Power Struggle
Improving the energy dialogue in Canada (and beyond) through honest, non-partisan, and fact- based conversations.
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Power Struggle
Canada almost froze—here’s what saved it // Greg Caldwell
In January 2024, temperatures in Alberta dropped to -50°C. The electricity grid sent out alerts. Demand skyrocketed. So what kept homes warm?
Stewart Muir is joined by Greg Caldwell, Director of Policy and Advocacy at ATCO Gas, for an inside look at the cold snap that put Canada's energy system to the test.
They break down the physics of energy delivery, why batteries can't replace pipelines, and what the rest of the world can learn from this chilling wake-up call.
🎧 You’ll learn:
• What really happened during Alberta’s January energy crunch
• Why natural gas played a critical role — and what that means for climate goals
• The global consequences of Canada saying “no” to LNG
🔔 Subscribe to Power Struggle for more fact-based, human-scaled conversations about modern energy.
The energy conversation is polarizing. But the reality is multidimensional. Get the full story with host Stewart Muir.
Reach out to us with thoughts, questions, or ideas at info@powerstruggle.ca
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The colonial age ended at the end of World War II and Canada and North America would be well served to not suggest how other countries you know use energy and make decisions Like we can provide advice, obviously, but I've been to China, I've been to India. These countries are extremely competent, in some ways much more than we are. China's the manufacturing center of the world. They're going to get their energy. The question is do we want to be at the table? You know countries that trade together generally, prosper together.
Stewart Muir:Welcome to Power Struggle. I'm Stuart Muir. Today I'm joined by Greg Caldwell, a leading voice in Canada's energy conversation. Greg blends deep expertise in energy systems and finance with a pragmatic view of sustainability, affordability and energy security. He actively champions innovative energy solutions like hydrogen and renewable gas, while emphasizing the essential role of conventional energy in maintaining Canada's economic and national security. Currently, greg is Director of Policy and Advocacy at ATCO Gas and Pipelines Limited. He's based in Alberta and he's here at the studio in Vancouver. Let's dive in, greg Caldwell. Welcome to Power Struggle.
Greg Caldwell:Thank you for having me. It's exciting to be here.
Stewart Muir:You know I appreciate the presentation you gave recently. I'm aware of your work, but I'd like to dive into a certain date in the calendar January 2024.
Greg Caldwell:Take us back there, because in this story it's a very exciting time for us in our business because we provide natural gas to the majority of Albertans, and our system, our network, is essential in the energy system that feeds the lifeblood of the province, which is, you know, small business, industrial business, our hospitals, whatever you look at our electricity networks.
Stewart Muir:What exactly is this system?
Greg Caldwell:Yeah, so it's the natural gas transmission and distribution.
Stewart Muir:Transmission pipe.
Greg Caldwell:Yeah, pipe system transmission and distribution for most of the province and so we have about 1.3 million customers, about 60,000 kilometers-ish of linear pipe, so a lot of pipe. It touches most corners of the province. You know, on a day, you know, we'll talk about what happened in January of pipe. It touches most corners of the province. You know, on a day, you know, we'll talk about what happened in January of 2024, but you know we're providing the vast majority of the energy to the province.
Stewart Muir:on those days, so the middle of winter in Alberta I've lived in Edmonton. It's very cold winters, but this was exceptional.
Greg Caldwell:Yes, it was. It was exceptional. We had about five days of minus 30 or below, which even for us is exceptional, and in Northern Alberta we were hitting the minus 40s, minus 42. I'll say Calgary, edmonton, red Deer, grand Prairie, florida.
Stewart Muir:Greg, I researched it In Keg River. It was like minus 51.5. Whether that's with wind chill or not, I don't know. You might be right.
Greg Caldwell:I won't debate you on that, but in our major centers-.
Stewart Muir:It's the coldest in decades, that's for sure.
Greg Caldwell:Yeah, and more so that it was an extended cold. You know it was five or six days without a reprieve, and so that was a real challenge.
Stewart Muir:Yeah, that's not normal operating systems, but it does happen.
Greg Caldwell:But it is how the system's designed and the system is designed for that. We'll get into it, but it performed well.
Stewart Muir:So this is an issue. There are all these people heating their homes all around Alberta your customers.
Greg Caldwell:Suddenly it is 40 below for a week. What happened in the energy system during that time? So those who are listening to the podcast from Alberta will remember there was a number of alerts that went out specific to the electricity grid. We had significant challenges providing enough electricity to Albertans. However, you know we at the same time did not have any substantial challenges on the gas grid. So the two systems were able to really work together and I want to even commend the electricity folks like they kept the lights on during a very challenging time and at the same time that this was going on in Alberta, british Columbia you know we're in Vancouver right now was also very important in keeping the lights on in Alberta. You know there was a lot of electricity going back and forth.
Stewart Muir:It was warmer in British Columbia.
Greg Caldwell:It was, but it was also extremely cold in British Columbia at the same time.
Stewart Muir:The cold's not in both places.
Greg Caldwell:And we can get into here in a second yeah we'll come back to that part of it.
Stewart Muir:So here are these people. They've got electricity in their homes for the lights and some other things, but they're also dependent on gas coming into their homes to heat water and run their furnaces. Yes, and suddenly they're using way, way more gas because it's so cold out.
Greg Caldwell:Yeah, so when, during these periods, you see the electricity grid and I'll try not to like get too deep into the numbers here, but I'll just make it really clear in Alberta terms, the grid provides about 12 gigawatts of power at any one time. That's about peak in Alberta and the as-grid was providing between 105 and 110 gigawatts at the same time. That's about peak in Alberta and the Ascred was providing between 105 and 110 gigawatts at the same time. So it's like an eight to one difference. And you know, obviously the two networks need each other, but what was really just telling to us was that people don't understand how important that gas network was to keep the lights on and also that it did it affordably and really completely reliably during that period. And we can get a little further into how we did that, but it was extremely telling, you know, as our grid has changed over the years and I'd love to get into like why we had the grid alerts and what role natural gas plays and renewables played and all that and even storage.
Stewart Muir:I think people who follow the space already know that we're talking about the fact we're in a time when there's a lot of pressure to electrify everything and maybe some assumptions about how easy that is. But January 2024 in Alberta and BC, it turns out, is kind of a life lesson in how this could unfold in future.
Greg Caldwell:Yeah, I think the first thing we learned and it's something that I like to talk about when I speak is that we have been told you know, just electrify everything and it'll work and you'll save money and everything will be perfect. You'll save money and everything will be perfect. The physics don't work that way. You know, when you have a grid that provides eight times more energy at peak than the grid they're saying to move to, well, that's just not a practical suggestion. Secondly, it does it at a fraction of the cost. And so you know, on a kilowatt hour basis, in Alberta, it's about five times more expensive for an average homeowner to use electricity than it is to use natural gas.
Stewart Muir:So those five days we're talking about that was sort of an aberration, because in July you don't have that. But let's do that comparison so you're saying it's eight times more gas was used for people's energy, lives and electricity in January 2024. But what about an average July?
Greg Caldwell:Oh, an average.
Stewart Muir:July.
Greg Caldwell:What is that ratio Is it one to one In Alberta. It would be quite close actually, because on a July day there isn't a lot of natural gas demand.
Stewart Muir:So if you wanted to plan an energy system based on July, that would be probably pretty easy to do if we're assuming there's no January coming, when it's really cold, because you could just supply as much gas energy as electricity energy, and then you're good for July.
Greg Caldwell:Yeah, I would say it would be easy to do for electricity end uses. And we have to be careful we mix these things up all the time. You know a typical industrial economy 20 to 25% of the energy end use is electricity, 75% is not. So if you want to make steel, concrete, ammonia, plastics, you can have all the free and cheap electricity in the world. You don't have the petrochemical inputs to do that and I mean I'll use Alberta because that's what I understand best. Then you don't have an economy. No-transcript decarbonization. You know, as in as in the energy end use, when I say 80% of the economy.
Stewart Muir:But they're also, in some European countries, de-industrializing because of the cost and availability of of energy, are they not?
Greg Caldwell:They are. You know, I want to be careful not to knock these European countries too hard, because a lot of things are happening. It's not just the transition to a lower carbon economy. The war in Ukraine has had a significant, significant impact, and so when you look at energy prices in Italy, germany, the United Kingdom, like residential electricity prices in the United Kingdom, like residential electricity prices in the United Kingdom are five to eight times what the average Canadian pays. So when you look at deindustrialization, I mean we can point to that. The question would be is it the decarbonization policy drowning that? Is it Vladimir Putin? Is it some third reason that you know I'm probably not an expert enough to point at? I can talk to the energy reasons. The answer is yes to all of it, but it's not just one thing.
Stewart Muir:So I just want to go back to that period. 38 all-time cold records were broken in Alberta during that cold spell Unreal. You must have a control room somewhere where your engineers are watching the system At any point, were they concerned that there wouldn't be enough gas to go around.
Greg Caldwell:There is never a concern of supply. Supply is the easy part. It's actually delivery of supply and, just like with electricity generally, you can generate enough of it. It's moving it around when I would say our control room and the folks that work specifically on storage. So I haven't explained the role storage plays for gas and it's not well understood. I mean, the natural gas grid is a bunch of pipes. Well, pipes are batteries grid is a bunch of pipes. Well, pipes are batteries. They just store compressed energy.
Greg Caldwell:And that's what makes pipelines so different from power lines. You know we do not store electricity broadly. We store potential energy in a dam or a pile of coal or something like that, but we don't store electricity broadly. And so the gas grid really, where we are able, we have the flexibility to go from. We talked about July where we might be using the same amount of energy as the electricity grid. So, say, 12 gigawatts out of each system, we go to 110. It's storage that gives us that flexibility. So we, every day the cold snap went on, we became more and more reliant on our storage, and that was one of the images you know we and I had talked about that I had, and you know you can see each day when we get more and more reliant. I think by the last day about 50 to 55% of the natural gas used in Alberta came from storage.
Stewart Muir:Right, and someone is thinking if this cold snap goes on another five days we might be out of gas from storage.
Greg Caldwell:I wouldn't say out of gas, but the easily accessible storage is getting near its end and so we operate a pretty significant storage facility in the Edmonton region and our working capacity near the end was getting quite low working capacity of the gas and the storage. These are salt caverns, just they're underground. For listeners that may not know how this works, these are all underground. They're huge salt domes that have been washed out and we keep compressed natural gas in. But after the five days we were getting- Right Getting low.
Stewart Muir:Getting low, yeah, okay, now the electricity supply. I guess there's an image we've all got in our heads, or many of us who aren't energy nerds maybe that electricity is the green alternative to natural gas. But one question has to be asked how do you make that electricity?
Greg Caldwell:So in the Alberta context, about 75% of the electricity delivered in Alberta on an average day let's say average comes from natural gas. Now we are adding more and more wind and solar all the time. In Alberta it's been the primary driver of new capacity additions the last five years. Wind and solar have done a great job at not only providing non-fossil sources of electricity but also reducing our dependency, during windy and sunny times, on fossil fuels and lowering the grid emissions as we do that. But on going back to the cold day, I mean you see wind and solar capacity factors. So that is capacity factors, the percentage of the installed capacity that is available to be used. And you said you've had spent some time in Edmonton.
Stewart Muir:I was there actually during COVID and I had to get out of the house, so I went for very long walks in those cold, cold months and it was bright, blue. It was so bright. I was always curious and I'm sure you'd be able to tell me how much, because it's in the north, it's wintertime, maybe that sun isn't that strong, but it feels strong when you're walking around.
Greg Caldwell:So what's the capacity factor of solar? So when we hit these peak periods I'll call it minus 25 and below we see capacity factors of wind and solar every single time drop below 10%. Now we can have periods, especially with wind, like little periods where it jumps up to 20, 30, 40%, but broadly the average is less than a 10% capacity factor. So what you end up seeing in practice during those peak periods is a grid that's completely dependent on natural gas, coal when we had it we've now retired all of our coal assets in Alberta and electricity imports. In the Alberta scenario you have Saskatchewan, montana, british Columbia. Well, saskatchewan and Montana are coal imports broadly and some natural gas. So you're you know we're kidding ourselves when we say we don't need it or we can operate without it. It's just not practical.
Greg Caldwell:And and going back to the storage topic that we just touched on and I didn't say it then but I'll say it now we actually did some math and said, okay, for this five day, if we just eliminated gas storage and used batteries, could we do it. And our team went back and looked at global lithium-ion battery production for electric vehicles, what's being produced every year, and the quick math is it's 13 years of global lithium-ion battery storage for the whole world to put the batteries in place to do what the underground gas storage did in Alberta for five days. You know, no matter who you are, you hear those numbers and you go. Battery storage can play a part for you know, short-term, quick duration, reliability on our electric grid, but it is not replacing this other system. There's no physical way, there's no technical way and there's no economic way to do that.
Stewart Muir:So for that to work, suppose you can get 13 years worth of global production and you could exclusively buy those and the electric vehicle. People can't get batteries because Alberta's scooped them all up and you put them into a big field and you hook them up. In order for this to work you would need a lot of time to charge them up and you'd have to charge them with energy coming from the grid. I mean, this is so theoretical because you'd never be able to do this, but as a thought exercise it's fascinating that it's so monumental. Just for how many people. There's 4 million people in Alberta, just to five now, and you don't even serve all of them in your network. So in your network alone, those 1.1 million people, they would need all of the world's battery production times 13 years.
Greg Caldwell:Well, and it wouldn't be. You know, if our goals are emission reduction, sustainability, less reliance on fossil fuels, what would be better? A bunch of batteries sitting in Alberta not being utilized 99% of the time.
Stewart Muir:Because you're not using them in July. We don't need them.
Greg Caldwell:You don't need them, yeah, 99% of the time, because you're not using them in that joy. We don't need them. You don't need them, yeah, broadly.
Greg Caldwell:Or putting them in millions of EVs around the world. I'm answering my own question, but it's not a productive use of the resource, for starters, and then, secondly, the economic cost of doing such, of doing that. I mean I talked about UK energy bills being five times that of the average Canadian energy bill. Well, we could flip that on its head if we start installing infrastructure like that, because I didn't talk about the cost of that, but obviously it's staggering and, um, you know, it just doesn't make any sense. So it's not going to happen. I mean, I use it as an example. Um, because we have been told and there's been, you know, politicians, politicians, I'll say I'll point the finger at politicians broadly who have said no, just electrify your economy, everything will be fine, it'll all work. And if you talk to engineers, technical folks that work in our industry, even the electric industry, they'll tell you, give you a very different answer.
Stewart Muir:Right, and it doesn't even matter that much whether the electricity is coming from this source renewables or from gas or coal or nuclear. The fact it's electricity means that there's only so much that you can use it in the homes the way we live now, so you can't just have five times more electricity to offset.
Greg Caldwell:And homes don't use most of the energy, right, like we keep talking homes, but homes are like I'm going to call it the easy part when I talk about. In your average OECD economy, where I said, 80% of the economy is using fossil energy still, and that's in the European context. You go to China, the United States, canada, you're closer to 90% of the economy is powered by fossil energy still. We should be working to reduce those numbers and we are, and you are seeing progress around the world in that. But you know, putting a bunch of batteries in Alberta and building a bunch of renewable energy is not going to be the solution.
Stewart Muir:Now we've talked about Alberta and you referenced BC. So at the same time, back in January 2024, bc had some pretty cold weather and it was pushed. Bc is very different. In its energy system. It relies very heavily on hydro for its electricity creation. Also, it has phased out natural gas to create electricity, so it has fewer options than it used to. But it uses a lot of gas, just like Alberta does, in homes and businesses. So the deep freeze in Alberta gets cold. What happens next? You've got these two provinces side by side that share electricity to some extent. They share gas systems. They're a bit intertwined right. What happens?
Greg Caldwell:Let's start on the electricity answer and then we'll move to gas. So DC, so BC does, I think, broadly like something like 95% of the grid is hydro. Here it's extremely urban. That being said, when we look at last year, for example, 2024, you know BC has become quite dependent on electricity imports. So it is correct to say the grid here doesn't have any natural gas in it. But without electricity imports from other provinces that is generated from natural gas, the grid here would struggle during these peak periods and it may actually collapse without those interconnections. I mean, it's not.
Greg Caldwell:I believe last year Hydro came out with a report recently saying that about 24% of the electricity consumed in BC was imported last year and that is because the impacts of climate change and less rainfall that you're just producing less electricity in BC than you have historically.
Greg Caldwell:So to answer your question, yes, the grid is much lower emission in BC than Alberta. And yes, the grid is much lower emission in BC than Alberta but it is also still totally reliant on fossil fuels, even though within the borders of BC you could say you're not, but you are. And then the gas grid in BC during that peak time was producing well over double the amount of energy the electric grid was producing in BC during that same January period. So, again, to replace the gas grid in BC with electricity, you'd be looking at, you know, doubling to tripling what you have today in the hydro assets, and we know what the last site C cost and I just there aren't that many rivers left and so you're going to be looking. Even if you did electrify the economy, and whether it's nuclear or natural gas, coal's probably not going to happen, but you know you're going to be looking at a number of solutions that involve fossil fuels, unfortunately.
Stewart Muir:Well, it seems as if governments are advised by parties that are saying you can move these gas furnaces over to heat pumps, you can decarbonize the vehicle fleet by having EVs, you'll just get more electricity. But you're saying that the supply of electricity is going to be a problem if you do that.
Greg Caldwell:Yeah, I mean. So I want to be very clear. You can move to heat pumps, especially in this climate.
Stewart Muir:A model climate.
Greg Caldwell:Yeah, when I say this climate, I'm referring to Vancouver specifically. Broadly, it will work. The technology works. You can move to EVs. I'm not anti-EV or anti-heat pump. What I'm anti is political decisions driving bad engineering outcomes, and the outcome of electrifying all the heat in BC would be for five days a year. Bc rate payers would need to pay for triple the amount of infrastructure to supply it. And in what world does the average BC rate payer go? That's good for me, like there's other ways to reduce emissions and other ways to achieve the broader environmental goals that aren't that.
Stewart Muir:And somehow we've come to a point, especially in British Columbia, where it's almost like you're not allowed to talk about those other things that you could do to achieve what is hopefully the goal here, which is to have an impact on emissions.
Greg Caldwell:You know, I think people are well-meaning when they talk about this and they talk about, say, banning natural gas from a municipality or banning it from, you know, banning energy exports, banning oil exports. I understand that the core of all is we have an emissions problem, we have a climate change problem, like an ecological issue. There is an ecological issue. I don't deny that at all. I don't deny that at all. I don't deny the science. I actually totally accept it. You know, when we've talked before, what I push back on pretty hard is that banning natural gas, whether it's in Edmonton or there's actually a community in Edmonton it's banned from, believe it or not or in Vancouver, that that is the solution.
Greg Caldwell:I'll tell a quick story here. So I was in India in early 2020. I went with a group of friends and we did a trip drove from, effectively, the Pakistani border all the way down to Southern India, 3,000 kilometers. We drove it was 23 days, something like that and I got to just see in that country just what the lack of access to energy means in real life to just regular Indians. Because I'm dropping a motorcycle or a tuk-tuk, depending where we are, and I'm privileged I can afford to buy gas, and gas in India is actually more expensive than gas in Canada at the time, which was surprising. And just to bring this full circle, I did some research when I got home and the average Indian uses one to one and a half barrels of oil a year of energy.
Greg Caldwell:The average Canadian uses 20. The average American uses 20. The average Japanese individual uses 15. The average Chinese uses four barrels. And so what I would say to people who are banning them? This will all make sense here in a second. So if you're going to go ban a fuel or ban an LNG export project in Canada for climate change or emission reduction reasons, what I would say to you is the people in India 20 years from now are not going to be using one or one and a half barrels per person per day. And a half barrels per person per day it will go up, but they're going to be the ones that actually decide broadly for the world people in India, china, africa. They're going to be the ones that decide what the carbon outcomes are, because they're going to be the ones with all the growth.
Stewart Muir:It won't be Canada saying we don't want to send LNG to you because we think you shouldn't be able to use a fossil fuel. That won't cause Indians to decide to not advance their journey out of energy poverty, will it?
Greg Caldwell:It won't even hit the radar. You know. Again, you look at, you know. Go back to China and India, because to me you have 3 billion people, the two primary drivers of economic growth, probably for the next 20 years. China's importing 12 million barrels of oil every day today. India is much less. I think India is around 5 million barrels, something like that. But even if the Indians went from one barrel a year per person to 10, that's an extra 45 million barrels of oil per day in world. That's a 50% increase. So we produce around a hundred million barrels a day.
Greg Caldwell:And so what Canada must be doing is not focusing on oh, I'm going to ban this or I'm going to regulate that. You know, we can get into that in a second. What Canada should be doing is is reaching out to them and saying well, how can we get you the lowest carbon energy, which I would argue LNG would be a good start how can we help you with nuclear in your country? How can we help you with hydrogen? How can we help you? I mean, broadly, it'll probably be China that'll help them with solar and batteries and windmills. But like, how do you help them so that those numbers instead of going to 45 million barrels a day. Maybe they go to 10 million barrels a day. That would do magnitudes more to reduce emissions around the world than carbon taxing Canadians and banning gas services and banning projects in Canada.
Stewart Muir:Well, I'm just running the numbers on that. If India is using 5 million a day, that's about a Canada worth of exports. That's how much Canada exports. I think a little more, maybe. So one Canada today serves India. If they go to the number you cite, that's nine Canadas worth of oil. Or Canada would have to increase its production ninefold in order to continue to serve the equivalent of India's needs. That would be wildly optimistic, even in Calgary. I don't think there's anyone predicting that, but there's those saying it could be significantly more. But that's just an illustration. Your point here, greg, and let's go back over it because I think it's so important for a country whose leaders over the last few years have told Greece and Poland and Germany and who else, what other countries, japan I think came asking for liquefied natural gas. Please can you send us that? We want to decarbonize our economy, will you help us to lower our emissions? And the Canadian answer was no, go away. We're not interested in selling you gas because we think you wouldn't know how to use it responsibly.
Greg Caldwell:Basically, the United States in the last 10 years has added 18 billion cubic feet of LNG export to their shores. 18 billion cubic feet is what Canada produces in natural gas per day. So that's what they've added. They've added a whole Canada and just started exporting it. So not only is there a business case, the business case is exceptionally good. That is partially what's driven the US economy to just outperform most of the world's economies over the last decade. And regardless of who the president's been, what the policies have been, and we've gone from Republican to Democrat back to Republican there hasn't been broadly a change in this.
Stewart Muir:And over the past decade, canada's relative wealth has fallen greatly compared to the US. A lot of people are asking why, meanwhile, the US has prospered. You're drawing a connection between their LNG exports and their prosperity. Do you think that if Canada was doing what the US was doing, we wouldn't be Alabama, would be California or New York State?
Greg Caldwell:It would be a guess to know where our GDP per person would be if we had done that. But what I can say is that Canada has chosen to forego these opportunities. And going back to my point about we won't solve climate and emissions here. What we can do is build stuff and be part of the solution and figuring out what that future is. But the hierarchy of needs for our energy consumers and we haven't talked about this today is always going to be price and availability. And availability is parallel with reliability.
Greg Caldwell:If we look at Germany, when the Russians invaded Ukraine and obviously Nord Stream got blown up and all this, all that mattered was availability of energy. Price didn't even matter for a while. Price matters now greatly, but it didn't matter for a while. Like availability is everything. And there wasn't anyone going oh, what's the emission factor of this LNG from the United States? You know, if you don't have energy, nothing else matters. And so you know, to the no business case comment to that we should leave it in the ground. Well, we can, but the rest of the world will just pick up the pieces, whether it's Russian exports, qatari exports, american exports or Australian, even those are the kind of the big four in the LNG world and Canadians to your point about our economic performance since 2015,. We've seen our GDP per person effectively flatline. We've seen our productivity growth go negative, which is the first time since World War II Canadian productivity growth. There was a little blip when I was born in like 1981. I don't know what was going on then. You might remember I don't.
Stewart Muir:But it was me getting some wide-legged. You were probably yeah.
Greg Caldwell:Alec Riders, probably in elementary school or something. Yes, slightly further, but yeah. But it's like we've gotten to the point where productivity I say productivity growth has gone negative. Gdp per person is flat for a decade. Foreign direct investment like capital outflows. When you look at foreign direct investment into the country and Canadian investment outside of it, it's gone negative. So that means more dollars are going out of the country than staying in, and so you're seeing this capital shallowing across. This is across Canadian industry, not energy. Capital shallowing of cross. This is cross Canadian industry, not energy.
Greg Caldwell:And really what we need to do is be honest with ourselves that we must invest in these industries because they are the most productive industries in the country. And to my point about the Indians, the Chinese, your point about the Europeans people need this energy, so we have an obligation I would argue, a moral obligation as holders of this energy, to provide it to countries that need it to thrive. The final thing I'll say, just to round that out, is that we have a lot of challenges within Canada. Right, we have to. Your point about our GDP is low.
Greg Caldwell:We've got communities that are economically underserved. We can really help people, and I say this you know, parts of Alberta are some of the wealthiest parts of the country. I'm not talking about just helping Albertans. I'm talking about helping people along these corridors along the way to have economic opportunity, because we might be exporting the energy from New Brunswick or Northern British Columbia or even Manitoba. You know this is not just about one province or one industry and all the industries that support it along the way. I just see it as like such an opportunity to strengthen the country and make Canadians proud of you know what they're doing you know what they're doing.
Stewart Muir:Right now. We're a few weeks away from LNG Canada beginning to export natural gas to the other side of the Pacific, probably because it's countries there that have invested in this to be able to get the gas. What are they going to do with that LNG when they get it, and what will Canada, being able to provide it, do for the Canadian economy?
Greg Caldwell:So LNG Canada, which is, like I think it's still the largest single investment ever made in Canada, will export somewhere between one to two BCF of gas today.
Greg Caldwell:So just taking back from my past comments, that's a billion cubic feet, except it's cooled so they could pour it onto a ship, chill it to like a minus 160-ish and put it in a ship so it's really dense, and send it off to. I mean, the largest consumers of LNG are broadly the Asian countries. Japan is the number one consumer of LNG in the world. I don't know where LNG Canada cargos will go.
Stewart Muir:Some of it will go to Japan. Is there an investor?
Greg Caldwell:You can assume, japan, malaysia, south Korea, like that region, even China very possibly, but broadly, the natural gas that goes to those regions are used for all the things we talked about, whether it's producing ammonia so you can grow food, or generating electricity, heating homes, cooking even natural gas vehicles. I mean the Chinese have been making massive investments into LNG-powered vehicles in China and we're starting to see oil demand. I'm not going to say slowing or flat in China, but it's slowing, and a big reason is because even LNG on an energy-equivalent basis can be cheaper than diesel. When you said you know folks in Canada are saying, well, they can't be trusted, what I would say is the colonial age ended at the end of World War II and Canada and North America would be well served to not suggest how other countries you know use energy and make decisions Like we can provide advice, obviously, but you know, I've been to China, I've been to India. These countries are extremely competent, in some ways much more than we are. You know that China is the manufacturing center of the world. They're going to get their energy and they're going to figure out how to use it.
Greg Caldwell:And the question is, do we want to be at the table or not, and so I think not only can they be trusted to use the energy well, but it's essential they have it. So we have a world that's prosperous and stable and we're all working together. I mean, I think trade has generally been the way countries meet in the middle on many, many issues. I don't want to get into what's going on right now around trade, but you know, countries that trade together generally prosper together, and I think that there's that's been lost probably in some of the back and forth going on right now. But I think Canada has a real opportunity and I talked about how optimistic I am to go. You know we're going to be that country for you, that trusted partner, and we have just I mean, we've talked about oil and gas here, but we have minerals, we have agricultural products, we have wood. You know I could go on it.
Stewart Muir:We're so lucky. Well, let's run with the optimism, because I think in a lot of these energy debates it can leave you feeling that you're kind of polarized, that you're into you're having to argue a point when what we all want to be doing is innovating and improving things and leaving the world better than we found it, as challenging as that idea can feel at sometimes. You've been talking about the different utilization of hydrogen in homes and I just wonder if you could kind of draw us a picture of what's happening in that space.
Greg Caldwell:Yeah. So I've been really lucky over the last four or five years to work on a number of decarbonization programs, projects that our business has been actively investing in, and so we've got a hydrogen blending project where we blend hydrogen into the natural gas system. We've done some pure hydrogen buildings, done some renewable gas projects, some carbon capture like small scale, like think on your building where you do some small scale right at the furnace, at the furnace, yeah you know, just trying to um figure out how.
Greg Caldwell:you know, how are we gonna work in a world with where you have, you know, you have a price on carbon, you've got customer expectation around emission reduction and and you also have the practical realities of energy. You know, when I talked earlier about you're just not going to electrify everything. I mean people and I'm sure the second. I talk about hydrogen and if people watch this there'll be some comments like hydrogen's stupid, hydrogen's crazy, it doesn't work. And the reality is we actually don't know what the best solutions are to get off of our addiction to fossil fuels. But without trying these things, we just don't know.
Greg Caldwell:And so, yeah, the hydrogen project has been really exciting because we've proven that you can safely, reliably provide that energy in a home heating solution, which means you can also provide it in a vehicle. You can provide it to do power generation, whatever your end use is the challenge, and I'll just be transparent the challenge around hydrogen and there's only one is cost. That is, the challenge around hydrogen is that even in the Alberta context, where you're producing a hydrogen molecule with carbon capture, it can be 90 to 95% lower carbon intensity than natural gas, but it's quite a bit more expensive, and so how does that work? I mean, renewable gas is similar, where you have this effectively decarbonized molecule, but again it's quite a bit more expensive than natural gas. And yeah, so that's been the. It's been really exciting, but also really challenging.
Greg Caldwell:And with the current what do you want to call it? The politics of carbon, where we're seeing the individual carbon tax is dead in this country, it'll be interesting to see where these initiatives and projects go, because they are largely driven and I think it's important to say like, without an industrial carbon tax, it's hard to justify making low-carbon products. We don't believe. At least there's natural hydrogen in the ground.
Stewart Muir:We know of some very I met Alaskans who insisted that there's a bounty of. There may be Actually hydrogen in the ground that we can extract and it's frozen.
Greg Caldwell:There may be, but we and my background is petroleum engineering I'll say we don't know of where it is. But so, assuming we don't have natural hydrogen and we need to, it's like electricity you need to make it and you know we're Bake it till you make it. No, that's a different thing, exactly. But yes, you're making hydrogen, either from natural gas or, you know, using electricity and splitting water there's a few different ways or pyrolysis of the natural gas molecule. I would say it can become cheaper. But to say it will be as cheap or as affordable as natural gas, probably not Like, that's just probably off the table, unless someone invents a process that doesn't exist today. But could it be affordable for a number of energy end uses? That's the question. So can it be as affordable as diesel? Can it be affordable as propane in certain situations? That's the question we have to ask ourselves. And the answer is yes.
Greg Caldwell:You look around the world, there are examples of that. And then what are the policies? Again, is there a carbon tax? Is there a renewable fuel standard? Those things drive, at least in our market drive adoption of those technologies.
Greg Caldwell:But I do want to go back to what I said earlier about India and China and the Asian Pacific region. The driver of decarbonization is not going to be carbon policy, and this is something that I think almost no one in Canada understands. The driver of decarbonization is going to be energy security. So my example of India saying, well, if they want to get to 10 barrels a day of individual energy use, they need 45 million barrels a day of oil you brought up. You were like that's nine, canada's Probably not going to happen and it's actually a resource constraint. 45 million barrels of extra production would probably send the price of oil to $300 or $400 a barrel. So, whether it's India, china, sub-saharan Africa, even South America, all these regions that are growing, the driver of DCARB is going to be energy security, and so Canada can be there with them, first to provide oil, lng, but also to provide all those other things. Like, we have a great nuclear industry. You know the Canada technology.
Stewart Muir:And we have uranium.
Greg Caldwell:Yes, and as you incentivize growth and incentivize things getting better flourishing of those countries, the demands from the local population for these solutions will also increase. And you see this around the world the world, the countries with the highest GDP, with the highest standards of living. You know Singapore, parts of Europe, parts of North America. They're the countries even parts of China now that are doing all this.
Stewart Muir:And you can see blue sky in those places. Correct and clean water.
Greg Caldwell:Correct, exactly. And so in Canada, like we can either be like Norway, where we're, you know, unabashedly producing our energy resources and reinvesting in our own country and around the world in these solutions, or we can, you know, continue what we've done, which is saying, well, we won't do it here and hope the rest of the world follows along. And we already know the answers. And they aren't following along. And with the recent political changes around the world we're seeing, not only are they not following, some countries are unfortunately doing a 180 even on some of these policies, which I think in hindsight won't necessarily be the most prudent choices. But we can't control other countries, right?
Stewart Muir:Well, I was at a conference in New Delhi a few years ago and I discovered that India has a minister of coal just coal. I don't know any other country that is so specialized and I actually met the minister, came to this mining conference and made it very clear that India is going to develop its coal resources if it has to and if it has an alternative that it can afford that is cleaner, it's going to do that. So it certainly confirms my own experience, what you've observed in terms of the fact that those in the world who want more energy will find a way to get it, because that's what humans do. We always have.
Greg Caldwell:And if Indians develop their own coal you're making my point. For me, Is that energy security?
Stewart Muir:Well, it's going to be secure for them.
Greg Caldwell:Exactly. They're not reliant on a ship with LNG, a ship with oil, to bring the energy to them. So it might not even be the lowest cost solution, but it's the most secure solution. And that's you see in China going on right now. Chinese coal demand for the last 20 years has grown effectively every year, and China is the leading producer of wind and solar solutions. China is the leading adder of hydro resources in the last 20 years, more so than any other country in the world, and is, I will argue, the leader in nuclear technology.
Greg Caldwell:Now, well, why are they adding coal? Well, the number one reason is energy security because they're so dependent on imports of oil, of natural gas Most of their natural gas comes from Russia or LNG. They don't want to be more dependent and so they're using that coal resource. Coal also pairs very well with wind and solar because you just have that base load, you can run it, and a huge part of the Chinese advantage is they have some of the world's lowest electricity prices.
Greg Caldwell:We can pull our hair out here around these policies, around industrial carbon taxes, individual carbon taxes, and think we're we're changing the outcomes around us, but we're not, and and I think that's a big message I wanted to get out today is that we actually need to double down on what we're good at. What we're really good at is this resource stuff and you know, by engaging with these countries we can have influence and we can suggest solutions and all that. But if we're not at the table, you know whether the Germans or Japanese, whoever comes here asking for our energy if we're not at the table, we're just not part of that solution.
Stewart Muir:It sometimes feels like there's a binary that's driving the political discourse here in Canada. Fossil fuel's bad, renewable's good. We need to go from here to there, and it's just a matter of wishing to do it. We have to be thinking right, and then we'll be able to get there. Is that how it works?
Greg Caldwell:Yeah, I'm going to jump back to. So one of the people I really enjoy listening to and I say and he's not around anymore is Milton Friedman. And he says one of the great mistakes we make is judging a policy by its intent policy Desired outcome.
Greg Caldwell:Desired outcome versus its actual outcome. And you know, what we keep doing here is looking at our policies and say, well, the intent is to reduce carbon. You know the intent is to, you know, respond to climate change, and so I respect that outcome. I think that's a positive outcome. We want a clean environment, we want an environment we leave our children children that is better than the one we have today. But the reality is and I'll just go back to the facts as we know them, we've seen a 54 megaton reduction in carbon emissions in Canada since 2005.
Stewart Muir:We're going in the right direction.
Greg Caldwell:We are, so that's a 7% reduction. We are, so that's a 7% reduction. So 54 megatons is do you care to guess how many minutes of Chinese emissions?
Stewart Muir:I don't know, it's 36 minutes 36 minutes.
Greg Caldwell:Yes, so we've pulled our hair out and I have none left. Neither do you over these policies, for you know, I'd say a decade since 2015. It's when we really started to get aggressive on these policies. And while we've done that, the Americans have built 18 BCF of LNG export right. World oil demand continues to increase. Emissions continue to increase.
Greg Caldwell:The reality is, we need to be honest with ourselves and look at these policies and go. They're not having the outcome we thought so. We need to be honest with ourselves and look at these policies and go. They're not having the outcome we thought so. We need to change with the world and that change has to be, you know, unleashing what we have on the world and really being competitive. And you know, I promised myself I wouldn't get political here. But you know, for us to be this nation that's strong and can push back on people that try to infringe on us, well, the number one way to be strong is have a really strong economy, even stronger energy security and have allies that rely on us for energy, because if there's a bunch of countries that rely on us for energy, they're not going to put up with someone else threatening our sovereignty or anything like that, like good to have friends in a dangerous world.
Stewart Muir:Well, that's an interesting point because right now, in terms of oil and gas, only one country depends on us, and that country is not a very good friend right now to us. I'm talking about the United States.
Greg Caldwell:Yes, 90% of our crude oil exports go to the US and 99% of our natural gas imports go to the US. And 99% of our natural gas imports go to the US.
Stewart Muir:So maybe if they were concerned that 90% could go to another country instead of to them, they would treat us with a little more consideration.
Greg Caldwell:It couldn't hurt. That would be my.
Stewart Muir:We would have options in this cold, cruel world.
Greg Caldwell:Yeah, and also this comes back to when I talk about optimism here. It's like well, what's the future for Canadians If also we can export to other countries? We get higher prices, we can choose who we export to. We sell our natural gas at a huge discount to NIMEX price or Henry Hub price, which are the American hubs for natural gas. It's usually half the price of those hubs.
Greg Caldwell:Part of that's transportation, because it does cost some money to move it down to those hubs, but most of it is because there's no market. Lng Canada will start to fix that but it by no means will completely eliminate the differential. And so those are Canadians own that resource. I mean people in British Columbia. Constitutionally the provinces own those resources. But I want to say Canadians own those resources and Canadians get the benefits of the income taxes, the royalties, the wealth that's created from those companies.
Stewart Muir:The jobs, yeah, the regional development, first Nations, participation in the economy. I mean it goes on and on.
Greg Caldwell:Yeah, it's a staggering impact to our economy. So even if you could get an extra 20% on that impact to our economy, so even if you could get an extra 20% on that, you know, whether it's you want to build affordable housing or build more hospitals or, to your point, bring clean drinking water to Indigenous communities, that should have it by now, we have the funds to do it and you know. I just think that that's been lost and our industry has probably done a bad job at explaining that to Canadians. I don't want to blame Canadians. I think our industry that's part of the reason I'm here is we really need to talk about that and explain to them. If you live on a farm in Manitoba, why should you care about what I have to say? Or you're a fisherman in New Brunswick or Newfoundland, why should you care?
Stewart Muir:Well, I'd like to close this out on an optimistic note, if it's possible to do that. So imagine January, a cold January, but in the future let's arbitrarily choose 2050. If you're an energy optimist, what does that look like? What does the cold snap of January 2050 look like, when a whole bunch of things have gone well because we've done the right things, Greg?
Greg Caldwell:So I think when you look at an ideal energy system and I'm an engineer, so I'm going to answer this a little bit as an engineer First off, you want a whole bunch of different technologies working together. So I see a future where we do have homes. Some of them are electrified, some of them have EVs in them that are potentially even putting energy back into the house. They're bi-directional. The natural gas is keeping at least the baseload of the power grid going in many, many provinces. But you also have nuclear. You do have wind and solar. You have hydro working where it can during those periods, solar, you have hydro working where it can during those periods. But broadly, we are utilizing everything we can to make the system as resilient and affordable as possible so that what we aren't using you know we're not wasting natural gas or wasting oil, that we could use a better technology. You can export that to a market top dollar for it and use all those funds not only create jobs here but create a better like social safety net in this country. So, um, I think that would be the the ideal. This is, you know, very optimistic, but it's you want to see an energy system that you know we don't want to go back in time and just oil and gas and nothing else. No, canadians will have electric vehicles.
Greg Caldwell:I think 2050 was your timeline so many of us will have electric vehicles.
Greg Caldwell:Many of us will have storage in our homes, solar panels on the roof, whatever that looks like. It'll be different in each part of the country, but we're not so dependent on one thing and even the Alberta example that I gave you, we're really dependent on natural gas. If Alberta had some nuclear plants or had some new hydro or even and I hope I didn't come across as anti-solar and wind, because I'm not I'm just honest about what they can and can't do Some solar and wind with battery storage that you know it's paired up where it acts like a baseload plant on that minus 35 day. All like the economics will drive what those solutions are ultimately, um, but that would be the system that I think canadians would be happy with. But I do want to go back to resiliency and affordability have to be the core drivers of that solution. It can't just be. You know, my ideology is this and I want to see that solution, which I think has driven some unfortunate outcomes in the last decade.
Stewart Muir:Well, as an engineer, would you say that there is maybe some chance that a solution that we haven't even heard of might come along before 2050 that will solve all of these problems and we can live long and prosper. Maybe it's dilithium crystals, star Trek or fusion. Is there something that's going to come along? Deus ex machina? Is that what they say in theater? It'll just sort of come in and save the day.
Greg Caldwell:You know it's possible. I think that's a bad plan. I think we you know, going back to my comment earlier, that you know only 20% of our energy, the energy we use in our economy, is electricity. So let's just say someone could invent some, some box that's free electricity for everyone. We'd solve the 20%, but we'd still be left with the other 80. And and I think that's what's lost on people is is that you know we really need to think beyond electricity, and I think it's unlikely we're going to find that.
Greg Caldwell:But we should be using the benefits we get from exploiting our resources to figure that out, because ultimately, like fossil fuels are not, we're not going to run out of them anytime soon. We're going to run out of cheap ones, and that's what's lost on folks that don't understand petroleum geology is we broadly have really cheap energy and it's never been cheaper. The natural gas that we produce today is much, much cheaper than going back to my comment about 1980. Yes, it is very affordable, but it won't be that way forever if we exhaust the resource. And so you know the reasons to work on these things and the reasons to create that energy system that you talked about is so that we can optimize the resources, and it's the same reason we should have energy efficiency programs and that EVs are good. You know like very different world by 2050 and how we use energy, but the idea that we won't use traditional natural gas, lng oil, coal, et cetera is just completely flawed.
Stewart Muir:Well, last question, and then it's time to go. You're prime minister. What's the first thing you do on energy policy on day one?
Greg Caldwell:The very first thing, the very first thing you do on energy policy on day one, the very first thing, the very first thing. I think that the industry requires policy certainty to invest in Canada and there has been so much uncertainty and you know you put forward a project, you don't know if it'll get approved. You don't know even if it gets approved, you might end up in court for five years. We need an extremely clear, transparent and auditable system of project approvals, and so some of the candidates both candidates actually have talked about this to some extent. But I think you need to know that if you put, if you want to put in a piece of infrastructure this goes way beyond oil and gas, by the way. Okay, like I'm talking about electricity, roads, railroads, like I could go on you need to know that it'll get approved within six to nine months and you need to know that, once it's approved, that you can build it. And our competitors are solving those problems and are making it easy. You know Atco operates in Australia. We operate in the United States. Not all countries are like this and it's really really important Canadians solve this, because if they don't, you'll just continue to see investment leave the country and we won't solve those productivity and GDP issues that I think most Canadians. When you talk about cost of things and cost of housing, they're feeling it because incomes have stagnated and incomes have stagnated because we're not growing. It's all interconnected.
Greg Caldwell:I'm Stuart Muir. This has been Power Struggle. Our guest today, greg.
Stewart Muir:Caldwell from ATCO in Alberta. It's all interconnected. I'm Stuart Muir. This has been Power Struggle Our guest today, Greg Caldwell from ATCO in Alberta. Thanks for tuning in. Be sure to like, subscribe and share, Thank you.
