Natural Resources Committee on Feb. 5th, 2013

[John Gilleland]

We've given consideration to it, and I cannot pretend I can predict social response that far into the future. Therefore, our approach has been to try to develop this reactor in countries that have nuclear expertise, but to design a reactor that one of my Korean colleagues said is socially responsible to export. For example, this particular type of reactor could be received and operated without the need for a sophisticated infrastructure, and it would have these inherent safety features that we mentioned.

The attempt is to formulate and develop and demonstrate a reactor that is as close technically as you can get to something that an unsophisticated infrastructure could accept. That's the best answer I can give you.

[Joan Crockatt, Conservative, Calgary Centre, AB]

What essentially is the barrier, then? Is it just technological at this point?

[John Gilleland]

The barrier is the length of time it takes to show the device operates as you predict. There's this profound enhancement and modelling capability, a huge database that was not available in the previous century, and these side tests that you can do. The barrier, basically, is to find the sponsor and be up and running, and to build this thing efficiently.

We're thinking that in the end it will take state money, not just the money of visionary investors, to build this device. The 2022 schedule assumes that some state does indeed step in to support it.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Thank you.

I'm going to turn my time back to the chair now.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Ms. Crockatt.

Mr. Leef, you have about four minutes. We have to get out to the vote soon.

[Ryan Leef, Conservative, Yukon, YT]

Thank you, Mr. Chair.

I'm on the record thanking Mr. Julian for his cooperation and good nature today.

[The Chair, Conservative, Leon Benoit]

Such cooperation.

[Ryan Leef, Conservative, Yukon, YT]

My question will be for Mr. Rovang, before my colleagues get distracted because of these votes and we all have to rush out.

There was a question posed a bit earlier with respect to the SR and ED tax credits. There's an implication that research and development is done because it's incentivized. I'm wondering if I could get you to project the future for your company in continuing to invest in R and D.

I noticed in your presentation that you put $60 million into environmental research. Was that to improve the bottom line? Is that to simply comply with regulations that exist? Is that for a corporate social licence, or is that investment also because it embodies the corporate values of today's industry, or a combination thereof? With those questions in mind, I wonder if you can project the future investment picture in terms of environmental research and development.

[Glen Rovang]

You hit a couple of the answers actually in your question, but research and development for Syncrude is certainly in our DNA. We started as a research and development organization long before the company was the much larger company of today, back in 1964 with our 30 employees of Syncrude.

Certainly, our research efforts are targeted toward those areas I spoke about, the environmental areas, so environmental and tailings management are key, but it's also continued efficiencies that have benefits in emissions and also in profitability. And we continue to work on new and better processes, especially in our core technologies, which are really those that are key to our operation and that we have developed. We need to continue to improve those.

I don't see that we would stop pursuing these. In fact, innovation for us is key to our environmental performance, to our social licence, and to our ongoing profitability and good business sense. So for Syncrude, yes, research is in the future.

On your comment on incentivized research, we do research for those reasons. It's good business and it's good for sustainable operations and for improvement in performance, not necessarily for external incentives, while those do help.

[Ryan Leef, Conservative, Yukon, YT]

Gentlemen, thank you very much to both of you for your time today.

[The Chair, Conservative, Leon Benoit]

I want to thank you both very much. This is fascinating information. It will be very helpful for our study. Thank you very much, Mr. Gilleland, from TerraPower, and Mr. Rovang, from Syncrude.

The meeting is adjourned.