Thank you very much, Mr. Chair.
Thank you to the committee for providing this opportunity for Suncor Energy to share some thoughts on this very important topic of energy security. Of course I am very pleased to be here, as well, with Dave Collyer and John Wright this morning. We are going to discuss, during the course of my comments, the important challenges and the contribution that the oil sands make to Canada.
I've come here this morning to talk about the oil sands in the context of energy security. I'll share some brief introductory remarks on some major themes relevant to your study, including the economic benefits of oil sands to Canada; the need for continuously improving our environmental performance; increased global demand for energy; and the need for energy strategies and new technologies, which we believe are necessary to ensure the responsible development of oil sands as a secure energy supply for Canada and for markets outside our borders.
Let me start with a simple statement: development of the oil sands is all about science and technology. It always has been. In the first 40 years of development of the resource, the research was directed toward the challenge of achieving commercial viability, and the perseverance and the magnitude of the innovation effort that occurred during that timeframe should be a source of pride and courage for all Canadians as we pursue our future energy challenges.
While improving the economics of the business is still a major priority, this is increasingly being achieved through an enhanced focus on technology to reduce the resource intensity and the associated environmental footprint of the industry. Let me be clear that these two goals are compatible. If we use less water, energy, and land, the environmental impacts are reduced and costs are lowered.
What it really comes down to is that we need to develop this Canadian resource in a way that harnesses both Canadian and global intellectual capital and is consistent with Canadian values, with benefits to all Canadians. It is about Canada, not just Alberta. To name just some of the benefits to Canadians, the industry is Canada’s largest private sector investor, with $1.7 trillion in GDP impact expected over the next 25 years and nearly half a trillion in new government revenues over the same period, mostly federal. It is the livelihood of half a million Canadians, with about half from outside Alberta. Lastly I’d point out that Suncor has spent more than $1 billion on aboriginal business contracts in the past decade, a point that we are particularly proud of.
That said, I think we could do a better job of explaining our importance to the Canadian economy and our progress to Canadians on the environmental front and with regard to new technology. Let me give you examples of improvements related to air, land, and water.
Suncor has reduced our greenhouse gas emission intensity by 53% since 1990. The industry has cut greenhouse gas emissions by 40% on an intensity basis during that same timeframe. This puts this industry at the forefront of all Canadian industry in terms of intensity reduction.
Current research shows CO2 emissions from an oil sands barrel are now about the same as, maybe less than, some crudes from places like Nigeria and Venezuela or California.
Total water use at Suncor’s oil sands operations has been cut by about a third since 2004, and that's in absolute terms. At our Edmonton refining operations, we’re using high-tech filter systems to allow us to use municipal grey water.
On land impacts, Suncor recently celebrated the surface reclamation of pond 1. It becomes the first oil sands tailings pond to have been reclaimed in the oil sands, and there will be many more to come.
Getting to these kinds of improvements doesn’t usually happen in a single technological leap. It’s mostly been a journey with a lot of small steps. It’s not especially sexy, and it's probably why it doesn’t have much profile. But it’s practical, and it is delivering real results.
We also have a few game changers. Suncor is moving on one major leap right now. Recently we rolled out our new tailings technology, which will reduce the need for ponds to store tailings in the future. And the pace of reclamation to natural habitat will be reduced from 30 years to approximately 10 years.
The fine clays in the tailings take very many decades to settle. This new technology can dewater tails in a matter of weeks versus decades. We plan to spend more than $1.2 billion on implementation of this technology over the next two years. We expect that investment to pay both environmental and financial dividends over the long term. We have made progress and we know there is much more to do.
For now, let me take these two themes, the major economic impact of oil sands development and continuous improvement in environmental performance through technology, and add a third.
The world will continue to need oil for the foreseeable future. Demand is expected to grow from 85 million barrels per day to more than 100 million barrels per day over the next 20 years. That's largely driven by India and China, but Canada will have a piece of that demand with our growing population.
Together these three themes say to me that we are better off if our needs are met by Canadian oil, oil that is produced in a democratic society in a strong and transparent regulatory regime, with a focus on improved technology that broadly benefits Canadians. Few, if any, of these attributes are found where 80% of the world's oil reserves are.
I really want to underline this point. The development of the oil sands and the work under way to continuously improve its environmental performance is the product of two key freedoms.
First is the political freedom of citizens and stakeholders to engage with governments and industries to drive toward solutions, because directly or indirectly we are all accountable to the Canadian people.
The second freedom, equally important, is regulated but free markets. It's no coincidence that the major technology advances that have shaped our world have sprung from free market economies. Innovation and entrepreneurial instincts are the critical drivers to achieving practical solutions to our challenges.
Frankly, Canadian oil should be differentiated on these positive qualities in the international arena. Our choice is not oil sands, yes or no; it's where do we want the oil to come from, and what it means to Canada and the rest of the world.
I focused on the oil sands because that's Suncor's main business today, but we should recognize that most oil companies are actually energy companies.
Suncor is one of Canada's biggest players in biofuels and we are also one of the biggest investors in wind power. We got into these businesses in part because we know we need to take a broader look at energy. As a company, we want to help create a constructive dialogue in this country on energy.
That includes the role of Canada's oil sands in our energy mix as both a secure source of supply to our economy and a bridge and an enabling resource to the new energy technologies for the future.
We think it's important to get Canadians engaged in a realistic, fact-based dialogue about our collective energy future.
We think the time has come for a dialogue on a national sustainable energy strategy, one that respects provincial jurisdiction but allows for a broad, integrative perspective on energy, the environment, and the economy.
A sustainable energy strategy must go well beyond the issue of basic energy production. We need to look at how we use energy, including the cars we make, how we plan and build cities, the role of mass transit, and a stronger conservation ethic from businesses and consumers.
We need to assess our likely energy requirements 10, 20, and even 50 years down the road. We need to determine the mix of proven and potential energy sources that can best meet those needs on an economically and socially sustainable basis. We must find ways to build the required infrastructure to deliver energy where it's needed and when it's needed.
We need to understand that the future is about increasing energy choice, not restricting it, and that targets for reducing greenhouse gas emissions must be part of our vision.
Governments will need to promote investment in technology. This includes direct funding as well as economic cooperation to stimulate a higher level of capital investment in new technologies.
For its part, industry needs to build more research and development into their business models, and the level of investment and deployment of new technologies should be a key measure of our success.
As a leader in Canadian energy, we are more than willing to contribute to this dialogue that enables a secure and prosperous energy future for all Canadians.
Thank you.