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Modest beginnings help Pathways Alliance president with grand goals toward net zero

August 8, 2022

When he wasn’t required to swing a mop or take customer orders behind the counter of his family’s downtown dry-cleaning business, a young Kendall Dilling was most likely found with his brothers in the southern Alberta backcountry or pinning opponents to the mat on his way to becoming a world-class wrestler.

As he wrestles with the biggest challenge of an expansive career leading safety and conservation efforts in Canada’s oil and gas sector, the newly-named 53-year-old Pathways Alliance president expects to lean heavily on humble family beginnings he credits for giving him an unrelenting work ethic, a spirit of collaboration and a lifelong dedication to environmental protection.

Leading a challenge essential to Canada’s climate change mitigation efforts, Dilling recognizes showing steady progress towards the goal of the six Pathways Alliance oil sands companies to achieve net zero greenhouse gas emissions by 2050 and continuing to shrink their environmental footprint on land, air and water is critical to the industry’s long-term future.

“I have held strong to my belief throughout my career that it is not an either-or relationship between energy and the environment and I feel very privileged to have this opportunity to help our industry and our country prove that to the world,” said Dilling.

His early desire to parlay a biology degree into a career as a park wildlife officer morphed into a steady rise through the ranks of a then burgeoning energy sector hungry for people to lead sustainability efforts.

“I know I will need to bring every one of the skills I have acquired throughout my career and many more that I still need to develop to help the industry accomplish its ambitious environmental goals. Fortunately, I will have the full support of an incredible team of engineers, scientists and professionals committed to implementing the Pathways Alliance plan.”

Since being seconded from Cenovus Energy in June of 2021 to lead the regulatory work of the new Pathways Alliance organization and then being named its first president a year later, Dilling has noticed the more than 125 industry experts pooled from Canada’s six largest oil sands companies see their work as much more than just a job.

“This team is full of people who are so passionate about making a difference that will help preserve and protect our environment and make Canada’s energy the world’s preferred choice.”

Human relations lessons learned over ruined garments

Born the third of four boys on the Saskatchewan side of Lloydminster, a city straddling the boundary with Alberta, Dilling moved with his family to Calgary at a young age, where his father Ray began operating a One-Hour Martinizing dry-cleaning business in the city then on the brink of becoming Canada’s energy capital.

At that time, there was very little to connect Dilling with oil and gas. Ray taught his boys a love for nature and the family was out whenever they could, fishing, camping, hunting and hiking in the back country.

“I was lucky to have a father who taught me respect for the land and the animals. We didn’t waste anything. We followed and respected the rules,” said Dilling.

“I grew up with that ingrained in me that you don’t take things for granted and you are respectful of the environment, of land owners and all living things out there.”

He also learned early on – sometimes the hard way – the art of human relations at the dry-cleaning business Dilling and his brothers would spend most Saturdays and weeknights working at through their school-age years.

“Running a dry-cleaning operation could be soul-crushing at times. It’s a grinding, tough job. You have high staff turnover and you’ve got a lot of customer interface.

“But the customer service end has really been invaluable. I remember many times having customers go up one side and down the other because of a damaged article of clothing.”

The experience also taught Dilling he’d need to work hard to find a livelihood he would enjoy.

“It definitely taught me that it’s important to love what you do. Don’t get me wrong, I’m very grateful that my dad worked so hard to provide a living for our family and did what he had to do but I don’t think he ever loved his job. I think that pressure he was under did inspire me to pursue something I was passionate about.”

He also took lessons on hard work from his mother Betty, who found the energy during the day to care for four young boys, before taking the night shift as a lab tech at the Calgary General Hospital.

“Somehow, she never missed a beat during the day as a full-time mom. I don’t know how she did it all those years but she was a hard-working, depression-era farm girl who just worked 24-7.”

Humanitarian experience leads to decision of academics over athletics

Dilling would take his passion for nature to the University of Calgary, where he would eventually graduate with a bachelor of science in biology and a bachelor of arts in French.

Joining the university’s wrestling team, Dilling would also continue a very promising trajectory in the sport that saw him competing on the national team and winning the 1987 World Junior Wresting Championship in Toronto.

With a strong year on the mat and Olympic wrestling visions still in his mind, he acknowledges the first year of studies were overshadowed by his efforts in the gym.

Taking what he jokingly called a “Dean’s vacation” to sort out his priorities, and focus his life he filled a backpack, landing in Haiti, where he set out doing humanitarian work supporting aid agencies on the ground with various community programs and teaching English.

“The enduring thing I left Haiti with was a realization that for so many Haitians, life was so hard and so unfair that they had actually lost their belief that there was a brighter future for them,” he said.

“We take that for granted here. Most people here have a conviction that ‘if I work hard and do the right things, it’s going to pay off and I’ll have a better life for it.’

“In so many countries in the world, because of corruption and other obstacles, it gets decoupled. People can work hard and do the right things and still never catch a break because the system is structurally unfair and benefits a few at the cost of many.

“I really came back with an appreciation of what we have here.”

Human compassion at heart of career success

The strong sense of human compassion has been a key part of what has made Dilling successful, said Al Reid, his former boss at Cenovus Energy, where Dilling served as the company’s vice-President of health, safety, environment and regulatory affairs.

Dilling excelled at all the core competencies needed in the position that ranged from leading a team of close to 200 people on efforts such as reducing health and safety incidents throughout the company, addr

essing environmental liabilities and improving relations with governments and Indigenous communities.

He’d come a long way since his early days out of school when he was as an independent contractor in the field collecting soil and water samples for oil and gas companies.

He’d arrive in his VP position at Cenovus in 2012 after various regulatory positions in both the upstream and midstream energy sector – and just a couple of years before the sharp commodity price crash and economic downturn that devastated the sector and hollowed out downtown Calgary office buildings.

It was then Dilling did some of his most difficult work letting go of people due to needed downsizing.

“He’s such a good person and that’s what I think of Kendall more than anything else,” said Reid, who also brought Dilling aboard to the Pathways Alliance where Reid served as the director before his retirement in early 2022.

“We went through some very tough times as a company (at Cenovus) when we had to let go of a lot of people and make groups smaller and he never lost his sense of compassion. He has a set of principles that he sticks to and one of those is to treat people with a lot of respect.

“He never gets flustered and if he does, nobody knows it – even when he has to do difficult things. Anything you give him, he approaches it the same way and he always gets results.  But he gets them in a way that nobody ever feels like they’ve been run over in the process and that’s a real skill.”

Step change needed to address climate change

Despite a commodity price rebound, Dilling recognizes the long-term future of the oil sands industry is reliant more than ever on achieving absolute reductions in greenhouse gas emissions.

It’s something he acknowledges the industry should have moved sooner on, despite significant work reducing the emissions intensity of each barrel.

The average consumer, he said, is powerless when it comes to changing the global energy system and meaningfully addressing climate change and is looking to industry to lead the way.

“What they want to see from industry is us saying ‘collectively, we’ve got a big problem with greenhouse gas emissions. We have the scale and the expertise and the resources to actually be a meaningful part of improving that system.”

“We’re not going to feel sorry for ourselves or tell you why we’re no worse than anyone else. We’re just going to get to it, put our best people on this and be part of the solution.”

It’s an attitude shift that took a while for the industry to accept. The reality is that industry was already world leading due to the stringent and sophisticated regulatory system it operated in, he said.

“But that becomes table stakes at a certain point and figuring out what you can meaningfully do beyond that is a critical part of almost every business these days, particularly in the extractive industries. That has become fundamental to long term success.”

It’s a philosophy he also maintains as Director of the Orphan Well Association, an industry-funded organization that manages the closure of orphaned oil and gas wells, pipelines, and facilities, and the reclamation of associated sites, across Alberta.

“It’s something I’ve always felt passionate about. Our industry needs to be responsible for our footprint on the land and to make sure we’re not leaving anything for future generations or taxpayers to be responsible for,” he said.

“We’ve gone through some tough years and the orphan well inventory has grown significantly. We’re now bringing more resources to bear to make sure we’re bending that curve and bringing that inventory down to a reasonable level.”

Extent of CEO collaboration and synchronicity unprecedented

The simultaneous commitment to achieve net zero that leaders at the highest level of the six companies involved in the Pathways Alliance is beyond anything Dilling could have expected.

“The CEOS have put competitiveness aside on environmental matters and are saying ‘Listen, the long-term future or our business is at stake and we all benefit from each other’s success in eliminating GHG emissions, so let’s put our collaboration on steroids and combine our resources to tackle this problem.’”

Dilling was named president at the same time it was announced that Canada’s Oil Sands Innovation Alliance (COSIA), formed in 2012 and the Oil Sands Community Alliance (OSCA), formed in 2013 would be integrated into the single Pathways Alliance organization.

The synchronicity that will be achieved by bringing all of these companies under one organization is essential to the future of the industry as it continues to raise the bar in all areas of environmental performance.

“To bring it all under one tent, have one voice and connect all of those pieces to the CEOs and their very hands-on direction was an opportunity that just made too much sense,” he said.

“We do, and will continue to have differing views on commercial competitive matters but it’s really on the environmental, social and governance matters (ESG) that we decided we had to come together.

“Although Pathways was created primarily to address greenhouse gas emissions, the work that COSIA has been doing for a decade on a broad range of air, land, water and tailings issues also remains critically important.”

Continued collaboration key to success

Collaboration with governments, Indigenous communities and other stakeholders is also fundamental to the success of both climate goals and Canada’s energy and economic future, something Dilling says has been a refreshing change from acrimony and mistrust in the past.

And that continued political support will be essential – especially as Pathways pushes forward with its foundational carbon capture and storage project that will take emissions from up to 20 oil sands facilities near Fort McMurray where they will be transported by pipeline and injected safely deeply underground.

“The biggest challenge is that none of these things can proceed without significant and diverse stakeholder support and governments play an essential role in helping to build that support,” he said.

“Canada’s recent track record on developing large infrastructure projects is not stellar. So as much as Pathways has a very credible, technically feasible plan to get to net zero, it will be very challenging to make it a reality unless we can get a broad range of stakeholders aligned.

“Thankfully, reducing environmental footprint is a shared value so it’s relatively easy to get high level buy-in for these types of projects, but people are still understandably concerned about the local impacts of the associated infrastructure development.

“People nod their head and say ‘yeah, dealing with greenhouse gas emissions is great but what do you mean that you’ve got to put a pipeline on my back fence line in order to do that?’”

Achilles heel can become competitive advantage

Dilling laughs when he thinks back to his early days dealing with dry-cleaning customers and how it prepared him to deal with six CEOs, government ministers, landowners, Indigenous groups and other stakeholders.

“That retail customer interface taught me a lot about inter-personal relations that I think has been a service to me throughout my career as that remains vitally important for industry in working with a lot of people to achieve a common goal.”

And if that same collaboration and consensus can be achieved to help make a dramatically cleaner barrel of oil, it’s good news for Canada’s environmental and economic future.

“It’s going to turn what had been our Achilles heel into our competitive advantage,” he said.

“Canada’s oil and gas industry has long been a global leader in terms of broad ESG performance. Now add a steady path toward net zero on top of it. Why would you want a barrel of oil from anywhere else in the world?”

 

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Cautionary Statement: Statements of future events or conditions in this press release, including projections, targets, expectations, estimates, and business plans are forward-looking statements. Forward-looking statements can be identified by words such as achieve, aspiration, believe, anticipate, intend, propose, plan, goal, seek, project, predict, target, estimate, expect, forecast, vision, strategy, outlook, schedule, future, continue, likely, may, should, will and/or similar references to outcomes in future periods. Forward-looking statements in this press release include, but are not limited to, references to the viability, timing and impact of the Oil Sands Pathways to Net Zero initiative collaboration and the development of pathways in support of a net-zero future; support for the pathways from the Government of Alberta and the Government of Canada; the ability to enable net zero emissions from oil production and preserve economic contribution from the industry; the continued role of fossil fuels as part of a diversified energy mix; and the deployment of technologies to reduce GHG emissions, such as CCUS, process improvements, energy efficiency, fuel switching, electrification, infrastructure corridors and new emissions-reducing technologies. All net-zero references in this announcement apply to emissions from oil sands operations (defined as scope 1 and scope 2 emissions).

Forward-looking statements are based on current expectations, estimates, projections and assumptions at the time the statements are made. Actual future results, including expectations and assumptions concerning: demand growth and energy source, supply and mix; amount and timing of emissions reductions; the adoption and impact of new facilities or technologies, including on reductions to GHG emissions; project plans, timing, costs, technical evaluations and capacities, and the ability to effectively execute on these plans and operate assets; that any required support for the pathways from the Government of Alberta and the Government of Canada will be provided; applicable laws and government policies, including climate change and restrictions in response to COVID-19; production rates, growth and mix; general market conditions; and capital and environmental expenditures, could differ materially depending on a number of factors. These factors include global, regional or local changes in supply and demand for oil, natural gas, and petroleum and petrochemical products and the resulting price, differential and margin impacts; political or regulatory events, including changes in law or government policy and actions in response to COVID-19; the receipt, in a timely manner, of regulatory and third-party approvals including for new technologies; lack of required support from the Government of Alberta and the Government of Canada; environmental risks inherent in oil and gas exploration and production activities; environmental regulation, including climate change and GHG regulation and changes to such regulation; availability and allocation of capital; availability and performance of third-party service providers; unanticipated technical or operational difficulties; project management and schedules and timely completion of projects; reservoir analysis and performance; unexpected technological developments; the results of research programs and new technologies, and ability to bring new technologies to commercial scale on a cost-competitive basis; operational hazards and risks; general economic conditions, including the occurrence and duration of economic recessions; and other factors referenced by the companies’ in their most recent respective annual reports and management’s discussion and analysis, as applicable.

Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties, some that are similar to other oil and gas companies and some that are unique to the companies. Actual results may differ materially from those expressed or implied by its forward-looking statements and readers are cautioned not to place undue reliance on them. The companies undertake no obligation to update any forward-looking statements contained in this press release, except as required by applicable law.