IN THE MONEY EXCLUSIVE: WATCH THE FULL EPISODE NOW!
Canada just announced two new pipelines — so where’s private capital? The CEO of one of Canada’s largest pipeline operators weighs in. On this special episode of In the Money with Amber Kanwar, Amber sits down with Greg Ebel, President and CEO of Enbridge (TSX: ENB, NYSE: ENB), live from the Calgary Stampede for his first interview since the pipeline announcements — including the Northern Shield West Coast pipeline and the Alberta-Ontario pipeline proposal.
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Two major pipeline proposals were announced in the last week, but the private sector was glaringly absent. Enbridge CEO Greg Ebel says it’s still a bit of a “show me” story before private players like Enbridge step in. “We are not there yet,” Ebel said in an exclusive interview — his first since the announcements.
“There are no private sector proponents at this point in time,” Ebel said. “When you set on fire several hundred million dollars trying to do projects, you’re a little hesitant to do it again.” Enbridge knows that firsthand: its Northern Gateway proposal, which would have run from Alberta to BC, had its approval overturned in 2016 over inadequate Indigenous consultation, leaving the company with more than $350 million in sunk costs.
“I think [the government] recognizes the risk is not very attractive quite yet, so they’re going to front-run that,” Ebel said. “I’d expect at some point the government — which has looked at recycling capital on airports — to recycle that on TMX too, and maybe that pays for TMX. So I think eventually it gets into the private sector.”
Still, Ebel sees reasons for optimism in what these announcements signal for the country. “I think back to where we were two years ago, when the government of Canada was actually trying to shut down the business,” he said. “A lot of the people responsible for that aren’t around anymore, for all the right reasons — they’re out doing ‘Top 40’ things with Katy Perry or whatever, which is probably a better use of their time,” Ebel added, taking a shot at former Prime Minister Justin Trudeau.
But if Canada wants to compete with the US, it has to do things better — not just the same. “We have to run — not at the same speed as the United States to attract investment — we have to run faster,” Ebel said. “I think that’s the context all Canadians, and I think the Prime Minister recognizes, since he’s a super smart guy, that we better run faster, and we’re not running fast enough. I think he’d say that too.”
Enbridge has spent much of its recent capital investing in the US over Canada, largely because it’s a better place to do business: “better returns, lower taxes, quicker moves,” Ebel said. “That’s what attracts capital.”
Ebel also cautioned that the focus on pipelines is only part of the equation. The country needs oil producers to increase production first — and that won’t happen unless regulations shift to incentivize, rather than penalize, growth.
“I think all Canadians, regardless of politics, feel better than they felt 18 months ago about maybe getting this right,” he said. “And if we do, the opportunity is enormous.”
