What Energy Data Reveals About Oil Markets with Dane Gregoris

What are investors actually seeing in today’s energy data — and what does it reveal about the future of oil markets?

In this episode, Stewart Muir speaks with Dane Gregoris, Energy Director at Enverus Intelligence Research, one of the leading energy analytics firms in the world.

Gregoris leads the oil and gas intelligence team at Enverus, where he works with vast datasets that help investors and companies understand the forces shaping global energy markets. From production trends to capital flows, he explains how data is increasingly driving decision-making across the energy sector.

They discuss:

• What current oil and gas production data is telling investors
 • How energy analytics influence investment decisions
 • Capital discipline and market signals in the energy sector
 • Global energy demand and long-term market trends
 • How companies interpret energy market intelligence
 • What the latest data suggests about the future of oil and gas

This conversation explores how the energy industry reads the market — not through headlines, but through data.

At a time when energy debates are often driven by politics and speculation, understanding the underlying market signals has never been more important.

The real story of the energy market may not be in the headlines — but in the numbers.

#PowerStruggle #DaneGregoris #EnergyMarkets #OilAndGas #EnergyInvestment #EnergyAnalytics #GlobalEnergy #EnergyData #OilMarkets #EnergyIndustry

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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Transcript

Welcome And Guest Background

SPEAKER_00 0:13

Welcome to Power Struggle. I'm your host, Stuart Muir. Today we're joined by Dane Gregoris. He's managing director at Enveris Intelligence Research. He's in Calgary, one of the most respected data and analytics platforms in the global energy industry. Dane leads the firm's oil and gas intelligence team. Dane, welcome to Power Struggle.

SPEAKER_01 0:33

Thanks for having me, Stuart. Great to be here.

SPEAKER_00 0:35

I heard your group uh analyzes markets, capital flows, a lot of that investor information they need to have, production trends. You're watching the energy sector, and I guess the work is designed for investors and companies, is it? Is that the idea?

SPEAKER_01 0:48

Aaron Powell Yeah, that's a great summary. I mean, our role within the industry today is really to pull apart all the data that is reported to many different jurisdictions around the world and come up with commercial insights so that our investor clients as well as our corporate clients can make better decisions, particularly from a capital allocation standpoint across the energy industry. My role is more oil and gas centric, but I would say broadly as a firm, you know, we do sort of the the whole energy supply chain.

Is Canada Missing LNG Opportunity

SPEAKER_00 1:22

Now, recently you came out to Vancouver, you spoke at the Greater Vancouver Board of Trade, and I was really impressed with how you engage with the audience. I always like to see how it's landing when an expert uh comes in and talks. You know, people were kind of leaning forward, they weren't on their phones. That's always a good sign, you know, when you're at a conference and someone's doing that. Um I I thought you were taking this in a really complex area and making it tangible, uh understandable for a generalist business audience, you know, relevant and above all memorable. So I guess your background in engineering and geology has given you the toolbox, but you're also that kind of unique skill set where you've also gone into the finance, you've you've got a CFA, right? Mm-hmm. Yeah. Um, engineering and finance. It's an interesting mixture. Um and so you're dealing with some of the most important questions of our time, which is simply how will the world produce and use energy in the decades ahead? Which is kind of how we got the word phrase power struggle for the show, because it's a bit of a struggle. So um I want to jump into the struggle part of this because Dane, there's a uh over the years that I've covered LNG, liquefied natural gas as a Canadian opportunity. From time to time, um I find maybe media's calling, or there's there's a you know, question I'm getting from people, is Canada missing the boat on LNG? Because it's this big global opportunity. And you've got different things going on. I just wonder if you could help me understand. Uh, you know, years ago, Premier Christy Clark in BC was talking we're gonna have all of these. I know there was a list of proponents of like 20 at some point, 18 or different projects. No one ever thought they would all get built. But, anyways, um, if you're a member of the public, you're not necessarily a specialist like you are, help that person to navigate through the information they see so they can understand what's happening.

SPEAKER_01 3:11

Yeah, for sure. It's definitely a uh an opportunity, you know, like no other, I think, for Canada. Um if you look at the natural gas industry today globally, they consume around 400 BCF a day. And BCF stands for billion cubic feet of natural gas, and that's every single day. We think the industry, um, if you if you sort of extrapolate trends for the last 10, 20 years, the global natural gas consumers will add another 100 BCF a day to their demand over the next 20 to 30 years. So this is actually, I most people think about the oil and gas industry today as a fairly kind of slow to no growth industry. A lot of you know, folks in Canada actually think it's a declining industry, which is which is a bit of a false narrative that came around the time of COVID. But both oil and gas consumption globally are growing. Now, I think maybe where some of that false conception comes from is they're not growing in the developed world. They're growing in the developing worlds. Okay. Right. And so coming back to natural gas, natural gas is probably the growtiest hydrocarbon demand um piece if you look at all hydrocarbon products globally. And the opportunity for Canada is to participate in the growth of natural gas demand. Um, it's a competitive market. There are a bunch of other countries and producers in the world that can fulfill that 100 BCF of day of incremental demand that we see mainly gonna be shipped to Asia to be consumed in Asian countries. But if you think about that 100 BCF a day, that I think is Canada's opportunity to participate in. And to date, I think it's fair to say that we have missed the boat, um, at least initially, the first phase of LNG projects sort of coming, uh, that were proposed to be built on the west coast of British Columbia. Um, only really one of those projects is in service today, but there could have been many, many more. And I think looking forward, we have sort of a second chance in in terms of building for LNG exports. We have the rocks, we have the resource in both BC and Alberta. Uh it's just a matter of getting that to market. And um, the location uh being in Western Canada is actually advantageous for our customers in Asia or potential customers in Asia.

SPEAKER_00 5:47

Aaron Powell Okay, let me drill into this. The first wave we kind of missed. We got the LNG Canada project out of it. But that was about it. There was a little bit of activity on the Fraser River in Vancouver with I always like to mention this. I know you're aware of it, the Tilbury LNG, but that was more for local consumption, I guess. Um but the big story, yes, and uh lots of cool stuff. I I I see them fueling different ships in the harbor. More and more ships in the World Fleet are running on clean natural gas instead of that bunker oil, which is just filthy stuff, um, which is a good a good a good thing. Um So the second wave, now that's where we are. So um we got swamped on that first wave. We did see one big project out of it. Might someone be thinking, well, that's gonna happen again because that's sort of the Canadian story, you know, more disappointment. What will prevent that from being the ending here the second time?

Why The First LNG Wave Failed

SPEAKER_01 6:42

Yeah, it's it is interesting. I I think I mean maybe a little bit of context on like what um drivers of the sort of missing that first wave were. A lot of it had to do with, you know, regulatory uncertainty, permitting issues that really extended the timelines for a lot of projects that were proposed on the BC coast. Um it's really a function of government and and um uh regulatory environments, both from the federal side as well as the provincial side, that that were made it difficult for capital providers, um, oil and gas companies uh to invest. And a lot of those dollars, frankly, went to the US. Um there's over the same period that BC could have added multiples of LNG Canada over the last decade, the US added roughly 18 BCF a day of kind of flowing export capacity in the Gulf Coast. And so it it, like I mentioned before, it's a competitive market and capital moves pretty freely around the world. So if you don't have the right or if you have an uncertain kind of regulatory path to being built and ultimately being in service, um capital tends to move pretty quickly. And so I think that's the real reason why the boat was missed on the if on the initial phase uh in in terms of you know really building our LNG export capacity um at the scale it could be.

SPEAKER_00 8:17

So what's different now that seems to make you a little optimistic?

SPEAKER_01 8:22

Yeah, I mean, I think, you know, it was it was great to be at the the Greater Vancouver uh Board of Trade event. I definitely think there's a a cohort of folks in British Columbia and perhaps a growing cohort of folks that you know are looking at the economic realities of the both the province as as well as the um the citizens, um so both from you know personal kind of finance as well as um you know kind of provincial finances and are saying we need to move this economy forward. Um, you know, you can't rely on a you know really booming real estate sector anymore. I mean, that's that's sort of dried up. Uh and so you need another industry to come in and and support economic growth in the in the province. And so I heard that from a number of different parties that there's a lot more will, um maybe starting from a low base, but there's maybe some more will at the provincial levels to get these projects um over the line. And it's um it's definitely getting complicated um by a lot of the First Nations and um kind of title disputes that are happening kind of throughout the province. But I would say there's definitely more um more appetite uh for for economic development in the province that that's related to resources, and that's good.

Prices Look Low Until You Zoom Out

SPEAKER_00 9:49

Right. Now, Dane, um I've been seeing stories in the news. People are even asking me questions. They're saying uh LNG prices are really low. There's a lot of LNG in the world right now. So surely in these conditions, no one would want to invest 10, 20, 40 billion into an LNG plant on the coast of BC. What would you say to that?

SPEAKER_01 10:10

That's an interesting debate. Um I think it's perhaps a little myopic. They might be looking at a price chart of LNG prices from 2022 until today, of which they have fallen precipitously. But if you zoom out that price chart to include the years of kind of 2010 all the way to today, you'd actually see that LNG prices are up significantly since the first wave of projects were proposed on the BC BC West Coast. So prices during call it 2010 to sorry, 2019, so during that period, we're in the kind of six to seven dollar range for Asian delivered LNG prices. Today, I mean, even excluding the recent price rally due to the uh invasion of Iran, um, we're around kind of nine to ten dollars. So if you think of a normalized price environment, um, you had almost 20 BCF a day of proposed projects between 2010 and and 2019 on the on the on the west coast of British Columbia at six to seven dollars per uh MMBTU. Now prices are in the nine to ten dollar range. And so so the justification of prices are lower now is not a reality, I I think. I think it's more just a a maybe perhaps a a cherry-picking exercise of looking at the prices during 2022, which is exceeded$40 per MMBTU. And that was because of um the Russia's invasion of of Ukraine and the Nord Stream pipeline being destroyed. And so I I don't think I think you just need to zoom out and you get a different perspective.

SPEAKER_00 11:56

Aaron Powell Now it takes a long time to build one of these projects, doesn't it? No doubt. No doubt. So the the prices we have today are unlikely to be the prices of five, ten years from now when that project is complete.

SPEAKER_01 12:08

Aaron Powell I think history would suggest that the commodity prices are very difficult to predict. And most of the project participants, both from a financial perspective and the folks that are ultimately going to be owning and operating these plants, um really focus on the fundamentals. Is there going to be demand there? And which countries can we rely on to buy our natural gas? And they'll they'll actually sign up customers before the projects are even built. And so the projects themselves um are typically very highly contracted. And so there's there's less um kind of price risk as long as you have people willing to sign up for the gas in in the future. And that's typically how they're all financed.

Asia Demand And Energy Poverty

SPEAKER_00 12:54

Now, uh um just going back to something you said earlier, Dane, that it's not the growth of where we live here in North America or or Canada that's contributing to the consumption of natural gas. Although I wonder with AI coming in, but that's let's come back to that later. Um it's in the developing world. Uh couldn't can we lean into that a little bit? You know, why why is this? Uh I mean, I'm sure energy poverty is part of that story, but what do you see?

SPEAKER_01 13:21

Aaron Powell Yeah, I mean, I think if you just look at energy consumption per capita trends and you look at the developing worlds, um you know, Asia is increasing in in terms of energy consumption per capita and has been, you know, on this steady rise, you know, over the last three or four decades and and will continue um to to rise in in our view. They still only consume, I know the numbers on an oil basis, I think it's you know, a a third uh to half of what a North American kind of energy oil consumer consumes. Um a multiple of more energy consumption for folks in Asia to live the same quality of life that that we live here in North America. And so as their economic growth continues, they will likely be consuming more power for electricity, they will be consuming more natural gas to for heating or industrial uses. So there's a bunch of reasons why um, you know, there's there's this appetite. And I think even in some of the the you know, press notes from Kearney's trips through Asia over the last 12 months, I mean, they're all talking about, hey, we we need energy. And you're seeing it today. You know, all these Asian um businesses are are really crying uncle saying the fact that Qatar has just shut in 10 BCF a day of flowing LNG is is dramatically impacting their ability to conduct business in Asia. And so it just shows you how important natural gas um and energy broadly is to keep the economy going in Asia. And and they don't have, they're not as endowed with the resource bases that we have here in North America.

Geopolitics And Canada As Safe Supply

SPEAKER_00 15:19

Have you ever, with maybe your colleague, sat around and had a what-if conversation? You know, what if we built uh three or four LNG on the coast and and imagine here we have war in the Middle East, what what position would Canada be in? Uh if if you hadn't had that conversation, what would it sound like?

SPEAKER_01 15:38

Oh yeah. I mean, we talk about it all the time. I mean, there's almost equivalent in terms of gas resource in Canada as there is in the U.S. The U.S. is going to be export it exports around 18 BCF a day today, um, or or getting to that by the end of the year, and and we'll be by the end of 2035, we'll be exporting nearly 40 BCF a day. Um Canada has exporting two BCF a day today. So I think it's very easy, at least from the years between 2030 and 2040, not necessarily over the next five years, because these projects take a very long time to build, but in that 2030 to 2040 period, easily export out of the west coast of BC 20 BCF a day. And that could be um, I guess, consumed and accepted by the global market because the market's growing. And so the opportunity's there. It's it's really a function of um of building the the the necessary infrastructure. And particularly in a world where, you know, right now um much of the gas that's consumed via LNG today is produced in the Middle East, right? Like Qatar and and the US are the two biggest exporters of LNG. And so we we we we we think you know, Canada is uh um a lot further away from from kind of military or um geopolitically um unstable regions, and and Asian customers would love to be buying Canadian gas today because they're unable to buy Qatari gas, which is completely shut in at this point in time.

SPEAKER_00 17:26

Aaron Powell So Canada would be a secure supply, reliable. Now I just want to check out if I heard you right. Did you say Canada has a chance to go from 2 to 20?

SPEAKER_01 17:38

Yeah. A 10x.

SPEAKER_00 17:40

10 times more. What would it mean for the Canadian economy if we did that?

What 10x LNG Exports Mean

SPEAKER_01 17:44

Aaron Powell Yeah, I mean you'd be looking at a lot more revenue in in terms of government services. Um you gotta you gotta remember that um uh every uh molecule that's uh that that comes out of the ground um in Canada pays a revenue-related tax. So it's not a tax on the profits, it's a tax on the revenue. And so it's because this, you know, the citizens of this country you know take share, take part in resource extraction initiatives. Um it doesn't just go to one company, it really does get taken right off the top from the revenue side. And so that that number would grow you know by 10x from a natural gas production standpoint um in terms of the export volumes, perhaps not 10x. Um, it would double from what we produce today. So the Western Canadian sedimentary basin produces about 18 BCF of day gas. That would go to 40, right? If you export 20. Um, so that the natural gas-related royalties would increase by 2x. That would be a huge boon to both the Alberta and and British Columbia um economies. And you would you'd probably see more than a 2x in BC because their production base is a little bit smaller today. And and it's it would be relied upon even more heavily for the natural gas exports um on the West Coast. So there's a there's a real BC kind of centric um impact. And then when you think about all the jobs, indirect jobs for building all that infrastructure. I mean, I think the last time I looked, LNG Canada was nearly a$40 billion project. So to get to, you know, call it 20 BCF, you know, you would be um building many multiples of those, 10 of those projects. So it's it's quite um, you know, it's it's it's it's quite a huge opportunity, we think, for the country. Obviously, this is you know wouldn't happen immediately, but it's sort of a 2040, 2050 goal that I think the the country should should uh have the ambition to set for itself.

SPEAKER_00 19:49

I keep hearing a reference to the Motney Shale. The Motney shale, which is if you look at a map, it's a blob that sort of oblong. It's it in Alberta and it's in BC. What is it?

The Montney Resource Explained

SPEAKER_01 20:04

Yeah, so the Monty is a a lot of people it it a lot of people talk about it as a tight sandstone, uh a silt stone, if you will. So somewhere between a more permeable sandstone to a to a shale. Um so it's a quite high-quality shale formation, it's probably the best way to think of it. Uh shale um is the the the type of rocks that typically um hydrocarbon is created within. So shales are found across North America. Hydrocarbon is is is uh the molecules that that are created in the hydrocarbon kind of hang out, like to hang out in shale formations. Um and then typically what happens is when they are under a lot of depth and pressure and heat, they they the um the kerogen or the umxic kind of bacteria and materials turn into oil and gas um and and turn into hydrocarbon. Now, those shale formations, although they're full of oil and gas, for a long time were very difficult to extract these oil and gas molecules. And thanks to the you know onset of hydraulic fracturing, uh horizontal drilling and hydraulic fracturing, what you're able to do is extract the hydrocarbons from the source, the source rock, if you will. And what the what that's done is unlocked, you know, million barrels, trillions of cubic feet of natural gas, millions of barrels of oil across North America. Um, what we've have in the Montani today in both Alberta and BC is this really high quality shale that is, you know, almost ubiquitously um kind of laid out across the um the deepest, deepest areas of the Western Canadian sedimentary basin. So you can think of right up against the Rocky Mountains from you know all the way from the you know kind of southern Alberta to towards Dawson Creek and almost up until kind of Fort Nelson, um, you have this huge shale formation that can be developed uh with you know horizontal drilling and multi-stage fracking that allows for you know trillions of cubic feet of gas to be to be you know pulled out of the ground and ultimately um used for industrial, commercial, residential purposes. Um we have way too much of it in Canada for our own economy to use. So a lot of the gas today is exported to the United States. Um and some of the gas is exported to Asia via LNG Canada, we talked about nearly two BCF a day. But I think that number could get a heck of a lot higher. And there's enough gas in that rock to serve that. It's there. Right. It's not like we need to go explore for more gas, right? It's not like you build these export projects and you hope you find enough gas to backfill them. I think if you look at the opportunity, just looking at all the work that we do, you know, the MONE is the biggest gas resource in North America based on what's proven today. And I think almost 70% of the remaining gas actually sits on the BC side of the border. So a lot of people think about oil and gas and they think, oh, you know, it's it's an Alberta thing. You know, Alberta is really obsessed with oil and gas, and the rest of the Canada doesn't really care or doesn't have it. And that's it's not quite true, particularly on the gas side. You know, BC has this, you know, vast and very um economically attractive resource um in in the northeast part of the province.

SPEAKER_00 23:52

Aaron Powell I understand ALNG is, among other things, a way to get a bigger price, a better price for your natural gas. Can you explain how that fits in with the U.S. and our our coastal opportunities?

SPEAKER_01 24:07

Aaron Powell Yeah, that's a good question. So um because of the you know abundant gas that's found in Western Canada and the limited export capacity today, um, you know, to put to be put simply, we just produced produced too much of it. And so the price that we receive in our um markets is you know around 50% of what an American company would receive if they sold their gas at Henry Hub, which is in uh which is a the main natural gas price um for natural gas in in the US. And because of most of our gas is exported to the US, it's at the kind of the main benchmark price to to to compare against. So Canadian gas trades at about a 50% discount these days. Obviously that fluctuates. Sometimes it's better than that, sometimes it's worse than that. But recently the discount is is very wide. And if you add more export capacity, um, just like we've seen with the TMX project on the oil side, Transmounted the price for all the natural gas in Western Canada goes up.

unknown 25:18

Okay.

SPEAKER_01 25:19

Because prices are set at the margin.

SPEAKER_00 25:20

I I just had an idea. Produce less gas that will drive the price up, and then we won't have to build all this infrastructure on the coast. Life will be great. Yeah. Make sense?

Why Canadian Gas Trades Discounted

SPEAKER_01 25:30

So that's a scenario that would be good for producers, okay, but terrible for everybody else. Right. Right. Uh so that's not a great place to be, right? Like so some producers will make a lot of money if if you if you if they're able to keep their gas production flat while everybody else declines, you know, they will benefit from high prices. That's typically what like kind of the OPEC policy tends to be, right? They want to keep production low and and increase price to to uh you know bring in more wealth for for their monarchies or their citizens. Um now, in a in a market economy, that theory doesn't work because everybody wants to grow production because they want to grow their own business. And that's to the betterment of the royalty owners, so the people that make royalties, which is the um citizens of of uh Alberta and BC. Um, it's to the benefit of all the businesses that now can grow their volumes and and add jobs. Um and and so it's also to the benefit of all the consumers in Canada, the consumers in the US, the consumers in Asia, um, as they get more and more gas at a reasonable price, um, they can do more with it and the economy grows. So it's sort of a a key bedrock of sort of market um forces that creates the the most reasonable cost and the um at the at the most amount of gas um that that can be consumed for any activities for just kind of living your lives or um or or starting a business or any sort of industrial process. Like it's it's just so key for the the entire world. And and what's really interesting is right now, given the um the war in in Iran, like that's exactly what people are feeling today. If you're a business owner and say you make plastics, or say you're a business owner and you make chips for data centers in Taiwan or um South Korea, you're using tons of energy all day on a continuous basis to make these high, high-end technologies that's gonna be super important for the future, and you need energy to do that, and they're gonna be they're gonna see their costs go up because of these uh, you know, Qatari shut-ins and and conflict in the Middle East.

SPEAKER_00 28:00

So you've explained that we have a resource that's abundant. We have some technologies that have come along that have unlocked that abundance, and the result for the consumer here in North America, here in Canada, is that we've got low energy prices in our lives, which is pretty good, because I know my natural gas bill is not a high one. So I I think I think uh what you say is very compelling and relatable. Um is that putting it together about right? Am I passing the test here?

SPEAKER_01 28:28

Yeah, I think you nailed it. Exactly. Like it's it's to the betterment of everybody to um to produce more gas at a reasonable price. I mean, I think that's the that's that's the name of the game for our economy to flourish and our citizens to flourish.

BC Shipping Advantage Versus Gulf Coast

SPEAKER_00 28:42

Aaron Powell Now there's another layer here, which is not that we have the gas, it's where we are, where British Columbia is on the map globally relative to where the demand is. As you've said, it's in the Asia Pacifics, on the other side of the Pacific. Um what what what does this locational situation have to do with uh Canada's advantage?

SPEAKER_01 29:01

Aaron Powell Yeah, I think it you know that's maybe something that um got talked about a lot during the first wave of LNG projects and it's sort of subsided since um but I think it's it's worth kind of reframing just because we've seen so much capital and so many projects be announced in the U.S. Gulf Coast. So you could think about the U.S. Gulf Coast as the sort of competing jurisdiction for a North American LNG project. That's the biggest place, that's the the most amount of gas is exported in the world is the U.S. Gulf Coast. It's gone from exporting kind of zero BCF a day and kind of the mid-2000s to now exporting like close to 18 and it's going to 40. So like that's sort of the hotbed for LNG. Um and when you think about the the market, um, so like I mentioned, most of the growth, that 100 BCF a day, that's gonna be you know, 400 BCF a day is consumed globally, natural gas going to 500, you know, by 2040, 2050 time frame. The US Gulf Coast is a great place to go build gas. The only bad part about it is that it takes 25 days for a tanker out of the US Gulf Coast to make its way to Japan. But if you if you are a tanker and you go you pick up gas from LNG Canada rather than the US Gulf Coast, so this is in Kidmap, BC, it only takes you eight days, nine days, 10 days in that range. And so you're like half the distance to go from um the West Coast of British Columbia to Asia to deliver gas versus the US Gulf Coast. So I think that works out to be your shipping costs, obviously, are kind of in half on a on a per unit basis. And so that gives a, we think, kind of a one to two dollar benefit um for uh on a dollar per MMBTU basis for gas to be shipped um on the West Coast of BC versus versus the U.S. Gulf Coast.

SPEAKER_00 31:01

Aaron Ross Powell, Jr. So you're saving 10, 15, 16 days. What does it cost to hire a ship per day, say, if you broke it down that way? Like what what does a 15-day difference make in how much the uh shipper or owner of that gas gets to keep in their jeans?

SPEAKER_01 31:17

Aaron Powell Yeah, like it works off to be like about half the price.

SPEAKER_00 31:20

Um is is is the but how much what is that in dollars like per day? So like uh 50 grand per grand, like it must be a lot.

SPEAKER_01 31:28

Yeah, it's in the it's in the millions of dollars for millions. Not per day. Oh yeah, for sure. It's probably in like the you know tens of tens to hundreds of millions of dollars per day. I don't have the math at the top of my head, but I know if you if you look at the full cost of um building the LNG terminal, shipping the gas, liquefying the gas, like that full kind of cost. If you and I were going to go in on a project, right? Right. You and I were gonna pool our retirement funds and say, okay, let's go, let's go buy one of these pro let's go build one of these projects. Um, you know, it might cost us$40 billion or so, but on a cost per unit of capacity, in the West Coast of Canada, you know, LNG Canada was probably around, you know, eight bucks in MMBTU. Okay. So not too bad, right? Eight bucks. It sounds like not that bad of a number, but you're producing two B sev a day. So the costs are very high. Um in the US Gulf Coast, we think that's like more like nine to ten dollars, uh, maybe around nine dollars. So it's like a whole dollar difference in terms of the margin that we would receive selling our gas into Asia. And although one dollar doesn't sound like a lot, the entire industry, one dollar is like that's a lot of profits. That's that's millions, billions of dollars a year. Um, and so there's a there's a the whole industry is kind of you know very focused on lowering costs and and obviously increasing returns. And one way to do that would be able to kind of cut down on those shipping costs. Um and and so that's that's the name of the game. Now, what's transpired is despite the cost advantage of shipping gas from BC to Asia more cheaply, the uh permitting timelines and the regulatory burden in BC has has effectively kind of pointed these capital providers and these LNG businesses to say that's too much work. We're just gonna build it in the U.S. Gulf Coast where we can have certainty in shorter timelines.

SPEAKER_00 33:41

Okay. So we have abundant low-cost resource. We've got a transportation advantage that translates to a huge saving in the expense of getting the gas from the coast. But then now you say there's this other thing that is on the other side of the ledger. It's is are you saying it's too expensive to build a project, or there's the the the the time required is too much? Or what exactly is the issue?

Investors Want Permitting Certainty

SPEAKER_01 34:03

Yeah, that's a good question. I mean, to be honest, I'm not really like an expert at the like the regulatory kind of quagmar in BC. Uh I'm learning more about it.

SPEAKER_00 34:13

Aaron Powell But you're talking to investors. I mean, you know what they're saying, so why are they saying what they're saying? Aaron Powell Yeah.

SPEAKER_01 34:19

So I mean effectively they just say it's too hard, right? Like they don't get certainty on a project. Um they look at the projects that have been announced and how many that have failed to cross the line from a permit standpoint. And they're essentially thinking, well, that province isn't open for business, right? That country isn't open for business. They're not enabling kind of economic growth. They're they're trying to slow it down through um, you know, permitting delays and and clarity between who has veto power across as a federal, like who do you need to get a permit from? I think that's still very unclear. Um and so all of these kind of regulatory headaches, if you will, just sort of take these opportunities and and sort of move move them elsewhere in investors' minds. And and we hear about this all the time. Like it's sort of a, you know, I think the Canadian oil and gas industry right now is is actually done pretty well, and investors are sort of viewing the industry a little bit more positively these days because of all the benefits that we talked about from a resource perspective. Um, but there's still the question of, you know, can both our country and the provinces kind of get together and say, hey, we gotta, we have all the resource, we just gotta get it out of the country. Um and there's a lot of kind of skepticism that those projects will get built. Or, you know, even if they should get built from a sort of spreadsheet and logic perspective, um the kind of regulatory uncertainty holds them back from actually going forward.

SPEAKER_00 36:06

Aaron Powell Which is kind of a way of saying politics, because in Canada, regulations ultimately are uh in in the hands of the Crown. The the cabinet can make decisions. We've got this big opportunity. Um Canada is, it seems, on the cusp. Uh recently, the Prime Minister in Davos made a speech that almost seemed to flip a switch for a lot of people. The business executive class suddenly said, you know, having said for a year, well, uh he's saying the right things, but uh I'll believe it when I see it, you know. And then it seemed like overnight uh Mark Kearney made that speech and it was like, well, let's give this guy a chance. You know, is there a sense that there's some tangible bankable thing that that is reaching to investors, the the people you talk to, the pension fund in New York or Switzerland, um that they're seeing that too? Or do we have to do some more work in Canada to show we're serious about this?

Which LNG Projects Advance Next

SPEAKER_01 37:01

Yeah, I think um I think people want to give um the comments that you know Prime Minister Kearney um has made, he he really wants that I think people want to give them the benefit of the doubt, and they they want to believe that um sort of this Liberal Party, this this sort of federal uh office is is viewing the world a little bit differently. Um so I think there is that appetite. Um I think as you get more and more local and you talk about more and more specific projects, I think you find out that like, well, it's still very complicated. So I think the high-level commentary is good. Um, but I think when you talk to people that are investors or or you know um kind of global capital providers, whether that's in an oil and gas company or one of these pension funds or private equity funds, like when they're looking at the world, they still would view the local projects as difficult to get done and and and require perhaps a higher discount rate because you don't really know how it's all gonna play out. Maybe you spend a bunch of money, you do a bunch of permitting, you do exactly what the you know authorities tell you to do, and then it goes nowhere or it gets vetoed at the last second. And that's the sort of problems that um that I think still exists in our country is is although the high-level commentary is great, and even you know, Premier EB, I mean, has been a lot more supportive of LNG projects um than the NDP party has been for many years. So that's that's great. I think where the rubber meets the road is the the local permitting and kind of working through all the um local opposition uh across the coast to to try to to try to get to a yes. And I think that's where there's a lot of work to do.

SPEAKER_00 39:05

Trevor Burrus, Jr. Dan, you've talked about this second wave that we're in right now. And you look around, you've got LNG Canada phase one. It was finished in 2025, but there's a phase two as well, and that's the same size, so it'll be twice as big when that gets built. It's all permitted, but there's not a decision on it. Cedar LNG, also in Kitamat, and then uh Silissim's LNG, which is north of there, the NISCA nation. And then on the south coast, you've got wood fiber LNG, and there's some things happening at Tilbury LNG as well to get more of that gas. So if you count it all up, um there's a total of six projects that the Premier has been talking about at events, and quite excited about it. But uh was it Shakespeare uh who made the phrase there's many a slip twixt cup and lip? And I wonder what are the slips that could make this second wave opportunity not land the way I think a lot of people wanted to.

SPEAKER_01 40:04

Yeah, I mean, I I think um the projects that have, you know, that you mentioned, I think are are largely all the way there uh from a permitting and regulatory standpoint. So they've in many of these projects have been in the works for decades, right? So a lot of them were kind of part of the first wave, if if you will, of projects that were canceled and are just getting through that that permitting process today. So we've hit final investment decision on wood fiber and cedar. And so those projects, you know, barring any, you know, cr you know, very crazy um outcome, you know, they're all gonna go go ahead as as scheduled. And that's great.

SPEAKER_00 40:44

I mean, it's great to they're going like gangbusters with wood fiber LNG. They're bringing in some huge pieces. So um I'm sure the Czechs have cleared the bank for that to happen.

The Truth About A Green Premium

SPEAKER_01 40:54

Yeah. Like those are happening. Like in our minds, like you're gonna get that, that those projects done. I think the um the ones that are a little bit bigger, so they're more important and and haven't met that FID hurl yet are are LNG Canada phase two, um, which is the doubling of LNG Canada uh phase one, uh, which is in service. Um, and and Solisms, uh, which is in the Nixon Nation, which is further north. Um, I'd say for LNG Canada phase two, that's probably in our minds, like a little easier to underwrite and and and and uh expect to go through. Um, you know, the the pipeline is already built. So Coastal Gas Link that uh TC Energy owns and built um is equipped to to to be able to fulfill um kind of more gas to to to send to LNG Canada Phase Two. So the fact that that pipeline is already kind of in the ground and is is a great sign um and helpful for the project. Um the SLISMS project, I mean, I thought it was great that it made um the prime minister's office a major project office list. I think that will go a long way in terms of streamlining the the regulatory process. Um the fact that it's sort of an Indigenous-led project is is obviously terrific. Um, and and hopefully we'll we'll speed things up too. Um I would say that one is maybe it seems like the timeline is similar to LG Canada Phase II, but the maybe uncertainty is slightly wider just because you don't have the pipeline yet. You need uh the Prince Rupert um transmission line to get to to be built. And so that's a big pipeline. Uh and as you know, pipelines in this country tend to take a long time and and are expensive. So that's one where maybe there's a little bit more risk around it. But um yeah, we we're we're hopeful that both go through. We think at the end of the day they will. Um we are we are pretty um optimistic that they'll go through. And if you add up that whole stack of projects, we'll be up to six BCF a day, probably in the early 2030s. So, you know, making some some headway. And I think that's good, and we got to celebrate that um as a as a country. But I do think if you if you get more ambitious and you think more globally about the opportunity, you know, I do think it's entirely possible with the rocks we have today and with more will um from a regulatory and and political standpoint, you know, you could be uh a multiple of that higher, if not, you know, near that 20 BCF a day number that I quoted.

SPEAKER_00 43:26

Aaron Powell There's one thing I want to get into before we have to wrap it up, and it's the uh call it the the green premium. So in Canada, not everywhere in the world, but in Canada, we've invested in regulations in equipment to uh overall reduce the greenhouse gas impact, the other environmental impacts of producing and moving and using natural gas. Um I I I think uh we probably want to look to external uh judges of whether we're succeeding. And if you look for international validation. Of this, it's not hard to find. Clearly, Canadian gas in the West, especially for the Monty, is a great product intrinsically. And then the way it's handled by things humans do is also reducing its footprint. Am I wrong?

SPEAKER_01 44:15

No, I think you're right. I mean, everything that we look at, you know, suggests it's a low-carbon molecule. Um it has some carbon emissions associated with it. You know, we shouldn't be afraid to say that. Um, but it's generally a, you know, if you think about the the net impact of an LNG cargo and the amount of coal that's that's burned in Asia every day, you know, there's a net emission reduction um moving from coal to LNG. And I mean, that's what that's what's driven the emission reduction in the United States over the last decade or two, is purely been a a coal to the natural gas switch. So so we think there's definitely an environmental argument for um building LNG projects. I do think what's interesting is, you know, I think the there's a lot of talk in in in this country about a green premium. Um, are we going to get higher prices for our um molecules, whether it be natural gas, whether it be oil, um, because of the stewardship and the the sort of care and the and the environmental protection um and perhaps some of the carbon features associated with them. And in today's market, uh there is no premium. Like like I think like the countries that need hydrocarbons are they really need them. It's it's not a uh and they want them at the lowest cost possible. Um so I I do think there's there's a little bit more sometimes. I I I think if you go to the outside of Canada, um you hear, and maybe outside of Europe as well, you're a lot more pragmatism in the world about the need for energy, the need for hydrocarbon at the lowest cost possible. And um although it's fantastic that we have a very low carbon um molecule gas, I mean I think at the end of the day, um what the market cares about is the price of it. And and and and uh and there's no they're not uh they're unwilling um broadly to to to pay more for a lower carbon molecule than a higher carb carbon line.

SPEAKER_00 46:20

Trevor Burrus, Jr. But it's table stakes for Canada amongst Canadians and votes decisions to be as green as it can be. Like there's not really a case that, you know what, there's no premium for this, so let's not do that stuff.

SPEAKER_01 46:33

Yeah. It's funny. Like yeah, I I agree with you that it seems to be table stakes in this country. Like I think people are very focused on it. Um maybe a little bit less so in Alberta, but more, you know, more on the other provinces, um, like BC and Ontario and Quebec, they're definitely focused on the carbon impact. Um I mean if you go to the you know, southern US, like it's you just build it and you sell it, and there's there's really less of a conversation around that. You know, obviously they the buyers in Europe, you know, even the buyers in Europe, right? Like, although they um they may have to pay carbon taxes and there's all sorts of taxation in Europe on on carbon. I mean, at the end of the day, they're signing up to buy this gas, and they're just signing up for the best uh best cost gas that they can um procure to to to run their economy. So it is a yeah, it's an interesting dichotomy. I think when you you step out of the Canadian sphere, um I think there's a lot more kind of recognition. I think Carney's speech kind of touched on this that like the world has changed and people are a lot more pragmatic today because of kind of physical constraints, because of economic constraints, that they just, you know, they need energy, they need it cheaply, um, because ultimately they're just trying to work for kind of a better quality of life for their citizens.

Dane’s Career Path And Lessons

SPEAKER_00 47:54

Dana, I just want to wrap up. I'm I'm curious how you chose and got into and succeeded in your career.

SPEAKER_01 48:01

Yeah, it's a great question, Stuart. Thank you for that. Um, I I uh started working in the energy industry um right out of school. Uh I was fascinated by physical sciences um and sort of started as as more of a practical decision. Like I studied geological engineering in university because I was I was good at science and math. And I I always kind of had an aptitude for um kind of understanding how the the world works. And so energy was kind of the perfect um dynamic between sort of physical sciences, kind of rocks up, understanding of how the world works. And as I've gotten more and more in some ways away from that um over the course of my career, I realize how much the energy industry is actually governed by the people that sit on top of the rocks and not the rocks themselves. And uh I become more and more fascinated with that side. So I spent a lot of my time today on the kind of market side of the business, um, whether that's kind of EMP, equity market, EMP being exploration and producers, like the oil companies, you know, the equity markets, you know, how are they valued in the market? Why do they do projects? Why do they not do projects?

SPEAKER_00 49:14

So so did you start with engineering and then go into an engineering job and then say, you know what, I want to get some finance too? Like how did you come to that?

SPEAKER_01 49:24

Effectively, yeah.

SPEAKER_00 49:25

I mean, so how long did you work in the field as an engineer?

SPEAKER_01 49:29

Sure, yeah. I I you graduated in 2013. I got a job with uh in Canna at the time. Now now and so I was working as a production engineer. Yeah, no doubt. No doubt. Um big, yeah, big Canadian company is sort of like a blue chip Canadian producer job. Super lucky to get that. Um I did an internship with them and then I was in a production engineer in the field. Uh I was actually working out in Drumheller. I don't know if you've ever been out there. Um it's kind of a neat, neat little value. The dinosaur of senses remains. It's an incredible class. Yeah, the the big dinosaur museum. And um that was uh definitely a bit of a culture shock coming from like you know, Aurora, Ontario, which is like a suburb of Toronto. But um it was cool. I really enjoyed kind of my time out there. Um unfortunately, um you know, after about four or five months, I was laid off. They sold the asset in Central Alberta. They were they were moving on. And uh I got a job with a I stayed in Calgary. I sort of, even though I, you know, hadn't been here a long time, I stayed in Calgary. I wanted to work in the energy industry. Um, and at the time, you know, the economy was still pretty good. That was in 2014. Um, and I started, I got a job at uh a petroleum consulting company. They did reserve auditing. It's called GLJ, Petroleum Consultants. Um so it's like a real, kind of really reputable reservoir engineering firm in Calgary. I did that for about a year. Um, and then I found myself kind of more and more interested, I think maybe particularly because you know, feeling maybe the the uh licking my wounds a bit of being laid off my first job. I just wanted to understand like why assets get sold, why decisions get made. Everybody that I worked with at Incana sort of talked about the asset that they worked on favorably. They said, Oh yeah, this is a big, you know, this makes a lot of money. We make a lot of money here. I never really understood what that meant or why companies would sell things that make money. And um, and so I wanted to learn more about that. Um, and and so I decided to uh to look for a job more on the the kind of market side. So I worked uh I that's where I got my job here, really. Um it was with a predecessor firm of Inveris called ITG. You know, I was a research associate, so I was helping write equity research for um, you know, the same clients I work with today, right? Whether they're oil companies or whether they're investors that are allocating capital to the the uh oil and gas industry, that's kind of how I got my start uh in this role. And more and more I've just sort of gravitated to more of the financial and more recently kind of more interested on the political side too, just just given, you know, as you think about the markets, as you think about the the energy industry, you realize like how it really is a if if I sometimes use the anecdote if um oil prices would be so much lower globally if if there were if it was a perfect market, right? Like there's tons of oil out there, and the only reason why they're relatively high is because of the people on top, not not the rocks. There's there's lots. Um and so um and I think there's this very similar story in you know in BC and the gas story. And so I've just found myself after spending time in the market side understanding the rocks, like, you know, I think that that sort of political lens is definitely of interest to me. And it's uh that's why it was great that you reached out, you know. I'm really happy. I think what you're doing, Stuart, um, is is truly like a a really admirable um kind of role for for uh both citizens and the industry. I really appreciate what you do. And I think um it's a hard job, no doubt, yeah. Uh to to kind of you know fight the good fight and and sort of advocate because you know, for for all the benefits that the industry um kind of delivers to citizens, countries, consumers, employees, that I personally don't think it really gets a fair shake out there. And so um anyways, yeah, that's that's kind of my my arc in a long-winded way.

Slides Link And Closing Ask

SPEAKER_00 53:27

Well, Dan, it's just been so fascinating. We've covered uh a huge amount of ground here. You've explained what you told to that business audience recently in Vancouver. You shared a PowerPoint. Is it okay if I put that on uh the links here so people can look at it? Because I thought the slides were so informative. Um, if it's good with you, um, or some of the slides. There's you you almost need to have a CFA and an engineering degree to get all of the nuance. But you know what? I love that stuff. I I just love learning from it. And you've got to look up the acronyms or the abbreviations. But um, yeah, it's been a learning experience. This is very much in line with what we're trying to do at Power Struggle. So thanks for bringing what you did today. Thanks for listening or watching this episode of Power Struggle. I'm your host, Stuart Muir. Today we were joined by Dane Gregoris, he's managing director at Enveris Intelligence Research in Calgary. Great conversation, global energy markets, oil and gas demand, especially LNG, natural gas, and what the data tells us about the future of energy. If you enjoyed this episode, make sure to subscribe to Power Struggle, whether it's Spotify, Apple Podcasts, watch it on YouTube, all of the places, and spread the word. Because if you find this conversation valuable, you can share it with someone who might learn something, who cares like you do about energy policy, Canada's economic future. These are big issues. You can find more episodes and more information at powerstruggle.ca. Thanks for listening. Stay curious, stay engaged, and we'll see you next time, or you'll hear us on Power Struggle. Thanks.