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Russ Girling's ascent last summer to the top job at pipeline and power giant TransCanada Corp. looked pretty smooth at first. After all, he was inheriting a strengthened company from predecessor Hal Kvisle. Then, the BP oil spill and the Enbridge pipeline leak in Michigan heightened controversy over TransCanada's proposed Keystone XL pipeline to carry oil sands output to the Gulf Coast. All this and cost overruns on a nuclear retrofit means the 48-year-old Mr. Girling inherited both a strong company and a very hot seat.

Was it some cruel joke becoming CEO at this difficult time?

Certainly it would have been nicer to have a summer uninterrupted by things like that. But it comes with the territory and I was fully prepared in the way the company ran the succession management process. I'd been moved into every [major]job in the company and had the chance to be chief operating officer for a year.

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What's with this study released by the U.S. Department of Energy [DOE]on Keystone XL? You say it makes the case that the pipeline reduces foreign oil dependence; environmentalists say it shows the line isn't needed.

The facts are the U.S. consumes 15 million barrels of oil a day. Whether the environmentalists like that or not, that's a fact. Americans import 10 million barrels a day of that from other places. Two-point-two million and a bit comes from Canada, which means eight million barrels come from other places around the world.

If you bring another million barrels a day from Canada - and that's already contracted to refiners in the U.S. - that means they are not going to refine so much crude oil from elsewhere. Bringing in Canadian crude oil will back out crude oil from somewhere else. When we talk to refiners who are contracted to our system, they say they are displacing heavy oil from Mexico, Venezuela, Saudi Arabia. So to suggest that is not going to occur - well, I don't know what facts they would use to back that up.

What about the claim that any U.S. fear of critical oil sands output going to Asia is unfounded because of the barriers to building a new pipeline to the Pacific?

I don't really know what underpins the logic they bring to the table. The logic which I would suggest the DOE had in mind, and we have in mind, is the oil sands are the second-largest reserve of crude oil in the world, and they will get developed. If the U.S. denies access to Canada for that crude oil, there are other places around the world that are interested in accessing that oil and ensuring it gets developed.

How long will the State Department's crucial overview process take?

What we've been told is the State Department has yet to determine if they need any additional information. But at some point, they will issue a final environmental impact statement. Our understanding is there will be a 90-day public-interest-determination process. I'd say we are looking at four to five months of process left and we've kind of tagged that date at mid- to end of summer in terms of a conclusion.

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What's the toughest thing about your job?

After the BP spill, it's the increase in regulatory scrutiny, oversight and public pressure to ensure that what we're doing is in the public interest and it's safe from both the public and environmental safety perspective.

Is your communications role hard for you?

I love this business and I love what I do. I'm proud of our capabilities. Getting the opportunity to talk about it isn't a hard thing. There is a certain satisfaction, especially when we're in this marketplace of misinformation - which can be frustrating.

I like running the business better than talking about the business, but I get to tell people we're not demons, we're actually providing a public service. We're making sure the lights stay on and the economy keeps running every day and we do it behind the scenes and we are usually not in the limelight.

How will a Russ Girling company be different than a Hal Kvisle company?

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There will be subtle differences in style but the company transcends individuals. One difference is our educational background and what brought us to the job. He came up through more of a technical side, and I came through more of a market, business development and finance side. I rely more on the technical people to do their work and I focus on my strengths - where is the market going, and how do we maximize the financial returns?

Is the business still power and pipelines?

It is - and I came to the company as the individual who ran the fledgling power company. I think it is a great opportunity. From a media perspective, the crude oil pipeline business has overshadowed it, but my view is the power business has a lot of similar characteristics. The regulators are the same, your customer group is the same, the equipment you are running is the same.

Financially, the way we structured the power business is looking for facilities that run 100 per cent of the time. We're a base-load company - run-river hydro, coal plants in Alberta, nuclear in Ontario. It doesn't look odd on a balance sheet to an investor group to have these two businesses together.

How committed are you to your big stake in Ontario's Bruce Power nuclear facility?

Very committed. It's a tremendous opportunity, and we have the potential to produce 6,500 megawatts on one site. We've had a difficult time getting through the restart of the Bruce 1 and 2 units, but I think back to the Bruce 3 and 4 restart we did a few years ago, and we learned some things.

Have you moved your own project management skills in?

We've integrated our own project people into [the restart]over the past couple of years because that's a competency we bring to the partnership. We brought our folks in and we learned a lot.

As a collective [ownership] we've learned we can refurbish the balance of those Bruce facilities in an economic way. We weren't 100 per cent sure when we started down this path. At somewhere between $70 and $100 a megawatt, we can produce power that runs every day and has no emissions. There isn't anything else that comes close - outside of a natural gas world that is now trading at $4-$5 U.S. per thousand cubic feet.

In your gas pipelines, you have faced overcapacity on your main line. Can it be converted to moving oil?

The genesis of Keystone was a conversion [to oil]of Line One on our mainline gas pipeline, so it can be done to the extent that makes economic sense. Right now, though, we're operating at a fairly high capacity factor - as it has been cold in the East. In the last couple of weeks we have moved a lot of gas along the main line. In certain markets along the main line, their only source of gas is our pipeline system. So it is a system that is going to be required for some time in the future.

We have seen a reduction of Western Canadian conventional production but our forecast indicates that as the new shale gas in northeastern B.C. comes on, that will offset the decline we see on the conventional side.

Are you nimble enough to respond to the shifts?

We have no choice but to be nimble enough. What we've tried to do is make sure we attach our system to every possible supply source we can and, as they change, we change the rates and flows in our system to match. The difficult one for people is the Marcellus shale deposit, because it is right in the middle of the [U.S. Northeast]market.

What keeps you awake at night?

Bruce has taken longer and cost more than hoped. Our share [of the cost increase]is about $1-billion. For the whole project, the original cost was $2.8-billion and it's probably $4.8-billion now, and we're probably 24 to 30 months behind where we thought we'd be. That's not a great feeling but it's a first of a kind and we have learned a lot. At the end of the day, even at that cost, it's still going to be cheaper than anything else that can be produced in Ontario. But that's a challenge I need to focus on.

What else do you think about?

The opposition to our Keystone XL permit. I believe we are on the high ground and doing the right thing but we have to be persistent and stay with that through to the end of getting our permit, which is a six-month-plus process yet to go.

And there is the shifting of gas supply in North America and how we respond in making sure we're on top of it. I sense we are still winning. For example, we've captured the lion's share of gas out of northeast B.C.-northwest Alberta plays.

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