Title: Canada Wants Pipelines — Enbridge CEO: Private Capital Still Isn't Sold
Show: In the Money with Amber Kanwar (YouTube)
Guest: Greg Ebel — President & CEO, Enbridge (ENB)
Date: 2026-07-09
URL: https://www.youtube.com/watch?v=QYrLmthmQ6U
Length: 48:52
Note: auto-captions; fillers removed, caption garbles fixed; wording otherwise verbatim.

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(0:01) [music]
(0:02) Great day in Calgary. Join me and welcome Amber and Greg Ebel to talk about the energy industry here in Canada. Yahoo! Yahoo!
(0:11) Canadians are not myopic and self-absorbed. They're looking at the rest of the world and going, "Dang, how can we not participate? If
(0:20) you don't get the production growth, you don't need the rest." And I think there's been a lot of focus on the pipes and that's kind of asked backwards. You were advising the government.
(0:28) Why isn't Enbridge a proponent? $35 billion, $40 billion has been thrown out for the West Coast pipeline. Could private sector do it cheaper?
(0:36) Of course, you've had opinion pieces come out saying maybe we don't need a pipeline because we have expansions. How do you respond to that argument?
(0:44) I think back to where we were 2 years ago where the government of Canada was actually trying to shut down the business. A lot of those cats aren't around for all the right reason. They're
(0:53) out doing top 40 things with Katy Perry or whatever. Right. It's great.
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(2:14) I want to thank everybody for joining us for this second live episode at the Calgary Stampede. Welcome to In the Money with Amber Kanwar. Applause.
(2:26) [applause]
(2:27) And of course, I have Greg Ebel, the CEO of Enbridge joining me. I want to thank ATB for making this possible. We love ATB at In the Money. You should, too.
(2:37) So, if you're not banking with them, please bank with them. Greg, thank you so much for joining. Glad to be here. Thank you, Amber.
(2:44) So, I've gone through, I did all the research and, back in the fall, you said competitiveness in this country has been a disaster. Yeah.
(2:53) For the last 10 years, it's the kind of plain spoken talk we don't regularly hear from CEOs of Canadian companies, but a lot has happened since then. In
(3:02) fact, in just the last week, we have not one but two pipeline announcements. Talk to me about
(3:09) the significance of what has taken place over the last couple of months since that speech.
(3:14) Well, I think the recognition has been out there that and as you say, not always plainly
(3:22) spoken that Canada's basically had a lost decade under the Trudeau government. I think the prime minister would even say that, right, and has said
(3:29) that. And you take that, you throw on Iran, you throw on Venezuela, and shall
(3:37) we say some unpleasantness between the nations, Canada and the United States, and I think it's game on. And people have realized, we we're either
(3:45) going to be on the track running or we're going to be run over. And so I think you see some moderation in attitudes towards
(3:54) conventional energy, which makes all the sense in the world. That's what the fundamentals say anyways. And then you also see governments trying to create
(4:03) structures. We're not there yet, but trying to create structures that makes the formation of of private capital
(4:10) more attractive in this country relative to our competitors, right? It's not Ontario versus Alberta. It's Canada versus the rest of the world. And let's
(4:18) face it, the greatest capital market in the world is the United States. So people have recognized, we have to find a way to be more
(4:26) competitive. There are some things maybe governments aren't willing to do yet. Taxes and stuff for example, but I think
(4:34) they're trying to find ways that how do we get permitting reform? How do we make this faster? Why does it take forever
(4:41) to be able to get pipelines or any infrastructure frankly built? And how can we attract capital if we can't
(4:50) figure that out? And so I think it's a representation. Now, there's pros and cons as you know, there's not private sector proponents at this point
(4:58) in time. I think the premier yesterday or the day or last week spoke to this that well, there's a reason, when you set on fire several
(5:07) hundred million dollars in trying to do projects, you're a little hesitant to do it again. So, I think it's still a bit of a show me world. But hey, I think all
(5:15) Canadians feel better, regardless of your politics, feel better than you felt 18 months ago about maybe we're going to
(5:21) get this right. And if we do, the opportunity is enormous. The world has fundamentally changed just in the last
(5:30) week, right? Let's think about the oil trade. I think the normalization trade was what people were talking about last week. I haven't
(5:38) checked in the last hour, but I think oil is up 7% today. So much for normalization, right? Natural gas LNG in
(5:45) Europe is now 15 bucks an M. It had come down right here in North America it's only three bucks. So you put that
(5:53) together you see the Venezuela situation. You see people not wanting to rely on a single market either export or
(6:01) import and that is a heaven-sent situation for Canadians if we take advantage of it. And now we're
(6:09) we're talking about how great the tide's going to raise all boats, not terminal values of of investments
(6:17) in this country, right? That's pretty awesome. Long ways to go.
(6:21) [clears throat]
(6:21) So I hear you were were making those steps. There's so much that you mentioned there. We're going to pick up on each of those points, but I want to pick up first on what you said about private capital around these pipelines.
(6:33) Industry has been asking for pipelines.
(6:36) Now there is a will and industry is basically nowhere around these two proposed pipelines, but let's stick with the West Coast one for now.
(6:45) You were behind the scenes. You were advising the government. So I want to know why isn't Enbridge a proponent.
(6:54) So look, I think it's early days.
(6:56) First of all, the government of Canada owns a pipeline. We can say whether that's good or bad. So I think they recognize that the risk is not very
(7:05) attractive quite yet and so they're going to front run that. I would expect at some point in time they're going to the prime minister has looked
(7:13) at and the government has looked at recycling capital on airports. So why wouldn't you recycle that on on TMX and
(7:21) maybe that pays for TMX too. So I think eventually it gets into the private sector. But at this point in time, I
(7:30) I've got $40 billion worth of projects that we're doing in all of our businesses. Two-thirds that in the gas
(7:37) business, building out new oil infrastructure already to go south at this point in time. I've got plenty
(7:45) to do in the near term. But we'll be looking at opportunities. We provide we're in 43 states, all the
(7:52) provinces, five countries. We are advising governments of all different stripes all the time and the one thing
(7:59) we focus on is not the color of the government but the fundamentals and so the fundamentals create some better opportunities right now in other
(8:08) parts and then I think as we move along the time frame here I think the government's own number is what 33 34 for when this happens who knows
(8:17) it's hard to predict on that front there'll be plenty of time for the private sector to get into this I want I want to
(8:24) correct one thing when you say the industry's been talking about pipelines I would say yes and no
(8:31) there are multiple Ps here and the pipeline's the last one the first one is production without production there's no
(8:39) need for a pipeline so the other shoe to drop and it sounds like I'm not part of those conversations but it sounds like the governments of
(8:46) Alberta and Canada are in close consultation with my customers and when they get the green light to produce
(8:56) millions of barrels more, which apparently the premier of British Columbia, the prime minister, everybody wants oil sands and
(9:05) we're going to maybe even ship more east. Who knows? Which would mean you have to double capacity of refineries in Eastern Canada. So maybe Quebec and
(9:13) Ontario are thinking about supporting the doubling of refineries. That would be incredible. But the first thing is
(9:20) production. If you don't get the production growth, you don't need the rest. And I think there's been a lot of focus on the pipes. And that's kind of asked backwards.
(9:29) I think that's a good point. And in fact, the CEO of Cenovus, John McKenzie, made that point about a month ago, saying you need to
(9:36) incentivize us, not penalize us for increased production. It sounds like in your chats with your customers that
(9:43) they're optimistic that going forward they won't be penalized for increasing production. Do you have a sense of what that looks like? Oh, well, some
(9:51) of the conversation last week from the premier and the premier of Alberta and the prime minister talked about some of the things they're looking at. So, I
(9:59) I think they'll get there, but they're not there yet. And, the devil's in the detail, right? It's one thing to draw a line on a map. It's
(10:07) another thing to invest. I think John Whelan at Imperial Exxon talked about this whole thing and I
(10:15) agree with him. This is a hundred billion dollar investment from upstream to midstream to ports. Just to put
(10:23) that in context that's a trillion dollar investment in the United States even that's big money for the president right so I think we can't
(10:32) underestimate the size and until there's not just clarity but some element of certainty about what the
(10:39) regulatory structure is going to be for production it's hard for producers to commit and so in the wake of this in the
(10:47) wake of an absence of a private proponent and the fact that the government is doing slash the taxpayer. You've had opinion
(10:55) pieces come out saying, "Well, maybe we don't need a pipeline because we have expansions and that's
(11:03) enough to take on the current capacity, the current levels of production that we have." How do you respond to that argument?
(11:09) Well, what I would say is we don't you use the word current capacity. I think that's right. I mean, pipes are full. Like we've been in 12 months of apportionment, meaning we don't
(11:18) have enough space on our the last 12 months. We don't have enough space on our pipeline to serve all the requests from our customers. But this
(11:27) isn't about current. This is about 10 years out. And I think it's fair to say we'd like to diversify markets. All
(11:35) all businesses and countries obviously like to do that for all the reasons we've seen just in the last six months. Forget the Russian situation.
(11:45) So I don't think we should focus it on the near-term. It's the long term. We have always underestimated production in Western Canada and the
(11:54) Permian Basin for that matter as well.
(11:56) [clears throat]
(11:57) The IEA, the International Energy Agency has talked about declining demand for oil forever and they've been
(12:04) wrong forever. And there's seven billion people on the planet and
(12:10) six of them don't have access to affordable energy and they don't have access to conventional fuels. There's a
(12:18) reason why we're going to the coasts in Fortress, North America. It's because people want the product that we have and it's cheaper here and they don't want to
(12:27) be relying on unstable environments. So, I think it's not so much about the near-term. I think it's about the long term. Government should create the
(12:36) conditions for private capital to form and be utilized. And I'm appreciative of all the governments that are out there thinking through. I may
(12:45) have different views about tactics in one jurisdiction or another, but ultimately if the goal is for the private sector and private sector
(12:52) employees and Canadians or Americans in the case of the United States have an opportunity to invest and do well,
(13:00) that should be in the interest of all policy makers ultimately. If they have to stoke the fires a little bit,
(13:06) it kind of bristles me a little bit, but I understand the rationale from a from a national security perspective.
(13:15) Well, I wonder if it's kind of a grand bargain because there's a number of things you talked about in the fall of last year, including the
(13:22) the tanker ban on the North Coast having to be removed. And so, a lot of the things that industry, including yourself, has been asking for remains in
(13:31) place. And so maybe the government is kind of making that decision that since we want to keep those things, we understand you're not going to show up
(13:39) to the table and so we're going to go ahead and start this without you.
(13:43) Yeah, I think that's the decision. I mean, you'd have to ask I know you've spoken to him. You'd have to ask the prime minister and others exactly why they've done that. But yeah, if you
(13:51) can't get private sector there now and he and the premiers don't think they can get that grand bargain now, then
(14:00) they want to start the process, right? We're a long ways from reaching even FID, right? I think their number is 28-29.
(14:09) So there's a lot of work and a lot of opportunity to participate down the road if that's what they want to do.
(14:16) I'm still a believer that the tanker ban is not that helpful to Canadian interest. If you like one path, why wouldn't you like two? We have a
(14:25) southern path that sends 95% of all the oil we produce to the largest market and the most profitable market. And now,
(14:34) people have talked about going east and we can chat about that, I'm sure, but if you like going west, why wouldn't you like to going west? Now,
(14:42) there's a whole bunch of issues. Obviously for Enbridge, which has long been doing this with indigenous, sometimes successful, sometimes not
(14:49) successful, but we have indigenous ownership in our pipeline. So, I think we know how to do this. You start with
(14:57) the indigenous. You do not finish with our indigenous partners, right? So, I think maybe they thought that would take too long at this point in time. I don't
(15:04) That's a discussion for them. But let's not lo everybody in the oil and
(15:11) gas business in Canada will do better, right? Like I again I think back to where we were two years ago where the
(15:20) government of Canada was actually trying to shut down the business point now, right? And a lot of those cats aren't around for all the right reason. They're
(15:28) out doing top 40 things with Katy Perry or whatever, right? So that's great, that's
(15:34) probably a better use of time for that individual. And now going
(15:40) forward I think the industry I think the industry is realizing you know what and the prime minister we have
(15:49) much to offer and we have much to offer the world both in terms of fortress North America for energy which is really
(15:58) important to the United States and Canada and really important to our colleagues in Europe who remember apparently the Germans didn't want it but they do. Yeah.
(16:08) And why wouldn't you want a safe, reliable source of energy and why wouldn't Canadians provide that to the world?
(16:17) Again, it seems like the price tag keeps coming up and I wonder, the number $35 billion, $40
(16:24) billion has been thrown out for the West Coast pipeline. Is that because it's a public sector job. Could private
(16:31) sector do it cheaper or efficiently, I guess, is a better Of course. Of course. I mean, really.
(16:39) but the conditions have to be there, right? I mean, is there any example where the where the public sector would do it cheaper without other kinds of
(16:47) subsidies? But I think there's bigger things the prime minister is thinking about today. It's not just the straight up economics of it. He's trying
(16:56) to advance the country, which as we started out, the country's growth has been brutal. The GDP of Canada per capita now is would be number 51 if we
(17:05) were a state, right? which which we shouldn't in my view but I that's that's not good. That is not
(17:14) what Canadians deserve. That's not what the great Canadian worker and industry actually would would have happen. Right?
(17:23) That's 10 years that we have to figure out a way to catch up. And the prime minister has fully realized that. The minister of energy has
(17:30) realized that. And I think they're trying to make progress the way they can at this point in time knowing nothing's perfect, right? And so now he's got a
(17:38) pipeline proposal out there. Don Ferrell and the MO will look at trying to get that thing deemed in the national
(17:46) interest here before the end of the year.
(17:48) The producers are being encouraged through one thing or another and we'll see how that goes in the next
(17:55) next period of time. All that's lining up for the private sector to actually take the lead on this, but we're not there yet.
(18:02) The energy pipeline going east. From a lot of the commentary I read is that it's not likely to happen. There's no federal support.
(18:13) There's no private proponent. Manitoba is not in the picture. Do you agree with that assessment that it's a lower odds slash completely unlikely?
(18:22) Well, we have to figure out what problem we're trying to solve, right? Because right now, there's a lot of discussion about look, I think we should be preparing for all opportunities that
(18:30) are out there. And again, ultimately, I think everything should be done by the private sector on that front.
(18:36) But I think we have to what is the situation? So, the issue is we have to have Canadian barrels in Eastern Canada.
(18:42) Well, of course we do, right? As a reminder, Sarnia gets 80% of its barrels from where? Here. Right. So, we already
(18:51) have Canadian barrels. Montreal, too, by the way, more than 50%. We have a pipeline treaty act that we have faced
(18:59) back and forth. Neither the Canadian government nor the United States federal government has ever threatened tariffs on energy. And there's a reason for that. That's not in anybody's interest.
(19:10) The United States can't project power without Canadian oil and the Canadian economy cannot move forward without the oil and gas industry. That
(19:19) is just a reality of the fact there are two large industries in this country, banking and energy, right? And we need to make sure both of those are
(19:28) strong. And I think so it seems to me it will be difficult but it's
(19:35) worth looking at and governments are willing to spend money to look at it that it will be difficult to have a new build pipeline to be cheaper than
(19:44) existing pipeline that already fuels all those refineries. Unless the governments of Ontario, Quebec, and the government of Canada are looking at doubling the refining capacity in Eastern Canada.
(19:54) Maybe they are.
(19:55) That'd be great. And built big new refineries in many places on the continent in 50 years.
(20:03) These are all provinces that are working together that have in the past very diametrically opposed views on the state of the country.
(20:12) But again, in the last couple of weeks, how far have these announcements gone towards national unity?
(20:22) You know, we'll see. Are we going to get two votes? So, there's a Quebec vote and there's an Alberta vote. But it can't be
(20:29) anything but positive. I would think, at least from a trend perspective, that we
(20:36) can do big things in Canada. We can do big things between provinces that, you're right, maybe didn't always have
(20:44) the same view. And that Canadians are not myopic and self-absorbed. They're looking at the rest of the world and
(20:51) going, "Dang, how can we not participate? How can we not participate for the advantage of ourselves, for
(20:59) investors, for everything and national unity?" So, I think it I'm hard-pressed to say how it's negative.
(21:08) And so we'll have to see how it all shakes out, but it's positive. You mentioned the US and of course Enbridge has a has a presence in both
(21:17) countries and maybe as a consequence of what happened with Northern Gateway.
(21:21) Part of how you came to Enbridge was because they looked south. They bought Spectra Energy and since then am I right most of your investments have been in the United States for growth.
(21:30) Yeah. Sure. So we have a $40 billion backlog. Two-thirds of that would actually be in the gas side and the
(21:38) majority of that would be in the United States. But we are spending billions of dollars in this country as well, right?
(21:45) We spend a billion and a half to 2 billion dollars a year in Ontario. We're building 6 to 8 billion of gas pipelines in British Columbia.
(21:57) We are spending billions of dollars on oil pipelines here as well. So, but it comes down not to a country. Enbridge is
(22:06) not a country. Enbridge is a company. We have a fiduciary responsibility to our shareholders first and foremost, right?
(22:13) Half my board's American, half is Canadian. I'm a dual citizen. We have an obligation to serve them. So, it comes
(22:21) down to where you started. Where's the most competitive place to do business?
(22:26) And I don't think there's a question of that today. And the prime minister is trying to change that and level the playing field. But today, the most
(22:34) competitive place to do business from a tax perspective, at least in the oil and gas business, from a speed of
(22:42) regulatory approvals, at least in the oil and gas business. I can't speak to all businesses. And then the size of the market. So, better returns, lower
(22:50) taxes, quicker moves, and that's what competitiveness and that's what attracts capital. So, that's my obligation. It's
(22:58) also a market that's 10 times the size, right? It is. But as you mentioned, there might have been some obstacles that prevented investment in Canada.
(23:08) Given the trajectory that we seem to be on and the change that is in the air, as you look out in the next 5 years, do you think that that balance
(23:17) of investing more in the US versus Canada could tilt in the favor of Canada?
(23:22) Definitely could tilt. But we're it again, we serve all the LNG
(23:30) facilities on the Gulf Coast. Let's remember, Canada had at least eight proposals for LNG and has only completed
(23:37) one just now. The United States went from it being not allowed to be in the largest export market in the world in a
(23:45) decade. So we have to run not at the same speed as the United States to attract investment and domestically
(23:53) be more attractive. We have to run faster. And so I think that's the context that all Canadians and again I think the prime minister recognized
(24:01) that. He's a super smart guy that we better run faster and we're not running fast enough. I think he said that still.
(24:11) Yeah.
(24:13) Well, do you want to say more about that? Well, I mean I think I like he's he's and all these Look,
(24:20) I have a lot of respect for the people running for office. I sure wouldn't want to do that, right? I mean and it's
(24:28) and you spent time in government. So I did in early days working for Mr. Mazankowski. I did the legislation eventually the IPO of Petro-Canada. So my
(24:37) heart is in this like this is a business that's an amazing business in the private sector hands and ultimately
(24:44) that's where they have to be but it's like I'm yeah we just have to go faster. We are not going fast enough.
(24:50) And I think the prime minister would say that
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(26:54) And it's coming at a time where a very friendly neighbor towards the south is looking less friendly, right? And so
(27:03) that what was a tailwind maybe now is becoming a headwind. As you mentioned, you're kind of both sides of the border. How do you as a
(27:12) company internalize that friction and what do you see as the way forward? So, to reconcile for sure we have a motto inside the
(27:21) company right our goal is to be the first choice for investors for employees our customers the communities
(27:29) we serve and be the first choice for regulators and policy makers and what I mean by that is they pick up the phone and talk to us first because we'll
(27:38) give them largely unbiased advice they may like it they may not like it I think they generally see us as straight shooters and we're there for the long
(27:46) term like I truly believe that governments of all stripes whether they do it well or not they have an intent to
(27:54) advance their economies advance their people. So we tell them here's what we think is in the best interest.
(28:00) They don't always follow that, but we're in the White House. We're in the DOE.
(28:06) We're in Ottawa. We're in all the provinces. We're in all the states. Like the states and the provinces often have a bigger impact on this stuff with local
(28:14) regulations. We're in seeing first responders and it is constant. You have to constantly be
(28:21) there and giving your advice. Try not to surprise them obviously and but recognize the infrastructure and we
(28:29) build linear infrastructure so it's virtually impossible for me to go from one end of Canada to the other and have
(28:36) governments that see eye to eye but it's not like okay well let's go around Manitoba today or let's go around
(28:43) Ontario or Alberta it's linear so you've got to find ways to give them wise counsel advice and ultim
(28:52) ultimately believed that fundamentals will win. We have believed that I when I first came back in the
(28:59) role from being CEO then chair then back to CEO I was like we got to stick to the fundamentals like oil is going to be
(29:07) used gas we knew gas we bought gas utilities 3 years ago when people are I don't know about gas and now people wow
(29:14) this was this seemed to work out quite well for investors and customers and growth is 25 or 30% higher than what we thought it would be in those utilities.
(29:24) And why is that? Because fundamentals matter. Security, affordability. Yes. And sustainability as well. And
(29:33) that's impossible without using conventional fuels. So, I think it's just talking truth to power and being
(29:40) willing to be on the receiving end of some shade sometimes, but ultimately knowing I'm just giving you our best advice, what we see in
(29:48) different jurisdictions and you know, because you're behind closed doors with government, maybe you have a better sense of what the real
(29:56) state of affairs is between Canada and the US. Is the friction better or worse than the headlines suggest? Yeah,
(30:04) you know, Amber, I'm not involved with that part. There's great trade people, I look at our lead trade
(30:12) representative, Canada, Janice Sharrett, I've known her forever, Ambassador Wise, when you see them and you give them counsel, but exactly what's going on
(30:19) between that, I really don't have a whole lot of common. Are you optimistic?
(30:25) by definition, right? I mean, if you're an infrastructure builder, you have to be optimistic, but the two economies are connected at the hip.
(30:36) And I know right now as Canadians, we bristle at that a little bit. It's not a bad thing if managed the right way. My
(30:44) number one customer in every jurisdiction we're in is Exxon. Do I always get along with everything that
(30:50) Darren or John would say? No. But I sure find solutions with my number one customer to keep it
(30:58) growing which doesn't mean I also don't serve Kico and Cenovus and CNRL and the rest right like so and I think we
(31:06) should be thinking about this in the same some things are going to take some time to adjust and normalize but does
(31:14) anybody remember Trudeau and Reagan they weren't exactly tight right I mean we've seen battles between prime
(31:22) ministers and presidents before, but when the rhetoric is gone, the
(31:29) economies want to move forward. You know, I was in working for Mazankowski in
(31:36) '88. Forget NAFTA, there was the free trade agreement. Remember we had election on that front and Prime Minister Mulroney won his second
(31:44) majority and realized and it was not looking good originally and then I think Canadians realize I'm not
(31:52) always happy with the United States but we're better together and we're better taking being a great provider to that
(32:00) economy while also looking at other places and you mentioned off the top this is not happening in a vacuum you know
(32:08) the last couple of months I think the market has treated the war between Iran and the US as kind of a one-way trade to peace.
(32:16) And then quite suddenly it seems the ceasefire is broken, attacks are happening again and as you mentioned
(32:23) crude oil moves higher again. You've seen some impact to your business as a result increased activity
(32:32) at export terminals in the United States. What are the conversations around that? I mean, it's a huge
(32:39) geopolitical event that has maybe permanently altered how you think about the security of getting oil out of
(32:47) the Middle East. What are those conversations like for you and what does it mean for Enbridge? Well, I think several things.
(32:54) One, again, the value of infrastructure has been an easier discussion right across North America. The value of
(33:00) exporting has been seen as not only an economic activity but a geopolitical tool. that is as powerful if not more
(33:08) powerful than military activity. And that doesn't matter whether it's the Middle East or projecting power off the Gulf Coast or eventually projecting
(33:15) power off the west coast of Canada. So that's because I think nobody in the energy sector is that surprised by the
(33:24) volatility like this takes a very long time to come back, right? This is years and years of people wanting to go back in the water figuratively and literally.
(33:35) and fixing the infrastructure that's been destroyed. So that I don't think that's
(33:44) a surprise. I think the industry has stepped up and produced more oil.
(33:48) Oil is an international product, but it's still cheaper than what you see on international markets here. And obviously for reasons we talked
(33:56) about infrastructure, it's even cheaper here in the United States. Gas is the perfect example. and people. It's
(34:02) proven out the reality of producing lots of oil and gas and having good
(34:10) infrastructure that it can be super valuable, right? Like $3 gas versus $20 JKM, right? That is a massive
(34:18) competitive advantage, political advantage. So, it's allowed groups like the API and stuff
(34:27) to have, I think, a very strong voice with the administration. American Petroleum Institute.
(34:32) Yeah. The American Petroleum Institute which is all the largest companies producers and midstream
(34:39) companies as well to have a great ear into various policy makers. And I you
(34:47) know sadly some of the things that we've been saying here's why this is important now it's playing out in real life. Can anybody deny that having
(34:56) infrastructure in North America has been a valuable tool to the United States and Canada through this time period? Can
(35:03) anybody deny that natural gas is cheaper where there's infrastructure? We're trying to build gas into the northeast
(35:10) of the United States, some of the most expensive gas in the world. Like this winter, I think it hit 25 bucks an M.
(35:18) there's only one reason for that because the Marcellus is right nearby. no infrastructure. Well, guess what?
(35:24) Governments are now asking us to build infrastructure because what are they focused on? Not necessarily geopolitical stuff there. They're focusing on affordability.
(35:32) Mhm.
(35:33) And you throw on top of all that geopolitical stuff, I think policy makers are also saying, well, by the way, we have this data center AI
(35:42) power gen thing happening. What can you do on that front? So a company like Enbridge can help people on the gas distribution side, on the gas
(35:51) pipeline side, oil side, export side, LNG side, storage has become really valuable. So we've always had good
(36:00) access to administrations of different stripes in this industry. I think it's just better access and more
(36:09) credibility. Well, let's bring it down to what all of what we've been talking about means for Enbridge.
(36:15) First let's actually start with how we started, which was those pipelines.
(36:20) Because you're not participating, I guess you have to view them as competition. And, the question is there's
(36:27) potentially a lot of new capacity coming online to compete with primarily your mainline pipe. Is it going to pull
(36:35) volume away from you down the road? Do you conversely look it's good for industry but is it a competitive threat for Enbridge?
(36:42) Oh look I mean well there's lots of competition out there. There's always been lots of competition. So that's a Enbridge has always been pretty good at
(36:50) doing that. We go by 75% of the refining complex in North America. We are the largest exporter of oil out of
(36:58) America. So, and those assets exist today. And despite TMX being built, the
(37:06) despite the upside of Keystone being built in South Bow, what has the main line done? The main line's gone in 2000
(37:14) from a million barrels a day to 2 million barrels a day in 15 to 3.2 million barrels right now. And we are continuing to expand it. We have
(37:23) projects in 27 and 28. We also own Express-Platte. There are a lot of ways that we're going to serve our
(37:31) customers, but I don't take it for granted that it's competition. I like the competition. It makes us sharpen our pencils. It makes us really show the
(37:40) value of our system to customers. And remember, everything we're talking about, whether it's east, whether it's
(37:47) west, those are a decade away, right? Or close to I think decade's the right way to think about that. A decade away.
(37:55) So in the meantime, we continue to find multiple different opportunities. And if everybody's as happy as they are 2
(38:04) years from now and we see production going on its way to getting not a million barrels by 2035, but 2 million barrels 35, there's going to be a need
(38:13) for a lot of infrastructure. So that's one. Two, don't forget Enbridge's regional system. So everything that
(38:20) happens here in Alberta, we have a massive regional system. think of Fort McMurray to Edmonton.
(38:28) that's a huge part of our business. That business alone is larger than some midstream public midstream companies in Canada. Diluent
(38:37) will be needed. And we have Norlite and we have Southern lights and condensate. So, I think the opportunity
(38:44) set is great. Frankly, our backlog's gone from 26 to 40. I'm kind of thinking out how do I get it to $60
(38:52) billion backlog and that'll be a high class problem. How do you deliver on all that stuff? So I think there's plenty of business for everybody and I've never been afraid of competition.
(39:03) How do you get to 60? Do you think about I mean you guys have done quite a few acquisitions. You're more of a diversified player than say TC Energy
(39:12) now which is more exposure on the gas side. Do you think about doing deals, size and scale? What area of the market would you want to bulk up on?
(39:21) Yeah, we've I mean we did a pretty big 14 billion US acquisition in 23-24
(39:29) on the utility side and yeah we we're a believer in all the above approach always have. I mean you could see any
(39:37) comments I've made for a very long time on that front. I you will continue to see us buy and sell assets. You will
(39:45) see us monetize assets and also solve what I'll call social license issues.
(39:53) So, you've seen us sell 10 to 15% of our regional oil pipeline system that I just talked to uh First Nations in
(40:01) Alberta. You've seen us bring 40 nations into our gas pipelines in British Columbia. I think you'll continue to see us do the stuff. So that raises capital
(40:10) that allows us to utilize that for the buildup. You've seen us buy storage assets. You've seen in both the Gulf
(40:17) Coast and British Columbia. We did that a couple years ago seeing what was coming on LNG and now you see storage rates going up. You've seen us buy
(40:26) more in the Permian. So we build super system there. We started with the oil export facility and we've
(40:34) worked further back to to the wellhead in the Permian. So we'll keep looking at that stuff. But the benefit Amber of
(40:42) $40 billion in projects I don't have to go out and pay a big buck to do that, right? Like I can it's as a capital allocator. It's a pretty good spot.
(40:53) like, okay, in all of our businesses, including renewables, we see growth because people are not talking about the color of an electron or a molecule.
(41:03) They're talking about how fast can you get me energy in I won't be shocked if the United States grows at four or 5%
(41:10) GDP. And I won't be shocked if the United States or Canada grows at higher GDP than people are predicting today because there's this flywheel
(41:18) that's now going on on demand. And so It has to be accretive to the
(41:26) earnings and earnings per share. It has to be at least neutral to the balance sheet and you're competing against four other business units inside Enbridge to get it.
(41:34) You mentioned AI being a huge driver of energy demand and I'm curious how
(41:41) that filters down to pipelines especially from a multiple perspective.
(41:46) And I thought it was curious, you brought this up on your most recent conference call. There is kind of this trade out there, the halo trade, hard
(41:54) hard assets, low obsolescence. And so we've seen infrastructure get lumped in with the AI bucket and benefit from that. And it sounded like
(42:03) you were lamenting that maybe investors have not applied that similar momentum
(42:10) to Enbridge. Do you think the multiple is too low on your business?
(42:14) Absolutely. And I wasn't really I wasn't just talking about Enbridge. I think as investors there's a lot of recency bias. I think as companies and
(42:23) governments when we talked about the the risk-off trade in oil and that was good two days ago not so smart
(42:30) today. Right. So I and where I was going is that the recency bias is that
(42:37) for several years it has not been as robust an infrastructure build market.
(42:42) we yeah, we went through Russia, but that wasn't as big an issue for North America. But you throw in Venezuela, Iran,
(42:49) you throw in the data AI stuff and now it's like, wow, this looks more like the middle of the last decade.
(42:57) so think of that 2010 to 16 period where there was a lot of infrastructure build and multiples were much higher. So we
(43:06) are investors should are no longer asking me about terminal value. They're asking me, "How long can this growth go
(43:13) on?" That in itself changes the multiple. You're no longer looking at an like a shrinking annuity. You're now
(43:21) looking at a growing business at kind of 5% for us off a big base
(43:29) through 2030. And now the discussion is how much longer will that go on? And every year it goes on, people should be
(43:36) paying a higher multiple for that. Just do the math, right? And all that leads to increased dividends and a balance
(43:45) sheet that could even get stronger or stays in that four and a half to five times range which leads to more opportunity. So that should change
(43:53) investors perspective on companies that have exposure to the most amount of these areas. And when you move 30% of
(44:01) all the oil, 20% of all the gas, and you're the largest gas distributor in North America. Oh, and we do a bunch of renewables. It sounds like we have a
(44:10) bunch of exposure and I'm not sure investors have fully taken that into account yet just because of recency bias.
(44:17) And I mean maybe that's the pitch to investors on why investors should own Enbridge. You know we got
(44:23) the SpaceX IPO like taking up a lot of oxygen like when you talk about multiples like all the way out to the moon.
(44:33) Mars actually.
(44:33) Yeah. Yeah. Mars one day if he has his way. But how do you think about like the value proposition of an Enbridge in a portfolio?
(44:42) Sure. So pretty simple and we've kept it consistent for a long time. We're trying to provide investors 10 to 12%
(44:49) total shareholder return made up of the dividend which is growing every year for 30 years and earnings growth and we've hit our financial targets every year for
(44:58) 20 year 21 years. Right? So you take that that's going to give you 10 to 12% return. Some people would like 30, some people like 20. last few years we've
(45:07) done a lot better, but that's what we're offering and we feel very comfortable with that. In other words, you'll double your money every less than seven years,
(45:14) right? And how do we do that? We do that by serving the best quality customers throughout North America on the oil and
(45:22) gas side with the built infrastructure system that is there, high, as I said, high quality
(45:29) counterparties, no virtually no commodity risk inside the company. And that allows us to grow at that 5%
(45:37) and stay in the four and a half to five times debt to EBITDA. And then why is it sustainable? So how and why is that
(45:46) sustainable? And we've talked about a lot of it. It's sustainable because energy demand continues to go up. It's
(45:53) sustainable because affordability and fortress North America is getting a bigger and bigger reality. And the
(46:03) last but not least, we see policy and permitting change at by different governments, right? A Republican government in the United States and a
(46:11) Liberal government in Canada. And they're both making policy changes that completely create even a stronger
(46:19) bedrock for us to build upon. And I don't think that's to every reaction there's an opposite and equal reaction as as you know. But I'm hoping the
(46:28) pendulum will now go like this as opposed to like this. And I think the reason why that happens is back to that affordability. So,
(46:35) and let's bottom line into my last question. Everything that we've talked about, do you think we're at a genuine turning point for the Canadian energy sector?
(46:44) Yeah. Abs. I think we're already making the turn. It's a big tanker, no pun intended, but it's a a slow turn, but
(46:52) we have supportive governments. We have supportive capital markets. money is not an issue. There's lots of capital
(47:00) out there. Like that's not the issue. And we're starting to get bankable projects. So again, I think the
(47:08) lynch pin is my customer. If the producers get the deal they need with the federal government and the
(47:17) provincial government and those changes are made, I think we're on our way to producing 2 million more barrels a day out of Western Canada and we know we're seeing growth in the Permian.
(47:29) All that leads to Fortress North America energy infrastructure being a positive spot.
(47:34) Would you ever do a green field pipeline at this point or so much more needs to happen? Well it depends where like
(47:43) we do build some green field pipes in certain jurisdictions right but to today that's really not a discussion
(47:51) point in Canada and I can serve my customers faster and meet their current demands with expansions of our existing assets.
(48:00) Greg, thank you so much for your thoughts and insights. It's been such pleasure. Yeah. Thank you everybody for your attention.
(48:07) [applause]
(48:12) Thank you so much everybody for joining and really thank you Greg for being so open and forthright. We don't get a
(48:20) lot of that talk from Canadian CEOs. We appreciate it even though you're a guest. I guess you're a half American.
(48:26) No, I'm full Canadian. I'm an immigrant to the United States legally.
(48:29) I just want to point that out. Never know what they but All right. Thank you very much. [music]