These people are dedicated to making sure the energy flows every day

In light of the COVID-19 emergency, we’ve temporarily suspended our regularly scheduled series of conversations with Canadian CEOs. But we’re not going away. Instead, we’re going to pivot to the health emergency itself. We’re going to explore the impact on companies and workers across the country. And we’re going to find out how business leaders are responding to crisis.

“These people are dedicated to making sure the energy flows every day”  Russ Girling, President and CEO of TC Energy, discusses pandemic preparedness, keeping essential workers safe and lessons in leadership during a time of crisis.

Transcript

Goldy Hyder:
Welcome to Speaking of Business, I’m Goldy Hyder of the Business Council of Canada. The COVID-19 pandemic is challenging us all, as individuals, as communities, as companies, and as a country. In this special podcast series we are speaking with business leaders to find out how they are responding to this unprecedented crisis.

Goldy Hyder:
It’s an especially challenging time for leaders in Canada’s oil and gas industry, a sector that was already hard hit by dropping all prices even before COVID-19. How are they weathering the storm? Joining me today is Russ Girling, President and CEO of TC Energy. Welcome, Russ.

Russ Girling:
Thanks, Goldy, good to be here.

Goldy Hyder:
Well, look, let’s just jump right in. Everybody is being told to stay at home. Obviously not every company can allow or have their staff do that. You run a business that’s an essential service, working to keep energy flowing to people’s homes. How has this crisis changed the way you’re operating and what are you doing to keep your employees safe on the job?

Russ Girling:
Well, I guess maybe I’d start with, we’re one of the fortunate ones. We have a pretty extensive crisis management program that allowed us to move to remote working pretty quickly but there’s a lot of folks out there that didn’t have the same kind of plans.

Russ Girling:
I’d like to start by, obviously, expressing my gratitude to all of those essential service workers, both in health care, but as well the ones that are supporting the supply chains that are keeping all of our goods coming to us as a company every day, but as individuals. Truckers and grocery store workers and warehouse workers, all of those folks that are keeping the lights on and keeping things going day to day are truly an inspiration to us all. So, start there, there’s a lot of people that are doing a lot of heavy lifting to make our lives a lot easier.

Russ Girling:
As a company, we extensively plan for these kind of events. And it might be a pandemic, it may be other things that cause us to not be able to operate the way that we do every day. We were able to isolate our workers very quickly and move to a protocol that keeps those workers away from all others. We did move all of our non-essential workers to working from home. That lift happened very efficiently. We have the technology to be able to allow people to work from home.

Russ Girling:
But there is what I call essential service workers that are amongst those few that I mentioned earlier. We have isolated certain individuals from their families so that they can make sure that they’re not infected and they continue to operate the control rooms every day. We have a limited number of those individuals so it’s very important.

Goldy Hyder:
I was going to say, how long can you do that? They have families, right?

Russ Girling:
They do have families so we’ll have to rotate them. What we did actually, and again, it’s heartening just watching people step up to these things, Goldy. We asked for volunteers to come forward to isolate themselves and to ensure that we could continue to keep the energy flowing every day. Almost 100% of those employees in those roles stepped up to that job.

Russ Girling:
Hopefully we don’t have to operate like this forever and we will come up with other protocols as testing and those kinds of things improve, how we can move back to a normal way of operating. But until that happens, what I can tell you is these people are dedicated to making sure that energy flows every day. We’re supporting their families in every way we can. I mean, obviously all of those things that need to be put in place to support the families of those that are ensuring the energy flow for people every day are the kinds of things that we needed to do.

Goldy Hyder:
You mentioned preparedness and planning. I’m curious, did you actually have a plan for a pandemic?

Russ Girling:
Yes, actually pandemic is part of our planning process. What we’ve done, for example, around our control rooms is we have alternate control rooms. We have them in our head offices, but we also have them in remote rural locations. In a pandemic situation where employees can’t access the main building we can provide them access in isolation in those other places.

Russ Girling:
We have those kinds of things in Canada, the United States and Mexico. We do plan these things and we actually run through rigorous testing on an ongoing basis to make sure that it works. Unfortunately we had to see whether it works and it worked very well for us here over the last few weeks.

Goldy Hyder:
Some have suggested that the energy industry has been in crisis mode for some time now and this is in some ways a double or a triple whammy with what you’ve had to deal with. Can we talk a little bit about the resiliency of the industry, how it’s responding to these crisis on top of crisis? How is the industry doing?

Russ Girling:
It’s very difficult, obviously, in the upstreams. You mentioned the double whammy of both supply being impacted the same time that this pandemic got underway, a global price war was ensuing and we’re seeing large producers, Saudi Arabia and Russia, pushing more product into the market. So increasing supply at the same time the pandemic has had a huge impact on demand. So those two forces together have pushed the commodity price down to levels we haven’t seen for a long, long time.

Russ Girling:
You add that to the liquidity crisis that comes with the pandemic and a lot of our upstream customers are in pretty tough shape. Obviously what we’ve got to do is keep their product flowing as best we can. On the one side, the demand that we have to meet every day is making sure people’s houses are heated and electricity is going to the hospitals and those kinds of things. At the same time, moving as much product as we can for these producers, ensuring that they have as much cash-flow as they possibly can.

Russ Girling:
So we’re working with them on a daily basis to try to manage storage in any way we can to make their logistics as easy and as streamlined as we possibly can.

Goldy Hyder:
Now, as you know, industry sectors across the country have been working with government to get a response to the challenges that are being faced. Some announcements were made last week, more are likely to come. Is it fair to say that the primary need of the industry, particularly your customers and partners, is liquidity?

Russ Girling:
Absolutely. It’s a cash crunch and I think it’s very similar to all businesses that are directly impacted by this COVID crisis, where their cash flow has been impaired in a significant way and their access to capital to manage their way through has been impaired as well. The energy industry is no different than those other businesses.

Russ Girling:
I think the government has moved quite considerably on a lot of fronts to ensure workers have access to pay cheques and they’re starting to provide liquidity to businesses. That started last week with the announcements made as to how the government can support the energy industry and my understanding is that there’s more to come. Those are the main things, is that they need access to capital so that they can weather this storm and come out the other side in reasonable shape.

Goldy Hyder:
I think of the comparison to what happened in 2008 and 2009 in the auto sector and what’s going on in the energy sector. So hopefully, as you note, there is more to come on the liquidity front and a number of initiatives are certainly underway.

Goldy Hyder:
Now, one thing that happened in the middle of all of this, to have a positive here, is you, in partnership and support of the provincial government of Alberta, made a very significant announcement in terms of planning to proceed with the Keystone XL Pipeline. Can you tell us what led to that decision and are you surprised by it yourself?

Russ Girling:
We’ve been working on these things for a long time and the demand for our services, all of the services that we offer and operate on a daily basis, have all been deemed essential service through this pandemic. I think it just highlights the need and nature of what we do every day in keeping the economy rolling and keeping the lifestyle that people have become accustomed to.

Russ Girling:
We have a vote with Keystone now, about a $45 billion capital program underway. It’s to build the essential infrastructure that people need to keep their businesses going, to keep hospitals heated, to keep ventilators going. What we do is extremely important. We always have to keep an eye, while we’re running the essential services and delivering the energy people need today, the energy that people need tomorrow is going to require new, enhanced infrastructure from what we have today.

Russ Girling:
Keystone is just part of that. We have been working on that, as you know, for a long period of time and had been working on a construct with the Alberta government to move that project forward. It just happened coincidentally to occur at exactly the same time as this pandemic. But I think, I wouldn’t say it surprised me, it just highlights again, the need and nature of the criticalness of this infrastructure.

Russ Girling:
In this case we’re going to deliver heavy oil from Canada, which is one of the most environmentally responsible nations on earth producing heavy oil, and deliver it to the largest heavy oil refining complex in the world, which is the US Gulf Coast. Even through this pandemic where we’ve seen light oil prices plunge, heavy oil is still being imported from other places around the world, primarily Venezuela and in the Middle East. If we can move more Canadian oil into that environment, it doesn’t take a rocket scientist just to see that that actually is going to improve national security, energy security, and in doing so, global security.

Russ Girling:
It’s clear that having control over supply chains and access to supplies from friendly allies is certainly an enhancement to the current situation we find ourselves in. It’s no surprise to me, and I think actually this situation just highlights those critical needs that North America continues to have.

Goldy Hyder:
How critical was Alberta government’s involvement?

Russ Girling:
It’s essential. As you pointed out earlier in the conversation, capital markets is a difficult place given where prices are, the conversation around ESG and the like. Obviously bringing in the Alberta government as a partner is going to allow us to get access to the capital required to complete the project and, if completed, obviously that’s going to have a huge impact on the Alberta economy and the upstream’s ability to invest capital.

Russ Girling:
So it’s a chicken and egg kind of thing. It’s building the infrastructure is required for building capital markets confidence. Certainly the Alberta government’s investment will help instill public market or capital markets confidence in this business.

Goldy Hyder:
Well, congratulations on that. I know that’s not an easy thing to do. So, good news. It’s a win-win as you point out for the environment and energy and jobs, no question.

Goldy Hyder:
Now, one of the things we want to cover off in the podcast, Russ, is what are companies doing in response to the crisis to help the community or others? Now, I know in your case you’ve got employees who are also working from home. You talk about being a, if I can quote you here, “Virtually supportive while being physically distant.” What are you encouraging your employees to do and how are they helping the community?

Russ Girling:
It’s heartening to see. Our employees want to step up and help the communities in which we operate. It’s very difficult to know in each individual community along the hundreds of thousands of kilometers or right of way that we have, is where to put the money and how do we quickly get money into the hands of those that need it?

Russ Girling:
We started by seeding each one of our employees’ donation accounts with $25 and then we put in place a match to say that if they wanted to contribute to their communities, we would match them two for one on every dollar they contributed to their communities. That would give us a road map as to where those funds are needed and we could quickly move funds into those communities.

Russ Girling:
Over the last four weeks or so, our employees have stepped up to the table and we’re now at about $2 million in individual communities. Things from the Red Cross to Mexican food donation outlets and the like. It’s really been inspiring. Seeing our employees want to step up to the plate and actually participate has been extremely heartwarming for me, as we see, these folks have got their own issues.

Russ Girling:
They’re dealing with their families that are, in some cases, are under pressure. Dual income families where they’ve lost an income. They have children at home and all of those kinds of things. Yet, they still see themselves as being fortunate and wanting to step out and help their communities.

Russ Girling:
So we’ve seen the number of volunteer hours increase, as well, as I said, these donation dollars. It’s actually been in places where I would say that are more difficult for federal and provincial and state dollars to get to because they’re the smaller communities that need the help. It’s worked well for us and hopefully it’s working well for the communities.

Goldy Hyder:
Well, it’s a great example of leadership and the culture of the company. Congratulations to you and your employees. Let me conclude with a question that we’re trying to learn here. A lot of our listeners are doing their MBAs and are future CEOs and future leaders. What have you learned personally through this crisis as a leader?

Russ Girling:
I think that leadership is easy in growing environments and true leaders emerge during crisis. What I’ve learned in this situation is, probably the primary thing is, is we’ve got a lot of experts inside this company, as I said, we do crisis management and that sort of thing, is as a leader, what I realized is I don’t know everything. And that especially in a situation where I haven’t found myself before, we have trained people that know how to get things done and how to implement these crisis plans.

Russ Girling:
My job is to actually ensure that those plans were in place before but when they happen, it’s, really, is just to get out of the way and support those people that are the true leaders, in making those implementations, transitions to, I said, working from home, the protocols around our control rooms, the protocols around our maintenance.

Russ Girling:
Then in the construction basis, we’ve had to modify everything that we’re doing on construction sites today to ensure the safety of both our employees, the communities and our contractors. I haven’t had experience of doing all of those things but there’s people that have. As a leader, having good people, having plans in place and having the courage to actually step out of the way and let them implement. It’s been just tremendous to watch what people can achieve if you just get out of the way and let them do things. We’ve accomplished unbelievable things here in the last five weeks of this pandemic. Certainly I’ve learned a lot about how to do this just from watching our people and our leaders.

Goldy Hyder:
Well, here’s hoping that we never have to do it again. Thank you for doing this and I’ll let you get out of the way here because I know you’ve got a company to run and people counting on energy getting to their doorsteps. Thank you for sharing with us, Russ, much appreciated.

Russ Girling:
Thank you, Goldy, and thank you for all that you’re doing to advance business and as well to bring this crisis to an end as quickly as we can and emerge the economy from the pandemic as smoothly as we possibly can.

Goldy Hyder:
Russ Girling is President and CEO of TC Energy. If you would like to hear more of our conversations with business leaders about the COVID-19 crisis, you can find them all wherever you get your podcasts, or go to our website, SpeakingOfBiz.ca, that’s biz with a zed. Thanks for joining us. Until next time, I’m Goldy Hyder.