Saturday, September 09, 2023

Enbridge out of step with the world

Enbridge is a good example of much that ails this country. When I see the smug smile of new CEO Greg Ebel, as in a recent article in the Globe and Mail, and read his words, I get a slightly-sick, slightly-angry, slightly-depressed feeling in my stomach. (Can stomachs be angry or depressed? I think mine is.)

Enbridge has never been a great climate change champion - its core business is pumping oil through pipelines! - but Ebel is taking the company further to the dark side. One of his early moves was to buy up three (large) US natural gas utilities for US$9.4 billion. Yes, they have that much in petty cash.

Ebel is a big proponent of natural gas. He calls it "sustainable and affordable energy", and says it will play a crucial role in the world's low-carbon future. He wants to make Enbridge into a "three -legged stool" (a weird metaphor) selling oil, natural gas and renewables, but very much in that order.

He thinks that Canada's Liberal government is off base with its opposition (as he sees it) to natural gas. "The Germans, Japanese and South Koreans came to Canada looking for more energy, and we've turned them away. What message does that send to our allies, trading partners and the developing world?" Well, actually, it sends the message that oil and gas is 20th century technology and we need to be looking to electricity and renewables to deal with the climate crisis. But that's not a message Ebel wants to hear.

Ebel talks a good game (in his own way), but he is also out of step with most of the business and investment community. His announcement of the purchase of the US gas utilities met with a solid silence, and Enbridge share price sank to a 2½-year low. Over the last 5 years, Enbridge shares have only risen a paltry 1.6%. Now, most of that was from before Ebel's tenure as CEO (although he was still Chair), but it seems like he is unwilling to read the writing on the wall. Just another dinosaur in Western Canada.

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