June 9, 2026 | Global Energy Show
Jon McKenzie, President & Chief Executive Officer
Check against delivery​

Good afternoon, and thank you. 

Thank you for attending today’s conference and thank you for coming to listen. 

I know everyone is busy, but I genuinely appreciate your interest. 

Global geopolitical events over the past number of months and years have reminded us all about two basic energy truths. 

One, energy security is national and economic security. 

And secondly, the world will require hydrocarbons, in increasing quantities for decades to come. 

The reality is that even after spending hundreds of billions of dollars on renewable and alternative energies, over 80% of global primary energy consumption comes from hydrocarbons. Just as they have since the 1950s. 

Over that time period, from 1950 until today, global demand for primary energy has more than quintupled, and the global supply of hydrocarbons has risen to meet the supply challenge. 

And while it is true that the relative share of global primary energy supply attributable to coal and oil has fallen, it is not because of displacement by renewables or alternative energies, it is because natural gas has become an increasingly important and dominant component of our energy mix. 

In absolute terms, the amount of coal, natural gas, and oil demanded by the world to sustain our quality of life and lift third world countries out of grinding poverty, will continue to grow – year after year after year. 

Hydrocarbons are ubiquitous in everything we do and the energy systems we have created over the past century are immense, complicated, and entrenched. 

To break and replace these systems and linkages will be costly and take time. 

These are just facts, to be neither celebrated nor condemned, but to be dispassionately understood. 

They highlight the magnitude of the challenges society faces in simultaneously trying to provide a decent quality of life to as many people as possible, while at the same time limiting the externalities of our environmental footprint. 

They also highlight the shallowness of much of the energy debate and policy, and the absurdity in villainizing or venerating energy types in absolute terms – clean versus dirty, green versus fossil fuel. The reality is, all forms of energy have negative externalities as well as societal benefits. Further, the world will need all forms of energy in rapidly increasing quantities. 

Supplying our growing energy demands and needs is fundamental to sustaining and improving our quality of life. 

The vision of a bloodless, imminent, and seamless energy transition from fossil fuels to renewables and alternative energies has been laid bare as fallacious. Only the most ardent of idealogues still pedal this vision. In reality, we are entering into a period of energy diversification, not transition. We use more wood, coal, oil, and gas today to generate energy than at any point in history. The only fuel that we have truly transitioned away from over time is whale oil. 

We have come to accept what we always knew from basic economics – “There are no solutions, only tradeoffs.” – There is no free lunch. 

Vaclav Smil is one of the most recognized and respected energy economists. Although he is Canadian and from the University of Manitoba, he is perhaps more well known outside of Canada. In his book – Grand Transitions – he wrote: 

“A world without fossil fuel combustion might be highly desirable, and our collective determination, commitment, and persistence could hasten its arrival – but getting there will exact not only a high financial and organizational cost, but also persistent dedication and patience. The unfolding global energy transition will last for decades, not years, and modern civilization’s dependence on fossil fuels will not be shed by a sequence of government dictated goals. Perhaps nothing is as important for understanding energy prospects as is an informed appreciation of the fundamental realities.” 

The second truth that I briefly touched on is that energy security is national security, and energy security is economic security. 

Without access to affordable, reliable, and abundant energy, the quality of life that we enjoy, and other aspire to, is unsustainable and unattainable. 

There are no examples of First World countries that don’t have access to affordable, reliable, and abundant energy. It is a prerequisite for the quality of life that we enjoy and should never be taken for granted. 

In Canada, we have been blessed with energy and resource abundance. We have the world’s fourth largest oil reserves, immense natural gas and coal reserves, the world’s third largest uranium reserves, and we are one of the largest developers and operators of hydroelectric power. 

Our resource endowment is the envy of the world. 

And yet, in Canada, we have taken our energy endowment for granted. 

Over the past decade, we have myopically focused on climate policy to the exclusion of the multitude of benefits responsible energy development and production has brought, and can bring, to this country. 

Despite Canada being consistently and emphatically recognized as the most responsible energy producer, amongst the top ten global producers, across a broad range of metrics, we have continued to add complex, ineffective, and costly regulations and policies that uniquely erode the competitiveness of the Canadian energy industry relative to its global competitors. 

Over the past decade, we have continued to add incremental regulatory burdens and cost to the industry: the industrial carbon tax, the carbon cap, methane regulations, clean fuel regulations, clean electricity regulations, permitting delays, increased royalty and tax burdens, the Impact Assessment Act, the West Coast tanker ban, and the list goes on. 

We have done all of this under the belief that we are climate leaders. The reality is we are not leading if no one else is following. 

At times we have treated our energy endowment with contempt as something that we tolerate, constrict, and manage down, versus recognizing it as our largest economic lever, our biggest and most important export, and the largest driver of Canada’s quality of life. 

And the result has been predictable. Investment has left Canada for other jurisdictions. The jobs that come with investment, together with the taxes and royalties, were never realized. Foreign investors and producers have left and taken with them the benefits they bring. 

Yet through this, the world has not demanded one less barrel of oil, not one less Mcf (thousand cubic feet) of natural gas. The world just gets it from different jurisdictions like the United States, Russia, and the Middle East. 

While it is true that Canadian oil and natural gas volumes have grown over the past ten years, they grew at a fraction of their potential. We have continued to grow by debottlenecking existing projects, improving efficiencies, and brownfield expansion. We continue to lever off the investments that were made prior to 2015. 

In fact, only one greenfield oil sands project has been approved and built since 2013, while capital investment in oil sands peaked in 2014. 

So as Canadians, we need to ask ourselves – what did we get for this? We forewent investment, jobs, royalties, and taxes, while the world continued to consume exactly the same amount of energy… it just didn’t come from Canada. 

We didn’t build the Northern Gateway, Keystone XL, or Energy East pipelines. We forewent the hundreds of billions of dollars of investment it would have taken to build and fill these pipelines. We chose to not meaningfully participate in the LNG buildout. And we need to ask ourselves what did we achieve and what did we get for making these decisions? How did we benefit? 

Over the past decade, we have failed to recognize that we need to compete for foreign investment, capital is mobile, and it will go to where it gets the highest risk adjusted return. If we wish to attract capital, we need to compete for capital on a global stage, and we need to treat it with respect.

Today we have an opportunity to course correct. Our federal and provincial governments have openly declared their desire to transform Canada into a global energy superpower. A majority of Canadians are favourable to this. 

As Canadians, we should be encouraged by the new found sense of cooperation and purpose. For too long, our governments and politics have been divided. For too long, we have lacked a common purpose. 

However, becoming an energy superpower will take time and perseverance as trust with the private sector is earned. It will take more than declarations of competitiveness and announcements of our investability. It will take a fundamental overhaul of our energy and climate policies, as well as our regulatory framework. 

The good news is that none of this is related to ruptures of the global order, the redefinition of the role of middle powers, dislocated supply chains, nor our evolving relationship with the United States. This is all within our control if we choose to get out of our own way and stop the self-sabotage. 

There is a clear opportunity before us right now to meet the increasing demand for secure energy from reliable sources. And if we step up as a country to meet this call, it is to the benefit of every Canadian. 

We have seen the federal government and the provincial government come together over the past number of months to sign two memorandums of understanding in an effort to negotiate a “grand bargain.”

Oil sands has actively advocated for a three “P” approach – Pathways the world’s largest carbon capture and sequestration project, a pipeline, and production. 

In reading the MOUs, it is clear that our federal government wants the oil sands companies to engineer, build, and operate the Pathways carbon capture project. It is also clear they want an industrial carbon tax. The Alberta government has been clear that it covets a one million barrel per day pipeline to the West Coast. What is missing and unclear in the MOU is the commitment to regulatory reform that would allow industry to grow production to offset the costs of the carbon capture project and fill the million barrel per day pipeline to the West Coast. 

What has been clarified in the MOU is the codification of the carbon tax and the tying together of the pipeline to the Pathways Project. If the Pathways carbon capture project is agreed, the quid quo pro is a pipeline to the West Coast. 

As it relates to the industrial carbon tax, industry has been clear that the industrial carbon tax is insidious and should be revoked. Just as the retail carbon tax made life more unaffordable for Canadians, the industrial carbon tax makes investment in Canadian energy, and particularly the oil sands, less competitive and drives out capital. The confirmation of the carbon tax does not provide certainty for investment. It provides certainty that our regulatory regime is increasingly out of step and uncompetitive. 

Of the top ten global oil producing nations, Canada is the only country that has an industrial carbon tax. This represents a unique cost to Canada which erodes competitiveness and impairs investment. 

The issues with the industrial carbon tax are many, but I would point particularly to these: 

The carbon tax does not incent decarbonization projects, it is simply a cost of doing business in Canada that has to be absorbed by the producer. 
I have heard some proponents of the carbon tax defend it by suggesting that the world will require decarbonized oil barrels going forward. To be honest, Cenovus places over one million barrels a day across three continents, and none of our customers have ever suggested or even asked about the carbon intensity of Canadian crudes. 

If customers were willing to pay for decarbonized barrels, we would certainly see these price signals and not require government interference. 

The carbon tax escalates through time, making our industry less resilient at lower commodity prices, and will require the premature shut-in and reclamation of oil producing projects that would otherwise be economic to produce. 

Much of this is being orchestrated in the belief that we can build a functioning carbon market. The reality is that carbon markets are a political construct and there are no examples of functioning, enduring, or investible carbon markets to draw from. 

As I mentioned, the development of the Pathways carbon capture and sequestration project has been clearly tied to the approval and development of the West Coast Pipeline. Without policy and regulatory reform that provides a framework for production growth, neither the Pathways Project nor the West Coast Pipeline make any sense. 

The proposed MOU commits the province and the federal government to reduce oil sands CO2 emissions by 16 megatonnes by 2035 through 2045. Ultimately, they will look to industry to build and operate this project with the costs largely borne by the oil sands companies. 

The oil sands companies can build and operate this project if there is an appropriate sharing of costs between industry, the federal government, and the provincial government. The question is really, how will Canada and Canadians benefit from this project? 

The reality is that this is a project with no revenue. It is simply another cost burden that will be borne by industry and the two levels of government. 

The current estimate of the cost of capturing and sequestering one megatonne of CO2 is between $1.5 and $2.0 billion. 
A project of this size will require the expenditure of $20 to $30 billion dollars which will show up as an incremental cost for industry and a budget deficit and debt for our governments. 

And Canadians should ask – what do we get for this level of expenditure? The answer is that we will reduce global emissions by 16 megatonnes. In a world that emits over 57,000 megatonnes annually, we will reduce our global emissions by 0.02 of one percent. For $20 to $30 billion dollars of spend, we will reduce global emissions by 0.02 of one percent. 

It’s difficult to imagine anyone would believe this is a good use of funds regardless of their political orientation. No other country in the world would consider this level of spending for such a modest benefit. 

With the commitment to the build out of the Pathways Project, the governments have committed to fast track the approval and development of a one million barrel per day pipeline to the West Coast. 

The benefits include diversifying our production away from the United States, as well as getting our production to tide water to ensure it attracts a global price, versus the discounted value that Canadian oil has regularly been subjected to. 

There has been heated discussion with the province of British Columbia who have opposed the pipeline, as well as questioning who will be the private sector proponent to take on this project. What has been missed in the discussion is, which producers will stand up to commit to transportation space on the proposed pipeline, and how they are going to grow production by one million barrels of oil per day to fill the pipeline. 

It will be an imperative to remove the regulatory obstacles that today prevent a private sector proponent from stepping up to take on the development and construction of the pipeline. Equally as important, the private sector proponent will rely on committed transportation agreements from the producers to backstop the financing and risk of the pipeline. Without firm commitments from the oil producers to commit barrels to this pipeline, sign on to take or pay agreements, this pipeline is unfinanceable in the private sector. 

To date, it has been assumed that the Canadian oil and gas producers will invest the tens of billions of dollars necessary to grow production and make the one million barrel per day pipeline to the West Coast a reality. It is assumed that the Canadian oil sands producers will bear the costs of the Pathways carbon capture project to make it a reality. The reality is that, Canadian oil and gas producers are not investing much beyond sustaining capital today. Without a competitive investment regime coordinated by the federal government and the Province of Alberta, the investment required to make this a reality will be challenged. 

The benefit and prize to Canada in getting this balance right, and unlocking the first meaningful capital investment cycle in the Canadian oil sands in over a decade, is immense. This is the prize in the MOU that should get Canadians excited. 

A report released by Alberta Treasury Branch and Studio.Energy stated the following: 

“Expanding Canada’s oil export infrastructure by 1.5 million barrels a day — an increase of nearly one-third — could add an average $31.4 billion to national real GDP each year over the next decade, according to economic research conducted jointly by ATB Economics and Studio.Energy. That represents a 1.1% increase in Canada’s real GDP — a meaningful boost considering this country has struggled to raise GDP per person for more than a decade. The analysis also suggests the buildout would increase employment by 112,000 jobs, on average, over the same period.” 

To be blunt, this is by far the biggest economic opportunity Canada has to reverse our declining economic fortunes. The oil and gas industry is our largest economic driver and is the only material Canadian industry that can singlehandedly move our economy forward. 

To the average Canadian, this means tens of thousands of high-paying jobs from engineers, to petrophysicists, to welders, to accountants, to truck drivers, and more. It also means more taxes and royalties to all levels of government that provide a much-needed boost to our public healthcare, public education, and our social welfare network. 

In conclusion, we Canadians have been on a path with our existing climate policies and regulations for over a decade. That is a long enough time to evaluate their effectiveness and do a true cost/benefit analysis. 
We should also be cognizant of the direction the rest of the world is going – moving away from the myopic focus on climate policies to a more balanced approach, rooted in fundamental economic and physical realities – perhaps there is wisdom in the masses. 

The opportunity in front of us is immense, and life doesn’t always give us second chances to succeed. I am hopeful that we can broaden the national debate on what it really means, and what it really takes, to become a global energy superpower.