Natural Resources Committee on Feb. 10th, 2011

[Glen Schmidt]

Flow of capital is important because of the size of the programs. What might surprise in 2011 is that the increased expenditures will actually be larger in conventional oil and gas. On the theme of technology, horizontal drilling and fracturing technology will see an addition of about $10 billion in incremental capital expended in 2011, whereas oil sands will only grow by $5 billion in investment.

Flow of capital to meet that growth is important, and as a country, but also as a company, so does ensuring that you have competition for capital. Competition for capital means that whether they are investors from Asia, the United States, or Europe, they are competing for a secure jurisdiction where they can have a good return. Canada offers a secure jurisdiction and an effective tax structure, and they seek that return. The flow of joint ventures, whether it's the recent announcement of Encana on gas or other projects, means that those various sources of capital compete, which allows companies like ours to attract that capital to not just develop production but to do our research.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Mr. Thomas-Muller raised the issue of first nations concerns. I wonder if your company engages, and how actively you engage, the Bigstone Cree Nation, which falls within your project.

[Glen Schmidt]

I think we did what Clayton suggested. We should start the discussion before we have any operations, so we did, about four years ago. We opened an office in the community, notwithstanding that there are larger companies in the region. It is staffed by people from the community. And we talk. We understand what their needs are. We've completed the traditional studies with respect to the chief and council. They have two councillors who are focused on us as a company. We try to respond to both to understand the questions they have, the business development they are seeking, and how effective we are in developing a project or in bringing it forward to application.

I think it really comes back to working within the community, and listening, before you launch an application or a program.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Would it be fair to say--would you agree with this comment--that it is a general principle among the industries to work with local aboriginal communities?

[Glen Schmidt]

I think every responsible company is focused on working within the communities they're in. The aboriginal communities in northern Alberta are the communities we're actively working with. Establishing a relationship of mutual respect is absolutely critical to a development.

I don't know of a responsible company that doesn't see that as an objective.

[Devinder Shory, Conservative, Calgary Northeast, AB]

I have another concern. Quite a few witnesses have raised their concerns about the amount of water from the Athabasca River being used. I'd like you to clarify whether there are any regulations on water use and the Athabasca River itself.

[Glen Schmidt]

We're not in the mining sector, which is the historical oil sands. There are a large number of regulations with respect to utilization of water from the Athabasca River.

What I know is that there are limitations with respect to low-flow periods. There are a number of areas with very specific regulations.

On the in situ side, where we are, there really is a prohibition, for commercial purposes, on drawing surface water. We are really going below to non-potable sources so that we don't have the impacts, which people are seeking to mitigate, with respect to withdrawals from the Athabasca.

[The Chair, Conservative, Leon Benoit]

Mr. Shory, your time is up.

We will end this part of our meeting and suspend for a while. Then we will come back to future business, which I don't think will take very long, but we'll see.

Before we suspend the meeting, I want to recognize that we have a couple of journalism students at the back of the room.

It's really good to have you here.

Thank you to all the witnesses for their presentations and for the answers to the questions today.

The meeting is suspended.

[Proceedings continue in camera]