Canada’s Oil Sands: Creating our Energy Future Together
Steve Williams, President and CEO
Suncor Energy Inc.
Toronto Board of Trade, Energy Speaker Series
Dec. 6, 2012
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Thank you Carol and good afternoon everyone. I’m pleased to be here today and it’s good to see some friends from the time I’ve spent in Toronto over the years.
I hope I am more successful today than recent visitors from Calgary were, the Calgary Stampeders. Congratulations, Toronto, on your 100th Grey Cup victory.
Energy has played a major role in our history and our lives as Canadians. What remains to be seen is what role energy will have in our future.
That is what I’m here to talk about today. I believe we can start to have a conversation that unites, rather than divides Canadians, about our shared energy future.
And ultimately, I believe we can build bridges between our industry and those who are touched by it. We can work together to deliver economic prosperity, improved social wellbeing and a healthy environment for today and tomorrow.
Energy Touches Our Lives
Energy touches all of our lives, whether we’re heating our homes over the holiday season, driving children to hockey practice or using it to power our society’s infrastructure, like hospitals and schools.
And in financial terms, Canada’s energy industry is one of our nation’s most prolific economic engines. The industry creates employment and business opportunities, contributes taxes and royalties and generates an enviable quality of life for all Canadians.
Yet in many ways, and until recent years, Canada’s energy industry has been largely invisible. We’ve built new facilities, created jobs for tens-of-thousands of Canadians, pioneered new technologies to reduce our impacts, constructed the pipeline infrastructure necessary to get our products to market and contributed billions of dollars to Canada’s economy.
But about four years ago the spotlight shifted onto Canada, and specifically onto our oil sands resources. And quite suddenly we are no longer working quietly behind the scenes. We are very much front and centre.
There’s no doubt this shift into the limelight has brought some challenges with it. Ultimately, though, it has also brought great opportunity, especially when you consider the bigger picture.
Canada’s Enviable Resource
Canada is in an enviable position in terms of our energy resources. We have the world’s third-largest oil reserves, an abundance of natural gas, substantial hydro resources, a growing renewables sector and the Canadian ingenuity to bring all of this potential to market.
We have rigorous environmental standards and regulations, strong human rights practices and a stable geo-political climate. We have an enormous amount to be proud of in our energy sector and tremendous opportunity.
The bigger question is how we deliver on this opportunity, especially in light of shifting economies and energy dynamics, as well as an increasingly polarized public debate.
The Global Context
There have been a number of changes in the global economy and in energy in recent years that provide important context for our nation’s future and the oil sands opportunity.
Four years ago, we saw an economic downturn due to a credit crisis that is still having reverberations today. Canada weathered the downturn better than most, largely because of our energy industry. Indeed, it is the energy sector that is also driving our recovery. But there is still a lot of uncertainty in global markets.
Across the planet, energy demands are going to continue to rise, driven mainly by growing populations and shifting standards of living in China, India and other developing countries.
According to the International Energy Agency, demand is expected to grow by more than one-third by 2035. We’re going to need all sources of energy to meet it.
Closer to home, we’ve seen revised forecasts in the United States that suggest our top trading partner will be meeting more of their own energy needs in the decades to come. New shale oil and gas production may be on the rise, but we still believe there is a significant role for the oil sands to contribute to North American energy self-sufficiency.
And of course there is increased scrutiny on Canada’s oil sands for our environmental performance which has translated into resistance to building new pipeline infrastructure and heightened public discourse about our industry.
Boiling this all down, I reach four conclusions:
One – Canada’s energy industry literally fuels the nation’s economy. It is an economic driver that provides Canadians with an unparalleled quality of life, employment opportunities and financial stability. The energy industry has the potential to drive economic prosperity for generations to come. And if our efforts at Suncor are any example, it can be done in the context of responsible, profitable growth for our shareholders.
Two – There is an opportunity for Canada to steward natural resource development. Globally. We can provide global leadership. We have the scale, means, technology, will and ingenuity to create energy for a better world. We can raise the bar.
Three – A healthy energy future for Canada requires more than one trading partner. It’s simply good business. While we will continue to have a role in providing the United States with a preferred product, we also need to develop new markets. We need to do this together.
Four – We need to build bridges with one another and work together to determine Canada’s energy future. Rather than continuing to polarize this debate, we need to focus our energy on constructive solutions. We are all connected and a part of something bigger.
So how do we get there?
Not without a clear understanding of our challenges and willingness to collaboratively, and collectively, overcome them.
I’ve touched on some of our challenges already. We’ve been working quietly behind the scenes for decades, especially in the oil sands. We’ve been focused on bringing the resource to market and haven’t had a public presence.
In some ways we were unprepared for the limelight. Now we’re trying to figure out how to have conversations rather than confrontations. We’re trying to take emotion and polarization out of the debate. We are trying to collaborate to find common ground.
We don’t underestimate the challenge of maintaining our social license to operate.
We have also faced challenges in terms of environmental performance. It’s fair to say our understanding of environmental management has matured, as has our technology.
An interesting, though perhaps unusual, comparison is cellular phone technology and how much it has changed since the 70s and 80s…I remember having a cell phone that was literally the size of a brick.
Cell phone technology initially simply allowed us to become more mobile, and coverage wasn’t very good. But it was still better than what we had.
Over time it evolved to include texting…which I am not sure is actually much of an improvement when it comes to quality family time at the dinner table…email and limited internet usability.
Compare that to what we have today. We literally carry computers in our pockets and can find ourselves on maps, interact via social networks, take and share photos instantly, have video conversations, text, email and talk.
The technology has literally changed the way the world communicates. And it is ubiquitous. There are few places on the planet where people don’t have, and use, cell phones.
Much like cell phones have evolved, so too has the oil sands industry, especially in terms of our technology and environmental management.
In the 70s and 80s we were focused on trying to figure out how to get the sand out of the oil and turn it into usable forms of energy. We were also focused on how to create an economically viable industry. Like the early days of cell phones, we were trying to figure out the basics and bring our product to market. We were a bit clunky and unsophisticated.
And then we evolved. With this evolution has come an improvement in our industry’s environmental performance. I would like to share a few of Suncor’s improvements with you by way of illustration:
- By harnessing technology and innovation, we have cut per-barrel greenhouse gas emissions by half at our mining operations since 1990.
- Over the past six years, we have reduced our freshwater intake by more than 30%. Our fresh water use is the lowest it’s been in absolute terms since 1998, even though we have tripled production.
- Suncor developed, and is now implementing, game-changing technology to manage tailings. We expect to shrink the land area covered by our existing ponds by 80%, eliminate the need for new ponds, and reclaim entire mine sites in about a third the time it now takes.
While we have evolved – as has our understanding of reclamation, ecosystems, biodiversity and new technology applications – we recognize we still have work to do.
Especially if we are to realize our mission of being trusted stewards of our natural resources as we deliver economic prosperity, improved social wellbeing and a healthy environment for today and tomorrow.
Suncor is prepared to be a leader, but we are unable to do it alone.
People as Part of the Solution
I often reflect on how we got to where we are today in terms of public sentiment about our industry, especially the oil sands. And I think you’d wonder the same thing if you were to visit us at Suncor, walk around our office and meet the thousands of Canadians who are bringing the best of themselves to work every day.
I started with Suncor about 10 years ago and have worked in the industry for about 35 years altogether. And I have never worked with smarter, more dedicated people than those at Suncor.
Engineers, geophysicists, financiers, environmental specialists, technology developers, biologists, innovators…people focused on doing the right thing. On delivering energy the right way and with integrity. These people, our people, are the foundation of Canada’s energy industry. And I believe these people are going to be a part of the solution.
Ultimately though, I believe no one has a monopoly on good ideas. Our industry requires fresh thinking, new perspectives and additional intellectual capital. Industry collaboration is a part of this.
The Role of Collaboration
We’ve made some good first steps in bringing the industry together to collaborate.
About four years ago, six companies came together to form the Oil Sands Leadership Initiative, or OSLI.
OSLI was focused on performance rather than public relations, which is why you may not have heard much about it. Our goal was to lead an industry shift towards collaboration.
We were successful. OSLI proved that by collaborating to achieve a shared vision, we could create a step-change in performance. OSLI pioneered a number of projects targeted at reducing water use, improving land reclamation, building sustainable local communities and creating space for technology and innovation.
Most importantly, OSLI was one of the primary catalysts for Canada’s Oil Sands Innovation Alliance, or COSIA. COSIA formed earlier this year and its member companies account for over 90% of all oil sands production. COSIA has recently finalized legal structures, formed working groups and is now working on determining shared environmental goals. Already, the companies have contributed hundreds of millions of dollars to help improve our collective environmental performance.
There’s no doubt industry collaboration is going to drive improved environmental performance in the oil sands. I am now looking forward to finding ways for our industry to tap into global ingenuity beyond our national, industry and traditional borders.
Building Bridges for a Shared Future
While industry collaboration is essential, it will only get us so far. To achieve an energy future Canadians can be proud of, we need to engage every sector of our economy – and all of our citizens – in an informed dialogue.
We need to look at how our vast resources – both hydrocarbon-based and renewables – can help build the kind of society we want to create. In addition to making resource development more environmentally responsible and economically viable, we need to talk about how each and every Canadian can use energy more wisely as we plan our cities, heat our homes and drive our vehicles.
We need to engage in conversations with government – and encourage constructive dialogue between governments – to thoughtfully determine how we’re going to position Canada for long-term success amongst such global uncertainty.
We need to have more informed conversations with friends and family about the energy sector and how it all fits into Canada’s long-term economic prosperity.
And finally, we need to step away from our polarized positions, pause, listen to one another’s point of view, and engage in constructive, solutions-based conversations. We need to make authentic connections.
Ultimately, we need to build bridges to ensure that Canada – and its energy-driven economy – takes a leadership role in creating energy for a better world.
What we have before us is an incredible opportunity, if we choose to accept it.
I’m confident that by all of us working together, success will be the hallmark of our efforts.
Thank you for your time this afternoon and I look forward to your questions.