Natural Resources Committee on Feb. 8th, 2011

[Joe Marushack]

Thank you, Mr. Chair.

First and foremost, many of the communities where we have not only our oil sands but also our gas operations are aboriginal communities. They are communities that don't have a lot of industry right now. So the biggest immediate benefit is to provide those particular jobs to the local communities. That requires training; that's the second thing. Generally, when we go up and we're in a new area, we do try to provide some education support, some community support, some training support. In addition to that, then, we take large contracts and we break them down into a small size so that an individual can buy a tractor and then do some clearing, or buy a welding machine and do some welding. We try to figure out how we can best provide the most amount of legitimate work in those communities where we operate. And it's not just the oil sands; it's all the gas properties as well.

[Devinder Shory, Conservative, Calgary Northeast, AB]

The second question is to you, and maybe Mr. Tertzakian can answer as well.

We are expanding all our trade relations with numerous countries, specifically in the Asian markets. Given that, give us an idea of what the Asian markets mean to our oil sands.

[The Chair, Conservative, Leon Benoit]

Mr. Marushack, go ahead.

[Joe Marushack]

I'm sorry, the question again was what does...?

[Devinder Shory, Conservative, Calgary Northeast, AB]

What does it mean to the oil sands when we are expanding our trade relations with the Asian markets?

[Joe Marushack]

I think, as Mr. Tertzakian said, generally when foreign investors come in they bring capital with them. A lot of the Canadian companies have the expertise right now to develop these, so the foreign companies are coming in trying to develop.... First of all, we've got a great asset base. We've got a secure government system. We've got rule of law. In a lot of places, this doesn't happen.

We've got a lot to build on, so they're wanting to invest in those assets. Then in the long term I think they would probably like to see access to those resources coming into their countries, to shore up and provide some energy security to their countries as well.

[The Chair, Conservative, Leon Benoit]

Mr. Tertzakian, would you like to answer that as well?

[Peter Tertzakian]

I don't have much to add; I think Mr. Marushack answered it.

[The Chair, Conservative, Leon Benoit]

Mr. Hoback.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Mr. Chair.

I want to welcome everybody here again, on behalf of my riding of Prince Albert. Believe it or not, even though we're in Saskatchewan, the oil sands impact us hugely.

The city of Prince Albert had its pulp mill shut down a few years ago. I think most of those employees were absorbed into the oil sands, but their families stayed in my riding. They stayed in Prince Albert; they wanted to raise their families there. They do the week in or two weeks out.

You've been very flexible in allowing employees to create a structure that works for their family needs plus their employment needs.

You talked about education and employment and getting skilled workers. One of the things we're doing out of Cumberland College is just that. We're doing it with aboriginal workers, bringing in the kids who are coming out of the reserves of the north and teaching them construction tools. By tools, I mean the big trucks, the graders—the heavy equipment stuff.

What type of other training are you providing or looking at for skills as new developments come forward? Are we going to see the proper type of education coming out of the universities? Are we seeing the proper kind of education coming out of the trade schools? As we go forward, we're going to see more and more complex ideas possibly being formulated. Do we have the skill sets to handle that?

[The Chair, Conservative, Leon Benoit]

Mr. Marushack.

[Joe Marushack]

Yes, I believe we do. I think we need more of everything. The basic education system we've got in Canada—all the way from grade school to the trade schools, the unions, the colleges—provides lots of opportunities for folks. We just need more of those.

I will say, though, that I have a son who's in college right now, and I've tried to stress this to him. They don't teach this in college very well. The most important thing I believe we need to stress, to any level, is safety—safety culture, making sure you're not doing anything that puts you or a fellow worker at risk—and protection of the environment. That is our licence to operate.

If you join ConocoPhillips, we spend a lot of time working on those. When we go out to the communities, we talk about how important those things are as well.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Hoback.

We can go for about two minutes in the final round, so if you could just have short snappers....

Mr. Andrews, up to two minutes.

[Scott Andrews, Liberal, Avalon, NL]

Thank you very much, Mr. Chair.

My question is for you, Mr. Tertzakian. In your opening statement you talked about maximizing benefits and how we're not doing a very good job of that, and I think in the last question from Mr. Pomerleau you alluded to it.

Could you expand on where you see us maximizing benefits and how we can do that? If you were to write a recommendation from this committee for government, what action will we have to take so we can maximize our benefits from the oil sands?

[The Chair, Conservative, Leon Benoit]

Mr. Tertzakian, go ahead.

[Peter Tertzakian]

It's just a simple recommendation. The federal and provincial governments and industry together I think have to work at a fairly quick pace to expand market access to our oil and gas commodities off the west coast to international markets.

I'll repeat the number. We generate $100 billion of revenue a year from these products. If we're losing even 10%, it's $10 billion a year. If you multiply that by a 20% royalty rate, that's $2 billion a year right there. And that doesn't include the taxes and all the derivative benefits.

[Scott Andrews, Liberal, Avalon, NL]

I have a quick question for Elizabeth. Did your advisory panel make any recommendations regarding the Athabasca River and the water monitoring there, and what were the specific recommendations on how we can improve that situation?

[Elizabeth Dowdeswell]

No, we did not look at specific monitoring sites and make recommendations specific to them. We were designing the overarching system, and I believe Environment Canada is now looking at a plan to look at specific sites.

[Scott Andrews, Liberal, Avalon, NL]

So you didn't look at the river specifically at all?

[Elizabeth Dowdeswell]

Oh yes, we certainly visited. We did not, however, get into the detail. We could not get into the detail of the specific technology that was being used or the specific locations where the monitoring was being done, and we did not undertake to design the details of the monitoring system.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Andrews.

Mr. Harris, you have two minutes.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Thank you, Mr. Chair.

Mr. Marushack, there's a reasonable amount of criticism from activist groups that would just prefer to see the oil sands shut down for reasons of their own. I just can't imagine being able to operate in a country like Canada without paying particular attention to the environmental regulations that our country has, and Ms. Dowdeswell probably shares that view. But what I need to know is whether in your company, ConocoPhillips, your environmental people are working, on an active day-to-day basis, with the regulatory people, not only to try to make sure you're in compliance all the time, but to even strengthen the environmental regulations so that they lessen the impact of the footprint and the environmental impact.

[Joe Marushack]

We have something like 12,000 gas wells in western Canada in all of our operations in the oil sands. We have a small army of folks who work on a day-to-day basis to make sure we're environmentally compliant in what we're doing. We're also working on trying to make sure the laws and regulations that are passed do make sense. We believe in transparency. We believe in providing data that is clear. We actually believe that the better the information that comes out, the better it will be for the industry. So, yes, we're very supportive of that. We also work with CAPP and all the other different groups out there on better regulatory environments.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Thank you very much.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Harris.

Mr. Anderson, you have two minutes.