BY HIS OWN ACCOUNT, the most powerful man in Canada’s oil patch is, at heart, a simple country boy. Gwyn Morgan, president and chief executive officer of EnCana Corp., the world’s largest independent oil and gas producer, traces his core values and philosophy of life and business to his modest upbringing on a hardscrabble grain and live-stock farm near Carstairs, Alta. The youngest of four children, Morgan, now 57, remembers, at age 13, helping his Welsh-born father dig a ditch from the well to the house that finally brought the family indoor plumbing. Like most farm kids, his day began with two hours of chores—milking the cows, feeding the pigs, collecting eggs—and ended much the same way. “Around our house, there wasn’t any cajoling,” he says. “It was simply expected that you do your part—and do it well.” Besides instilling a strong work ethic, Morgan says, his parents passed on lessons that have guided him ever since. Among them: “Keep your word. Stay honest. Do your best. If the world deals you a tough blow, buck up and move on.”
Morgan has certainly moved on. As recently as 1998, Peter C. Newman’s Titans, a 650-page tome on “the new Canadian establishment,” made only passing mention of him as a “promising comer to watch.” Well, the promise has been fulfilled, the “comer” has arrived. By engineering the April 2002 merger of two oil and gas behemoths, Alberta Energy Co. Ltd. (which Morgan helped establish in the 1970s and had headed since 1994) and PanCanadian Energy Corp., the farmer’s son vaulted from a position of relative obscurity to someone who readily commands attention on the national stage. Morgan shows every sign of making the most of it. In a recent flurry of high-profile speeches, newspaper op-ed pieces and letters to the Prime Minister, Morgan has sounded off on everything from political and corporate corruption to what he describes as the “fatally flawed” Kyoto Protocol. And he has done it his way, with a high moral tone more often heard in chapel than in the corridors of commerce.
Take his performance at a black-tie dinner in Toronto in November, where Morgan received the 2002 Ivey Business Leader Award, an honour bestowed annually by alumni of the University of Western Ontario’s Richard Ivey School of Business. In his acceptance speech, Morgan lamented that some no longer draw a link between a leader’s personal and public conduct. “For example,” he said, “I recently had an animated dinner argument with a New York Times columnist who argued that Bill Clinton’s personal ethical transgressions, which include adultery and lying, were of lesser importance compared with his accomplishments as president. Needless to say, we agreed to disagree, profoundly.”
Morgan went on to criticize both business and political leaders for basing too many of their decisions on shortsighted yardsticks—for the former, overnight stock quotes; for the latter, public opinion polls. “The Old Testament,” he intoned, “gave the world a universal truth: ‘Where there is no vision, the people perish.’ I believe it is time for Canada’s corporate and political leadership to go back to the Bible, figuratively at least, until they get this message straight.” The impression left is of a holy roller out to smite the unrighteous. But, as is often the case with Morgan, the stereotype doesn’t quite fit. During a wide-ranging interview at his executive offices in downtown Calgary, Morgan is asked about his religious views. “I live with the idea there is a greater force at work in the universe, and celebrate that,” he says. “But I haven’t found in any of the conventional religions a fully satisfactory explanation. I’m kind of like a pre-Muslim, pre-Christian, pre-Jewish person. Remember when they all said there was a God and all worshipped the same one?”
AS MANY have remarked, Gwyn Morgan doesn’t remotely resemble Central Casting’s image of an oil baron. Slim and bespectacled, he speaks so softly that a listener sometimes has to lean in to pick up what he’s saying. The ardent free-enterpriser could easily be mistaken for a government bureaucrat—perish the thought.
Morgan surprises in other ways. He is an advocate of holistic medicine, not a common oil-patch preoccupation. EnCana is the primary corporate sponsor of the Integrative Health Institute, a Calgary-based non-profit organization that provides resource information and counselling on blending modem medicine with such traditional practices as acupuncture, meditation and herbal remedies. But this is no granola-and-incense exercise. Morgan is out to create a model for how people can take more responsibility for their own well-being and help contain spiralling health-care costs. “What we have in this country is an illness treatment system, not a health-care system,” he says. “We need a more preventative approach and there’s a lot of knowledge accumulated over thousands of years that can help in this regard.”
Morgan’s holistic bent is tied to another private passion. He is, as friends and associates freely assert, a “fitness freak.” Morgan walks (or, more accurately, strides) to work from the downtown luxury condo he shares with wife Pat Trottier, a fellow Carstairs native and long-time oil and gas consultant (the couple have one daughter, Jennifer, 24, from Trottier’s first marriage). He dedicates a minimum of one hour a day to a vigorous cross-training regime which includes running, skipping rope and an upper-body workout. He also estimates that he’s hiked, cycled, canoed and skied literally thousands of kilometres through remote stretches of British Columbia, Alberta and the Far North.
Morgan is often described as “intense” and “driven.” He begs to differ. “Given my lifestyle, I think I’m one of the more balanced people in the business,” he says with just the hint of a smile. “What I would say is that I’m focused. Whatever the task is at hand, I zero in on it and give it my undivided attention.”
No argument there from those who know him. Dick Haskayne, chairman of both TransCanada PipeLines Ltd. and Fording Inc., first met Morgan in the 1970s. A longtime board member with Alberta Energy Co., Haskayne was instrumental in the appointment of Morgan as CEO in 1994. “He’s a very intelligent and impressive fellow,” says Haskayne. “He can cut through the issues to get to the end point quicker than most people.” Martin Molyneaux, managing director of institutional research for the Calgary-based investment dealer FirstEnergy Capital Corp., puts it more bluntly. “Gwyn has a very low tolerance for bullshitting,” he says. “He doesn’t do it to others and he doesn’t expect people to do it to him.”
Under Morgan’s leadership, AEC, which started out in 1973 as a provincially owned Crown corporation, transformed into what Molyneaux describes as “a lean, mean, corporate machine.” Morgan shed many of the company’s assets—including interests in timber and mining—to concentrate on the oil and gas sector. He engineered a series of hostile takeovers (Morgan prefers the term “unsolicited friendly offers”) and built AEC into Canada’s second-largest petroleum producer behind Talisman Energy Inc.
Morgan’s nose for the main chance surfaced again in October 2001 when he heard about the abrupt departure of David Tuer as chief executive of PanCanadian, the recently spun-off energy unit of Canadian Pacific Ltd. Morgan initiated backroom negotiations with David O’Brien, the former chairman, president and CEO of Canadian Pacific who had replaced Tuer on an interim basis at PanCanadian. The result was a $21-billion friendly merger that created EnCana, an energy powerhouse with massive holdings both in Canada and around the world, including the American Rocky Mountain states, Ecuador and the North Sea.
While the deal was technically a takeover of AEC by PanCanadian, it was clear from the outset that EnCana would be very much Morgan’s baby. Molyneaux notes EnCana has almost entirely absorbed the aggressive, decentralized corporate structure championed by Morgan at AEC. “Gwyn gives his people a lot of latitude to execute a business plan,” says Molyneaux. “But if you say you are going to do something, you better do it. He’s a stickler for making people keep their promises.”
MORGAN doesn’t court controversy, but the mixture of his outspoken convictions and the scope of his business empire ensures he attracts more than his share. In 1998, AEC became one of the targets in a spate of bombings and vandalism at oilfield sites in northwestern Alberta. Wiebo Ludwig, a farmer and ex-preacher, claimed sour gas wells, some of them owned by AEC, were poisoning his land and his family. Ludwig, who was later sentenced to 28 months in jail for five offences, including bombing one gas well and vandalizing another, once exclaimed of Morgan: “Sometimes I think we should take [him] hostage, tie him up... and then slit his throat.”
At Ludwig’s trial, it was revealed that, in building their case against Ludwig, the RCMP had staged a phony bombing of an abandoned gas-well shack owned by AEC, a tactic reminiscent of the force’s dirty tricks campaign against Quebec separatists in the 1970s. Morgan insisted then, as he does now, that he acted properly in co-operating with the police. He also laments that, in some quarters, Ludwig continues to be regarded as a folk hero. “What sort of principles do people have,” he asks, “to idealize someone who resorts to a form of terrorism?”
Morgan became immersed in a different kind of dispute in 1999 when he resigned as chairman of the Alberta chapter of the Canadian Olympic Foundation, where he’d helped raise $300,000 over the previous four years. He did so to protest corruption within the International Olympic Committee. Morgan then shifted AEC’s support to an athletes’ organization co-founded by Olympic gold-medallist swimmer and Calgary native Mark Tewksbury. “We approached everyone we could think of to help us push the reform process,” says Tewksbury, who now lives in Montreal where he is helping to organize the 2006 Gay Games. “Gwyn was the only one who stepped up and really took a personal stand.”
More recently, EnCana has come under fire from several lobby groups, including Greenpeace and the David Suzuki Foundation, because of a $1.7-billion pipeline EnCana and its partners are building through an ecologically sensitive slice of the rain forest in Ecuador. Morgan maintains the criticisms are unfair and unwarranted and says the company is determined to “leave the environment in Ecuador in better shape than we found it.” He blames the controversy, in part, on radical activists who oppose all oil and gas development. “There are environmental groups we can work with,” he says, “and those we can’t.”
Morgan’s pitched battle, along with other industry executives, against the Kyoto accord has also put him at odds with many environmentalists. He has argued that Ottawa’s rush to ratify the international accord, which sets strict targets for reducing greenhouse gas emissions by 2012, is regionally divisive, potentially devastating to the Canadian economy—and will do nothing to improve the environment. Like many others, including Alberta Premier Ralph Klein, Morgan advocates a “made-in-Canada” approach to reducing emissions in a manner that won’t destabilize the economy. Morgan also believes there needs to be much more debate about whether greenhouse gas emissions are causing global warming, or if it is part of a natural cycle of the earth’s warming and cooling. “I’ve listened to scientists on both sides of the issue,” he says, “and both make terribly convincing cases.”
Such views are a red flag to people like Robert Hornung, policy director of the widely respected, Alberta-based Pembina Institute. “Morgan downplays the consensus of scientific opinion on this issue,” says Hornung, “and significantly overstates the economic doom and gloom.” All the same, Hornung credits what he calls “the big propaganda campaign” by the Alberta government and corporate leaders like Morgan for Ottawa’s announcement last month that it will cap the amount industry must pay to meet the Kyoto targets. “They’ve succeeded in having a lot of the burden shifted off their shoulders,” says Hornung. “It will be individual Canadians who pay the price.”
Morgan does, in fact, sound much more sanguine about the accord these days. “Now that it’s been ratified, maybe we can be less political and more rational about this thing,” he says. “Canadians want us all to work together.” On this, and many other fronts, the former farm boy promises to be a player— a man who speaks softly while wielding a very big stick.*
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