Emerging from the Storm
2020 In Review
Without question, 2020 has been a year for the history books.
The COVID pandemic has taken center stage, profoundly impacting how we function as a society, the operations of industry, and even our interactions with the people closest to us. It has also served as a reminder that acts of kindness, compassion and respect are essential to the human condition; we can find meaning in the chaos by focusing on what is within our control. We must continue to bring our unique strengths and perspectives to tackle the challenges at hand.
Adversity is not new to the heavy oil and oil sands sector. We have been under significant market and reputational pressure for almost a decade. The past year has brought our challenges to new heights with WTI futures prices falling to minus 37.63 USD/bbl in April, carbon taxes poised to increase to $170/tonne by 2030, and the introduction of Canada’s Clean Fuel Standard regulation. On top of this, much of the “build back better” narrative has misunderstood the critical importance of our industry, despite the undeniable reality that we are an essential component of any successful energy transition. We will be a big part of Canada’s energy future for decades to come.
In the last few months, we have witnessed an uptick in transactions, including Headwater Exploration’s acquisition of Marten Hills from Cenovus, the Cenovus acquisition of Husky (expected to closer in early 2021), and Strathcona’s offer for the balance of shares in OSUM (which remains in contention).
A lack of oil and gas investment during COVID is finally combining with the resiliency of global demand. This has started to impact commodity prices – WTI futures prices have hit a recent high of 48.27 USD/bbl. With vaccines rolling out, there is growing sentiment that demand will continue its rise faster than supply, resulting in further oil price rebound in early 2021. I am pleased to share more detail on these positive sentiments below:
Expensive and carbon-intensive oil and gas make other forms of energy and hydrocarbon materials more competitive. This underscores the need for our sector to double down on the drive to improve our sustainability and efficiency. Now is the time to unify in our resolve to adapt and to innovate. In doing so, we can better compete and become stronger – as an industry and a society.
At the recent 2020 ASC Connect event on October 27, 2020, industry leader Mac Van Wielingen spoke to this grand challenge and the opportunity in front of us:
“The opportunity for Canada is to embrace the vision to be the most responsible and innovative energy and resource developer in the world. This is true even in a long-term declining demand outlook. The path forward is to “extend and maximize” the long-term benefits from our unique oil and gas resource. The value and benefits are for all Albertans, all Canadians, and global customers. Talk of phasing-out or shutting down the sector should be replaced with talk about adaptation, innovation, and competitiveness. Specific to the emissions challenge for Alberta, we are going in the right direction, but we need a stepped-up, large-scale strategic response to the problem that can make an order of magnitude difference. Then, no other energy supplier in the world can come close to our Environment, Social, and Governance (ESG) performance.”
In 2020, company leadership and boards of directors intentionally turned their focus to sustainability, ESG, inclusivity and reconciliation. Our industry’s willingness to identify material issues, set targets and measure performance represents an early step wherein we take ownership for our actions as we strive to deliver more sustainable energy to society. Our next steps are sure to include further efficiency improvements and bold advancements in technology. Whether focused on digitalization, solvents, electromagnetic heating, carbon capture, use and storage, value-added customer-centric product design or regionally optimized energy systems, we have started down a path to designing and creating our future.
As for industry, 2020 has been a year of massive changes for the CHOA. Our simplified organizational structure is generating great results, including
- numerous well-attended CHOA-curated webinars
- a series of partner events
- the highly successful 2020 CHOA-SPE Slugging It Out Conference: The World of Tomorrow – The Path Ahead for Canadian Heavy Oil
- podcasts, and
- Journal content, which includes our sought-after Project Updates, available only to CHOA members.
Our partner events are the result of ongoing effort to collaborate with other organizations to more efficiently produce and deliver better content with bigger impact. As examples, true to our roots, we partnered with Emissions Reduction Alberta to deliver the Lessons Learned Workshop on In Situ Technologies, with ConocoPhillips, Imperial and MEG sharing their experiences. Moving in an entirely different direction, our Developing Professionals hosted a YP Link Energy Transformation Event showcasing ten ways that the energy industry is transforming.
CHOA podcasts, hosted by board member Louisa De Carlo, are designed as outreach, to share engaging and memorable stories about our industry and the people within it. In November, our Open Conversation with JP Gladu, Indigenous Business Leader podcast was our biggest success so far and a recommended holiday listen if you haven’t heard it yet.
Our staff and many volunteers continue to knock it out of the park, and we thank them for their valuable 2020 contributions.
In September, we conducted a member survey to help us understand our members experience and challenges, so we can serve the CHOA community better.
We are pleased to report that our members are happy with CHOA! More than two thirds of respondents reported net positive value from their membership. In-person technical events, Slugging It Out, Project Updates and webinars were considered to be of the most value.
We learned that our members are concerned about the future of our industry. We also see a gap in young professionals, the bright minds that industry will need to succeed in achieving our desired future state. We plan to step up and address this gap.
For 2021, we are working to design an evolved experience that supports our members even more fully. Our themes will include topics such as digital transformation, technology and innovation, sustainability and ESG and future skills. We will offer diverse perspectives and focus on providing quality networking opportunities, both virtually and in person. Please stay tuned for more information on this and our survey early in the new year.
A sincere thank you to everyone who took the time to participate and provide feedback. Now more than ever, your voice matters. Whether you were able to participate or not, please do not hesitate to reach out to staff, a board member or volunteer if you have suggestions and feedback! We want to hear from you! Together, we will ensure CHOA continues to grow and improve.
The CHOA exists to strengthen Canada’s energy industry and to accelerate the careers of our members through knowledge and relationships in heavy oil.
One of the ways we do this is by providing volunteer opportunities that allow our members to develop industry relationships and grow their leadership skills. Beyond volunteering, members have indicated three benefits that keep them coming back; staying abreast of important industry trends and changes, building a strong network of peers, and effectively growing their knowledge base.
For all members approaching your renewal date, please check out the full list of member benefits here. For those in career transition, please reach out as we do offer a discount so that you are able to maintain your membership. Please renew your membership here.
With year-end approaching, our CHOA Annual Corporate Sponsorship outreach is well underway. Annual corporate sponsorships are key to our health as organization, providing the foundation for all that we do. Annual sponsorships pay for themselves with the inclusion of individual memberships, corporate recognition programs and flex credits sponsors can use to target their unique needs.
Our CHOA event, webinar and podcast sponsorships, along with our Journal advertisements, are additional options that allow companies to associate their brand with specific themes or content. Annual Corporate sponsorship flex credits can, of course, be applied to these events and content.
If your organization is not yet a CHOA Annual Corporate sponsorship or an individual Event or Content Sponsor, please reach out to Jill Sugars, our office manager. Jill and a CHOA board member will work with your organization to create a sponsorship package that delivers real, targeted value to your organization.
There is light on the horizon. A few bright spots to consider:
- The combination of vaccines, recovering demand and a shortage of capital investment has set us up for an oil price surge. When this occurs, our industry will have an important opportunity to increase our investment in technology and future skills and take some significant steps forward.
- The industry is awakening to the reality that investment capital flows to companies that deliver both differentiated financial performance AND differentiated ESG performance. In fact, excellence in ESG ensures that we mitigate medium- to long-term risks, which in turn leads to better medium- to long-term financial performance. By identifying material issues, setting targets and measuring performance, we inherently advance to implementation, enabling progress and setting Canadian companies up to both succeed and lead.
- Companies are embracing the internet of things, data analytics, data science and automation, and we are poised to benefit from new insights, predictive maintenance and prescriptive optimizations.
- Our Indigenous partners have stepped up for Canada’s resources. As impactful and knowledgeable storytellers, these authentic leaders have started to reset the conversation around inclusive, responsible and sustainable resource development. This is only the beginning of many important conversations where together we will learn and grow, finding new and better pathways forward.
- No matter where you look, there is evidence of collaboration in action, companies coming together in new ways to do business. We are learning to efficiently leverage our strengths working alongside other experts, bringing together diverse perspectives to allow us to find new solutions to old problems.
- With country-wide COVID impacts and massive provincial and federal deficits, pragmatic Canadians are starting to refocus on the practical actions necessary to kick-start our economy and this refocus underscores the important role of our industry in Canada.
There is no doubt that 2020 has laid bare the challenges facing our industry.
We are beyond the point of waiting for a return to our past. We are beyond the point of waiting for someone else to take action on our behalf.
It is now time for each of us to take action and do our part to move us towards our grand and noble “vision to be the most responsible and innovative energy and resource developer in the world”.
Together, let’s rise to the challenge!
CHOA’s 35th Anniversary
Thank you, as always, to our members and sponsors for their steadfast support and contributions to the CHOA.
We enthusiastically look forward to 2021, our 35th anniversary, and the many opportunities it will bring for us to Connect / Share / Learn.
Wishing everyone a happy and healthy holiday season, along with an energized new year!