Building a Greener Economy through Innovation
GLOBE 2012: Opening Plenary Remarks, Vancouver, BC
“Building a Greener Economy through Innovation”
Wednesday, March 14, 2012
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Thank you, John for that kind introduction.
I’m honoured and delighted to be here again at GLOBE. Looking at the program for the next three days, it’s easy to see this is shaping up to be a terrific event.
With the theme: Building a Greener Economy through Innovation –GLOBE continues to prove itself as one the world’s great venues to discuss the environment, energy and yes, the economy.
The reality is that we need to have these conversations now more than ever. Sustainability has never been more important. As we all strive to move forward, it’s crucial that we share information and push the envelope.
After all, it’s the dialogue we have today that leads to the solutions we want for tomorrow.
You’ve heard Premier Clark and Jim Weigand speak about sustainability from a public and industry perspective. I thought I would frame my remarks around energy and how it fits into the overall sustainability picture.
If there’s one picture I’d like to paint for you, it’s about the importance of our shared energy future.
Looking ahead from an energy perspective, we need to answer some tough questions. For example: What does the future hold in terms of energy demand? How can we tackle the environmental challenges associated with energy production and consumption? What role will technology and innovation play in addressing our needs?
And, given the increasingly polarized environmental debate – a worrying trend I might add – is there any room for collaboration?
Answering these questions doesn’t just fall to one sector. Each of us in this room … whether you’re from industry, government, an environmental NGO or academia… and whether you flew, drove, rode public transit or walked to this conference…. All of us have a stake in finding the answers to those questions.
The challenges loom large. But the good news is that we have a sincere desire to get there – otherwise we would not be at this forum.
For me personally – as President of Canada’s largest integrated energy company – answering those questions means hard work on our part.
It also means reaching out to stakeholders beyond industry – and not declaring a position and defending it, but listening and responding.
When we talk about our energy future, it’s hard not to talk about the important role oil sands will play as part of the energy mix. This really is a resource that has the potential to provide the energy that growing economies will require – for the next century and beyond.
What I want to talk to you about today is the positive vision we at Suncor see, for responsibly developing the oil sands. It’s an approach that will help us meet our energy needs, while mitigating environmental and social impacts.
In short, it’s a vision that’s all about sustainable development. And not to disappoint you, but it’s not something new.
We’ve been working for over a decade to develop a vision for how the oil sands could become a key part of the 21st Century energy mix. And a green economy was something we envisioned even back then.
For those of you familiar with us, you’ll know we’ve long stressed a “triple bottom line.” In other words, energy resources should be used in a way that generate economic growth….promote social well being…..and minimize the impact on the environment.
Suncor has been active on this front before it became the popular thing to do. That’s because we understood then – as we do today – that there is no contradiction between strong economic performance and environmental stewardship. In fact, they are mutually supportive.
Every emission we eliminate… every time we reduce water use…. or every time we minimize land disturbance ….we ultimately save our shareholders money. Just as important – we earn our company’s societal license to operate, grow and develop a legacy resource.
The key to realizing sustainable energy development, or a green economy, comes down to two words: Technology, and innovation. I’ll talk about that more in a moment.
But first, I want to put oil sands development in the context of one of those tough questions I posed earlier. That is, where is energy demand headed and where will we get our energy?
Shared Energy Realities
I ask this question because it helps us understand whether Canada’s oil sands represent an obstacle – or, an opportunity – when it comes to building a more sustainable energy future.
There’s probably no better place to find answers to this question than the International Energy Agency, or IEA.
The IEA is an independent agency that analyzes global energy data – and it’s also been quite vocal in urging strong global action on climate change. They also publish an outlook, which covers energy trends from 2010 through to 2035.
Here’s a snapshot of the IEA’s view of how things will look 25 years from today:
- Global energy demand increases by as much as 40 percent, driven mainly by growing populations and improved living standards in China, India and the rest of the developing world.
- Fossil fuels remain dominant – supplying 75% of global primary consumption in 2035, compared to 81% today.
- Oil remains the primary source of transportation fuels, increasing from 87 million barrels per day in 2010, to 99 million barrels per day in 2035.
- That’s because despite increases in fuel efficiencies, the number of passenger vehicles is expected to double.
- Renewables become a bigger part of the energy mix, but it happens relatively slowly. The share of non-hydro renewables in power generation increases from 3% to 15% in 2035.
- But even that depends on annual subsidies to the sector rising almost five times, to $180 billion a year.
What’s clear from the IEA’s projections is that the world will continue to need safe, reliable and affordable sources of energy over the next quarter-century – and likely for much longer than that. And oil will need to be a part of that mix.
So, two things spring to mind. Where is that oil going to come from? And, what does it mean for a green economy?
In North America, finding new sources of oil is going to be harder and more expensive to develop. That’s just a reality.
Likewise, the countries where conventional oil is still plentiful, are unfortunately plagued by political and economic instability.
Canada’s oil sands stand apart. Consider the contrast. They’re located in a country dedicated to democratic principles, strong regulatory oversight and an open economy. They are developed in an open economy, which helps drive innovation. And they’re developed by a free society that holds businesses accountable.
So when it comes to developing new sources of oil, I believe we have a serious choice to make. Again – not just Suncor, but all of us.
We can support the responsible development of energy sources like Canada’s oil sands, and use the wealth generated by this development to create energy solutions for the future …. Or, we can increase our dependence on more distant sources of oil – that often carry much greater risks.
Of course, oil is just one part of building a more sustainable energy future. In an era of growing global energy demand, we’re not looking at an either/or situation. The future is about increasing energy choice, not restricting it. I believe we need to advance aggressively on three courses.
First, we must make continuous improvements in environmental performance when it comes to conventional resource development, whether it’s oil, gas, coal or nuclear.
Second, we need to responsibly develop existing energy sources to generate jobs and economic growth – while also investing some of today’s production revenues towards developing tomorrow’s alternative energy sources, and new environmental technologies.
Third, we need to look at future energy requirements… based on the kind of society we want to build… and then develop a clear strategy for meeting those requirements.
Let’s take stock, then take action
So let’s consider what kind of progress we are making:
On the environmental front, our industry is making tangible progress. Through innovation – and by harnessing technology, we’ve become much more energy-efficient. Since 1990, the base year for the Kyoto accord, GHG emissions per barrel have been cut about 40% industry-wide. At Suncor, we’ve reduced emissions intensity by 50%.
That puts us among North American leaders on this front, along with Ontario’s steel industry. It also means we’re producing more of the transportation fuels our economy requires with far less emissions than would have been the case a decade ago.
In terms of carbon intensity, we’ve closed the gap between oil sands and conventional crude imports to about 10% on a life-cycle basis.
Oil sands development is also water-intensive, but we are becoming progressively less so. Absolute water use at Suncor’s oil sands operations has been cut by nearly 30% in five years. We are now using the same amount of water we did in 1998, despite tripling production.
Like most energy production, oil sands development disturbs land – and, quite frankly, it isn’t always pretty. But we will reclaim and restore all disturbed lands to their natural state. One of the key environmental goals we have has publicly announced is to increase the rate of our land reclamation by 100% between 2009 and 2015.
Going forward, we expect to make further gains by working collaboratively with industry peers, governments, environmental groups and universities.
Does more need to be done? Absolutely. But I believe we’re headed in the right direction and working towards real, innovative solutions.
Now, let’s consider that second course of action I mentioned – using today’s energy resources as a bridge to a more sustainable energy future.
Consider this: The Canadian Energy Research Institute projects more than 2 trillion dollars will be invested in the oil sands industry over the next 25 years.
Over that same timeframe, the industry is expected to generate nearly half a trillion dollars in government revenues and more than 800,000 new Canadian jobs.
What’s exciting is that this wealth creation can be directly connected to progress on the sustainability front, or, greening our economy.
Let me give you a couple of examples.
Over the past two years, Suncor has introduced new technology to address one of our industry’s high-profile challenges – the huge ponds required to store liquid tailings from mine operations.
Five new storage ponds that would have been built under a “business-as-usual” scenario, will now never happen. We also expect to eliminate all but one of our 8 existing tailings ponds. All this with technology that allows us to reclaim entire mine sites in about a third the time it now takes.
This type of innovation is a game-changer, but it doesn’t come cheap. We spent tens of millions of dollars on R&D and plan to spend more than a billion dollars implementing the technology.
A second example is in the area of renewable energy.
At the risk of preaching to the choir – all of us know that solar, wind, biofuels and other alternative sources need to be an increasing part of the 21st energy mix. But it will take time, and considerable capital investment, before they become commercially viable on a broad scale.
Suncor has already committed $750 million to its renewables portfolio. We currently operate Canada’s largest biofuels production facility as well as 6 wind farms. We realize they are some of the energy sources of the future.
Shared Energy Future
Finally, there’s that third course of action we need to pursue – assessing our future energy needs and developing a plan for getting there.
Suncor was an early advocate of developing a national, sustainable energy strategy for Canada. We need to assess our energy needs 20 or even 50 years down the road – and determine the mix of proven and potential energy resources that can best meet those demands.
We must find ways to deliver energy where it is needed – and when it is needed. The challenges we’re encountering building new pipelines and transmission lines are testament to what happens when you don’t have a clear energy strategy.
And we all have a part to play in that. Governments need to provide both direct R&D funding and a pro-technology investment climate.
Industry, in turn, needs to build more R&D into its business models. This kind of strategy would set targets and goals for reducing GHG emissions and a clear plan for getting there.
Finally – and I can’t stress this enough – a sustainable energy strategy must also deal with how we, as a society, use energy resources. Again, it’s back to that idea of a shared energy future.
With up to 80% of the GHG emissions from a barrel of oil being generated at the point of consumption, not at the point of production – we need to look at how energy is consumed, as well as how it is produced.
The International Energy Agency’s outlook again, helps to provide perspective:
By 2035, it’s expected China will consume 70% more energy than the United States, the world’s second largest energy consumer. But even then, per-capita energy consumption in China will still be less than half the level in the US.
The lesson: if we’re really serious about managing GHG emissions, we in North America must get much more serious about reducing energy consumption in our own backyard.
Addressing these challenges won’t be easy, but I’m convinced that we can achieve them if we set our minds to it. And the task will be made lighter, but only if we step out of our comfort zone and begin working together.
Innovation through Collaboration
When you look at the oil sands industry, it’s not hard to see that innovation and human ingenuity are part of our DNA. The technological challenges require it – and thanks to the commitment and focus on continuous improvement, we’ve seen tangible progress.
I believe we’ve made strides advancing technology and innovation, but the pace of change has not been enough.
We’ve listened to Canadians… And we know you want our companies to do better.
We believe environmental stewardship is a shared responsibility – whether on tailings, water, land or greenhouse gases.
Working together with governments, NGOs and other interested parties, I’m pleased to say we are making progress towards a greener economy and a sustainable energy future. Certainly through innovation – but also through something I alluded to earlier – and that’s collaboration.
Two weeks ago, I joined 11 other oil sands leaders to announce the formation of the Canadian Oil Sands Innovation Alliance, or COSIA.
We formed the alliance with the recognition that we must work together in minimizing our environmental impacts.
It seems simple. Our 12 companies realized that none of us has a monopoly on ideas when it comes to the environment. And, we know the sum of what we do will be greater than any individual effort.
COSIA is our industry’s public commitment to collaboration. It’s meant to say we are ready, willing and able to respond to Canadians’ expectations and accelerate the pace and scope of our environmental performance.
And we know collaboration works. We’ve seen it through the success of other industry organizations, including:
- the Canadian Oil Sands Network for Research and Development,
- the Oil Sands Leadership Initiative, or OSLI, and
- the Oil Sands Tailings Consortium.
One of the best ways to describe COSIA and its predecessor organizations is to talk about the work they’ve been doing. One is a new oxy-fuel combustion technology to reduce CO2 emissions from in-situ oil sands operations.
Twelve companies collaborated on commercial-scale boilers which incorporate built-in CO2 capture, purification and compression technology.
This technology will capture 99 per cent of CO2 emissions – and result in a significant reduction in air emission contaminants.
Another example of collaboration, and one we think holds great promise, is in the area of land reclamation.
About a year ago, several producers came together to conduct a winter wetland planting trial in Alberta’s boreal forest.
Let me put that in context... winter… planting…
Now those are two words that usually don’t go together. But the companies found a way to make it possible. In temperatures as low as minus 25 degrees, 900 black spruce trees were planted in a disturbed wetland site.
The results showed that more than 94 per cent of the black spruce trees survived. The reason why this is so significant is that it will allow companies to re-vegetate areas which are difficult to access during summer months, due to the muddy nature of thawed muskeg.
In the end, we think this new technique will greatly increase our ability to reclaim natural boreal ecosystems.
The 12 COSIA companies remain competitors, and will continue to compete aggressively in market with our products – but we know that when it comes to the environment, we all win when we work together.
I am sure you can tell by now – I am an optimist. I firmly believe that innovative technologies and collaboration will create a more sustainable energy future.
But, I also believe in the critical need for a fact-based conversation on the benefits and risks of energy production – and how we maximize the former and minimize the latter.
Public posturing and name-calling don’t lead to real solutions. What we do need is the will to work together for the common good.
So I want to conclude by urging you to become a bigger part of the energy and sustainability dialogue. We want to hear your thoughts.
- So please be sure to visit our booth in the tradeshow exhibit area.
- Ask questions…and then ask some more questions…Ask some really tough questions.
- And when you visit, sign up for OSQAR – our Oil Sands Question and Response newsletter and blog. It’s just one more tool that we at Suncor are hoping helps shed light on sustainability issues.
When we think about our energy future, it’s all about the conversation. Tomorrow’s energy and environmental outcomes depend on dialogue, and the choices we make today.
Let’s work together to make sure we choose wisely and well.
Thank you, and enjoy the rest of the conference.