The Calgary Tower is reflected in a puddle on a warm fall day as snow melts in Calgary, Alta., on Oct. 30, 2020, amid a worldwide COVID-19 pandemic.Jeff McIntosh/The Globe and Mail
Some downtown streets will be closed beginning Sunday as more than 5,000 delegates and speakers make their way to the Calgary Stampede grounds and BMO Centre. The city is playing host for the World Petroleum Congress, billed by organizers as the Olympics of the oil and natural gas industry.
Part networking event, part conference, the congress, held every three years, stands apart for its ability to draw a diverse group of oil industry elites. It includes OPEC and non-OPEC countries, and leaders from state-owned giants and Western oil majors.
Darren Woods, the chief executive of ExxonMobil Corp., will be here, as will Prince Abdulaziz bin Salman Al-Saud, Saudi Arabia’s top energy official. It’s a good reminder that Canada – one of the world’s biggest producers – is still a price taker for oil, not a price maker.
This is also the first time the congress has focused so intently on climate, with a theme on the path to net zero. As of earlier this year, the London-based organization behind the event, the 90-year-old World Petroleum Council, was renamed WPC Energy. It’s part of a trend to take fossil fuel references out of long-established oil brands that is reminiscent of KFC’s decision to avoid a direct mention of fried chicken in its name, in part to market to a more health-conscious public.
This edition of the World Petroleum Congress (also likely to be renamed) “will be an important bridge between the traditional energy sector and a more carbon-neutral industry over the next 25 years. Many important conversations will happen in Calgary to help define realistic, workable paths to a net-zero future,” says its website.
Realistic and workable ideas in the convention halls will almost certainly differ from what the climate activists who rallied around the world Friday believe is possible. But the evolution of the congress is a demonstration of how quickly things are changing in the world of energy, and for Calgary itself.
A look at the city’s path to winning the 2023 congress hosting rights shows what a difference even a few years has made. When Calgary started work on a bid in 2015, Alberta’s economy was in a true funk – unemployment was high, oil prices were low and political leaders fretted about young people leaving the province.
“We were seeing a lot of hollowing out of the Canadian energy sector on the international side. The Nexens and the Talismans were disappearing,” said Denis Painchaud, president of the Canadian organizing committee for 24th congress. “The industry was really in despair.”
The city’s efforts to be host this year culminated in 2019, when four rounds of voting in St. Petersburg, Russia, saw Calgary edge out Baku, the capital of Azerbaijan, by a single vote. The United Arab Emirates, Argentina and Kazakhstan were also in the running.
Speaking from the sidelines during voting in Russia, then-mayor Naheed Nenshi called it “a shot in the arm for the Canadian energy sector.” Current Mayor Jyoti Gondek said this week the economic spinoffs of the congress for Calgary could reach $88-million.
But now the Canadian energy sector and the city are both in much less need of a shot in the arm. Oil prices are moving toward US$100 a barrel, and the province’s economy is more diversified. Alberta will likely lead the country in economic growth this year, and people are moving to the province at a historic clip. In fact, Alberta’s average annual population growth rate is somewhere around 4.5 per cent, which compares with the fastest growing countries in the world.
Even so, investment in new oil and natural gas projects is slow and cautious. Climate policies weigh heavily on capital decisions. People are moving here not necessarily for jobs, but for the (now diminished) prospect of more reasonable housing costs.
And the last time the congress met, there was no U.S. Inflation Reduction Act to function as an investment vortex for all different types of energy projects, pulling in dollars and skilled workers that might otherwise be put to use in Canada, Europe or Asia.
Net-zero aims also now rule all discussions, and with that the corollary discussion of whether fossil fuel producers and governments are truly bringing greenhouse gas emissions down. The debate is global. It isn’t limited to Canada’s domestic battle between federal Environment Minister Steven Guilbeault and Alberta Premier Danielle Smith over whether oil sands producer Suncor Energy Inc. needs a hard emissions cap to take climate issues seriously.
Thinking back to Calgary’s pitch in St. Petersburg four years ago, Mr. Nenshi said it was all about the future of the oil and gas sector, and how Calgary was poised to be a global leader in the energy transition. He believes Alberta’s United Conservative Party government is behind on the question of getting to net-zero oil sands production.
“I’m hopeful that all the noise around Alberta’s commitment to the future won’t undermine that industry message,” Mr. Nenshi said this week.
On the other side, is the question of energy costs and security, which has come into sharper focus since Russia invaded Ukraine in February, 2022.
Before then, Russia was still a warily accepted part of the global community. The oil powerhouse was actually a key host and member of the World Petroleum Congress. But this year, speakers, sponsors and exhibitors from Russia aren’t allowed. Although Russian delegates weren’t specifically barred by congress organizers, Mr. Painchaud said he doesn’t believe there are any, either.
Western countries want to keep energy prices from spiking, and therefore need to keep the cost of oil and natural gas at an even keel. But they also want to embrace climate imperatives that discourage western investment in new oil and gas projects, and wide-ranging sanctions on Russian oil. It’s a delicate and difficult balance as global demand for all energy, including oil, is at all-time highs.
The congress features a series of net-zero and climate discussions. To many people, having U.S. oil executives and Saudi energy ministers in these talks is absurd. Just this week, The Wall Street Journal reported on how ExxonMobil’s public words on the threat of climate change differed from its internal strategy, even as recently as 2016.
But as has been repeated by many a politician, there are no climate solutions without the biggest crude producers in the world – whatever they call themselves – getting in on the emissions reduction push.