Energy East champion says he changed careers ‘for my country’
TransCanada’s Poirier undaunted by Energy East challenge
François Poirier, president of TransCanada’s Energy East Pipeline Project, left the financial services business to try something even energy veterans have struggled with: building a major oil pipeline from Alberta.
Even seasoned energy executives have struggled with trying to get a single major new crude oil pipeline built from Alberta over the past decade. But François Poirier has turned his back on a successful banking career to attempt that very mission.
The 48-year-old president of TransCanada Corp.’ s Energy East pipeline is tasked with tiptoeing around provincial politicians, battling environmentalists and engaging communities and First Nations, in an effort to build a 1.1-millionbarrel-per-day Alberta-to-NewBrunswick corridor at a cost of $12 billion — making it the largest and most expensive pipeline undertaking in the country’s history.
You might call it a daunting task. Poirier wouldn’t.
“Not at all. I was attracted by it,” he said in an interview in Toronto — one of his three bases, the other two being Montreal and Calgary. “I walked away from a very successful and growing career in financial services to do something important for my country.”
In April last year, the Ottawa-born Poirier left his relatively comfortable and secure Bay Street role as founding president of Wells Fargo Canada to lead the development of the 4,600-kilometre crosscountry pipeline that will feed Eastern Canadian refineries and connect trapped oilsands to export markets via a terminal in Quebec and New Brunswick.
With CEO Russ Girling’s name synonymous with the controversial Keystone XL pipeline in the public domain, the Calgary-based company needed a new face to promote its new project — a move welcomed by many observers.
“Due to the scale of the project and complicated execution … it warranted having its own dedicated team,” said Matt Sallee, Leawood, Kan.-based fund manager at Tortoise Capital Advisors LLC, which owns 2.9 million TransCanada shares.
While TransCanada was looking for “some outside thinking” for the new role, it did not wander too far: Poirier already had a working relationship with TransCanada going back as far as 1999 as a JP Morgan adviser, helping raise debt and equity for the Calgarybased company.
“We grew up together — them (TransCanada’s executive team) in corporate development and me in financial services. So I have a 20-year relation- ship with individuals inside the company,” Poirier said. “I was as familiar as an outsider can be with the company’s values.”
Indeed, TransCanada’s ideal candidate was “somebody who is familiar with us, someone who we see as a good communicator and could help us get Energy East across the finish line,” Poirier said.
Crossing that line would propel Poirier to the status of a modern-day energy pioneer and a cult figure in the industry, especially as seasoned Canadian pipeline executives have seen their otherwise stellar careers marred by deafening opposition to their swansong projects.
Enbridge Inc.’ s Patrick Daniels retired without seeing his pet venture, Northern Gateway, put in the ground; TransCanada’s Hal Kvisle who proposed the controversial Keystone XL extension, left and then led and sold Talisman Energy Inc. even as the KXL file collected dust with the U.S. State Department; the current crop of CEOs from Enbridge, TransCanada and Kinder Morgan can’t claim to have a major oil pipeline under their belt in recent years.
The fluently bilingual Poirier is a fair distance away from his own finishing line with Energy East — in fact he suffered a false start in Quebec. Six months after submitting the Energy East application to the National Energy Board, the company retreated from a plan to build a marine terminal in Cacouna, on the St. Lawrence River in Quebec, conceding to environmental opposition.
Poirier doesn’t see the terminal’s cancellation as an admission of defeat.
“No, I actually view it as a success as we listened to stakeholders,” he stressed. “We realized it is time for us to walk the talk. We had said all along that unless we can satisfy ourselves that we won’t have an impact on the marine mammals’ population in Cacouna we won’t build it and we concluded we could not.”
TransCanada says 90 per cent of the project remains unchanged, and the Energy Board said Friday that it will proceed with the application.
But Adam Scott of Environmental Defence believes the project is in “disarray,” as the company has yet to secure another terminal location in Quebec. Environmental Defence is among 60 groups urging the NEB to scrap the Energy East application.
“They are desperately still seeking to find some community along St. Lawrence who might be willing to accept an export terminal, but they keep being rebuffed,” Scott said.
But Poirier asserts his company feels “entirely justified” to work on the application, and will file an amended application by the fourth quarter.
Still, he lets slip some doubt: “Will that meet the economic realities of our shippers, depending on where they want to sell their oil and what the delivery cost impact is? All of that is being reviewed holistically as part of our assessment.”
Despite the roadblocks, analysts give the pipeline a fair chance of succeeding.
“Energy East pipeline faces fewer challenges than Northern Gateway because even political parties are more onside with it,” said Dwight Newman, Canada Research Chair in Indigenous Rights in Constitutional and International Law at the University of Saskatchewan.
Opposition, though, could rise in the Maritimes and central provinces, despite TransCanada’s efforts to engage communities early in the process. “Northern Gateway engaged early on, too — more than is sometimes portrayed. It was involved in discussions with First Nations for over a decade,” Newman said, referring to Enbridge’s pipeline that has an NEB permit, but has yet to see shovels in the ground due to entrenched opposition.
TransCanada has met with 9,000 people, including First Nations, in 116 open houses related to Energy East, but it has not gained the traction it covets. In February, Ontario Regional Chief Stan Beardy sent a letter to the federal government, demanding the NEB halt the permitting process until the regional group of 133 First Nations communities is properly consulted.
TransCanada has already pushed back the project’s schedule by two years and a final service date may be beyond its stated 2020 timeline.
“It will be a challenge to get it done on time due to the scale and the permitting required,” said Tortoise Capital’s Sallee. “But I tell you, this and other projects are important to the market to free up some oil in Western Canada.”
Adding to the complexity, both Ontario and Quebec governments have demanded six “principles” that will determine whether they support the pipeline. A report from the Ontario Energy Board is expected within weeks, while on Monday Quebec Environment Minister David Heurtel directed the Bureau d’audiences publiques sur l’nvironnement to launch an environmental study for the pipeline. Poirier said Canadian government officials have been far more transparent than their U.S. counterparts in laying down the rules of engagement.
“If you compare and contrast our Keystone XL project to Energy East, I don’t think we can with an honest face say that we know what the next step in the Keystone process is,” Poirier said at a recent business event in Toronto. “But the provinces of Quebec and Ontario have shown some leadership.”
The rookie energy executive acknowledged “opposition is growing” and it will require more than engineering and regulatory know-how to get pipelines built. Despite the uphill task, Poirier said the opportunity to lead the development and secure permission for Energy East is a “dream scenario.”
“The opportunity to be involved in leading the development and obtaining permission for Energy East was, for someone who was in and around the energy sector my entire career, I just thought it was an important job to do.”