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Investing closer to home – American investors used to provide well over half of new funds into Canada. In less than a decade the United States has turned from needing Canada’s oil and gas to becoming its competitor. It’s not that Canadian plays aren’t viable, but American capital is reluctant to stray from home when there are plenty of new alternatives in Texas, North Dakota and Pennsylvania.

The grass is greener on the other side – When it comes to making money, it’s all relative.

The money-making potential of energy as an “asset class” is compared with everything else, from real estate to cannabis. For five years there has been more money to be made in other economic sectors with lower risk. For now, the grass remains greener elsewhere and green is where the money goes.

Show me the money – Oil and gas has had a poor track record of generating long-term returns on capital. The money has historically been made in the ups and downs of commodity prices, and in rolling out more and more barrels. Now, investors have shifted their expectations from growth in price and production volumes to growth in profitability. The latter is forthcoming, but not yet established with a track record.

The EV effect – The standard anti-oil narrative is that electric vehicles are going to push the demand for oil off the Rogers Pass. Even though replacing the petroleum powered fleet will takes decades, many investors are hedging the possibility of demise by raising their risk threshold. Perceptions about imminent demand destruction are sufficient to make them more cautious about investing.



I, Robot – Ever tried selling something to a robot? Don’t bother. It’s too busy calculating profitability trends and doesn’t like to make friends. Not long ago company executives went to financial capitals like New York, London and Toronto to schmooze with human portfolio managers. Half of them are gone now, ceding their offices to algorithms. It’s tough to pitch an equity financing to a motherboard. And if you get on the wrong side of one, your performance isn’t relegated to flash memory; it lingers like a bad social media post.