Canadian oilfield would produce more regulated as in the US: Encana CEO [UPDATED]
Montney could compete with premier Texas shale oilfields but it's being held back by a "cumbersome" regulatory system.
CALGARY — Western Canada’s Montney oil and gas region would be two to four times more productive if it was in the United States with its more efficient regulatory systems, says the CEO of Encana Corp.
The enormous hydrocarbon-bearing formation that underlies the northern Alberta-B.C. border can compete with premier Texas shale oilfields, said Doug Suttles on Wednesday.
But it’s being held back by a “cumbersome” regulatory system, along with the inability of smaller Canadian producers to access development capital.
The “complexity and uncertainty in the regulatory process is orders of magnitude higher” in Canada, where Encana produces about one-third of its oil and gas, compared with the U.S., Suttles said.
“The Montney now is the biggest area of growth in Canada — it’s where we’re focusing our attention — and if it sat in the United States it would probably be producing two, three, four times what it is producing today,” he said.
Suttles said his company and its partner have built gas-processing plants to process Encana’s Montney production that use hydroelectric power and are among the world’s most energy-efficient.
He said it’s “ridiculous” that getting permits for such plants can take longer than the time required to construct them.
Calgary-based Encana has been focused on growing its U.S. operations of late, including gaining a new core operating area in the Anadarko Basin of Oklahoma with the all-shares acquisition of U.S. rival Newfield Exploration Co. in mid-February.
Suttles made the comments during a panel discussion at a PwC-sponsored energy forum in downtown Calgary that examined what Canada’s energy sector can do to compete more effectively.
It’s vital that the country get pipelines built to take products to market, starting with the Trans Mountain pipeline expansion that could be approved by the federal government next month, said PwC national energy leader Reynold Tetzlaff.
Canadian politicians also need to co-operate to establish a credible national energy policy, he added, noting that investors don’t want to put their money in a country whose policies are a mystery.
“People need certainty. We saw it in 2011 when we had investment flowing into the Canadian sector,” Tetzlaff said.
“If they can’t model it out, foreign investors aren’t going to invest here. And to get certainty, we need these governments to actually get along.”
Alberta’s recently elected premier, Jason Kenney, has promised to take on foes of the oil and gas sector with an energy “war room” to counter misleading stories on the industry.
It’s a good idea if it focuses on delivering a torrent of good information about Canada’s climate strategy and sector efficiency but it shouldn’t let the focus be on anti-development non-government organizations, said Robert Johnston, managing director of global energy and natural resources for the Eurasia Group consulting firm.
“I know it’s painful but, trust me, no one is listening to those people, they really aren’t,” he said, citing his experience working with some 400 international investment entities.
“It’s just not relevant. What political leaders say and our CEOs say, (that) matters everything. What a lot of those groups say, matters not at all.”