Our Shared Energy Future: Alberta/Quebec Collaboration
Steve Williams, President and CEO
Suncor Energy Inc.
Rendezvous Alberta Conference
November 12, 2013
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Thank you, Michel.
It’s great to be here to talk about business and economic collaboration. And to be in a room full of leaders from Canada’s most respected companies in Quebec and Alberta.
First of all, a big thank you to Alberta Enterprise Group and the Board of Trade Metropolitan Montreal for convening this event. And to Tim Shipton – Tim, I understand you are moving onto another opportunity. Thank you for your work and leadership over the years.
Conversations about how to grow our economies are extremely important. And we appreciate both of these groups’ efforts in bringing us together.
I’m particularly pleased to be welcoming our guests from Montreal. As some of you may know, Suncor has a long history in that city, going back to 1954 when our Montreal refinery was originally commissioned in the presence of then Quebec Premier of the day, Maurice Duplessis.
We operate a 137,000 barrel per day refinery, which produces a range of products, and we do this with a team of nearly 500 dedicated employees, plus as many as 300-400 contractors on site every day.
Of course, we also have a strong presence throughout Quebec through the Petro-Canada brand, with 350 sites in operation there.
Our presence in Quebec includes a significant spend in the province. We source a wide range of services there from approximately 1,000 vendors and suppliers, including engineering, maintenance, and process equipment.
In 2012 alone, Suncor spent 425 million dollars with companies based in Quebec.
Having spent a great deal of time in Quebec myself, I’ve had various conversations about energy, the economy and the environment. And it turns out that we all want the same things.
Today, I’d like to frame my remarks in the context of how we can partner to create a future we all want:
- economic prosperity …
- a healthy environment…
- and social well-being.
Energy in our Lives
So first, a bit about energy and what it means for all of us.
Regardless of whether you live in Montreal or Fort McMurray, Quebec City or Calgary, you can’t ignore the economic, environmental and social implications of living in an area of the world blessed with abundant natural resources.
Energy has been a part of our lives throughout history. Wood provided warmth and the means to cook. Electricity provided light and heating. Oil and gas provided us with mobility and new products.
Today, we enjoy the benefits of iPads, cell phones, X-rays, inter-continental flights, and even ventures into space. The list goes on.
On a personal level, it’s hard to imagine our lives without energy. But the impact of energy goes well beyond that – reducing poverty, creating social well-being through advanced health care and education, as well as contributing to our overall economic prosperity.
Quebec’s incredible hydro resources…Alberta’s tremendous oil sands reserves… Both continue to drive our provincial and national economies, creating both direct and indirect jobs in the process.
For example, in 2012, Hydro Quebec contributed 860 million dollars to the provincial economy. They did that purchasing over 2 billion in goods and services from Quebec businesses in the process.
Hydro power also generates significant employment. Hydro Quebec’s Romaine project is expected to employ in excess of 2000 workers between 2012 and 2016.
The oil sands, meanwhile, are playing a similar role in provincial and national economies.
According to CERI, the Canadian Energy Research Institute, new oil sands development is expected to contribute significantly to the Canadian economy over the next 25 years.
That includes $783 billion in provincial and federal taxes as well as royalties. And, 905,000 jobs, including 126,000 in provinces outside Alberta.
Looking beyond Alberta, the impact on Quebec is significant – 14 billion dollars to the provincial economy over the next 25 years.
Some of you may have seen CAPP advertising showing Gaetan Bolduc from Prevost bus coach manufacturing. They supply 25 to 45 coaches each year to the oil sands – there’s a good example of the oil sands’ reach in action.
Suffice to say, the energy future for all of us in the room in both Alberta and Quebec looks bright.
The Polarization Challenge
But there’s a catch.
To get to that bright future, we have to get past today’s polarized debates.
Whether it’s climate change policy, 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:
- Transmission lines,
- Flooding caused by hydro dam development,
- Tar sands,
- Fracking, and yes, even
- Bird and bat-killing wind turbines.
In the midst of trying to prove who’s right and who’s wrong, I’m concerned that we may find ourselves in a worse place than where we started.
Talking about the Keystone XL pipeline, our Mayor once said:
- “it’s a terrible shame that this one metre in diameter pipeline is being asked to carry all of the sins of the carbon economy.”
We do need to think about unintended consequences. Make no mistake; oil will find its way to markets. It might just get there by different means which in the end, could be more carbon intensive.
And pipelines are the safest, most reliable way to transport energy. They also offer the potential to increase the competitiveness of our industry, by connecting western crudes to facilities like our Montreal refinery, creating jobs and contributing to the local, regional and provincial economies.
We need to stop focusing on what we’re against and start focusing on what we’re for – a healthy environment, economic prosperity and social wellbeing for today and tomorrow.
The world is changing and at a pace more quickly than ever before. And it’s becoming more complex.
As we prepare for a global population that’s growing from 7 billion to 9 billion over the next 25 years, as we grapple with the complex problem of climate change, as we look to meet the energy needs across this country and around the world, we need to work together.
Each and every one of the businesses represented in this room has a role to play whether it’s in the area of energy, technology, finance, construction, engineering, clean tech, transportation, or aerospace.
We have two choices.
We can weather this uncertain future as individual competitors – different provinces, different sectors, different companies. Or we can thrive as collaborators, working together to achieve common goals.
Let me say that again. Collaboration, in its truest sense, is working together to achieve common goals.
For example, hockey. A hockey team has a common goal – to win the game by working together.
It would be a very different game if the players were focused on achieving their individual goals. A bit like watching five year old kids play soccer.
Collaboration isn’t easy. Each of us needs to check our personal agenda at the door, realize our way is not necessarily the best way and focus on what is going to contribute to the common good.
The oil sands industry has some experience with collaboration.
About a year and a half ago 13 companies came together to form Canada’s Oil Sands Innovation Alliance, or COSIA. Its mandate is to collaborate on environmental performance.
What excites me about COSIA is this:
- 13 companies which account for 90% of oil sands production
- 13 CEOs are committing to step-change performance improvements in tailings, water, land and GHG emissions.
- 13 competitors who in just a year, have shared over 560 distinct technologies with associated development worth more than $900 million. This is unheard of. 13 companies determined it is better to share intellectual property rather than compete on environmental performance.
To our knowledge, COSIA is the largest collaborative effort of its kind, anywhere on the planet. And it’s happening in the Canadian oil sands.
- We’re better off sitting at the same table to tackle the big issues
- Working together gets us further ahead, and
- Creative solutions come from creative tension
In our industry, we’ve recognized the value of working together, when it comes to environmental challenges.
Together, we’re so much stronger.
Connected Businesses and Economic Futures
I see an enormous opportunity for us to take what we’ve learned and apply it to the economic relationships between Alberta and Quebec-based businesses.
We already have some strong business relationships between the Alberta energy sector and Quebec.
As our friends at Bombardier know, we have purchased and operate a fleet of four Canadair CRJ planes, flying workers to and from the oil sands. Last year we also purchased a Challenger 300 to add to our fleet.
They’re just one of the approximately 900 vendors we’ve done business with in Quebec. And that’s just Suncor. I am sure if you spoke with others connected to Alberta’s energy sector, you’d hear about many other business relationships between our provinces.
We also work with Quebec’s post-secondary institutions to support emerging leaders and industry-related programs and research. For example, with McGill University we support the Suncor Energy Emerging Leaders Award program and have done some work with HEC’s MBA students and their Annual Sustainability Challenge.
Our future prosperity is heavily dependent on working together in three ways:
- creating market opportunities,
- ensuring we are competitive in an increasingly interdependent world, and
- sharing the story of responsible resource development, if we’re to continue to have a social license to operate.
Market Access: A National Opportunity
It’s time to look at Canada’s vast and varied energy resources as a national opportunity. And that view should be regardless of whether we live in Alberta, Quebec, PEI or Nova Scotia.
We have an enormous national resource to steward that can help us drive our economy. We can support social needs, like education and health. We can create a better quality of life for us all.
A key piece of our industry’s future growth is market access for Canadian oil, whether it flows to Quebec for refining and marketing, to the West or East Coasts for global distribution or to the United States.
As business leaders, we know market access – diversified market access - makes sense. And Canadians also seem to know this. In a recent Ipsos Reid poll, 70 percent of respondents agreed it is important for Canada to access new markets for oil to reduce our reliance on exports to our single crude oil customer, the United States.
But we know to achieve market access, Canadians want to be assured oil can be transported safely and oil sands producers in particular are managing environmental impact.
The industry is working to address these concerns and meet Canadians’ expectations. I spoke about COSIA as one way we’re doing this. Suncor is making significant progress in this regard.
Sharing our story: continuous Improvement
That leads me to the second way we can work together, and that’s sharing the story of responsible and continuously improving resource development.
Here in the oil sands, early technologies were focused on economically getting the resource out of the ground.
Over the years of development, it’s become apparent that old methods of extraction no longer meet societal expectations.
The good news is that today, many of the breakthroughs are focused on environmental performance.
A good example is in how we’re dealing with tailings at our oil sands mines:
- At Suncor, we’ve spent over a billion dollars to develop a new tailings reduction technology.
- That’s already allowed us to cancel plans for five additional tailings ponds.
- And, we expect to reclaim entire mine sites in a third the time it now takes.
Another example is on water use:
- over the past six years, Suncor has reduced its freshwater intake by more than 30%.
- Our freshwater use is the lowest it’s been since 1998, even though we have tripled production.
We’ve made significant progress, but we know we need to do much more. That’s why we’ve publicly set ambitious environmental performance goals:
- To reduce our water use and air emissions
- Increase land reclamation rates
- and improve energy efficiencies - all by specific, targeted rates through 2015.
We, like others across the country involved in energy development, need to share our story. And we need your help to do it, if we’re to continue to grow and develop resources through a social license to operate.
As you get to know us as suppliers and partners, we’re looking for you to familiarize yourselves with the issues. That can be through conversations about these or through resources like the CAPP and Suncor websites, including our new website whatyescando.com.
We launched this site to help reframe the debate. Help us get the word out. Visit whatyescando.com and share our story with five of your professional contacts, friends or family.
We hope you’ll join the conversation about our energy future. It’s an important one that we want you to be part of.
The Quebec/Alberta Collaboration Opportunity
I look around this room and see an enormous opportunity. I see an opportunity for us to model cross-provincial economic collaboration that sets the example for the rest of the country.
As two of Canada’s economic powerhouse provinces, Alberta and Quebec can:
- Forge new business partnerships
- Break down interprovincial barriers and open up our markets to one another
- Create the pipeline infrastructure that connects Alberta’s energy sector and Quebec’s manufacturing, finance and high-tech sectors
- Show the rest of Canada that working together is in the country’s best interest in an increasingly complex world
We have many similarities to capitalize on: ingenuity, entrepreneurship, and interest in the long-term viability of our businesses.
Let the Work Begin
It’s an extremely exciting time. Thinking big and acting boldly are essential.
As we move forward, there are two questions we need to keep in mind:
- Will our businesses be able to compete in an increasingly competitive and complex landscape?
- Can we maintain the strong economy, prosperous communities, social well-being and healthy environment this country is known for?
Working together, recognizing how we’re all connected, and focusing on the opportunities ahead, I have no doubt that the answer to these questions is “yes.”
Thank you for your time today and I look forward to working with you in the months and years ahead.