Power Struggle
Improving the energy dialogue in Canada (and beyond) through honest, non-partisan, and fact- based conversations.
The energy conversation is personal: it’s in our homes, in our hands, and now, it’s in our ears. Power Struggle invites you to listen in on honest, non-partisan, and fact-based conversations between host Stewart Muir and the leaders and thinkers designing modern energy.
Watch videos at https://www.youtube.com/@PowerStrugglePod
Power Struggle
The Last Barrel of Oil // Adam Pankratz
Adam Pankratz is a professor at the University of British Columbia with a deep background in banking, energy, and mining. He joins Power Struggle to bring his unique take on the challenge (and costs) that switching from fossil fuels to green energy poses.
In this episode we discuss:
- Adam’s start in politics and how that sparked his interest in energy
- Where responsibility lies when making big change promises
- His concept of “the energy transition” and how to avoid another Covid 19 scenario
- The implications of AI and how much energy is needed to power innovation
- The often-overlooked connection between a green economy and the mining industry
- Why the last barrel of oil should come from Canada
- Adam’s $14 wine pick!
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Video available on Power Struggle’s YouTube! https://www.youtube.com/@PowerStrugglePod
Reach out to us with thoughts, questions, or ideas at info@powerstruggle.ca
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🎧 For audio versions of our podcast visit powerstruggle.ca and listen on the go in your favourite podcast app!
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Hey, this is Stuart, just letting you know that we had a few audio problems in taping this episode. The first few minutes you might notice a difference. After that it's as good as ever. Hope you enjoy the show. Hello, my name is Stuart Muir and welcome to PowerStraw. Today. My guest is Adam Pankratz. He's a lecturer at the Strategy and Business Economics Division at UBC's Sauter School of Business here in Vancouver, canada. Adam, welcome to the podcast. My pleasure to be here, stuart. Thank you, adam. We've known each other a long time. A lot of stories we're going to be able to tell and talk about today. I want to start by asking you about your international perspective, because that seems to run through the columns of the commentary your view of Canada in this international setting, which I think is often lacking. You've lived in France and Germany and Spain.
Adam Pankratz:Well, initially it was to study, because I did my undergraduate degree in languages and linguistics at Simon Fraser University and then I wanted to carry on in linguistics and I'd done a French degree, a Spanish minor, studied German and Italian as well, and so the initial draw was educational and I was fortunate that I ended up in a master's program at the University of Potsdam, which was relatively new at the time, but it was a program which focused on multiple language, both acquisition and study. So that was to me a really attractive program because, also on the practical side, I realized that when I graduated from there I would have four languages that I could speak fluent.
Stewart Muir:It was kind of the goal. Now, from there, you built a career in banking, international business, academia, and you're also in energy and running a mining exploration company in British Columbia, and I'm curious to know what was the spark that drew you into the energy and body space.
Adam Pankratz:Well, again, some of these things happen by chance. So, as you know, in 2015, I was a candidate with the Liberal Party of Canada in the running of Burnaby South and you know, I mean I've always been broadly aware, in living in Canada and seeing the world, that, okay, energy matter. But I'd say that I got much more focused on it all of a sudden because that was a big issue in the 2015 election, because the Transbound Pipeline terminates in Burdapete, and so that was an issue that necessarily needed to be focused on or understand well as a candidate for whichever political party you were running for. And as I got deeper into it, in particular, I started to follow it, continued to follow it after the election, it became pretty clear that the stories that were being told about it or being most forcefully put out in the media by those who were opposed in general, didn't seem to actually address the reality of what the situation was.
Adam Pankratz:And I think if there's any one thing to whoever's listening to this can take from our conversation about the energy industry is just the the scale and complexity of the problem and the fact that politicians and many activists like to try to make it seem like a very simple solution with a simple, a simple problem with a simple solution. And it's not. It's incredibly complicated and you need to understand. You, you know fundamentally how important this industry is and these issues are to our way of life before you can begin to advance deeper into the topic. And I found that that just wasn't being presented and there wasn't enough people who were calling out a lot of the nonsense and a lot of the nist half-truths or sometimes flat-out lies that were making it to mainstream communication. And how can we have a rational conversation about it and stop swinging mud?
Stewart Muir:So you write for the Canadian Parliament in the election of 2015. How did it go for you?
Adam Pankratz:Well, the experience generally was fantastic. I mean I'd lived in Burnaby my whole life and there were every day I met a community group or a group of people that I had no idea existed in Burnaby, because everybody goes about their own lives and they don't see everything necessarily about the city. But in politics that's necessarily your job is you have to know everything that's going on so it was a.
Adam Pankratz:It was a wonderful experience, learning experience, um, about a community that I already knew well, so that there was that side. Unfortunately, on the on election day we didn't quite get across the uh. The line we lost by uh, just over 500 votes for car you were running for didn't do too badly.
Stewart Muir:Well, the liberals, um won, won, won a majority, so that was a nice consolation prize You've been known to speak your mind on all kinds of topics to do with energy and natural resources. I often see you out there when there's something brewing. What drives you to take on these tough conversations, and is there ever a backlash that?
Adam Pankratz:you feel from it, and is there ever a backlash that you feel from it? The simple answer is this issue is too important to not be grounded in reality, right, and so when I see political announcements or grand statements being made that clearly are either just not true or cannot be true not true or cannot be true, and the time at which some idea is going to be implemented, the person announcing it or the government is going to have zero responsibility for whether or not it will ever come to fruition. But they are creating actual harm to people right now because of what they're doing. I find that very frustrating. Take, for example, this electrical vehicle mandate that we've had come down that there's going to be no more internal combustion engines sold by 2035. That sounds very nice, right, and Stephen Guilbeault, the liberals are never going to have any responsibility to see whether or not that actually happens. They're not going to be in office in 20. Well, not until 2035. Maybe they'll be back by 2035, but they're not going to be there until then. So they're going to have zero responsibility for this and, like on that issue alone, the complexity in terms of trying to make that happen is absolutely enormous.
Adam Pankratz:Starting with well, where's the electricity going to come from. In British Columbia, we've been working on the Site C dam, depending on where you want to take the starting point, but it really started planning for it in the 1990s, right? So we're 30 years about and it's going to be 10 to 15 years of actual construction and that dam is going to create, I believe it's 1.5 gigawatts I forget the exact gigawatts of electricity. I think it is. So if you want to electrify British Columbia, which essentially is what, like these goals are designed to do, right is electrify Canada Well, you need 15 gigawatts, so you need 10 sightsees, okay. So where are the dams going to come from? Or where's the electrical production going to come from to meet these electrical vehicle mandates? Where is the grid capacity going to come from? Or where is the electrical production going to come from to meet these electrical vehicle mandates? Where is the grid capacity going to come from? We don't have that either. And even if you don't do it all at once, you don't electrify the whole province, fine, you're going to still need another, even one more site C. Where's that going to come from? Well, I have no idea, and neither does anyone else who wants to immediately electrify or immediately push this energy change onto kind of an unsuspecting Canadian public, or at least they were unsuspecting until energy prices started to go higher and the cost of living started to go up.
Adam Pankratz:And now people are paying a lot more attention to this, paying a lot more attention to this. We're still very fortunate that we have inexpensive energy in North America compared to, like my friends in Germany or England or France where, following the Russian invasion of Ukraine, energy prices doubled or tripled out of nowhere and people. This was a serious, serious issue for businesses. So we're not there yet, but that's the type of complexity and difficulty that I'm talking about. I'm saying well, at least.
Adam Pankratz:You're talking about building one or two more site sea dams in British Columbia. That's a decades-long process. And you're talking about getting BC Hydro to up the grid capacity. That's going to take decades. So you know, I've said many times like why wouldn't you be in favor of greening the economy or greening the energy grid and and electrifying more? That's a very laudable and good goal. You curate renewable energy, no environmental impact that's great. But let's talk in real terms that this is going to take decades and everyone runs around talking about like it's going to happen in the next election cycle or two. We're not very far from 2035. It sounds a long way out, but it's around the corner. I mean it's tomorrow morning.
Stewart Muir:Yeah, and I would add that not only does the federal government of Canada have that goal, but in British Columbia, there are policies here that are actually much more aggressive than the federal ones. The BC legislation was amended not long ago for British Columbia by 2030 to have 90% electric vehicles on the road, and British Columbia drivers have actually done a lot. There's a lot of early adoption, but still it's more aggressive than California or the UK or anywhere else right here. So we might see some of the impacts that you're talking about occur on the west coast of Canada before they're seen elsewhere, assuming nothing changes.
Stewart Muir:You know, the framing you've provided is actually right at the heart of what we're doing with Power Struggle, because it is a struggle to get the power and energy in our lives, and here we talk about it in terms of the energy trilemma, which is an idea. It's like a dilemma, but there's, you know, three dimensions to it, and those three are reliability you want that switch when you flick it to result in the lights coming on and you want it to be affordable, so that people are not living in energy poverty, and you want it to be green. We all want these three things, and how do we get all that all at the same time well, and it's, it's.
Adam Pankratz:It's very difficult, right, and I think this is where you know the energy transition really is the right word to use for it, because we've spent more than 100 years basically getting addicted to fossil fuels. Well, you don't turn that around overnight, right, and we kind of know in as close as we will ever know, what does the world look like if you shut off fossil fuels. Well, that was the first two weeks of COVID Everything shut down, nobody was using anywhere near the oil and gas. That is what the world looks like. If you just shut fossil fuels off tomorrow, it stops. So we're not going to do that, okay. So what, then, is the solution? Well, electrification certainly looks like it's going to be a very large part of it. But what happens as we're getting towards that? That and this is where you know non-renewables like natural gas, but that are less energy intensive than oil, seem to be a very viable and a very useful power source that Canada has a lot of. I mean, we've got 80 trillion cubic feet right now in the ground ready to go. Well, that can power Canada and North America for probably a century, and we haven't even found everything that's there, and the United States has a ton of LNG too, so that looks to be a very good option in terms of lowering emissions and helping us get towards full electrification.
Adam Pankratz:But again, that intermediary phase, I think there's just a lot of either dishonesty or lack of realism in terms of how long it's going to take and what the complexities are and how much money it's going to cost too. A lot of politicians will just say, well, electrical vehicle mandate? No, well in there, what you're implying is trillions and trillions of dollars of taxpayer investment. Ultimately, that is going to be needed to get to where you think we should go, and you think that's going to happen by snapping your fingers. And that's just not realistic. And that's the part that always frustrates me is when it's talked about like it's this easy problem to solve. It is solvable. We, you know, we've solved many things over the course of human history but it's hard, it's complicated and it's expensive, and I just wish people would be more upfront about how hard and expensive it will be.
Stewart Muir:And here you are making these points, making these arguments. Do you find that, rather than it resulting in the desired dialogue, it winds up being that you're vilified because, well, if you're not in favor of this solution that we are urging and requiring, it must be because you have some malign intention?
Adam Pankratz:I mean, I get a little bit of that, but I think, by and large the feedback you know, when I talk about it with rational people and we just have conversations, most people kind of fall into the this camp of I am for, um, you know, greener, more renewable solutions, but I also don't want and I'm not going to accept my quality of life going backwards, right, and and if that's what you're demanding, well then you're going to find an opponent. But if you're saying here's the long-term solution and this is where we're trying to go and we're going to get there and talk about it in a realistic manner, most people are on board with that. There are very few people, I think you would find. If you say, well, the long-term goal here is that we emit less and have less impact on the environment, the message most people are going to get behind. But what they're not going to get behind is what the extreme voices also are implying when they say you know that we're going to hit all these mandates under a certain timeline. They're also kind of implying you know de-industrialization in a lot of ways, right, and that it's not a fantasy.
Adam Pankratz:I mean Germany, um, volkswagen just a couple of weeks ago, right, they shut. They're shutting plants, um, in Germany for the first time ever, uh, and the reason for that is because of the cost of of running those plants is too high, and they can do them. They can, they can run them more efficiently, uh, where the energy costs are lower, either in the United States or China or wherever else South America, I think, they have plants as well, and this is what's more German than Volkswagen or German cars, right, and these industries are struggling big time, and the reason is because their energy costs are so expensive and it's become uneconomical. Well, that's not the future that we want for our country either. So there is a middle road here, but, like a lot of other things in society, we're very polarized on these things at the moment.
Stewart Muir:Yeah, now with Germany they've lost access to the cheap natural gas from Russia and they've had to import LNG. But they've also shut down their nuclear, which was, in the post-war period, the basis for that clean green economy they were building. They shut that down too, and now they're burning a little more coal, or maybe a lot more coal. They're adding a lot of wind, are they moving?
Adam Pankratz:ahead. So my answer would be no. My German friend's answer is no, that this is ludicrous. My German friends' answers is no, that this is ludicrous, and I mean all the more ludicrous from the news just this morning, right, that Three Mile Island is going to get started back up, which was mothballed in 2019, I believe. But it's starting up again because Microsoft has committed to buying the power from that nuclear power plant as part of its green commitment and the energy required as we move into AI, which is going to require a ton of energy, a ton of energy.
Adam Pankratz:And so Germany had all these clean, well-running nuclear plants and for ideological reasons at the time I forget now the exact composition of the German parliament 10 years ago, but the Greens essentially were in a were one of the key support groups that the CDU needed to have, merkel needed to have in order to remain in power, and one of their demands out of that was that they wanted the nuclear power plants in Germany shut down, and they got their wish. But, as you say, the result is now they're burning more coal, which is definitely not cleaner than nuclear, and it's this backwards or however you want to frame it backwards fictitious, ill-informed view that nuclear. Is this dangerous thing, like on the Simpsons or something? It's not. I mean, nuclear can be very, very safe and it could very well be a part of the green future. Right and next door you've got France, where 70% of its energy comes from nuclear, and they do it quite fine.
Stewart Muir:Yeah, does one have the sneaking suspicion that deindustrialization maybe is a higher value for those campaigning for these energy shifts than decarbonization alone? And no doubt you know a cleaner, greater economy is what the Greens want in Germany. But deindustrialization maybe is the end to capitalism that you know there are certain quarters of society that would see that as a high value. Do you think these are confused goals or intertwined at times?
Adam Pankratz:Yeah. So I'm always just because I you know, like you're asking, if I get attacked, I get a lot of values ascribed to me because of things I've said. I always hesitant to ascribe what somebody is actually wanting without them saying it, although some of them do straight up say they don't want capitalism. So those people I believe A bit of that at least. Yes, there certainly are some people who believe that. My intuition is that it's just a misunderstanding of what they're actually implying, but what they are, what they. The necessary implication of what they are saying and what they are advocating for, in the absence of some miracle technology that does not yet exist, is deindustrialization Right, and certainly there's a portion there. We just say, well, capitalism is the source of all our ills, despite the fact that capitalism has brought more people out of poverty and given everyone a higher standard of living than any other system ever devised. Let's put those facts aside for one second that they are advocating for.
Adam Pankratz:There's a large portion who are, I think, advocating for a cleaner economy without again not understanding what comes with all of that if it's not done in the right way and if it's not done in the right way. Deindustrialization just cutting emissions is on the cards, is in the future. If you want to green the economy and we haven't even talked about this one aspect yet which is, well, you need a lot of metal to electrify an economy. And so where does that metal come from? Well, it comes from the ground, it comes from mines. You have to have a very robust mining industry in order to meet the electrification goals as well.
Adam Pankratz:And you know just off the top how many people who advocate for a green economy or who say, well, we have to reduce emissions, how many of them are also, you know, out in the street protesting and banging the drum, saying we also need to have more open pit mines? Not very many, in my experience. Right, there are not a lot of people who are out there saying lower emissions and start opening up mines. But you need to. There's no way around this. Right, there is not enough copper in the world, there's not enough molybdenum, there's not enough nickel, there's nowhere near enough of this stuff. Well, all of this stuff comes from mines and again, that is a part that is like that hasn't even entered the conversation yet. Slowly, in some quarters, like you see it a little bit, and, and you know, the mining industry is trying to get people to pay attention to it and say if you're going to do this, you need metal and and it comes out of the ground. It doesn't come from anywhere else.
Stewart Muir:Well, you're more than an observer and commentator on this issue, Adam, because you're director of Rockmaster Resources. You're looking for copper and other metals in northern British Columbia, right?
Adam Pankratz:Yeah, so Rockmaster is an exploration company, right, so we're a very small company, but this is an important industry, particularly in Vancouver. I mean, there's over a thousand junior exploration companies listed companies that are currently in Vancouver operating in some form. A lot of these exploration projects will not see the light of day and end up being mines, but some of them need to, and we were. I forget the exact number now, but we used to have about 30 operating mines in British Columbia. Now we're down to 10. And the permitting time for these mines is incredibly long.
Adam Pankratz:Again, if you say that the numbers for electrification goals for copper from here to 2040, we need to mine, and this is worldwide. But what governments allegedly say they're going to do? We need to mine more copper between now and 2040 than we've mined so far in all of human history. So, okay, do we have the technology to do it? Yes, but this stuff's hard to find and finding. Permitting putting into production a copper mine, saying that we need it by 2040, well, that's like saying, yeah, I need it tomorrow morning.
Adam Pankratz:These projects take more than a decade and cost again billions of dollars, are extremely risky and need government permits and supports and all kinds of infrastructure in order to actually get that copper into a piece of wire, get it out right to world markets into a piece of wire, get it out right to world markets. So you know if we're going to green the economy, good. Well then everybody who believes that they had better also be calling their local officials and saying what are you doing to speed up mining permitting times and what are you doing to encourage mining investment? You know, in British Columbia or in Canada, you know the government to their credit, and we want to only dump on the government.
Adam Pankratz:Today. They do have the critical mineral strategy. That's good, that's a positive step in the right direction, but we need more and more than that. We need to send a clear signal to the international investment community that Canada is a place where, if you want to mine or you want to extract resources, there's a clear pathway forward to make that happen right, and you can't have regulatory changes and uncertainty. Otherwise there's zero chance that anybody is going to come along with the tens and it is tens at minimum, tens of billions of dollars required to get the mines and all these other projects to operational capacity.
Stewart Muir:Right Now there's something like 17 mines in queue for the necessary permits just in British Columbia. So, as you say, it's not for lack of there being a resource there. It is there. It is waiting to be developed. What are the barriers?
Adam Pankratz:Well, I think it's a lack of desire to have and value these projects. Right, if you're in the Ministry of Mines in British Columbia, are you going out to your mine permitters? Are you going out and trying to find a way like, how do we get this to happen as fast as possible? How can we, oh sure, make sure that we're doing it in the right way, which we do, by the way, in Canada? We do it, we. We consult with Indigenous people, we make sure there's not going to be arsenic in the river right, we make sure that these things are all mitigated and accounted for, but that the government, the government we're going into an election tomorrow, on Saturday.
Adam Pankratz:Okay, the conservatives are talking about it, but is the NDP, who's been in power now for seven years? Are they saying a key part of this for BC's economy, which is kind of struggling now, is going to be that we're going to figure out ways to accelerate the permitting of mines in Canada or in British Columbia? No, that's not what's going on. And again, if you're an international investor or even a domestic investor, and you're going to have to stump up hundreds of millions of dollars for the initial phase of a mine, are you going to do that unless you have real certainty that the government is going to be behind you. And if you start the process that you're going to see this mine through or you're just going to have hundreds of millions of dollars of stranded capital, we can't do that. So people are rightly worried about putting their money behind these projects because they don't know what the government's going to suddenly decide to do and change the regulatory process on them Now we need these resource products.
Stewart Muir:We need the metals just as we need other energy sources. We also need the economic activity that comes from doing that, because in Canada this is the base of our economy, because we trade the things we produce, like metals, for the things we don't produce and need, be they iPhones or oranges, and that's how the world goes around. But it seems like it's really hard to get that message out. And this week is when all the mayors and councillors from around British Columbia gather in Vancouver it's UBCM and I've been talking to a lot of the local leaders Incredible frustration Officials who understand how their local economies work. They see the benefits, they know that that mine are producing a lot of jobs and so forth, but they're frustrated. They tell me that those who live in cities aren't seeing the connections. Just try to explain in your way what are the benefits to all Canadians and British Columbians from having this kind of activity that solves a shortage of materials but also has another impact on their lives.
Adam Pankratz:Just from a pure economic standpoint, from like for British Columbia, mining accounts for 25% of the value of our exports out of province, right? So a quarter of the exports that go out of British Columbia, those are mining, and you know how many. You know I did not come from a mining background. I didn't really think about mining. The only one I ever saw, and probably the only one most people see, is when they drive down the number three highway. They see Copper Mountain just outside of Princeton, right, and you know, honestly, it's not the prettiest site ever. And if that's the only impression you get of mining, you maybe think I'm not, I'm not sure this is, this is, this is the best thing. And I understand that view because I kind of was how I, how I grew up a little bit like I saw this one thing on the side of a highway. But I think, if you look at the value of minerals, to double check the numbers, but I think it's $43 billion worth of mine exports were in 2020 out of Canada. So $43 billion, that's a big number, right? That $43 billion that is sold to the world, or oil and gas, too, we could throw that in there. I mean, they're over $50 billion close to $100, I think and an extremely productive industry, right, I mean they're for every hour worked, I think, to GDP. Oil and gas is $700 an hour and mining is up there as well. But these are very, very productive industries that we sell to the world so that we can buy the things we want and also so that governments receive the royalties which pay for education, healthcare, roads, bridges, schools. All of this money flows back. I mean, the BC budget a couple years ago was balanced because of its natural gas exports, and that was when natural gas prices had spiked and gone through the roof because of the Russian invasion in Ukraine. So these things make tangible differences in government budgets, in people's lives, in taxes accrued in value to the country that we then can buy all the cool stuff that we want iPhones, oranges, as you said, t-shirts, whatever it is. I mean. At the end of the day, canada's economy is still banking and natural resources. That's what we do, that's what we're really good at, and if we start looking away from those very productive industries, we're going to see kind of what we've seen in the last 10 years, where our quality of life and our economic productivity flatlines for 10 years. What do we need to do about that? We need to start promoting these industries as industries that Canada does well and Canada can be a leader in right.
Adam Pankratz:When we look out in the world, where are we competitive? What is our competitive or comparative advantage in the international markets? It's not going to be manufacturing. Right, that ship has sailed. We're not going to be a manufacturing superpower. Like when I go to China and you look around, you're just like, okay, we have no chance, this is not going to happen. But where can we be a real leader in something that we're already good at? We keep trying to chase down technology in the United States. Okay, maybe, but we have a built-in advantage in natural resources, in oil and gas, in mining, in forestry, and we need to lean into those industries.
Adam Pankratz:Right, because the world again, the world is not going to stop using oil and gas tomorrow, it is not going to stop needing metals for a very, very long time and it's not going to stop needing wood products.
Adam Pankratz:So the way I like to think of it sometimes is if I look at the world and I think of okay, when that day comes that the last drop of oil is used or drawn out of the ground, and there's been a progressive reduction in the size of the oil industry, from where we are now more or less 100 million barrels a day and we eventually end up at a day where it's zero.
Adam Pankratz:Well, where do I want those last barrels of oil to come out of? Well, I want them to come out of Canada, and the reason that is is because I know that then those last barrels of oil are going to be being extracted in a very environmental way that has looked at if there's any negative environmental impacts, has looked at Indigenous communities, made sure they're getting a fair share, and this is being done in the right way. Right, it's not being done in a way that's polluting the river next door or is ruining a village or God knows what. Last drop of oil that gets pumped, I want it to be in Canada and everyone else can shut it down, because they're likely harming the environment or being a lot less careful about what they're doing than Canada is, and so I think we should lean into those industries. It's going to be good environmentally because we do things the right way, but it's also going to be really good for our economy and enhance our quality of life.
Stewart Muir:It's an economic advantage, but it's also an energy security advantage, and I'm intrigued, especially with your international perspective on things, adam, as to how the recent rise of energy security is a topic that everyone's talking about, especially since Russia invaded Ukraine, is something for Canadians to reflect on as to how we can fashion a role for a country that seems to be very challenged in a lot of ways like productivity.
Adam Pankratz:So on energy security, I mean we are fortunate that we can produce the energy that we need and that we're not going to find ourselves ultimately in a situation like my friends in Germany where all of a sudden you have no options and you wonder, well, where is my gas going to come from? And I'm entirely beholden on someone else to give me that gas. Right, and we saw Germany signing those massive LNG contracts with Qatar for 30-year takeouts and so on, because they lost the Russian supply. We're never going to end up in that situation and that is to our great advantage because again, where friends in London saw the price of their heating at that time go from 100 pounds a month to 400 pounds a month, nothing happened in Canada. Nothing happened in the United States either.
Adam Pankratz:We have oil and gas resources. We have the ability to produce energy. A lot of European countries didn't have that. So I think Canada, there's two sides to it. We're very lucky that we're isolated from it. We're lucky we're geopolitically probably pretty safe because we're next to the United States. So you gas LNG to our allies, in sort of the Western alliance, that we can play a key role in making sure that Europe has its own energy security. For sending LNG tankers across the Atlantic, we have enough of it. And if we're going to stand against countries which would otherwise, you know, be our aggressors or our enemies, well, canada has a role. There Again, we're not going to be a nuclear power, we're not going to be sending massive amounts of troops in, but supplying key energy to countries which are maybe more on the front lines or do need that, in order to make sure that they can play the roles they are required to play. Well, that's, I think, where we have a real opportunity to have some global influence.
Stewart Muir:Yet in Canada, our environment minister and this is a critique that you have raised is seen by some as ideological and disconnected from economic realities. Is that a harmful?
Adam Pankratz:situation. Well, I don't think for Minister Guilbeault specifically I don't think there's any question that that is the case with him that you look at his past, you look at what he's doing now, you can see very clearly that this is someone who has a very clear axe to grind, and it's not limited development, it's not development done in the right way, it's no development and that's really the only answer. Again, when I said I don't see the activists who want the economy to be green also yelling and screaming that we need more mines, well, this is exactly the thing a person like Minister Guilbeault should be doing, because he has the ear of cabinet, he has the ear of the prime minister, he has the ability to do it. He should be screaming from the rooftops loud and clear. Now, is he doing it behind closed doors? I don't know, but it seems unlikely, based on the direction we see that the government is going and the mining industry is going. You should be screaming from the rooftop for all to hear that we need more mines, right, we need metal from Canada. This is where it needs to come from. This is the green future, and that's not happening.
Adam Pankratz:The only answer you ever get from him is no, no, you can't do that, no, you're not going to be able to do that in the future. But it's totally disconnected from reality, and perhaps nothing's more emblematic of that than when he was going to go across Canada by train to lower emissions. Of course, that's never happened because it can't happen in a practical manner. So he flies everywhere Like. These are the type of things where he's like yeah, it's great to grandstand and yell and scream whatever you want, but then when you actually have to implement a serious government policy and do something properly for the country oh, you have to you're confronted by that thing. You really hate reality.
Stewart Muir:Sometimes there's a sense that yeah it's inconsequential.
Stewart Muir:We'll make these decisions and things will be fine. But you can look around the world and often this seems to translate to measures like bans or prohibitions. That's the way to solve the trilemma. We're going to ban this thing that looks like it isn't producing perfect results. So electric vehicles are not just encouraged. Internal combustion cars are banned. That's how EV uptake, at least in theory, is meant to work, and I just wonder what your take is from an economics point of view on this idea. Is that the only way that we can bring about the solutions we need?
Adam Pankratz:No, I mean absolutely not. And the ban is weird. I wrote an article specifically about this. I can't remember, maybe a year ago, but it seems to be the preferred tool on many different things of governments lately, at least in the Western hemisphere or the Western world, where you know they don't again. Like you said, they don't try to encourage a change in behavior. This ban another behavior, and that's whether it's smoking or drinking or anything, but I'm going to ban this.
Adam Pankratz:Well, that is not going to work long-term, and especially not if you're, if you're talking about such a major shift as energy, because the way to get people to adopt electric vehicles, to create a business environment or a situation wherein you can have an economically viable or economically more attractive electric vehicle or electric solution to people so that they start moving it on their own, and right now that's not happening. Right, like Ford loses money on its electric vehicles, ford is losing billions of dollars on its electrical vehicle production and they've scaled back their production targets. A lot of companies have done this right. They've scaled back. We can't produce these this quickly. We're losing too much money. It's not there yet.
Adam Pankratz:Okay, does that mean there is no future for EVs? No, there is, but it has to be economically efficient, economically attractive not only to the companies but also to the consumers who are going to buy them. And a country which has actually done a pretty decent job of this, I would venture to say, is Norway. Right, where Norway has lots of oil and gas and has lots of electric vehicles, and they use their oil and gas resources to fund that transition and that electrical vehicle network build out. But they're not eliminating their most productive industry. They're using the money that it gives them to build out the electric infrastructure. So you know, why are we not doing that? Why are we not taking and encouraging and saying yeah, absolutely, guys, we've got 166 billion barrels of oil sitting there in Alberta. Let's get this stuff out to the world as fast as we can, get as much money for it as we can, and that money is going to go back into figuring out a way to make Canada's economy as renewable and as green and as efficient as possible Topical.
Adam Pankratz:We're having the election in British Columbia tomorrow and someone asked me what do I want to see in the platform? And I said I want some party to write in their platform that we're going to create an attractive business environment and we're going to get the hell out of the way. And we don't do that right. The government is always sticking its nose somewhere in that process and not allowing the market dynamics to work. And on these large questions, you have to get the market, an efficient market dynamic, working for the consumer the end consumer, ultimately and for these businesses to get the necessary investment to get the product in the first place and then to get it to be produced at scale at a cost that the customers are going to go out and buy it. And we're not doing that.
Stewart Muir:I'm trying to be an optimist here. We're not doing that. I'm trying to be an optimist here. 10 years from now, what could we be looking at if we get some things right? What would those be to get to a solution to these issues?
Adam Pankratz:Well, I think it's a good thing to think about, because Canada's a rich country with a lot of smart people, at the end of the day right, and we have a lot of businesses and a lot of expertise which is able to address the problems that we're going to face in the future. The key here is that the government switch the narrative, I think, and switch the expectations that you know. I look at young people at the University of British Columbia that I teach. How many of them look at a career in oil and gas or mining and think, boy, I'd really like to be a part of that. I don't hear it very often and the reason you don't hear it is because, as they say nowadays, those industries give a lot of people the ick right. They are natural resources. I don't want to be in that.
Adam Pankratz:Well, mining is an industry of the future. If you're going down the green path, we got to have a big industry in mining and I think we've got to shift this narrative away from. It's got to be the green economy and move it towards. Well, yeah, we're going to do that. But here's the multi-decade transition and you can be involved for the next 30 or 40 years working in natural gas extraction and you've contributed to limiting emissions, because you extracted them responsibly and you limited the amount of coal and oil that went into the atmosphere and instead it was natural gas. Is the problem solved? Are there no emissions? No, but there's less, and it took you decades.
Adam Pankratz:Yeah because it's a complicated problem, and then your kids are going to maybe complete that journey. That message comes back again to realism and understanding the scale and complexity of the problem that we have, but also therein, the opportunity. This is a problem that is solved by adults being in the room and saying, okay, this is really what we're up against. How do we get the best people involved in this and how do we make it worth their while to solve the problem? And that's not happening right now.
Stewart Muir:Well, I have a sense if we do those things we're going to be okay. So I do hope we're on that trajectory. We've shared a glass or two of wine over the years. I suppose you're on the doorstep in Burnaby and you discovered someone didn't have any wine background but wanted to be able to tap your enormous wine knowledge and wanted a bit of advice as to where they should start what region, what vintage variety. Might you steer someone?
Adam Pankratz:into. Well, the first thing I'll say as I'll say I think is the most important thing I ever learned about wine from working in the wine industry and from the experts therein is it doesn't matter what wine you drink, it matters who you drink it with. You can drink the best bottle of wine in the world with people you don't really care about. You're never going to remember that bottle of wine, but you can have a bottle of Planck, but with good friends, in a good environment, and you'll remember that bottle of wine for the rest of your life. So, however you drink it, make sure you drink it with good people. But I would say to go to regions where you wouldn't go at first glance for value.
Adam Pankratz:South America is very good, but in the British Columbia liquor store actually, there's a very good Montenegrin wine that I always recommend because it's only $14, but it's worth at least a $30 bottle of wine in my view, and it's called Vranach V-R-A-N-A-C. That's kind of a little gem that happens to be in the in the BC liquor store. But other than that, I just say to people the. The joy of the wine industry is that no matter how much you know, you never know enough. So the and the only way you figure out what you like is by trying lots of different things. And if you do that with with good people, you're going to have a lot of fun and and enjoy wine and and remember that it's there to be drunk and enjoyed, not to be scared of it. I find too many people are, you know, they think they have to know something about wine. No, it's there to be drunk and it's there to be drunk with people you enjoy and if you do that, you're doing it right.
Stewart Muir:You know it is Friday afternoon. It feels like the next part of this podcast should be. You know, we pull something out of the drawer and unfortunately I made that plan today, so we have to bite it off here and call this a day. It's been an incredible conversation. We'll link that wine in the show notes. And, adam Pankratz, thanks for coming to Power Struggle, my pleasure.
Adam Pankratz:Thank you, Stuart.
