[#18] Energy 360 Podcast

First of two lively discussions moderated by David Arkell and Lysandra Naom of 360 Energy. A few points from this episode.

(Podcast can be found here)

Canada is at a cross roads. On the one hand we need to recognize we're a petro-state: our national discussions about energy, economic strategy and climate are dominated by an incumbent industry with a highly concentrated economic profile. Because the existing fossil fuel industry's jobs and capital are focussed within a few companies, they're better able to dominate our business pages and political and economic discussions. From that vantage point, they have (and will continue) to defend to the very last minute their ability to sell as much high-carbon energy stuff as possible. This is entirely rational (if unwise) from their perspective, and so we should expect them to to continue to push against any constraints on production or profit.

But that conversation hides the fact that the cleantech sector has, for years, employed more people than oil & gas. And more to the point, it collectively spends far more on R&D. The economic upside over the long term of the technology that underpins a low-carbon economy is much larger than that of selling oil & gas. One reason China massively dominates clean energy supply chains (solar, wind, batteries, now heat pumps) is they've not been distracted by a large internal oil lobby.

Tomorrow's energy pie will not look like today's. The challenge for our national discussion on long-term economic and energy strategy is to amplify the relatively small slices of that pie to reflect their relative importance to Canada over the long term. Canada is very late to the game relative to China and Europe, and we were recently passed by the US. Playing catchup looks like paying $15B for a highly-foreign-owned automated battery factory in the hopes it seeds some kind of ecosystem.

We can, and should, play to our strengths.

Lowering the barriers to mining the materials we need, while maintaining our historical commitment to (relatively) clean operations, can open up much more of the value stack of those battery plants. The Ring of Fire in Northern Ontario, for example, is plagued by opposition and layers of regulatory oversight. Yet the value we might add to that mineral extraction is substantial, prior to the final production of batteries by global brands in Canada. The opportunity to demonstrate the the world that Canada remains a leader in transparency and corporate governance might unlock even more of those profits, as ESG standards percolate to end consumers and suppliers.

Our energy incumbents might be laggards, but we've got leaders in other industries. Capreit's aggressive de-carbonization plans for their real estate portfolio puts them in the leading ranks globally, alongside EPC partner Krome/Kolostat. Our tech startups are growing stronger every month: Hydrostor is well-positioned for huge scale and growth in the emerging utility-scale, long-duration storage market; Woodland Biofuels are getting ready to build a series of deeply carbon-negative fuels (hydrogen, rNG, methanol, ethanol) plants by combining cellulosic inputs with carbon sequestration; Morgan Solar has managed - uniquely - to bring deep IP back to the solar industry with their building-integrated solar blinds and optics.

We don't have time to waste. Let's not wait for our incumbents to be the champions here, rather, let's find and support those emerging industrial champions capable of leading the way to value creation in a low-carbon economy.

Episode Two of this conversation is forthcoming.