It has some of the most talented management and staff in Canada’s upstream petroleum sector. Its men and women have experience touching virtually every molecule in every formation in the Western Canadian Sedimentary Basin. They’ve put Canada on the world energy map with their knowledge and talent; their experiential DNA can be found in most global basins, leading the way in sustainable and responsible petroleum development from one end of the molecular spectrum to the other.
They’ve been key to building the reputation of Canadian energy competence in all hemispheres. It’s an investor’s dream team. But this new team has no assets to develop; no business strategy to execute; no shareholder value to create – and no economy to which those efforts can contribute.
Loose Ends Energy Inc.
Right now, its management and staff are walking the streets.
They are not running world-class safety programs; not solving cost and productivity challenges; not analyzing complex geology; not imaginatively brainstorming climate and low-carbon solutions.
They are contributing nothing. Innovating nothing.
But to many – including political leadership – they’re just statistical casualties; collateral damage in a campaign against fossil fuels that has no understandable shape or form.
That’s a brutal way of describing the fate of the talent that’s been stripped loose from Canada’s oilpatch – from oil and gas operators, and from their key service providers and suppliers all along the value chain.
It does nobody any good, least of all the Canadian economy, to have so much talent at loose ends. Some people will be slowly assimilated back into the sector; some will bite the retirement bullet; and others will drift to other sectors perceived to be more stable and valued by politicians. But no one has been adding up the price of that talent loss in a way that exposes the real consequences to Canada’s energy future. And no one has tallied the loss in time and money involved in recruiting and training that talent pool in the first place.
This represents the single largest, and most sudden, knowledge capital loss in Canadian corporate history. Any politician who doesn’t understand that the foundation of a vibrant and vital energy future is based on a healthy and robust hydrocarbon economy needs a lesson in basic economics. A petroleum sector that knows it needs to evolve to survive has incentive to be innovative and responsible. Not only will it provide the dollars required to drive innovation, it will provide something perhaps more important: motivated human capital.
These people have cut their teeth on hydrocarbon development, and that may be the best training for tackling an uncertain energy future in which fossil fuels still figure prominently.
The knowledge capital loss has been so enormous that the impact on slowing innovation investment toward sustainable resource development is almost incalculable. An equally important consequence is that young men and women on post-secondary campuses across the country, reading the political tea leaves, are making career decisions that don’t include oil and gas. That’s especially ironic in that the creative technical and business challenges that would shape their careers are arguably more exciting than ever.
Politicians have, with the public’s uninformed permission, wound back the innovation and investment clock by at least a decade – and in doing so, have impaired the efficacy and health of the very system that can help contribute to effective climate change and carbon reduction initiatives. There are many ways to describe a lack of political will to come to terms with that reality; the most charitable is political and economic inexperience – at a time when Canada needs experienced leadership to guide it. Talk about a vacuum.
As a result, those politicians seem to be oceans apart on the market access dynamic that would resolve so much of this mess. Politicians cannot control commodity prices and market behaviour directly but they can profoundly shape the business environment and political and regulatory frameworks in which better prices can be realized.
Pipelines, of course, are central to achieving the tidewater access that will inject a spirited competitive advantage back into Canada and reposition its global role.
Unfortunately, the Loose Ends Energy team won’t be part of helping resolve the impasse to which Canadians and their elected leaders have navigated themselves.
It seems such a waste.
Bill Whitelaw is president and CEO at JuneWarren-Nickle’s Energy Group.