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Al Monaco doesn’t deal well with sitting still.

As head of Canada’s largest utility, Enbridge Inc.’s chief executive is used to being on the road. The company’s pipelines carry three million barrels of crude oil a day – 25 per cent of the North American total – and 20 per cent of all natural gas, about 18 billion cubic feet. Mr. Monaco makes it a priority to spend time with customers at each end of the pipe: producers in Alberta’s oil sands and refiners on the Gulf of Mexico.

The 60-year-old CEO is also evangelical about building relationships face to face. Want support from Indigenous groups or the anti-pipeline Governor of Michigan (a.k.a. Democrat Gretchen Whitmer)? Mr. Monaco knows he must meet on their turf. Need cash to pay for $11-billion in projects? That requires winning over bankers in Toronto and New York. Trying to knit a Canadian culture into the fabric of the 6,000-strong Houston-based work force of Spectra Energy, acquired three years ago for $37-billion? You’ve got to go Texas. (Enbridge owns three aircraft, including a Falcon corporate jet, to carry its executives around the continent.)

Then came COVID-19. Enbridge executives began planning for a potential pandemic back in January. In early March, the company activated emergency control centres in Edmonton and Houston. Its staff was separated from existing facilities at pipeline hubs in Alberta and Texas, to ensure oil and gas would continue to flow even if some employees got sick or were quarantined. Enbridge also rearranged the furniture at its call centres to ensure employees could take customer calls with a hockey stick’s worth of space between them. “We’ve faced hurricanes in the Gulf and floods in Calgary," says Mr. Monaco. “We’re well-versed in contingency planning.”

As for Mr. Monaco, like most of us, he suddenly found himself house-bound – a non-essential employee. In a time of crisis, he’s confined at home in Calgary, running one of North America’s largest energy companies off his laptop in a modest home office. When asked about the last time he spent more than a consecutive week or two in one place in his eight years as CEO, he pauses and then says: “I honestly can’t recall.”

Mr. Monaco admits he thrives on a jam-packed daily schedule – he’s described in every media profile as having “restless energy.” That helps explain how he managed to earn an MBA at the University of Calgary while working full time at Home Oil Co. and raising three sons with his wife, Laurie (all three kids are out of the house now, meaning it’s just the two of them on lockdown).

Being cooped up at home right now is extra hard for Mr. Monaco as the industry landscape shifts.

Last week, rival TC Energy Corp. moved ahead with its Keystone XL pipeline, snagging a US$1.1-billion investment from the Alberta government. As he told a virtual Scotiabank conference after the deal was announced, Mr. Monaco always assumed Keystone would be built, and he was pleased to see it move forward – customers pump more than enough oil and gas to fill new pipelines from both TC and Enbridge.

ENBRIDGE’S NORTH AMERICAN

ENERGY INFRASTRUCTURE

KEY

Liquids Pipeline

Liquids Pipeline

(proposed)

Natural Gas Trans-

mission Pipeline

Natural Gas

Gathering Pipeline

Natural Gas

Liquids Pipeline

CANADA

U.S.

Enbridge moves

25% of North America’s crude

oil and 20%

of natural gas

JOHN SOPINSKI/THE GLOBE AND MAIl

SOURCE: ENBRIDGE

ENBRIDGE’S NORTH AMERICAN ENERGY INFRASTRUCTURE

Enbridge moves 25% of North America’s crude oil and 20%

of natural gas

CANADA

U.S.

KEY

Liquids Pipeline

Liquids Pipeline

(proposed)

Natural Gas Trans-

mission Pipeline

Natural Gas

Gathering Pipeline

Natural Gas

Liquids Pipeline

JOHN SOPINSKI/THE GLOBE AND MAIL, SOURCE: ENBRIDGE

ENBRIDGE’S NORTH AMERICAN ENERGY INFRASTRUCTURE

Enbridge moves 25% of North America’s crude oil and 20%

of natural gas

CANADA

KEY

UNITED STATES

Liquids Pipeline

Liquids Pipeline

(proposed)

Natural Gas

Transmission Pipeline

Natural Gas Gathering

Pipeline

Atlantic Ocean

Natural Gas Liquids

Pipeline

MEXICO

JOHN SOPINSKI/THE GLOBE AND MAIL, SOURCE: ENBRIDGE

But Enbridge’s Canadian clients are reeling, thanks to the month-long price war between Saudi Arabia and Russia, which effectively cut world crude prices in half and slashed Canadian prices from US$40 a barrel to just $4 (though there were signs late in the week that the two countries had declared a ceasefire). As a result, Mr. Monaco said recently he expects Canadian producers to slash output by up to 25 per cent this year.

Enbridge is largely insulated from swings in commodity prices, since it sets prices for transporting oil and gas in long-term contracts. But an oil price war or prolonged recession that drives down either supply or demand for energy – or both – could translate into lower volumes across the company’s 192,000 kilometres of pipelines. That uncertainty, along with the broader COVID-19 market meltdown, explain a 21-per-cent decline in its stock price since the beginning of the year.

So, from his home office – decorated with a photo of the boat that brought his parents to Canada from Italy in the 1950s – Mr. Monaco is using this forced downtime to burnish Enbridge’s credentials. He’s on the phone most mornings by six, checking in with employees, customers, regulators and investors. Dressed in a favourite black sweater, rather than the CEO’s more traditional blue suit, he makes frequent appearances at virtual investor conferences. His pitch: Enbridge’s strong balance sheet and deep ties to the world’s largest energy companies differentiate it from rivals.

Enbridge’s boss is also looking ahead to a time when the company can shift from crisis management back to growth strategies. Part of that planning is focused on winning the social licence it needs to build new pipelines when a large segment of the population has turned against fossil fuels.

In 2016, a federal court blocked its planned Northern Gateway pipeline, ruling the federal government had failed to adequately consult with Indigenous groups. The CEO says Enbridge has always prioritized good relations with Indigenous communities, and he has made a point of staying in regular contact with First Nations leaders throughout the pandemic.

He’s also launched a charm offensive, putting in calls to U.S. regulators and government officials who will determine the fate of planned pipelines in Minnesota and Michigan. In a series of recent virtual conferences, Mr. Monaco said Enbridge is making headway on projects in both states thanks to a combination of lobbying and litigation.

Closer to home, the born-and-bred Calgarian has been quick to praise politicians for stepping up in a crisis that’s expected to leave one in four Albertans unemployed. “The provincial and federal governments are taking decisive action,” he says. A long-time advocate of using Canada’s energy resources to help fund the transition to an economy that’s less reliant on fossil fuels, Mr. Monaco says he’s encouraged that both Alberta and federal leaders “recognize we have to protect the energy industry.”

Mr. Monaco is an accountant by training. His first corporate job was tracking inventories as an analyst at Home Oil. After the company was acquired and its management team let go, he joined a predecessor to Enbridge in 1995 and was named CEO seven years later. The accounting background bubbles up in the way Mr. Monaco answers questions, occasionally numbering his conversation points.

What has Enbridge learned from the coronavirus crisis? “Two key learnings. First, it reinforced the need for a robust IT team to support the whole organization and the importance of cybersecurity," he says. “Second, COVID-19 reinforced the need to ensure our critical infrastructure can stay up and running.”

What are his priorities? “There are four things,” he replies, then rhymes them off: protecting and supporting Enbridge’s 12,000 employees and millions of customers; setting goals for the next 60, 90 and 120 days to recognize the shifting landscape; ensuring the company has the financial strength to fund essential projects; and finally, getting a long-delayed pipeline built to link Alberta oil sands to eastern refineries.

In fact, Enbridge has a list of 14 major projects, along with maintenance work, to keep it busy, and by mid-March, with North American businesses going dark, the company’s engineers and financiers began reviewing that list, with a total tally of $11-billion over three years. Big-ticket items include $2.9-billion to complete the final U.S. section of the Line 3 pipeline, which runs from Alberta to Minnesota, and rebuilding part of a second pipeline, Line 5, in Michigan. Enbridge also plans to spend $1.8-billion on an offshore wind farm in France.

Some of this work might be “deferred and delayed” due to the pandemic, Mr. Monaco says. But $5-billion in funding for new projects is already locked down, and the CEO is confident he can raise an additional $6-billion from lenders. Enbridge has relationships with about 50 banks – the executives of which are on the other end of some of Mr. Monaco’s early-morning calls. Collectively, they’ve pledged to lend the utility up to $12-billion, if needed.

Sitting at home, talking about Enbridge’s financial muscle and growth plans, Mr. Monaco comes about as close as any energy CEO ever can to talking trash about rivals.

Take the railroads. When Alberta oil companies pumped more crude than pipelines could handle last year, the railways saw an opportunity to grab customers by shipping oil in tanker cars. Mr. Monaco expects to win back that market share this year and next, as oil production falls and Enbridge brings on additional capacity. The economics of oil by rail, he says, just don’t make sense, since pipelines can get oil to refineries on the Gulf coast for about $8 a barrel, while the train trip costs roughly $20.

Where some companies are coy about revealing clients, Mr. Monaco wants everyone to know the utility has long-term contracts with Canada’s largest, deepest-pocketed players – Imperial Oil Ltd. and Suncor Energy Inc., top the list – providing a source of dependable future cash. During a Merrill Lynch virtual conference last week, he talked up the massive reserves among Enbridge’s clients, adding: “This is a bit of a contrast to the shale situation.”

He didn’t go full Rodney Dangerfield on the already beat-up U.S. shale oil sector. (Whiting Petroleum Corp., once the largest oil producer in North Dakota’s Bakken region, filed for bankruptcy last week, and more failures are expected.) But Enbridge’s boss wants investors to understand its oil sands clients will be sending crude down the company’s pipelines for decades to come, while shale plays are now measuring their lifespan in months.

To date, Mr. Monaco’s defining moment as CEO has been the $37-billion Spectra acquisition. The deal added a growing natural gas business to Enbridge’s portfolio and helped the utility maintain its track record for hiking dividends, with average increases of 11 per cent annually over the past 15 years.

Could the coronavirus crisis open up the opportunity for another major deal?

Mr. Monaco says the pipeline sector “is bound to experience some dislocation, some distress," which means the barrier to another takeover is simple: Quality utilities such as Spectra are unlikely to run into trouble and almost always command a premium price. But hunkered down at home, marshalling Enbridge’s resources in preparation for future growth, Mr. Monaco says his teams are tracking potential targets.

"We’re always looking.”

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 27/03/24 4:00pm EDT.

SymbolName% changeLast
ENB-T
Enbridge Inc
+0.89%48.81
ENB-N
Enbridge Inc
+0.47%36.16

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