced seafood harvests in the east, according to a February report from the Intergovernmental Panel on Climate Change.

Yet oil and gas remains the lifeblood of Canada’s economy. It’s a critical source of funding for government services like health care. It has insulated Canadian households against economic downturns before and it’s become a front in Russia’s war on Ukraine.

“When we look at how much oil and gas really contributes to our domestic economy, how are we going to decarbonize without hurting our economy? And that is, I think, that’s a difficult question,” says Nguyen.

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Walking along Bay Street in Toronto, the epicentre of the country’s financial activity, Nguyen tells Global News she sees a possible path to reconcile these seemingly opposing forces pressing on Canada’s energy sector and a future economy that doesn’t rely on “volatile” oil and gas.

She notes that some traditional oil companies have already rebranded themselves as “energy companies,” sensing the need to shift their long-term focus.

Shell, for instance, announced this week that it would replace its CEO with the head of the oil giant’s renewables program after years of criticism that it was not investing enough in the clean energy transition.

If Canada is going to protect its economy while keeping its energy industry relevant, Nguyen suggests that these corporations are best equipped with the talent to understand the industry and the world’s energy needs.

“If we want to move forward and decarbonize, we need to consume less fossil fuel. In order to do that, we need to transition to more renewables,” she says. “And it so happens that oil and gas companies just have a lot of expertise, have a lot of capital and human capital in order to invest in renewables as well.”

At the start of 2022, Morgan says he might have agreed with industry observers who had said oil and gas was “sunsetting.”

But he says the war in Ukraine and resultant energy crisis has put the question into a harsher light that could see Canadian oil eventually wrest some power from Putin’s hands and enable the global transition to a cleaner energy future.

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Clean energy needed to escape ‘petro-dictators’ and pandemic uncertainty: U.S. secretary of energy – Jun 22, 2022

© 2022 Global News, a division of Corus Entertainment Inc.

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Canada has picked a new ambassador to China – CTV News



Prime Minister Justin Trudeau has tapped Jennifer May to be Canada’s new ambassador to China, filling a nearly year-long vacancy in the key diplomatic post.

The government announced May’s appointment on Friday, after sources told CTV News and other outlets on Thursday that May—who speaks Mandarin— had been selected to take on the position and that China had signed off on Canada’s pick.

“I am deeply honoured to take up this important post on behalf of Canada and Canadians,” May tweeted on Friday.

In taking on this new role, she’ll become Canada’s lead on stickhandling a fraught relationship with China and will be responsible for advancing business and economic ties between the two countries, as well as “standing up for democratic values, human rights, and the rule of law,” according to the release from Trudeau’s office.

May, who until August was Canada’s ambassador to Brazil, joined Canada’s foreign affairs department more than 30 years ago. Over her career, May has held a series of positions, including executive director of defence and security relations, director of Eastern Europe and Eurasia relations, and has she served in Bonn, Hong Kong, Beijing, Vienna, Bangkok and Berlin.

“A dedicated public servant, Ms. May’s many years of diverse experience on international missions, and her deep understanding of Asia, will serve to manage this important bilateral relationship and advance Canadian interests in China,” Trudeau said in the statement.

Canada has been without an ambassador to China since the end of 2021, when Dominic Barton moved out of the Beijing offices.

Canada has an embassy in Beijing, as well as consulates general in Chongqing, Guangzhou, Hong Kong, and Shanghai. 

Asked by CTV News a few months back what the holdup was when Canada hit the six-month mark without an ambassador, Foreign Affairs Minister Melanie Joly’s office had pledged a representative would be named in “due course,” saying officials continued to engage with China at the “highest levels.”

At the time, former ambassador to China Guy Saint-Jacques said that the notable absence was an indication that the federal government “does not understand” the value of a strong diplomatic presence on the ground.

“Having an ambassador gives you intelligence… because here’s a person who can have access to high-level [information] that other people at the embassy can’t,” he said. “You are depriving yourself from all that useful information.”

Barton publicly announced his resignation on Dec. 6, 2021, just months after helping to secure the release of former diplomat and entrepreneur Michael Kovrig and Michael Spavor.

The two men were arbitrarily detained and held in a Chinese jail for more than 1,000 days. Their arrests are widely seen as retaliation for the Vancouver arrest of Huawei executive Meng Wanzhou on a U.S. extradition request.

Those events launched what would become nearly three years of icy relations between Canada and China.

May’s appointment comes just ahead of Canada marking the one-year anniversary of the two Michael’s release.

It was late on the night of Sept. 24, 2021 when Trudeau made a national address, announcing that Kovrig and Spavor had boarded a plane in China with Barton, and “they’re on the way home.”

With files from CTV National News Ottawa Bureau Chief Joyce Napier, CTV National News Producer Mackenzie Gray and Producer Sarah Turnbull

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RCMP ‘did their best’ in response to N.S. mass shooting: federal Justice Department



HALIFAX — The RCMP’s response to the 2020 shooting rampage that left 22 Nova Scotians dead was far from perfect, but police did their best, the federal Justice Department said Friday.

During the final day of public proceedings at the federal-provincial inquiry into the mass shooting, Lori Ward, general counsel for the federal Department of Justice, said there’s always room for improvement for all policing agencies.

“No response to a critical incident of this magnitude could be perfect, but when this crisis hit, the RCMP showed up, did their best and acted with courage, determination and dedication,” Ward said.

It’s difficult, she added, to separate what was known when the killer was at large on April 18-19, 2020, from what has been uncovered in the years since the tragedy. While hindsight is a valuable tool when used to learn lessons and make changes, it “can also impede a fair and objective evaluation of decisions made in real time.”

On the night of April 18, 2020, a man disguised as a Mountie and driving a car that looked exactly like an RCMP cruiser started killing neighbours and strangers in rural Portapique, N.S.

Ward said she is aware of the criticism levelled at the RCMP for allegedly dismissing witness accounts of the marked police car that the gunman was driving during the 13-hour rampage. She said the idea that the killer could have built such a car himself was beyond reasonable comprehension and was unlike anything police had seen before.

When the RCMP were sent photos of gunman Gabriel Wortman’s replica police cruiser the morning of April 19, 2020, it was initially viewed with “disbelief and incomprehension” by all members, Ward said.

“To assert that (RCMP) should have continued to search for a car identical to their own as opposed to turning their minds to alternatives like decommissioned cars is to view the events through the lens of someone who has now been familiar with the existence of the replica car for more than two years,” she said.

Ward, who at times before the inquiry had tears in her eyes, highlighted that among the “problems and failings” of the RCMP in the aftermath of the shootings was the delay in discovering some of the killer’s 22 victims.

Harry and Cory Bond, the sons of Peter and Joy Bond — a couple murdered in Portapique, N.S., the night of April 18, 2020 — started hearing from acquaintances the next morning about shootings near Cobequid Court, the road where their parents lived.

The summary from the inquiry into the mass shooting says it was about 18 hours after the killings started before an RCMP officer found the Bonds’ bodies inside their home.

“The anguish felt by the families of those victims at the thought of that lapse of time is unimaginable,” Ward said, adding that the delay is among the things the RCMP “wishes it could go back and change.”

To close out the final day of public inquiry proceedings, the three commissioners thanked all those who participated for their contributions and the public for its engagement.

A final report detailing recommendations from the inquiry will be released March 31, 2023.

Commissioner Leanne Fitch said that the inquiry has heard commitments from RCMP leaders and other “institutional representatives” that they will be open to the recommendations and are prepared to receive them.

“We are encouraged by these commitments and call on policymakers, institutions, community groups and members of the public to take action based on the coming recommendations,” Fitch said.

The commission of inquiry said it has conducted interviews with more than 230 people, including 80 RCMP officers, and has released 31 summaries of evidence — known as foundational documents — alongside more than 3,800 supporting materials and exhibits. As well, more than 900 members of the public shared their experiences of the mass shooting through the commission’s online survey.

Members of the public may submit suggestions for recommendations through email, mail or over the phone until Sept. 30.

This report by The Canadian Press was first published Sept. 23, 2022.

This story was produced with the financial assistance of the Meta and Canadian Press News Fellowship.


Lyndsay Armstrong, The Canadian Press

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Jason Kenney, soon out as Alberta premier, pokes fun at himself in speech



Jason Kenney, in one of his last speeches as Alberta’s premier and United Conservative Party leader, riffed at the microphone Friday, drawing laughs as he poked fun at himself and pretended to brush off a call from the prime minister.

“This is clearly not a UCP caucus meeting,” Kenney joked as delegates gave him an ovation in Calgary at the Alberta Municipalities convention.

He then looked to the moderator and said, “Too soon?”

Kenney will be replaced as party leader and premier on Oct. 6. He announced in the spring he was leaving after open challenges to his leadership from party members and a lukewarm 51 per cent vote of support in a review.

In his speech, Kenney lauded the accomplishments of his government and the province, which is once again gushing with oil and gas revenues just months after its economy was pancaked by the COVID-19 crisis.

As Kenney spoke, he got a call on his phone. He let it go to voice mail, saying, “Sorry, Justin. I’ll call back later.”

As delegates laughed, Kenney shrugged and added, “I got nothing left to lose.”

Kenney said his government did what it set out to do after winning the 2019 election. He said while oil and gas revenues have been the engine of the recovery, other policies have helped.

He noted his government slashed the corporate income tax, reduced needless and duplicative regulations, streamlined business approval processes, laid the groundwork to expand in growth areas such as high-tech and hydrogen, added more opportunities to teach skilled trades, and introduced tax incentives to lure more film and TV productions.

“You’re looking at something in the range of $90 billion of capital investment in this province over the next decade alone. This is huge,” he said.

Kenney joked that he had tried — and failed — to land a part in one of those film projects, opining, “I guess I’m proof that politics really is showbiz for ugly people.”

The premier also cautioned municipal leaders to keep their wish lists within reason, given that while times are good now, they can get ugly again in a hurry due to the mercurial nature of oil and gas prices.

He noted that at one point earlier this year, benchmark West Texas Intermediate oil was selling above US$100 a barrel but is now at less than $80, and fell $4 a barrel in the hours before his speech.

“Don’t imagine that we can wish our way out of fiscal constraints,” Kenney said.

Seven candidates, including four of Kenney’s former cabinet ministers, are running to replace him. The winner will have less than eight months before the scheduled general election in May.

Opposition NDP Leader Rachel Notley, in her speech to delegates, promised a new revenue-sharing deal with municipalities and an end to UCP policies that led to higher auto insurance rates, school fees and tuition hikes.

Notley said her party would end the rancorous relationship between the government and the doctors that began after Kenney’s government tore up the master agreement with physicians in early 2020.

She received the largest round of applause of the morning after promising her government would abandon the plan to replace the RCMP with a provincial police force in smaller cities and rural areas.

Kenney’s government has been advocating strongly for the change while municipal and rural leaders worry over who will pay for such an expensive transformation.

“I’m not ever going to endorse a plan that sees hundreds of millions of dollars go toward repainting (police) cars and changing the signs on detachments,” Notley said.

“I won’t download new costs onto your constituents or gaslight you about who’s actually going to pay for it.”

This story by The Canadian Press was first published Sept. 23, 2022.


Dean Bennett, The Canadian Press

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