Enbridge CEO: Oil and Gas Industry Growing Despite Renewable Energy Investments

Greg Ebel, who began his role as the head of Enbridge Inc. in January, quickly began to make changes and leave his mark on the company.

Governments are investing heavily in order to promote the switch to renewable energy sources, however, Ebel says that there will still be a strong enough need for oil and gas exports over the next ten years to justify investing in new infrastructure on the Gulf Coast of the United States.

Ebel asserted that population expansion, urbanization, and amplified utilization, as well as the sustained requirement for fossil fuels in industries such as heavy transportation and petrochemicals where more environmentally friendly alternatives are not easily obtainable, will all contribute to the ongoing demand for oil and gas in North America.

“While we all would like to go to a lower carbon future, I don’t think there’s a scenario that exists, or at least not a happy scenario, where we don’t continue to use natural gas in the future,” Ebel said on March 1. “And liquids, look, it may ramp down over time, but that’s decades and decades to go.”

Many investors in the sector agree with his thinking. “This is not a sunset industry,” said senior portfolio manager at Ninepoint Partners, Eric Nuttall.

“The demand for oil will grow for at least the next 10 years. And after that, you and I will both be consuming oil for the rest of our lifetimes.”

Enbridge has been investing heavily to increase its presence in the U.S. Gulf Coast, recently announcing that it will spend US$350 million to acquire 35 billion cubic feet of additional storage assets.

Enbridge is investing US$240 million to develop a heavy-oil facility in Houston, at the end of the Seaway Pipeline system. This pipeline transports Canadian oil as well as other U.S. petroleum products to the Gulf Coast, forming a hub for Canadian crude in the Houston region.

The larger goal is to create a “super system” to compete with its longstanding heavy system in Canada. In service of its Gulf Coast ambitions, Enbridge purchased the continent’s largest oil export terminal, the Ingleside Energy Centre near Corpus Christi, Texas in 2021.

Enbridge is not making a full commitment to the oil and light terminal they had planned to build with Enterprise Product Partners LP, but they are still assessing it. Despite this, they have recently announced plans for $3.3 billion in new spending, including updates to their natural gas transmission system, utilities, investments into renewable natural gas, and a natural gas pipeline in Ontario. This is a strong sign of belief in the continuing success of the oil and gas sector.

Ebel declared that Enbridge will still be investing heavily in renewable energy, hydrogen, and carbon capture technology; however, these must be profitable and not increase the corporation’s risk.

“I think (we) continue to build infrastructure, (we) continue to be more efficient  — that lowers emissions, but it’s not counter to continuing to provide investment returns for investors,” said Ebel.