Thank you, and good morning, Mr. Chairman and members of the committee. I appreciate the opportunity to present my views regarding your study of energy security in Canada, and specifically the role of oil sands. I regret that I can't be there in person but am glad to appear by teleconference.
Canadian Oil Sands is the largest owner in the Syncrude joint venture, which is an oil sands mining project. Syncrude is one of the pioneers in the oil sands industry and has been operating in the region for more than 30 years. Syncrude currently has the capacity to produce 350,000 barrels a day of light sweet crude oil.
To begin, I'm going to assume that this committee appreciates the size of this resource, the potential importance to North American energy security, and the positive economic benefits to both Canada and the U.S. These are well-known, cited points put forth by many people, including me. Most people now recognize that the oil sands are large and are economically vital, particularly in today's economy. Oil sands represent 97% of our oil reserves in Canada and currently over 50% of our production.
Without them, Canada's oil production would be in decline and our country would be a net importer, purchasing oil largely from countries that do not demonstrate the same environmental stewardship, social responsibility, or sharing of economic benefit. There's no doubt that the oil sands can and do contribute to Canadian energy security. I believe the question before you is, should they?
First, we must address the use of oil. There is a small but vocal group that believes, for various environmental and social reasons, that the world needs to move away from oil altogether. While this is not practical, in my view, it is a valid viewpoint.
To bring some realism to this question, we must consider the global energy landscape. The International Energy Agency estimates that global energy demand will increase between 36% and 47% over the period out to 2035. This is driven primarily by population growth and expansion of economies of developing countries. This hard and inescapable reality requires us to further develop all forms of energy. Not only do we need to drastically increase renewable energy sources; we need a concerted effort to expand our supplies of fossil fuels. As part of an honest discussion, let's disabuse ourselves of the notion put forth by oil critics that it is one or the other. The fact is, we need all sources of energy, and in growing amounts.
All sources of energy need to be developed responsibly, and we should acknowledge that all energy development, including renewables, has consequences, both environmental and economic. Most people do not appreciate that oil, natural gas, and coal make up about 80% of today's global energy; further, even in a relatively conservative scenario they will contribute 70% to 80% of total global energy needs by 2035. Meanwhile, the world's known oil production is declining at a rate of at least 7% on average, and producing regions are struggling to maintain oil production, let alone try to grow it.
Turning specifically to oil sands development, we fully recognize that our industry has an impact on the environment and local communities. We recognize that our future success depends on our continued ability to show improvement in our environmental and social performance.
The Canadian Association of Petroleum Producers has appeared before this committee on behalf of the broader industry and has followed up with supporting information. With that in mind, I'd like to review some Syncrude specific successes and challenges.
Like the broader industry, Syncrude has a solid track record of improving both its operational and its environmental and social performance. On land, Syncrude has reclaimed 22% of its disturbed land, planted over five million trees, and become the first oil sands operator to receive government certification for a reclaimed area, known as Gateway Hill.
The Alberta government's 2010 Directive 074 has sent challenging requirements that drastically speed up the timeline for reclaiming tailings ponds. Syncrude is responding with a suite of new technologies, such as centrifuging, for managing current tailings and perhaps reducing the need for future ponds. Industry continues to explore these technological opportunities and to share these best practices among themselves.
Syncrude is also pioneering a new initiative to establish newly created wetlands as part of its reclamation efforts. On air, Syncrude's greenhouse gas emissions arise from the use of energy, most notably natural gas in the production of crude oil. Since 1982, however, Syncrude has reduced its energy use per barrel by 39%.
Syncrude has also reduced sulphur dioxide emissions per barrel by about 60% since the early 1980s. Furthermore, in 2011 Syncrude will complete construction of a $1.6-billion sulphur emissions reduction plant, which will contribute another 60% reduction in sulphur dioxide emissions from the current approved levels and reduce, on top of that, particulate matter by 50%, despite increasing production rates.
Concerning water, Syncrude recycles 85% of the water it uses, with the remainder being lost to evaporation. Syncrude has reduced the water intensity of its process by more than half from its levels in 1980. Syncrude and other companies continue to research new extraction methods that do not require water.
Concerning community, Syncrude is one of the largest employers of aboriginal people in Canada, if not the largest; they represent 8% of our workforce. In addition, since 1992 Syncrude has conducted over $1.2 billion of business with local aboriginal companies, and Syncrude has donated over $18 million to community projects since 2005.
We also recognize that we need to do more. Syncrude has the only dedicated research and development facility in the oil sands industry and currently spends more than $50 million a year on research and development. It pioneered many of the industry's technologies to improve operations and environmental impacts. We will continue to invest heavily in new technologies to reduce the environmental impact of our operation. This commitment has been part of Syncrude for more than 30 years, and history has shown us that innovation holds the key to improved performance.
We need to ensure that the measurement and monitoring systems are effective and transparent and continually improving, and we need to continue to communicate with our stakeholders and stand up to the agenda-driven critics who mislead them with incomplete information. In addition, Canadian Oil Sands is contributing to the ongoing discussions regarding a Canadian energy strategy based on economy-wide solutions that focus equally on industry and consumers, on energy supply and energy demand.
Governments also have a role to play. It includes ensuring a continuing world-class regulatory system and standing up for Canada's record as a steward of the environment. They need to increase investment in technology, expand markets within the U.S. and offshore, and ensure fiscal and regulatory competitiveness necessary to attract capital and human talent.
Finally, I'd like to close by affirming my belief that the oil sands can and should contribute to Canadian energy security. In fact, it is our greatest opportunity. A lot of rhetoric surrounding energy and the environment focuses on the need to wean North America off oil and convert to renewables. As I said, development of renewables is important; I believe in it. But crude oil, specifically the oil sands, can act as a bridge to a future in which renewables play a much larger role. Given that over the coming decades, again, 70% to 80% of global energy needs will be met using coal, natural gas, and oil, Canada has the opportunity and indeed the responsibility to both provide that source of energy and to do it responsibly.
Crude oil will continue to play a critical role in the global economy, and Canada is indeed very fortunate to have the oil sands. Make no mistake, it is a national treasure.
Mr. Chairman and members of the committee, thank you for your time. I'm available to try to answer any questions you might have.