Environment Committee on June 18th, 2015

[The Chair, Conservative, Harold Albrecht]

Okay. We're going to have to move on.

[Robert Sopuck, Conservative, Dauphin—Swan River—Marquette, MB]

Thank you, Ms. Strom. I was very interested in your testimony. When you talk about the environmental performance in the oil sands, I completely agree. That comes from first-hand experience, because prior to becoming an MP, I did environmental monitoring in the oil sands. I worked on the Kearl project, a project I'm sure you're quite familiar with. The care with which the companies operate was nothing short of extraordinary.

Again, this is a very easy, quick question. I know what the answer is, but I'd like to get it on the record. I assume your operations are done under an environmental licence, and you are always in compliance with the terms and conditions of that licence. Is that correct, Ms. Strom?

[Arlene Strom]

You asked if we have an environmental licence, and we absolutely do. Your question was a very particular one: are we always in compliance? Certainly, we are always striving and working to be in compliance with every piece of that. On record, there have been certain non-compliances, but we have reported and remediated in any case, and they have been very rare.

[Robert Sopuck, Conservative, Dauphin—Swan River—Marquette, MB]

Yes, I certainly can appreciate that.

The manual we used on the Kearl project to implement the terms and conditions of the environmental licence was about two centimetres thick. Again, when one looks at the overall environmental performance of the oil sands, given the kind of work that's done up there, it's really quite extraordinary how well things are managed.

Ms. Strom, do you have the figures for the number of people, roughly speaking, in Canada, whose employment or livelihoods are based on the oil sands?

[Arlene Strom]

I don't have the exact number at the tip of my fingers, which I should have, but I am happy to provide that to your committee in writing as a follow-up, if you would like.

[Robert Sopuck, Conservative, Dauphin—Swan River—Marquette, MB]

No, I didn't expect the exact number. The one I saw, and it was a few years ago so I don't know if it's out of date or not, was that around 575,000 jobs in Canada are based on the oil sands. Actually, the number of jobs is still the same, given that production is still going on. It's the new projects, obviously, that are on hold.

Given that there are many people, primarily on the political left, who want to see the oil sands close down, what would be the socio-economic effect if the oil sands cease production in their entirety?

[Arlene Strom]

There would be many effects. We always talk about the oil sands in Canada as a driver of taxes and royalties. I believe the royalties paid in 2014 were over $1 billion, and taxes a similar amount—and that's for Suncor alone. Then there are the indirect contributions through the suppliers. We work with suppliers across Canada in every province. We work with suppliers in 49 states in the United States. We are a significant driver of economic opportunity across the country.

In terms of the social benefit, as I said, we have operations from coast to coast. We're involved in developing and building communities from Vancouver to St. John's. The taxes and royalties that we pay allow us to have the education system and social protection that we all enjoy. I think that's part of the reason we believe it's so important to look at this on the triple bottom-line basis. I don't look at it as a balancing, but look at it as developing our resources in Canada to a place where we're actually generating the economic success we need to enjoy the social community we're looking for, in terms of education, health care, and all of those other benefits.

[Robert Sopuck, Conservative, Dauphin—Swan River—Marquette, MB]

I just wish the opponents of the oil sands would appreciate what you just said, because I agree with you 100%. The positive socio-economic impact of the oil sands is simply overwhelming.

Ms. Strom, it must be endlessly frustrating for you and your company that no matter what you do in terms of environmental performance, compliance with your licence, endless consultations with groups, going over and above the studies that you need to do as required by government, there still are groups—as I said, primarily on the political left—who want the oil sands to be shut down.

Why do you think there's that disconnect between your environmental performance, which I know is exemplary, and those who, in my view, maliciously seek to shut down the oil sands? Why can't you build a better image of what you do, given all of the positive environmental activities that you undertake?

[Arlene Strom]

That is a very big question.

At Suncor we are looking to develop trust with each of those communities. As we seek to collaborate, we're stepping into spaces where we're working with not only supporters but also opponents. We actually think we don't have a monopoly on good ideas.

I would use the Energy Futures Lab as an example of something that I think helps minimize the polarization you're talking about. I've been to a couple of sessions already. This will be a two-year lab where we bring people together over the space of about two years and help them understand different perspectives, help them focus on those common areas that we're all seeking to have. We're all seeking to have a stronger Canada where we're continuing to improve our environment's performance and where we're dealing with challenges in climate change in a prosperous Canada.

[The Chair, Conservative, Harold Albrecht]

Thank you, Mr. Sopuck.

Mr. McKay, please.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Thank you, Chair.

To the witnesses, I particularly appreciate your being here, but I will direct my first questions to Ms. Strom.

Suncor is a really serious player in energy generation. You're a $50-billion corporation, which makes your revenues greater than those of the Province of Alberta. So it's really quite interesting that your CEO, Steve Williams, seems to have stepped out and started a really good conversation in conjunction with Ecofiscal on climate change and pricing carbon.

Currently in Alberta you're at about $15 a tonne for your intensity-based regime. What does that shave off the bottom line for Suncor?

[Arlene Strom]

I haven't calculated what it shaves off the bottom line. I don't even have the total number we've paid into that fund over the years. But one reason we like the specified gas emitters regulation in Alberta is the focus on technology. Because it's on a marginal price, on the marginal barrel—it's an intensity-based regime—you have a flexible compliance mechanism. We're able to invest in new technologies and also able to use that price as an incentive to improve our environmental performance.

[John McKay, Liberal, Scarborough—Guildwood, ON]

I buy all of that. I'd be interested in knowing, and possibly the committee would as well, what that means to a corporation like Suncor in percentage terms or absolute dollars on an annualized basis.

There's a secondary question that comes out of that. We're all interested in a cleaner environment, and energy companies are no different from the rest of us. We all think we have to breathe. In terms of the intensity-based regime, does that come out of your research budget, such that you end up doing research? You set out here a whole bunch of things—good things, I would say—that Suncor is doing for the environment. It's not clear to me how those funds get allocated among issues directly pertaining to energy generation, particularly out of the oil sands, and what gets allocated to projects that are of larger environmental impact, such as looking after water and animals and all that sort of stuff.

Do you have any idea how that breaks out?

[Arlene Strom]

From Suncor's research fund or from the technology fund?

[John McKay, Liberal, Scarborough—Guildwood, ON]

From both the Suncor angle and the fund itself.

[Arlene Strom]

Suncor's investment in research and technology is about $175 million a year. That is spread over a broad range of projects. But when you look at our investment in tailings technology, for example, we've invested over $1 billion in TRO, which is technology that helps to speed the rate of reclamation within tailings ponds. There has been a significant capital allocation to various initiatives.

With regard to the fund itself, I know of one example where we were an applicant to the technology fund. That's when we were working on battery storage of renewable energy power. It was about an $18-million project. I can't think of another example, but there are examples like that.

[John McKay, Liberal, Scarborough—Guildwood, ON]

I appreciate that this is maybe a level of detail for which you would not necessarily be prepared, but I'd be interested in how Suncor allocates its $15 per tonne and what influence it has on the fund itself.

My secondary line of questioning has to do with the statement by your CEO, who said “Climate change is happening. Doing nothing is not an option we can choose”. He talked about the leadership position and echoed Chris Ragan, “The truth is that a federal government of any political stripe would face significant challenges instituting a top-down, one-size-fits-all carbon pricing policy, especially if associated revenues would then flow out of the provinces”. My sense, having had various oil companies into the office recently, is that there's a real appetite, particularly in Alberta, to, if you will, spread the pricing pain in the form of a tax on consumers or on the general population.

I'd be interested in knowing Suncor's position on this conversation, in 25 words or less.

[Arlene Strom]

Steve Williams has made it easy for me. He's been very clear. He believes that a broad-based carbon pricing mechanism is a necessary mechanism and that climate change is a challenge we need to address right across the value chain. We need to do our fair share. He's been very clear about that, but we need to ensure that we're addressing the challenge right across. As we know, 80% of emissions come from the tailpipe, so if all of the climate change focus is on the upstream, then we're not actually addressing the challenge to the best of our abilities.

[John McKay, Liberal, Scarborough—Guildwood, ON]

To me, that sounds like a tax, smells like a tax, feels like a tax, and might even be a tax.

[The Chair, Conservative, Harold Albrecht]

On that note, we're going to move to our next questioner.

[John McKay, Liberal, Scarborough—Guildwood, ON]

I take it that smile means yes.

[The Chair, Conservative, Harold Albrecht]

Mr. Choquette, go ahead, please, for five minutes.

[François Choquette, NDP, Drummond, QC]

Thank you, Mr. Chair.

My thanks to the witnesses for being here.

My first question is for the representative of Agnico Eagle Mines Limited, Louise Grondin.

Looking at your 2014 report on sustainable development, I see that your annual reports are quite comprehensive. You have mines in Quebec, including in Abitibi, and I see you have a section on greenhouse gas emissions. Are you a participant in the Quebec-California carbon market that requires caps on emissions and carbon trading to which Quebec is a signatory? Is your company, or will it be, regulated by that carbon market?

[Louise Grondin]

Our mines in Quebec are not significant greenhouse gas producers because, in Quebec, we are lucky to have access to hydroelectricity. Only the LaRonde mine, which is very deep and consequently uses more electricity, is a larger mine. It emits more than 25,000 tonnes of greenhouse gas emissions.

[François Choquette, NDP, Drummond, QC]

My apologies, Ms. Grondin, but I have very little time at my disposal.