Thank you, Mr. Chair, and thank you, members of the committee, for this opportunity to present some perspectives of Suncor Energy on the issues of climate change, clean air, and our energy future.
I would like to begin by suggesting that we have a need to reframe the dialogue on the issue of climate change. I think over the last decade one of the key reasons that we've not been able to make the progress that's required on this difficult issue is that it's been a discussion centred on equitable allocation of pain. That's pain between provinces, between sectors of industry, and within Canadian society. Of course, we all know equity is in the eyes of the beholder, and that's a negotiation that we feel is doomed to fail.
We think the more powerful platform to discuss these issues from is to focus on opportunities. Those are opportunities to develop new forms of renewable energy, biofuels, new technologies like CO2 capture and sequestration, and energy efficiency improvements in how we use energy across our economy. We also believe an opportunity mindset relates to the setting of mid-term and long-term emission goals and also goals related to technology advancement and development as a key enabler towards energy and environmental sustainability.
I would highlight in this regard the recent work by the National Round Table on the Environment and the Economy that looked at what Canada's energy future might look like by 2050. We believe this is a compelling piece of work that needs to be carefully studied as a platform for climate change policy looking forward. However, to create that energy future that's more climate friendly and also contributes to clean air is going to require engagement of capital markets. Private sector capital is the only vehicle that's going to allow for the significant transformational change that's going to be required.
We also believe that sustainable development is the right context for approaching these difficult issues. The notion that a strong economy, a healthy environment, and social well-being are interdependent, we believe, still sets the platform for creative solutions as we look at difficult issues. These aspirations are interdependent and they compel us to think more broadly and creatively about the solutions as we look ahead.
In addition, I'd like to focus on some foundational assumptions for sustainable solutions. First and foremost in Canada is that we have had a legacy of abundant and cheap energy that has shaped Canada in a fundamental way. This is the reason Canada is not like Europe in terms of our vehicle fleet, our urban density, the size of our homes, and mass transit. We accept that as Canadians and as a global community we cannot continue to produce and use energy in the same way we have done in the past. This is at the heart of our urban air quality issues, climate change, and even quality of life concerns as we continue to expand our urban footprints.
In saying that, we also need to recognize that we are all part of the problem and we all need to be part of the solution. When we look at the issues of climate change and urban air quality, it's not just bad guys and good guys. It's not simply a case of industry being the problem and consumers being viewed as separate from it. You can't separate the supply of energy from the demand for energy by each of us as consumers. Industry, including the oil and gas industry, should be viewed as an essential part of the solution. Where else in society do you find the depth of technical, business, and commercial expertise, and, most importantly, the access to investors than in industry? We're prepared to be a positive part of that solution.
In order to make the progress we need to make, we have to engage capital markets and private sector investment. There is no amount of government money that's ever going to fund the transformational change that's required towards real sustainable solutions over the long term. As we reflect on the target-setting discussions that this committee is deliberating on, I think the real concern we have is targets that would erode investor confidence and that would be unintended consequences. That would be unacceptable I think for all of us.
Now I would like to cite a positive example of what engaging capital markets can look like. I would use wind power as the example.
In the year 2000, Canada was the lowest of any of the OECD countries in installed wind power capacity. Governments, collectively, declared the intent that wind power should be part of Canada's energy mix. There was an in-depth analysis by environment NGOs, industry, and government together to analyze why capital was not flowing to wind development in comparison to other countries. The wind power production incentive program and the recently announced eco-energy renewable incentives program were established, and they have contributed to substantial growth in this sector. Rather than provinces avoiding an equitable allocation of paying, they're actually competing for investment of wind power.
Suncor, with its partners, has now invested $306 million in 147 megawatts of new capacity. This was not done to comply with an obligation; it was done because the signals were put in place that attracted capital to this segment of the energy sector.
An additional example of positive engagement is the recent dialogue on biofuels. Ethanol development was declared as a common objective of provincial and federal governments. Investors have been consulted on required policies and measures. There was a combination of carrots and sticks put in place, including financial incentives, excise tax treatment, and renewable fuel standards.
In response to this direction, Suncor has now invested $120 million in a world-scale ethanol plant in Sarnia, Ontario. We're looking to double the capacity of that plant in the near future. We're also testing biodiesel with the Toronto Transit Commission in 1,400 buses.
We have more capital expenditures and projects planned across Canada. I would suggest other segments of industry are looking at biofuels in a similar way, as a growth opportunity, and an exciting one at that.
As we pursue change through development of this act, I think it's also important to keep the end in mind. In that regard, we think the National Round Table on the Economy and Environment's greenhouse gas reduction study shows where some of these key opportunity areas are. They include: carbon capture, energy intensity improvement of industry, biofuels and alternate fuels, renewable electricity, and many forms of energy conservation.
We believe that in order to move that vision forward, we need to engage expertise that would focus on each of those individual wedges to carefully assess what policies and measures could be put in place that would attract the capital to make that happen.
In addition, we believe target setting should take the form of outcomes for each of the wedges that have been put forward. As with wind power, where we talk about megawatts of installed capacity by certain points in time, we believe that same approach to target setting could be taken in other areas. The CO2 benefits of that would then be calculated as part of our progress towards Kyoto compliance.
Where do we go from here? In summary, we think we should use the Clean Air Act as an instrument to regulate very defined and targeted industrial energy efficiency and performance outcomes. Our industry sees the requirement for regulated internal energy efficiency targets, but those should be focused on bending the curve initially, as opposed to a hard cap. We believe we should initiate focused expert panels on the other key opportunity wedges as outlined by the national round table study. These could include areas such as CO2 capture and sequestration and mobilizing investor capital to make those opportunities happen.
Explore the full range of policy approaches: incentives, fiscal, regulatory.
Let's work to formalize a vision for Canada's energy future that ensures future generations have a healthy environment, a strong economy, and quality of life.
Thank you.