Know When to Walk Away, Know When to Run
What is Needed For a Winning Hand?

March 14-15, 2016
Calgary TELUS Convention Centre
Calgary, alberta, canada

The Gambler" was a song recorded by American country music artist Kenny Rogers and although the song dates back to 1978 some of the words may have meaning for today’s energy industry: “Know when to walk away, know when to run”. It may sound harsh but the reality is that the producers (The Gambler) that work in the Canadian oil and gas industry hold the money (hydrocarbon energy) but none of the cards. In this analogy, the cards represent access to existing markets, access to new markets, social license, carbon pricing, and investment dollars. The other players at the table include proponents of renewable energy sources (wind, solar, nuclear), First Nations, environmental groups and governments (federal and provincial).

For gas, hope for a winning hand comes from LNG exports from the Gulf of Mexico, US exports of natural gas to Mexico, LNG exports from the west or east coasts of Canada, new gas-fired power generation, and cogeneration.

For oil, one pipeline, any pipeline, repeat any pipeline going to tide water may produce a winning hand.

The oil and gas industry in Canada is experiencing a challenging business environment, and the future is still murky. This year’s price forecasts range from $20 to $80 per barrel for oil, and $2 to $3 per mcf for natural gas. Uncertainty regarding pipelines remains.  And the joker in the deck is new carbon pricing and royalty policies and how the industry will adapt.

What does it take to have an adult, fact-based, conversation about the future of energy? If the time is not now to heed the words from Don Schlitz’s song then it is coming at us quickly.