Kevin Krausert is the president & CEO of Beaver Drilling, co-founder of the Avatar Program, and the drilling rig executive chair of the Canadian Association of Oilwell Drilling Contractors
For the past five years, I have had the responsibility and the privilege of leading Canada’s oldest oil and gas drilling company through the ups and downs of an industry facing unprecedented disruption and rapid technological change. The global realization of climate change has forced all Canadians to rethink how we use and produce energy.
During the past two weeks, COVID-19 and the Saudi-Russian oil-price war have led to the most dire market conditions our industry has faced. And there is no doubt that the economic impact will be devastating not just for the tens of thousands of Canadians who work in the energy industry, but every Canadian.
The COVID-19 crisis will eventually end, but Canada has to make some smart and strategic choices in the coming days about how to build a cleaner and more resilient energy industry that can lead the world to a lower-carbon future. There is a real opportunity to use our current crisis to pivot to a new energy future all Canadians can support.
Canada’s energy industry is part of the solution to the global climate crisis. We are developing Canadian technologies and processes that dramatically reduce carbon emissions and provide the world with cleaner sources of energy. Now is the time for all levels of government to put aside their past differences and implement real solutions.
Global scientific, governmental and industry consensus is that the world must move to net-zero GHG emissions by 2050. They also agree that it’s impossible to eliminate fossil fuels and still meet the planet’s growing energy needs.
There are many initiatives afoot: exporting liquefied natural gas has the ability to dramatically reduce the world’s carbon footprint by displacing coal in the energy-hungry developing world; carbon capture and sequestration (CCS) technology allows us to decarbonize many heavy industries such as steel production and cement, which are otherwise nearly impossible to decarbonize fully; enhanced oil-recovery processes and carbon trunk lines hold the power of turning oil into a renewable energy source; and blue hydrogen (hydrogen made from natural gas) holds the potential of transforming much of Canada’s existing oil and gas infrastructure into a net-zero energy source.
As governments at all levels look at salvage measures for the industries most impacted by COVID-19, including Canada’s energy industry, they must choose between investing in the status quo oil and gas sector (which was already struggling with disruption) or building a new energy future for our country, which empowers the workers and innovators in the industry to lead this change.
Canada can use this crisis as a pivot for transformation. First, we need income protection for the thousands of oil and gas workers, from British Columbia to Newfoundland and Labrador. These are among the many hard-working Canadians who will imminently feel an impact from the crisis. The initiatives already taken by the Governments of Canada and Alberta, along with the recommendations of the Business Council of Alberta, should be applauded.
Secondly, measures need to be taken to ensure that the energy companies with the technology, people, training systems and processes that can pivot to a new energy future need to be protected. Unfortunately, not all energy firms will survive this. Canada is developing some of the most transformative technology in the world and we cannot let these innovations perish.
Thirdly, these new initiatives in the oil and gas sector – which are already reducing the carbon footprint for upstream fossil fuels – have struggled for financing as they have not been viewed as green enough during the energy debates of our recent past. This needs to stop. With our new reality, I’m optimistic the new funding structures of Business Development Bank of Canada, Export Development Canada and Alberta Treasury Branch will realize this much-needed goal.
Finally, a non-partisan Energy Sustainability Council must be established to work with governments, industry, First Nations and universities to oversee these initiatives with the resolute goal of empowering workers and enabling the energy transition. All of these initiatives are within the current wheelhouse of Canada’s energy sector and are only possible with a resilient energy sector. We can’t bench our best players during this time of crisis.
In 1962, U.S. President John F. Kennedy famously said, “We choose to go to the Moon in this decade.” And, amid the crisis of their day – the threat of nuclear war – the Americans did it. By aligning the highest hopes and greatest aspirations of our species during a time of crisis, something truly remarkable and unprecedented was accomplished.
My deep and profound love for our country knows we can accomplish the towering challenge of our time: abundant energy and rapid decarbonization. The COVID-19 crisis can be the turning point we needed.
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