FidelityConnects: Analyst Insights: Energy in 2026

[00:04:05] Pamela Ritchie: Hello, and welcome to Fidelity Connects. I'm Pamela Ritchie. Canada's energy sector could be getting a boost with a proposed oil pipeline to the B.C. coast. It's a new pipeline that is being discussed. While some are not happy with this deal announcement others are calling it a moment of opportunity. How is our next guest navigating the voices of competing interests and finding pockets of growth, ultimately, as this gets discussed? Joining us here today to dive deeper into the global energy and U.S. industrial sectors is equity research analyst, Jin Hwang. Welcome back. We haven't seen you, I think, in a few months, Jin, but it's great at this moment to have you sitting in the chair. This deal, MoU, was announced yesterday. I think most people have seen this. It's a surprise, does it mean a lot for the Canadian oil industry? Will it shift everything?

[00:05:00] Jin Hwang: First off, it's a very positive signal that we have a government that's supporting the development of probably our most highest value resource in this country for the first time in probably 10 years. If you just think back at the history of Canadian energy, we went through a period over the last decade where we have all the resource in the ground in the world. If you look at the top ten largest reserves in the world Canada is squarely number three, and anyone else within the top 10 is either fully depleted within inventory, i.e., kind of the U.S. of the world, or are largely in uninvestible spaces within kind of public markets context.

[00:05:31] Pamela Ritchie: Meaning sort of from a political standpoint it's hard to buy from them, essentially.

[00:05:34] Jin Hwang: Correct, yeah. We're talking about the Irans, the Venezuelas of the world where they might not have a developed public markets type world. Canada had this weird balance between we have a lot of resource in the ground but we can't take it out because we don't have the export capacity. For the last decade that's just been the case. Producers...

[00:05:49] Pamela Ritchie: The story has been stranded assets. Although some gets out but it's never been this growth story really.

[00:05:54] Jin Hwang: Exactly. We were in this period where we weren't able to grow, we weren't able to ship this much needed crude to markets that needed it, like the Africas or the Indias of the world, and that was the struggle of this sector. Come last year we spoke about this, I think, probably the last time I was here but the TMX pipeline changed that dynamic entirely. That added about 600,000 barrels a day of incremental export capacity that got used up almost immediately. We are shipping crude incrementally to Asia beyond just the United States. For the first time, producers had some optimism that the sector would be able to grow. That was fairly short-lived. We used a lot of that pipeline capacity fairly quickly but with the next steps that the government's taking here now we're now looking at potentially a million barrel per day pipe going out to the West Coast and additional expansions beyond that. We are now talking about a world that went from no growth at all to very little growth, potentially, kind of large swaths of growth in a very short period of time. It is a very exciting period for energy.

[00:06:46] Pamela Ritchie: Just put us back into sort of the Canadian story. You've been joining us and telling us a little bit of the story of the transformation of the oil companies, of the energy companies for the last several years. They have not been as tied to the price. Better balance sheets. They just look like more sort of stable, don't need to invest with the price of oil going up and down so much.

[00:07:06] Jin Hwang: Right. The history and it's evolved so quickly in just the last two decades. We went from the early to mid-2000s where we talked about this idea of resource scarcity. We actually didn't know where the next barrel of oil was going to come from because China was growing so quickly, India was growing so quickly. We had a capital-intensive global economy and we just didn't know where that was going to come from. That was the first phase of evolution for the global energy sector. From there we hit the speed bump period of U.S. shale where all of a sudden we had this unlocking of new supply in the U.S. that met every single barrel of demand out there. And it became pretty quick.

[00:07:38] Pamela Ritchie: It flooded the market, basically.

[00:07:39] Jin Hwang: Flooded the market. The incentive at that period, through this entire period, regardless of if it's even economic to pull it out of the ground. We had this period of undersupply going to massive oversupply through the 2010s, and then COVID struck. We had negative oil prices, nobody was buying oil around the world because everything was locked down, and all of a sudden these companies were on the brink of death. That...

[00:08:06] Pamela Ritchie: Remember that day when you just watched U.S. oil, that ETF just actually fall right into the water.

[00:08:11] Jin Hwang: Everyone had their views of negative was possible and then, sure enough, we hit it. At that point there was kind of a redefining of the sector where they said, you know what, we can't grow at all costs. We can't inflate our balance sheets to no end. That's when energy 2.0  came in where I'm going to reduce my leverage, I'm going to pay out more of my cash to shareholders, and every barrel that comes out has to come at a very specific return threshold so that we are valued as better businesses. For the last two, three years we've been kind of in that energy 2.0 world for the sector. As we think about going forward from here, look, the short term of the oil price world is a little choppy. There's a lot of new supply which we can talk about. Longer term though, we may still be having that conversation again of resource scarcity. By the end of this decade we might not know where that incremental barrel of oil is going to come from because the U.S. shale boom is starting to slow pretty dramatically.

[00:09:00] Pamela Ritchie: It's sort of hard to believe that in a sense because we have gotten to that point where we think the world is, you know, floating on oil to some extent and when will that supply ever really shift. The price of oil has reacted to that. It's hard to believe that in a matter of years we're actually not gonna know really where the next barrel of oil ... what's happening there?

[00:09:22] Jin Hwang: It's entirely shifted and it's because of the deceleration of U.S. shale. If you went through a period where you were drilling all your best stuff very quickly because the price of oil was $30, $40, $50 for most of the last, I guess, 15 years.

[00:09:34] Pamela Ritchie: And emissions meant nothing.

[00:09:36] Jin Hwang: Emissions meant nothing. You deplete your inventory, your resource super quickly. In today's world because you've already drilled a lot of your best stuff within U.S. shale the costs naturally start going up. You have to drill a little deeper, you have to drill a little longer to get that incremental barrel. I think the last forecast that I saw was from a third-party data provider but today to take out a barrel of crude from the Permian Basin, or from U.S. shale more broadly, to generate sufficient returns you need oil prices roughly in the low 60s. The expectation is because you're depleting that good stuff today by 2030 that could be 75, and by 2040 that could be 95. That curve sort of tells you the depletion of the U.S. shale resource is starting to materialize potentially into higher oil price in the future. If that's the setup we will have the question of where will that next barrel of crude come from?

[00:10:22] Pamela Ritchie: In Canada if we get new pipelines, it could be one, it could be more. I mean, they seem to be opening that gate up so we'll see. Where is the demand coming from? Or can you be specific about that?

[00:10:35] Jin Hwang: It's globally. For the longest time we thought oil demand might plateau in the 2030s. That's what the most onerous reports out there would say, and it's because of the electric vehicle penetration rate globally. We're seeing it in China, we're seeing it in the United States. I think what the analysis failed to reflect was the rapid growth of the emerging economies, call it the Africas, the Indias, the South Americas of the world, which are more capital-intensive, they're more industrial driven, and that's going to naturally lead to a longer tail of oil demand growth.

[00:11:00] Pamela Ritchie: And not EVs yet.

[00:11:01] Jin Hwang: Not EVs necessarily. That's an entirely different question because with EVs comes a need for more power and as it looks today we are kind of power constrained because of all the fun AI narratives that we have out there. Because of that the latest forecasts now say oil demand might grow until 2050, and that's a recalibration of the calculus that we previously didn't really think about.

[00:11:22] Pamela Ritchie: It's so interesting. EM, in fact, may power a longer oil demand and there aren't as many countries that have the oil. Canada sits closer to the top, would be at the top?

[00:11:33] Jin Hwang: Yeah.

[00:11:33] Pamela Ritchie: Really, seriously, we'll be at the top in terms of production.

[00:11:37] Jin Hwang: In terms of resource and ability to execute on the resource with the help of kind of private markets. Canada, again, we have the third most resources in the world for crude. We have a supportive government, we have clean emissions regulations that overlaps around the entire sector. Put that all together and it's the most natural source for economic growth within energy production.

[00:11:56] Pamela Ritchie: It's a global demand picture. For instance, if you think, you know, it's too far away to supply oil to India, for instance, or whatever, or India, it  would be faster for them to get it from Iran or, you know, and those are all politically sensitive discussions. The idea is there will still be other demand that then has to be filled.

[00:12:14] Jin Hwang: Yeah, 100%. Again, for all the short term headaches that we're seeing right now it's been a super volatile period for oil prices this year. Guyana, Brazil, Argentina, Canada, now even OPEC, they're flooding the market with barrels. We may enter peak or kind of all-time highs in surpluses for next year. But by the end of '26 as we look into '27, '28 those same sources of supply start to decelerate pretty quickly. We actually don't know if '28, '29 will be properly provided with respect to oil, and we could start talking about deficits. It's not because I think oil demand or forecasts suggest oil demand's gonna tick up. It's just a steady climb as it has been going for the last 20 years. As demand grows you need more barrels to kind of support that. We just don't necessarily know where that's supposed to come from. That's exactly where Canada can fit into the picture pretty clearly.

[00:13:01] Pamela Ritchie: Can I ask you, so Canada's obviously not part of OPEC, OPEC is a different group, OPEC+. They're controversial, useless some people say, it depends on who you ask. In any case they exist as a consortium. Do you think that will break down and if Canada becomes, you know, bigger on the scene there'll be new new discussions of consortium? I mean, how how is that shifting? You must watch the different alliances within the oil market as well.

[00:13:29] Jin Hwang: To be frank, no clue if that breaks down. I'm sure people have called for it many, many times. You've seen countries leave the coalition, you've seen countries enter the coalition. What we do know is that they have an incentive for higher oil prices over time and because the last five years they've had so much capacity that they've had to take off to support oil prices we haven't seen that materialize into higher oil prices. Saudi, we hear about the break-even number to balance their budgets, 80, $100, people throw out all sorts of numbers. That hasn't manifested into oil prices because they've had so much stuff taken offline to support the post-COVID world when everything was still recovering. By the end of '26, because of how much stuff they're bringing back to the market now, we might be saying, you know what, they actually don't have spare capacity to bring onto the market anymore in a way where they can't be the counter argument to every single geopolitical event that you talk about.

[00:14:19] When we see the Iran news, we see the Ukraine news, we see Russia, there's always a fear that global oil supply will be disrupted in some way, but the counter argument has always been, yes, but OPEC has six million barrels a day of spare capacity. This year they decide to unwind a lot of that and they're gonna do so increasingly through next year, so by the end of next year we might not have that argument anymore all of a sudden.

[00:14:38] Pamela Ritchie: Why are they doing that? I mean, knowing that ... they're reading the same numbers as you, that it could be growing, they might want to hold on to a little bit of it. Why are they doing that? They're transitioning themselves?

[00:14:48] Jin Hwang: There's a lot of speculation on it and we can go down those different paths. I think the idea is this has been a market share focused type of coalition for the longest time. If you can wedge all of your excess capacity in now why not do that, knowing that if you don't do it yourself then someone else is gonna displace your barrels.

[00:15:06] Pamela Ritchie: Really interesting time for Canadian producers right now, the pipeline companies themselves. Who is going to, ultimately, fund this pipeline? I mean, we don't know. This seems to be one of the many question marks of the MoU announcement yesterday. But who probably will step forward and fund this? It sounds like it's being tossed to the private sector and that's good.

[00:15:26] Jin Hwang: Before we go into the pipeline itself, it's important to note that we talk about Canada having a lot of resource and having the growth opportunity in front of us. Even putting this new pipeline aside we have several pipelines within Canada that a lot of these pipeline companies are talking about expanding, i.e. twin lines, add some pumping capacity, things like that. This is stuff that you're not digging new ground for, necessarily. It's a lot easier to do from a permitting perspective, it's cheaper to do. On those projects alone we might have capacity for a million barrels a day of growth. If you think about Canada being a 4 to 4.5 million barrels per day exporter today, a million barrels just changes the calculus entirely. Even before we talk about the extra million that we announced yesterday we already have a lot of visibility. In terms of who's going to build that next million, it's difficult to say. The government has said they want a private market solution to it with co-ownership from the Indigenous groups. But the most natural kind of buyers of an asset like this are going to be the existing pipeline companies.

[00:16:23] The challenge that you face there, and this is actually a good problem to have for the pipeline companies, is because of the gas renaissance that we're seeing, all this excitement around LNG, AI, data centre demand, they have so much capital they can deploy within that space in the U.S. and Canada that they don't actually need to do something like this. They're doing smaller projects, bite-sized at really high returns. We're looking at returns of...

[00:16:43] Pamela Ritchie: Using natural gas to steam it out of the ground and all that kind of thing. You can just go ahead and use it.

[00:16:47] Jin Hwang: Even just adding an extra line going to a power centre that might have been coal before and now it's gas but you make good returns just building an extra connection. They actually don't need to do this so it's sort of incumbent on the government to pitch a $20, $30 billion plus type project to these pipeline companies so that they can put some of the gas stuff aside and they want to willingly build this. That's going to be the challenge. I think if we see the world where we need more crude oil kind of globally, and there are deficits and resource scarcity conversations, it might be easy to actually have that conversation with the producers to backstop something like this so they can go to the pipeline company and say, you know what, we don't need this capacity today but we don't know where the next barrel of oil is going to come from. We're going to provide that to the world and we think we need the million barrels and you can sign a contract to help support that.

[00:17:33] Pamela Ritchie: The government in some ... it depends on who you're asking and at what point, but it seems like there's a shift that they would like to have made away from natural gas providing a lot of that energy for it to be nuclear. That's sort of another step and another piece. I don't know if you follow that as well. Is there some sort of sweetener or shove that the government can push them in that direction as well?

[00:17:57] Jin Hwang: We have a lot of levers here. What's interesting about today's world relative to even three years ago is it's not just one source or the other. It's actually an all-hands approach on everything. The latest forecasts from the U.S. manufacturers say that peak power demand in the U.S. is going to outpace capacity by 2028 because of all this new demand that we're seeing from data centres and power centres and things like that. If we're already constrained on one it's not just going to be we can go all-in on natural gas. You will have to find alternative solutions and I think that's what the government's trying to support.

[00:18:28] Pamela Ritchie: With all the LNG investments and the gas price still on the floor, it doesn't get up off the floor it seems, what do you think about within that industry? I mean, in terms of investment how do investors approach the gas industry?

[00:18:41] Jin Hwang: There's a lot of ways to approach the gas industry today. We can look at Canada specifically, U.S. and then sort of across the broad space. Within Canada it's been a tough space, just like oil. We have tons of resource in the ground but we just can't get it out. LNG Canada phase one was kind of the first step in the right direction. That came online this year and it's still ramping. If you're to think about broad strokes Canada is about a twenty BCF a day kind of gas production market today. Roughly half of that is domestically consumed and half of that is exported.

[00:19:08] Pamela Ritchie: Mostly consumed by the oil producers?

[00:19:11] Jin Hwang: Oil producers, power generation, things like that. If you think about the slate of projects even before this current government came to power, the next slate of projects from the LNG side in Canada we're looking at about five BCF a day of incremental export capacity that could come online over the next ten years. That is 50% increase in your export capacity for the entire basin. If you start layering in incremental projects that maybe the Carney government wants to support, you know, we spoke about Churchill LNG way back, this is additive to an already kind of growthy picture that we haven't seen in Canada for the last 20 years realistically.

[00:19:43] Pamela Ritchie: Further demand so it will bring that price up, we think.

[00:19:46] Jin Hwang: It's more of a timing question than anything else but if an investor can, and is endowed with kind of the ability to look past a one, two year horizon and see sort of the picture of the long term growth here, I think the story within Canada is particularly compelling. As you think about North America wide, gas demand is supposed to grow 40 to 50% over the next 10 years. Most of that is LNG capacity, but then you have coal to gas conversions, things like that. This is before we even start factoring in the AI data centre narrative stuff out there which could be multiples more than that if we really think about it. The picture just from a demand side, the first time we're seeing real acceleration in kind of natural gas demand is sort of the main story here.

[00:20:25] Pamela Ritchie: Everything you just laid out there in terms of what will cause demand to creep up and therefore probably the price, layer in nuclear. Nuclear seems to be something that's pretty long term out there and in the meantime it will be natural gas until people can build whatever they need on the nuclear front, if they do. That is the extra data centre piece. They'll use nat gas until they get nuclear. There's gotta be a crunch in there somewhere.

[00:20:53] Jin Hwang: It's not even just natural gas, it's everything. As I say, it's an all-hands approach. One of our PMs likes to say any power is good power at this point. Solar, wind, that may have been dirty words in the past, it's not that reliable, but when we're facing deficits potentially as early as 2028--

[00:21:09] Pamela Ritchie: Plug it into anything, yeah.

[00:21:10] Jin Hwang: --every source of power is going to be additive here. The only constraint that we have in all of this, it's not necessarily the molecules on the ground, it's not demand, it's actually the infrastructure side of things. To get those molecules from the origination points down to the demand centre is actually extremely difficult. If you look at, for example, turbine capacity for natural gas plants, the backlog for that goes out to the early 2030s. Basically, if you want to build a power plant it already takes a couple of years but to get the turbine on the ground at your site you're going to have to wait till probably 2033 at this point. The demand is unlike anything we've seen for a very long time. Again, while the short term movements may be volatile the end direction and the long term path remains very, very positive.

[00:21:51] Pamela Ritchie: But ultimately the oil producers will probably fund this pipeline. Is that where the money is gonna come? I was gonna throw out there the pension funds coming in for this, for infrastructure, the pipelines themselves. Where is this money likely ... which pool is it likely to come from? Or do we have foreign direct investment saying, wow, this is a great idea.

[00:22:11] Jin Hwang: As of now the most likely candidates are probably kind of the large infrastructure companies. The large infrastructure companies, again, it is a balance because the project is there, it's likely needed in a 10-year timeframe but they need the contracts in place to make sure that they're not taking speculative risk on a pipeline. The last time we built a new pipeline in this country was kind of a disaster. You need protections against that. It is a kind of all-hands approach again between the producers who need to grow enough to fill that pipeline and also the infrastructure company to take on the risk of building that project. You can't have one without the other. That's kind of their approach. I think the Carney government, their approach is kind of production, pipelines and then sort of pathways. You put those three together and you will be able to grow Canadian energy production pretty sustainably over time.

[00:22:53] Pamela Ritchie: The producers have been involved in pathways for years and years at this point. This is nothing new but it does seem to be bringing on a new role, piece. Is there anything that you want to say sort of from an investment perspective about this pathways project being contingent, or each of them being contingent on one another. That's good for investors?

[00:23:12] Jin Hwang: If you were to just think finance 101, discounted cash flow is effectively the value of a business, the more you can pull forward those cash flows to an earlier period the more valuable your business is going to be. If we're talking about 90 years of resource that 90th year of production that a Canadian producer would have is not worth that much. If you can pull that forward to the next decade that just changes the calculus on these businesses entirely.

[00:23:40] Pamela Ritchie: So when is it too early to invest this story? Today is too early. That's why you started out saying short term choppy, longer term better.

[00:23:51] Jin Hwang: The challenge there is I'm speaking only in directionals. Oil prices are probably the hardest thing to predict out there. The way I'd frame it is again, short term it does look sloppy. Again, the Brazils and the Argentinas of the world, they are contributing a lot of incremental supply that is not necessarily needed today. But a lot of that does fade away by '27, '28, '29. Unlike the shale boom, 2014, 2015 period, we have an end in sight as to how this is going to resolve itself. Eventually this production does come off, eventually demand just keeps growing and we're going to grow our way out of this current issue. This is a very different period. If you read any prior research from the 2014 period period nobody knew when this would end. Is it too early? Potentially. But at the same time if you don't think you can predict oil prices, which I don't think anyone reasonably can, and you have a long enough horizon here i.e., more than a year's worth of runway I would say this is the opportune time.

[00:24:48] Pamela Ritchie: This is the time to sort of get in there and start looking around, certainly. There's a bunch of questions coming in, which is great. See which ones you can answer. Necessary conditions, what conditions are necessary to close the price gap between WTI and WC Western Canadian. What do you see there?

[00:25:07] Jin Hwang: Those will always fundamentally be ... there's always gonna be a delta between those two only because the cost of getting the crude to the U.S. is one thing, but equally, the quality of that crude is lower. The reason that so many refineries in the U.S., I think 60%, 80% of the refining capacity in their keyed markets are heavy crude oriented, is they consume it for the cheaper, heavy crude that they can process and deliver into gasoline and diesel and things like that. Without that discount those refineries don't work anymore. There's always going to be a fundamental price difference between those two.

[00:25:39] Pamela Ritchie: They need it in order for it to work.

[00:25:40] Jin Hwang: A healthy price level between those two is always going to be kind of 11, $12. The good thing about today's world is we're at that level today. For the last decade we've gone as high as $20+ because there's just been too much production in here relative to export capacity. In a world where we continue to see 11, $12 differential between those two is actually a really healthy world for Canadian energy.

[00:26:01] Pamela Ritchie: Because it keeps it rolling. It keeps the whole business case alive. This question, well, you can answer it however you like. Which portfolio or fund would you see having the greatest upside to the MoU with Ottawa and Alberta?

[00:26:14] Jin Hwang: The Canadian torqued portfolios will have the greatest exposure here. What's exciting is we're not only talking about a Canadian energy story but a Canadian story more broadly. This is a government that wants to support resource development, infrastructure development, industrial development within the Canadian economy. If you were to think about the story, again, I keep going back to this last 10-year period, that just wasn't the case. If you were to think about the next 10 years from here the U.S., they have the data centre angle, a lot of these European countries, they have kind of the reindustrialization of those economies. Canadian is starting from ... it's a very different and lower starting point in a way where small incremental improvements, again, we're talking about small pipeline changes but the impact to the aggregate is actually pretty massive from the starting point we're at. If you think about kind of rate of change and sort of the direction of trave Canada looks particularly good. It's not just Canadian energy it's any portfolio that has a lot of exposure to Canada more broadly.

[00:27:04] Pamela Ritchie: That's fascinating because it's an infrastructure story across the country. Just to go a little macro here, what about the job story? I mean, there's potential for a lot of jobs and that ultimately goes to sort of lifting all boats.

[00:27:18] Jin Hwang: Yeah. If you listen to the providers of equipments or materials or anything within this boom they're all seeing exactly what I'm kind of articulating here. There's a lot of demand, it's not just a short spurt. It is a very long cycle type of economy that we're looking at and eventually that's gonna materialize into both more jobs but also higher value jobs.

[00:27:38] Pamela Ritchie: Yeah, higher value, exactly. This question, does this energy resurgence imply lower incentives towards electrification, the supporting infrastructure for that, sort of a general discussion about climate investing, or do you find it's wrapping it all into one? What do you think?

[00:27:55] Jin Hwang: It's all balanced. The only reason there's kind of a licence to be able to grow into this is first because we don't know where the next barrel is going to come from, so that's part A, but part B is the Canadian barrel from an emissions perspective actually ranks quite favourably relative to the rest of the world.

[00:28:10] Pamela Ritchie: Because of the nat gas?

[00:28:11] Jin Hwang: Because of the nat gas, because of the regulations that are imposed on the sector with respect to oil production. Again, if you think about oil production and kind of the supply curve being a global picture you're going to grow, the barrels either going to come from a country like Iran, Venezuela where the emissions regulations aren't that stringent, or it's going to come from Canada where the returns on that barrel is good, the emissions intensity of that barrel is good, and the social development behind that barrel is actually quite good. Those two aren't ... maybe in the last 10 years were in kind of in combat with each other but I think go forward it's actually supposed to be a bit more in sort of harmony between those two going forward.

[00:28:48] Pamela Ritchie: And as you say, the demand picture is behind all of that.

[00:28:51] Jin Hwang: The demand picture, it supports it. It's always kind of the the rising tide type dynamic. In this case we don't know where the next barrel is supposed to come from.

[00:28:57] Pamela Ritchie: That's amazing. You've hit on this a little bit but it's a great thing to come back to. What impact will this environment, with what's being discussed, have on natural gas prices? Just was circle back to that.

[00:29:08] Jin Hwang: To your point earlier,  we've just been on the floor on gas prices in Canada for the longest time. I think for this year on average Canadian gas prices on a U.S. dollar basis are 60% below that of the U.S. We have a lot of resource out there but just like oil over the last 10 years we have no way to get it out to the market, which means we're always gonna take a discount on it. From here it's going to be incredibly volatile. But what we do know is demand is growing multiple fold over the next sort of decade. I talked about LNG Canada coming online, that's gonna be net positive. The incremental facilities that we have, there's six projects in the hopper right now that will come online over the next 10+ years, that adds 50% increase in your export capacity. Yes, we have a lot of gas. There is a point when that production can't keep pace with that type of demand growth. One, you're starting from a low enough place where current prices aren't even supportive of breakeven economics, but two, you're coming into an environment where demand will continually grow. Put those two together and the direction of travel is positive. When it changes, I suspect when these LNG plants come online from now through 2030 but, again, the direction of travel seems quite positive.

[00:30:14] Pamela Ritchie: Ultimately, what do we need? We export it all pretty much. What, ultimately, does it look like from your perspective, just sort of in terms of how the energy picture for what we need domestically looks. How is that gonna change or shift?

[00:30:30] Jin Hwang: That's going to be very contingent on the data centre dynamic that we're seeing in Western Canada right now. We've seen a lot of fast development of kind of MoUs and new projects potentially coming into the hopper on the data centre side, that might add incremental gas demand on that side. What's unique about Canada more broadly is we have a lot of sources for power so it's not necessarily just all natural gas has to fill that. You look at Ontario, for example, we have nuclear. We're seeing potential expansions to nuclear in the 2030+ timeframe. That kind of goes back to the all-hands approach that we have here. What's key though is for Canadian gas, it really is increasingly becoming an international export story.

[00:31:11] If you think about LNG facilities globally, Canada, again, you're paying 70% lower for gas prices here. The U.S. Gulf Coast where they're massively building out LNG capacity you're paying, again, $4+ U.S. for gas. It's just a different sort of economic story both from the producer side but also from the customer side. If I'm an Asian customer and I can buy the cheap Canadian gas for pennies on a dollar relative to the United States why would I not do that? Our ability to bridge that gap between what is relatively expensive U.S. LNG versus kind of increasing demands in Asia for natural gas, it's kind of the key part of the story. Again, it's because we have so much resource that is scarce around the world.

[00:31:49] Pamela Ritchie: It's really interesting. It's the global picture as much as it is what Canada has to actually provide to that global picture. Any just final remark for an investor who sort of maybe has been sitting out on this for some time and thinking about dipping the toe in?

[00:32:03] Jin Hwang: I've walked you through the evolution of energy over time. I thought the period where they were returning a lot of cash to us was incredibly exciting because we just haven't seen that from a sector like this before. In a sector where we are talking about, hey, we're not sure where the next molecule is supposed to come from and we're sitting at prices today that are below a lot of the breakeven numbers that you've heard me quote, again, low 60s in U.S. shale to grow, we're below that today. You're starting from a point of really good prices with upside and you're looking at periods where you're gonna see demand growth. Theoretically, you put that all together and you're looking at opportunities across the space that we haven't seen for a long time. It's not just one pocket, it's everywhere. If you hear about the biggest stories in the news today it's we don't have enough turbines, we don't have enough molecules, we don't have enough infrastructure. All of that leads back to energy. Energy is what facilitates all of that.

[00:32:52] Pamela Ritchie: The word of next year is scarcity?

[00:32:54] Jin Hwang: Yeah.

[00:32:56] Pamela Ritchie: Jin Hwang, it's great to have you here. Thank you for joining us.

[00:32:58] Jin Hwang: Thanks.

[00:32:58] Pamela Ritchie: For painting this picture for us. Coming up on Fidelity Connects next week, we go to Monday, Jurrien Timmer, Director of Global Macro, will join us to bring his incredible charts, graphs, market views as he sets you up for next week and all that is to come within the trade.

[00:33:13] Then on Tuesday, Chris Kuiper, he's Director of Research at Fidelity Digital Assets. He's discussing the current state of Bitcoin. It's been a wild time, of course, for the price of Bitcoin and many of the stories that connect to that, and also the broader digital asset landscape. He'll share market trends that are driving momentum and what changes to expect in the digital asset space. That webcast will be available in English, of course, with live French audio interpretation.

[00:33:37] On Wednesday of next week we'll share some year-end tax strategies with Fidelity Director of Tax and Retirement Research, Jacqueline Power. She's discussing retirement contributions, charitable giving, all the things you need to be thinking about in this last month that is ahead. Wishing you a great weekend. We'll see you soon. I'm Pamela Ritchie.