ARC ENERGY IDEAS

This week we interview Eric Nuttall, Partner and Senior Portfolio Manager from Ninepoint Partners. While many investors have fled, Eric is a rare breed that is still actively investing in public oil and gas equities.  Tune in to hear Eric explain the sell off of oil and gas equities over the last several years, with many share prices now sitting at all time lows.  The discussion covers a range of topics including the complete lack of market liquidity, what caused this, and what could help turn things around. We also touch on the growing trend to more passive and algorithmic trading, another cause for disruption in the markets.This podcast references the past ARC commentary “The Fall of Oil and Gas Stocks”. Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/

This week we discuss Enbridge's proposal to change their Mainline pipeline from 100 percent open for all shippers to 90 percent contracted - leaving only 10 percent available for everyone else. This monumental change is concerning, especially considering that the Mainline makes up 70% of all Canadian oil pipelines and the region is chronically short capacity. Producers that represent half of all Western Canadian production have written letters to the NEB stating their opposition and concerns about the proposed change , including; Shell Canada, Suncor, MEG Energy, Canadian Natural Resources, ConocoPhillips and the Explorers and Producers Association of Canada (EPAC). And, many more producers filed complaints since the podcast was recorded.On the podcast we discuss the concerns these producers have, Enbridge's rationale for proposing the change, and possible next steps. For more information on this topic, please see our recent blog post: Not So Fast: The Case For Delaying Enbridge's Mainline Open Season Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/

This episode was recorded live on July 9th at the Scotiabank Stampede Event held in Calgary. On the podcast we analyze the results from audience polling questions, including: Are Canadian oil and gas equities fairly valued? What is the biggest issue facing the Canadian oil and gas industry? How fast will American oil supply grow? Is there a future for Canadian public junior and intermediate oil and gas producers? What is the most likely outcome of the Canadian federal election?We are now starting a break for the rest of the summer, our next episode will be posted in early September. Thank you for following the podcast, and tune in again next month!Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/

This week we interview Pat Carlson CEO of Kiwetinohk Resources Corp. Pat has founded a number of successful Western Canadian entrepreneurial companies including; Passage Energy, Krang Energy, North American Oil Sands and Seven Generations. Pat had foresight by entering the oil sands and shale gas developments at an early stage. His latest venture is focused on the Duvernay play. Pat explains his philosophy for stakeholder engagement in natural resource projects, and his view on building an oil and gas company considering climate change and a transition to lower carbon energy.The podcast refers to Pat's letter from the 2017 Seven Generation's Report about changing expectations for stakeholder engagement.Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/

This week we interview Steve Laut the Executive Vice Chairman of Canadian Natural Resources that has risen to be Canada's largest oil and gas producer aided by recent acquisitions, including purchasing Shell Canada and Devon's oil sands assets. Steve explains that oil sands are no longer high cost or high carbon and more improvements are coming with CNRL’s aspirational goal to reach net zero emissions on their upstream production. Steve also raises some concerns about the Enbridge Mainline, a system that constitutes 70% of all oil pipeline capacity exiting Western Canada. One issue is the procedures for allocating space on the pipeline that need to be fixed since they have contributed to lower Western Canadian oil prices, including during final quarter of 2018. Another concern is Enbridge’s plan to change the contracting for the Mainline, moving from 100% of the pipeline being available under an uncommitted service now to 90% of the capacity offered under firm service agreements, leaving only 10% for spot shipments.Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/

Canadians take for granted that they have energy security. But on this week’s podcast we argue that Canada could be one of the least energy secure countries in the world when it comes to oil. The pipeline that connects Western Canada’s oilfields with Ontario and Quebec flows through the United States. Now the State of Michigan wants to shut down this critical Enbridge Line 5 pipeline connection. If Michigan succeeds, crude-by-rail could be the only short term option for Ontario because the Enbridge Line 9 pipeline  --  that was originally built for energy security reasons -- is now flowing in the wrong direction for supplying Ontario with offshore oil and the east has no strategic oil reserve.Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/

This week we introduce the need for new plan for reducing global GHG emissions, since the current one, that envisions a fast switch from fossil fuels to renewables is proving to be unrealistic. The recently published International Energy Agency World Energy Investment 2019 report illustrates why the current plan is not working; investment into renewables has plateaued at best; energy efficiency is treading water, and world carbon emissions grew by 2.0% last year, the fastest growth in seven years. Instead, we propose the need for a more realistic plan that reduces GHG emissions on more dimensions, including a transition to progressively cleaner hydrocarbons, improvements in efficiency and growth in renewables.As referenced in the podcast, here is a link to the ARC commentary Mind the Gap.Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/

On this week’s episode we interview Barbara Zvan, Director, Chief Risk & Strategy Officer for the Ontario Teachers’ Pension Plan. Barbara is a member of the Canadian Government’s Expert Panel on Sustainable Finance. After over one year of consulting with a diverse cross section of leaders and experts, the panel has released their final recommendations for increasing the amount of sustainable investment in Canada. The report makes many recommendations, including increasing the amount of corporate reporting on climate change risks and creating incentives for encouraging more green investment. They also made some specific recommendations on how to support Canada’s oil and natural gas industry in a transition towards a low emissions future.Use this link to view the full report: “Final Report of the Expert Panel on Sustainable Finance – Mobilizing Finance for Sustainable Growth”Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/

Environmental, Social and Governance (ESG) focused investors have moved mainstream.  On this week’s episode we interview Patrick Bryden, Director, Equity Research at Scotiabank. Pat coauthored a must-read report titled “The Rise of ESG in Investment Research – In Search of the Right Elements”. His report makes a compelling case for ESG focused investing, referencing research that shows meaningful outperformance for companies that are more sustainable and diverse.  We also cover the state of corporate ESG reporting today, what investors are looking for, and how companies can get started.Please review the Scotiabank disclosure on their website: http://www.gbm.scotiabank.com/disclosuresPlease review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/

This week’s podcast gives our take on recent Canadian energy news headlines including the latest on the contentious Bill C-69 and Bill C-48, a Minnesota court ruling that could delay the Enbridge Line 3 pipeline, and the sale of Devon Energy’s oil sands assets to Canadian Natural Resources (CNRL).  We also talk about the big oil price drop over the past week.Please review our disclaimer at: https://www.arcenergyinstitute.com/disclaimer/