C-Suite Energy Executive Awards CEO of the Year: Mick Dilger

How Pembina Pipeline’s new CEO has kept his company on a roll – and kept it out of the public eye

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Mick Dilger, Pembina Pipeline CEO
Photographs John Gaucher

Pipeline companies have gotten into the habit of seeing their names in the news of late, whether it’s over a new project they’re trying to get approved or an old one that’s popped a leak. But Pembina Pipeline has managed to stay under the radar and out of the public spotlight, and while CEO Mick Dilger is quick to point out that this has a lot to do with the fact that the vast majority of its operations are in “energy-friendly Alberta,” he’s willing to accept at least some credit for his company’s low profile. “The main way to stay out of the news is to have safe and reliable operations,” he says. “We try really hard to keep the oil on the inside of the pipeline.”

Pembina does that, he says, by putting safety first. “When it comes to operations, we don’t have a money focus – we have a reliability focus. If there’s something going on with a pipeline, we make sure we’re absolutely sure that it’s fine before we turn it back on.” It also spends plenty of money — approximately $100 million in 2014 — on maintaining its existing assets, some of which are as old as the company itself. “That’s a lot of money to us, if you check our financials — a lot of money. But we try to stay ahead on that.”

Dilger, who took over from longtime company employee and eventual CEO Bob Michaleski on January 1, 2014, is just as much of a company man as his predecessor. When asked about what he hopes his legacy might be one day, he says that he hopes it isn’t about him at all. “The legacy of a CEO is really that of the company. You can’t distinguish them, I don’t think. So when I talk about my legacy, it’s more the legacy of the whole company.” And while the company has been hitting the ball out of the park – heck, out of the stadium — lately, growing its revenue by 47 per cent on a year-over-year basis and rewarding shareholders with an annualized return on investment of more than 50 per cent since the beginning of 2013, don’t expect Dilger to get a big head about it. “My biggest win has been being in a company full of super-smart people, in an industry that needed infrastructure right when I became CEO, to be honest,” he says.

“The main way to stay out of the news is to have safe and reliable operations. We try really hard to keep the oil on the inside of the pipeline.”

His job now is to keep that going. “You’re under the microscope in your first year as CEO, and mistakes, I think, are amplified. But luckily, we’ve had zero lost-time accidents so far this year. We’ve added 500 employees over the last two years and so we’re training those guys, we’re diversifying, we’re running four businesses at the same time and we’re growing them all, and we have zero lost-time accidents. That’s unbelieveable. Our driving record is safe, our environmental record is strong, and that — just keeping the momentum going, and building for a robust future — that’s what excites me.”

Can he keep Pembina growing at a double-digit clip? “In terms of our ability to keep growing, I think the answer is yes,” he says. “What the industry doesn’t see is how much we’ve grown the capability of what we call our service groups — our legal group, our aboriginal affairs group, our project management office, our accounting systems, our IT infrastructure — we’ve grown all that at the same pace we’ve grown our business. Ten years ago we were one-tenth the size we are now, and if we have another good year or two on the service side of our business, we’ll actually be better positioned to grow at this rate than we are today. So, can the company do it? It absolutely can do it. Will the industry stay hot, with the downturn in commodity prices? That’s a longer-term proposition.”

Part of Pembina’s future involves diversification into other markets and geographical areas. Its recent acquisition of the Vantage pipeline, along with Mistral Midstream’s interest in the Saskatchewan Ethane Extraction Plant, for US$650 million, is a big step in that direction.

“The Vantage pipeline gives us access to the Bakken without jumping in with both feet — it’s like a pilot project,” Dilger says. “The main customer on the Vantage pipeline is an existing customer, and it’s a long-term, contracted, fee-for-service business, but we will get exposed to the major players down there and the intricacies of the basin without making some of the mistakes we’ve seen other companies make entering the U.S. too fast.”

Dilger is the second chartered accountant in a row to occupy the top job at Pembina, a tradition that makes sense given the fact that the company’s success depends in large part on its ability to effectively operate and amortize its assets. But while Dilger says his instincts are more on the business side of the equation, he’s also very much an engineer, in spirit if not in letter. “I started out in engineering before I found out that business was easier, to be truthful about the whole thing. Six courses, three labs, four tutorials … I don’t know. I have to be honest — I found business very easy and intuitive, and so pursued it even though I was in engineering and I’m an engineer at heart. Both of my brothers are engineers, and my dad’s a professor of engineering. Guess what we talked about at the dinner table for 20 years?”

Today, plenty of families are discussing pipelines, like the ones Dilger’s company builds and operates, around their own dinner tables. He recognizes that his industry has struggled to deal with its newly elevated profile. “People know who the pipeline companies are, and they didn’t a number of years ago. But I think the fact that it’s become more political has clearly challenged the industry. I do think that it is — I don’t think, I know — a very safe industry, and we truly get a bad rap a lot of the time.”

How to fix that rap? Just get the job done. “I think what we have to do is keep performing at a high level, and the facts will float to the top,” Dilger says. “One of the tenets of the way I manage is that if you keep doing the right things, people will notice. If you tell people all the good things you’re going to do, it’s just talk. Just do it, be patient, make the information available and eventually people will notice. If you try too hard to push the public, they’ll be nervous about it. They’ll be skeptical. So we just have to keep doing the good things we’re doing, address some of the things we could do better and the public will notice.”

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