Thank you, Mr. Chair.
First, let me say that Gordon Lambert, our vice-president of sustainability, intended to be here today. Unfortunately, he's quite ill. I've been asked to stand in for him, given my previous role as general manager of tailings operations in Fort McMurray, as well as the fact that I spent the previous four years implementing our TRO technology on site. I am going to read from some prepared remarks and take questions afterwards.
Good afternoon, Mr. Chair and members of the committee. It's a pleasure to be here as part of this important discussion on innovation in the energy sector.
At the outset, I wish to extend my congratulations to the committee for the great work that it has been carrying out over the past few years. The committee has looked at a number of interesting issues, all of which are leading to increased understanding and appreciation for the tremendous work being carried out in Canada's energy sector. Suncor is proud to have been part of some of your earlier studies, and we are equally proud to be part of this one today.
Suncor has had the pleasure of hosting several of the members of this committee on tours of our oil sands operations, including our reclamation activities and, more specifically, our tailings management. As such, we are pleased to be here to offer insight and further understanding on TRO.
As a starting point, I thought I would take a few minutes to talk about Suncor and then address our approach to tailings management. Suncor is Canada's largest integrated energy company and, while we pioneered the development of oil sands in 1967, our operations now include upgrading, conventional and offshore production, both on Canada's east coast and in the North Sea, and our refining and marketing business, which operates four refineries as well, in Edmonton, Sarnia, Montreal, and Denver.
For many of you, I hope we're known as Canada's gas station, retailing products through a network of 1,500 stations under our Petro-Canada brand.
We're also very proud of our growing renewable business, with six wind farms now in operation in Alberta, Saskatchewan, and Ontario, and Canada's largest biofuels facility and ethanol plant in Sarnia.
While we maintain a significant scope of operations, it's our integrated business model—all pieces fitting together—that helps us drive value for our shareholders, spur investment in the resource, and contribute to the economy through jobs, taxes, and royalties.
Clearly, the biggest single challenge to our industry's continued success is demonstrating that we are developing and can continue to develop the oil sands in ways that minimize our impact on precious air, land, and water resources. The good news is that we're making significant progress.
On the air front, our industry is working hard to address carbon emissions. Compared to 1990, the oil sands industry as a whole has reduced energy emissions intensity by a third. That puts us among North American leaders on this front, along with the steel industry in Ontario.
Water use within the industry continues to decline. As an example, Suncor has reduced water use at our oil sands operations by 50% since 2004. Despite bitumen production nearly tripling, our water use is below 1998 levels.
If anyone doubts our industry's ability to drive positive change, consider what we're doing on tailings ponds. All mining operations produce a waste product known as tailings. For the oil sands industry, the sheer volume of tailings and the fact that they're difficult to solidify has meant building more and more holding ponds. To put it bluntly, the ponds are big, unsightly, and difficult to reclaim. However, we are making game-changing progress when it comes to tailings ponds. Allow me to quickly review for you our tailings challenge.
Tailings are leftover mixtures of fine clay, sand, water, and residual bitumen that are produced during the extraction process which separates the bitumen from the oil sand. Tailings are pumped into holding ponds, where the solids settle from the water.
The heaviest material, mostly sand, settles to the bottom. Water rises to the top, and the middle layer, mature fine tailings or MFT, is made up of fine clay particles suspended in water. Some of these MFT particles settle, but most remain suspended in water. MFT takes many decades to consolidate to a state where it can be reclaimed. As a result, Suncor has required more and larger tailings ponds over the years to store MFT, but these ponds take up space and are a significant environmental footprint.
In response to this enormous challenge, Suncor implemented a new tailings management technology that promises to dramatically accelerate the pace of reclamation. TRO is a new dewatering process developed by our company that will reduce our tailings backlog and the need for future ponds. It should also allow us to reclaim entire mine sites in one third of the time it now takes. Implementing the TRO process involves converting fluid tailings, the leftover material produced through the extraction process, into solid landscapes at a faster rate. To accelerate the speed at which the solid landscapes are formed, MFT is combined with a polymer that causes clay particles to bundle and separate from the water. The MFT mixture is then deposited in thin layers over sandbanks with shallow slopes to dewater. Water released during this process evaporates or drains back into the settling pond for reuse in the extraction process. Once the MFT has dewatered, it is capable of being reclaimed in place or removed to another location for final reclamation. At the end of 2012, we will have spent more than $1.2 billion to implement this technology.
Because tailings management is an industry-wide concern, all seven oil sands companies currently running mine operations have committed to an unprecedented level of cooperation on this issue. Suncor, for its part, has agreed to share its patented technology with industry competitors as well as university and government scientists so the environmental benefits can be maximized. The progress we are making on tailings is something we believe we can repeat in other areas including greenhouse gas intensity and water-use reduction and discovery of more efficient energy sources to power our operation.
We look forward to accelerating environmental improvements. In early 2012, along with other oil sands producers, we announced the creation of Canada’s Oil Sands Innovation Alliance or COSIA. To our knowledge COSIA is the largest collaborative effort of its kind in any industry anywhere in the world. But collaboration on our energy future must go well beyond industry alliances. We need to involve every sector of our economy and all our citizens in an informed, fact-based dialogue about the path forward.
Suncor has a strong track record of engaging with communities and stakeholders including critics of the oil sands industry. We believe that no one has a monopoly on good ideas. When it comes to our shared energy future, we need to get past our differences to that which unites us: strong communities, a healthy environment, and ample economic opportunity for the future. By listening closely to the concerns of our stakeholders and responding in an appropriate and timely manner, we are working to build bridges rather than walls.
As many here know, success in the energy industry is achieved by taking a long-term view. Not only are we collaborating on environmental performance but we’re also working on a world-class water monitoring system, facilitating discussions on a national energy strategy, working together on socio-economic impacts, and more. Our industry is responding to our stakeholders and changing the way we do business.
I’m confident that by working with our stakeholders and finding workable solutions to environmental and market-access questions, we can continue to be a strong force in the Canadian and global economies.
On behalf of Suncor, I appreciate the opportunity to be part of the committee’s study and look forward to any questions you may have.
Thank you.