Ivey Positive Energy Conference Morning Keynote Address
Presentation by Steve Williams, President and CEO, Suncor Thursday, March 5, 2015
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Thank you and good morning.
I appreciate Ivey and the University of Ottawa convening this conversation and the opportunity for me to be here and share my thoughts on this important topic.
We’re a proud partner with Ivey, with our investment in the Suncor Chair in Energy Policy, and our involvement in the Ivey Energy Consortium. This Consortium is working to tackle the complex challenges and opportunities facing Canada’s energy sector, policy makers and community stakeholders.
It couldn’t come at a better time. We’re facing lots of issues and challenges, including: increased opposition to energy infrastructure projects; big swings in energy prices; a global population depending on a reliable energy source to fuel its economy and feed its people; concern in our Aboriginal communities about energy development; an evolving policy environment; and, increased global concern about the effects of climate change.
I’ve been thinking about the intense polarization around energy and how paralyzing it is. Price downturns have had an obvious impact on our industry, and we’re starting to see the ripple effects across Canada.
But I know I have a responsibility to look beyond to five, 10, 20, 50 years out and to figure out what part Suncor will play in a sustainable future.
The UN Brundtland Commission’s landmark report, Our Common Future, defined sustainable development in 1987 as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
That is what we’re still grappling with today almost 30 years later. How will we meet present needs without compromising our future? Particularly with a rapidly growing world population. I can’t predict the next, disruptive energy resource, but I believe hydrocarbons do have a role to play in the energy future, a role in bridging to whatever’s next.
But when building that bridge we can’t afford to forget Barry Commoner’s four laws of ecology from 1971:
- First, everything is connected to everything else.
- Second, everything must go somewhere.
- Third, nature knows best.
- And of course, fourth, there is no such thing as a free lunch.
As an industry, we’re doing better at providing lower emission fuels, investing in renewable energy and fostering innovation to help us get there.
But there are huge challenges inherent in shifting to a greener future, including underlying infrastructure and energy distribution changes, increasing energy use by a growing population and the sheer economics of shifting global systems.
And it is absolutely critical we get this right. There is no room for heroes or villains in planning our energy future.
We need builders. Vision. A plan. The right tools. And we need to get on with it now.
And we also need to recognize the world has changed. It’s become much more complex. The rules of engagement are different. The tools have evolved.
How the world has changed
I think back to 10 years ago, and am amazed how connected we've all become.
People in the environmental movement tell me they can’t remember how they got to early protests. Perhaps it was posters on telephone poles or word of mouth decades ago. But now movements harness social media. A YouTube clip can end a political career, connect people from all over the world on a single cause, or hit a company’s share price.
The world has changed.
I look at my children, and how they grew up connected through Facebook and the internet, Instagram and Twitter. How they had their own cell phones as teenagers and can find information about anything in seconds by using Google.
They don’t have to walk the stacks of a library to see if interesting books fall off the shelves. Page one of a Google search has a half a dozen items related to the one they just searched for.
They are understandably very concerned about global issues – climate change, food supplies, poverty, and yes, the future of energy. Their world view is broad. And they understand we are all connected and a part of something bigger.
This comes with a daunting challenge. It means there are no simple solutions or silver bullets.
Many of us are concerned about a lot of things: climate change; the legacy we’re leaving our kids and grandchildren; how we are going to transform to a low carbon economy; and, what role oil, and other energy sources, need to play in that transformation.
These are tough problems and I don’t have all of the solutions. As a father, or as the president and CEO of Suncor.
But I do have some observations.
We must look at the underlying systems – economic, environmental, societal, geopolitical and technical. We can’t look at any one of these in isolation. There are enormous risks embedded in these systems. For 2015, the World Economic Forum outlined the top ten risks in terms of global impact. None of them are small. The list included:
- Fiscal crises in key economies,
- Water crises,
- Failure of climate change adaptation, and
As we work on the energy challenge, it’s clear that we’re part of the solution.
It isn’t easy to work together, even at the best of times.
I’m often asked by people at Suncor, by our communities and by friends and family, “How are we going to build a bridge to that energy future?” It’s a huge question, of global importance. And tackling it isn’t going to be easy.
It’s going to take some strong leadership. I believe there are two leadership qualities which will help us unlock solutions: effective collaboration and positive inspiration. Let me bring these to life for you.
First, getting more effective with collaboration.
We all know what collaboration is, working together to achieve a common goal. It’s not a new concept. But in complex systems, especially the energy system, we need to take collaboration to a new level.
We’ve learned how to innovate and be creative with COSIA, or Canada’s Oil Sands Innovation Alliance. It’s a collaborative hub of 13 companies who’ve come together to develop technology, innovate and rapidly deploy environmental solutions. About a billion dollars and 750 technologies have been put on the table over the past three years. Imagine throwing fiercely competitive companies into a room together. Then tell them to collaborate on environmental technologies. And here’s the catch, ask them to put their competitive agendas aside. It hasn’t been easy, with lots of complexity and creative tension. But now we’re starting to see the results.
We’ve set a strong foundation at COSIA – legal agreements for working together, bigger picture thinking, trust, conflict management, decision making processes, a clear vision and common goals.
And it’s paying dividends. Here’s the neat thing about COSIA, it’s actually harnessing the best of capitalism. We’re using market forces to pursue the public interest. Competitive companies, if they learn from COSIA, take advantage of the shared technology, whether it is focused on environmental improvements in land, air, water or tailings. And in the process these collaborators can actually become more competitive.
It’s interesting to note that several Harvard Business studies, including one by Thomas J. Tierney, pointed out that competitors are not always adversaries. And in fact competition can be in the service of the public interest. It can be in the service of reducing environmental impacts related to energy development.
One example is the Water Technology Development Centre. It’s a $165 million testing centre we’re building at Suncor’s Firebag facility with other project member companies (Canadian Natural, Devon, Husky, Nexen Energy and Shell Canada). The centre will enable innovators to test new water treatment technology in a safe, real-world environment. Why does this matter?
As any inventor will tell you, and as you’ve seen on CBC’s Dragon’s Den, it’s difficult or almost impossible to pitch a new technology, test it and scale it up so that it’s commercial. The centre gives inventors a safe place to test their gadgets in real life.
It reduces the risk for companies. There’s less of a production impact because it will be an off-shoot of the main plant. It will fast-track innovation on environmental solutions, while creating competitive upside for inventors and producers. So it’s a win-win.
And that’s why COSIA is working.
COSIA is a cool Canadian story that’s being talked about in some of the most interesting places in the world. I had public conversations about it in Davos in January with Al Gore and the global oil industry. It was interesting that the Saudis seemed particularly encouraged by COSIA. Harvard’s Michael Porter has recognized it as an innovation itself, an example of systemizing collaboration at a scale the world hasn’t seen before.
Now we need to think about how we apply collaboration to addressing complex, systems challenges like the future of energy, to find ways to create benefits for all.
Collaboration in a Complex System
Energy challenges are embedded in extremely complex systems. Over a hundred years of infrastructure that’s been stood up to support its production and distribution. There are deep economic and political ties between nations. Government-owned and publicly traded oil companies compete in the global market. Some societies and cities that have been developed around its affordable abundance, like in Canada, and there are those who are still energy starved.
Energy challenges cannot be tackled in isolation, by one company, government, or industry. It will take all of us, including academics, citizens, NGOs and our critics. Collaboration on these challenges will require a shift in how we relate to one another. It will require more openness to diverse perspectives and willingness to be creative together. It will also require many different interventions.
We’ve invested in a number of collaborative initiatives with industry, government and social partners. These initiatives are causing us to reshape the relationships we have and how we work towards the solutions.
Though we’re in early days, one example is the Energy Futures Lab, which is being led by The Natural Step and convened by the Pembina Institute, The Banff Centre and the Suncor Energy Foundation. It will involve a diverse group of people from government, Aboriginal communities, businesses, and academia who will come together to have solutions-focused conversations about our shared future. So we’re very excited about the opportunity ahead and you’ll hear more soon.
Another systems approach to collaboration is Canada’s EcoFiscal Commission. The commission is a group of leading economists that is working to align Canada’s economic and environmental aspirations. Here’s an example of how the carrots and sticks of economics can change behaviour and improve the environment.
Take London, England.
Traffic congestion there was a huge problem that needed a practical solution. I remember visiting London 15 years ago, and traffic was at a gridlock. It was challenging to get anywhere quickly and obviously a problem that needed to be addressed. And it was tackled through congestion charging.
In downtown London, cars entering high-traffic zones at peak hours are charged a daily fee. And there was huge resistance to this. But congestion charging created a financial incentive to carpool, use public transport, walk to work or bike. In the end it means fewer tailpipe emissions, less congestion and more use of public infrastructure. The fee may not get all the credit in a city the size of London, but it has helped reduce the traffic congestion by as much as 36 percent in 10 years.
Imagine doing this in Ottawa, Toronto, Vancouver, or downtown Calgary. Encouraging more environmentally-responsible commuter behaviour through fiscal tools that make sense.
So developing these solutions – that work for both the environment and the economy – will require the creative energy of unusual allies and strange bedfellows. Canada’s Ecofiscal Commission is just that, a broad group assembled from across provincial, partisan and sector boundaries. Leaders in business, not-for-profit, academia, the environmental movement, politics and think tanks who are applying Canadian ingenuity to solve tough, systems-based challenges.
I’m looking forward to seeing what’s next for both COSIA and Canada’s EcoFiscal Commission.
Creative collaboration isn’t enough by itself. Nor are all the scientific facts, market realities or technological advancements. We also need to be inspired towards a better vision for energy.
I’m sure many of you are also disappointed by the state of the conversation, and the deep polarization we’re facing. That’s why we’re all here today. Whether it’s climate change, low-carbon fuel standards, pipelines, or what source of energy we prefer, more and more of us are focused on staking out positions. We seem preoccupied with what we’re against: dirty coal, tar sands, hazardous nuclear waste, fracking, and yes, even wind turbines.
We need to take a moment in all these conversations to remember what we are for.
We’re for the benefits of energy:
- heat in the winter and cooling in the summer,
- light in classrooms,
- fuel so farmers can harvest our food,
- healthy economies,
- good jobs and businesses, and
- vibrant communities.
That agreement is a good place for us to start, to move beyond the impasse.
The academic who invented distributive bargaining, or getting to yes, Mary Parker Follett, realized this about 100 years ago. Ms. Follett is also known as a pioneer in management consulting. She said you need to get to agreement on what you’re for rather than what you’re against. You need to understand why you’re disagreeing in the first place and then find common ground to start from.
The same is true for energy.
I don’t believe we can continue pitting one form of energy against another. It isn’t as simple as good and bad energy. All energy is needed and it all has impacts.
The bottom line is that energy is central to our lives. It’s allowed us to dramatically increase food production, by fueling farm machinery. It’s afforded better education, whether it’s lighting up classrooms, or contributing to education funding. In health and dental care, it’s enabled everything from better equipment, to better medicines, to refrigeration, X-rays, MRIs and autoclave technologies. It’s brought nearly 700 million people out of poverty in the past two decades and increased the standard of living for many around the globe.
The very fabric of the developed world depends on energy. In the developing world, it can mean the difference between life and death.
In the midst of trying to prove who’s right and wrong, I’m troubled we may find ourselves in a worse place than where we started. We need to focus on building a positive vision. We need to move from conflict to dreaming together for a better future.
I am hopeful as I look around this room at all of you that we can find the positive inspiration we need to tackle the daunting and serious task ahead. To unite across provincial and ideological lines and work together as one.
I am hopeful we can:
- stop engaging in polarizing behaviour,
- start building bridges, rather than focus on conflict,
- inspire those around us,
- create the vision we want to see, and
- lead with heart and courage.
Conclusion – Rising to the Challenges Ahead
Building the bridge to a better energy future is an incredibly complex challenge. The solutions will require us to think and act in new ways. To use new tools. To collaborate effectively. To inspire.
As the global population continues to grow, energy will be needed in every form. There is no room for good energy and bad energy. No room for heroes or villains. We’re all in this together and we need to work together towards solutions.
We need more to be builders with great vision. We need to be thoughtful, holistic leaders. We need to understand how we all fit together.
Canadians are known for balance, ingenuity, pragmatism, tenacity and quiet diplomacy. Wouldn’t it be great if we put all those qualities to work when it came to energy, the environment and the economy?
I absolutely believe the people in this room can be a part of the solution. I intend to be. I’m willing to do my part and I hope you’ll join me. Let’s roll up our sleeves and start building the bridge together.