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Altex Energy Ltd. President and CEO Glen Perry (Roth and Ramberg/Roth and Ramberg Photography)
Altex Energy Ltd. President and CEO Glen Perry (Roth and Ramberg/Roth and Ramberg Photography)

Disrupting the pipeline business Add to ...

When that project wound down in 1979, Perry took work at Dome Petroleum, then Calgary’s brashest company. He found himself in its business development office, at the heart of its ideas-manufacturing operation. “I became intimately involved with 40 megaprojects”—everything from billion-dollar refineries to liquefied natural gas export plants. “It was the greatest experience of my life,” Perry says. He travelled more than a dozen times to Japan in a bid to sell B.C. gas there. It was an idea far ahead of its time: Only now are West Coast gas exports coming close to reality.

In 1984, Perry was hired at Unocal, which had found itself in a jam with the coal mine it had opened just outside of Jasper, Alberta. The company was selling coal in Ontario at $55 a tonne. Its rail freight costs were $40.

Perry knew coal could be mixed with water and transported through pipelines. And he knew Alberta’s oil pipelines had spare capacity. He wondered: “Can you mix coal and oil?” Turns out, you can. Unocal spent three years on the idea, and Perry’s name is on the patent it secured, although the project was never built. But seeds had been sown. Perry saw the potential of moving energy in novel ways.

That potential would soon come back to the fore, after he joined Direct Energy in 1989. Focused on natural-gas sales, it didn’t take him long to figure out something was very wrong. Alberta’s natural gas sold at a deep discount compared to sources from the rest of North America. In five years of working there, “gas prices I don’t think ever went above $1 [per million BTUs],” Perry says. So one day, he began to ponder what he could do about that.

Perry admits he had a beer or two in him when the doodling began. It was 1994 and he was talking to a friend about the low gas prices. “We decided we needed a honking big pipeline,” Perry says—a pipe that could end a supply constraint that had been killing Alberta gas. He grabbed a paper napkin and started sketching a 3,719-kilometre straight line from the gas fields of northeastern British Columbia all the way to Chicago. A direct line would open new capacity to the best natural gas market on the continent. He figured the idea would lift prices across Western Canada. Plus, he and a partner had a patent-worthy plan for mixing the gas with valuable liquids—propane, ethane and the like—that he figured would boost the economic attractiveness of the project, by carrying those goods to a new market.

He didn’t know it then, but he was right. What he did know was that he was throwing stones at Goliath: Nova Corp., which ran 22,000 kilometres of gas pipeline in Alberta and moved 80% of Canada’s natural gas. Nova had the clout of a monopoly, and it wasn’t likely to be pleased with his idea.

Indeed, first Nova, then TransCanada after the two companies merged, worked hard to defeat the project, even launching rival plans.

For Perry, there was something pleasingly subversive about taking on the giant. The Alliance pipeline started as the Northern Area Transportation Study, or NATS. Godfrey recalls, “it was an acronym that Glen actually thought was quite funny because he said, ‘we’re going to be these little gnats flying around the heads of these guys.’ ”

Perry, Jack Crawford and another colleague presented their plan 150 different times to producers. The audience was initially skeptical. Perry “thinks so fast and he talks so fast that in a lot of cases I think there was an inherent suspicion: Can anybody who talks that fast really be on the straight up?” Crawford says. “But after he said things quickly two or three times, it did make sense.”

Perry had the math right. People signed on, in a trickle that became a torrent and enveloped much of the oil patch. With funding eventually secured, the huge 90-centimetre pipe went into the ground.

Canadian gas prices surged and fortunes were made—Perry takes some credit for building Encana into the powerhouse it has become. At $1 gas, the growth of Encana and other gas producers would have been stunted. But after Alliance, Encana no longer had to deal with $1 gas.

An ideas man not interested in running a pipe, Perry left Alliance to sojourn on Pender Island, play with lifters and write about the solar system. But he also spotted a need for another honking big pipeline. This one would carry Alberta’s burgeoning oil sands output directly to the Gulf Coast. It was long before Keystone XL, the proposed TransCanada pipe that would travel much the same route, was bruited. But to Perry it made sense: Connect the fastest-growing oil play on the continent with its biggest refining complex.

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