Enbridge Inc.’s chief executive, Greg Ebel, expressed optimism regarding the evolving approach of both Canadian and U.S. governments toward energy infrastructure projects. He believes there’s a growing recognition of the need for expedited development of oil and gas projects.

During a conference call discussing the company’s financial results, Ebel stated, I’m completely enthused about it. This enthusiasm stems from recent political developments and policy shifts in both countries.

Canadian Political Context: Energy Infrastructure Takes center Stage

Energy infrastructure emerged as a critically important theme during the recent Canadian federal election, which concluded with the Liberal Party forming a minority government on April 28. The focus on energy stems partly from concerns about Canadian economic sovereignty, especially considering trade tensions and annexation threats from the U.S., which have spurred calls for diversifying energy export markets beyond the United States.

Liberal Leader Mark Carney, during his campaign, pledged to position Canada as an energy superpower encompassing both conventional and clean energy sources. A key component of this vision is the establishment of a federal major projects office designed to streamline project reviews, ensuring each project undergoes a single review process with reduced timelines.

However, several contentious issues remain between the Canadian government and the energy industry, including the industrial carbon levy, emissions caps, the West Coast tanker ban, and environmental review legislation.

The Conservative Party, in contrast, promised to fully address the oil and gas industry’s concerns, as outlined in an open letter from 14 corporate leaders advocating for the removal of contentious environmental policies.

Ebel noted the shift in focus, stating, The fact that people are now talking about energy, energy infrastructure, getting stuff done — that’s just a marked change here in Canada. He also questioned whether this newfound attention would translate into tangible permitting reforms, adding that he’s going to take carney at his word that he’s committed to building energy infrastructure in Canada.

U.S. Policy: Streamlining Energy Development

In the United States, the Trump governance has actively promoted oil and gas development, aiming to accelerate permit approvals for liquefied natural gas (LNG) terminals and pipelines, as well as opening new areas for exploration.

Ebel mentioned that he and other industry leaders have yet to meet with the new prime minister but anticipate discussing legislative issues and strategies for including Indigenous communities in projects.He believes that those things can be done very quickly with either a stroke of the pen or some legislation.

Enbridge’s Financial Performance: Q1 2024 Highlights

• Net Profit: Enbridge reported a first-quarter profit of $2.3 billion, a significant increase from $1.4 billion in the same quarter of the previous year.
• Earnings Per Share (EPS): The company’s EPS for the quarter ending March 31 was $1.04,compared to $0.67 a year earlier.
• Adjusted EPS: On an adjusted basis, Enbridge earned $1.03 per share, up from $0.92 in the first quarter of 2023.
• Total Operating Revenue: Total operating revenue reached $18.5 billion,up from $11.04 billion during the same period last year.

Strategic Expansion in the Permian Basin

Enbridge is expanding its presence in the Permian Basin in Texas. The company recently announced a deal to acquire a 10% stake in the Matterhorn Express natural gas pipeline for $300 million USD.

Colin gruending, executive vice president and president of liquids pipelines, commented on the Permian Basin, stating, The Permian is a great basin and always will be. It’s a critical basin and we’ve got our ear to the ground. he added that while recent commodity price volatility has impacted U.S. producers in the Permian, Enbridge’s business in the region remains relatively insulated.

Gruending noted the varying responses from producers, saying, The good news is, is that our business is built to be relatively insensitive to that price and to that indirect risk of volume risk. We have a contracted business in the Permian.