Natural Resources Committee on May 16th, 2016

[The Chair, Liberal, James Maloney]

We're going to get things under way here.

There are a couple of things at the outset. We have an extended session today. We're going to be sitting until 6:30. We have three witnesses in the first hour and two in the second. Because of all of the cancellations we've had due to votes in the last series of Wednesdays, I asked our clerk to see if he could line up as many witnesses as he possibly could for today, which he was able to do on Thursday and Friday, which I thank him for. The notice that went out Friday didn't include all of the witnesses, so it's not just some of you who didn't know the names of all the witnesses until earlier today or late Friday; it was everybody. I'm grateful to everybody for co-operating.

Our first three witnesses are Steve Reynish from Suncor, Jordan Brennan from Unifor, and Chris Boivin from Sustainable Development Technology Canada.

I would like to thank all three of you for taking the time to be here today.

I would particularly like to thank you, Mr. Reynish, as this is the third time you've been kind enough to make yourself available to attend, which in itself is extraordinary, but in light of recent events in Fort McMurray, it's even more so. Thank you, sir, for doing that.

I'm going to open the floor to our three witnesses who will have up to 10 minutes each to make a presentation, and then we will follow that by opening the floor to questions. We should be finished the first segment around 5:30. We can suspend the meeting for a few moments. I suspect we can take care of some administrative business then, and then we can get on with the second set of witnesses.

Without any further ado, I will turn it over to our witnesses.

Mr. Reynish, since you have waited the longest, sir, I will let you start.

[Steve Reynish, Executive Vice-President, Strategy and Corporate Development, Suncor Energy Inc.]

Thank you, Mr. Chair, and good afternoon, everyone.

I appreciate the opportunity to appear before you today. I have deposited the full text of my statement with the committee clerk. I will try to shorten my remarks to allow more time for questions and further discussion.

My name is Steve Reynish, and I am the executive vice-president for strategy and corporate development with Suncor Energy, Canada's leading integrated energy company, employing over 10,000 Canadians from coast to coast.

The scheduled topic for today is the future of Canada's oil and gas, mining, and nuclear sectors, and how we, in the oil and gas sector, are adjusting to this new, lower-for-longer price environment, or as we sometimes refer to it in Calgary, “even lower for even longer”.

First, however, I would like to make some very brief remarks on the fires in northern Alberta and the impacts on the community and the industry. The safety and well-being of people remain the number one priority. Working together, government, industry, and local first nations have safely evacuated thousands of residents and workers. Oil sands companies have world-class safety procedures, experience, and expertise in managing these types of situations and in planning and executing safe shutdown and restart of their operations. Safety and the environment will continue to be our first priority as operations restart, and I am pleased to say some of that is under way now.

The impacts of the fire on Fort McMurray are significant, as you know. Thousands of residents have been displaced. While work is under way to begin the process of rebuilding the community of Fort McMurray—where my family and I lived for three years—it will take some time for the safe re-entry of citizens. In contrast, essentially none of the industrial locations have been physically impacted, to date, and much of the industry is now in the process of restarting operations.

It is important to remember that the industry is here for the long term. These are 50- to maybe 100-year assets, and they are being protected. The communities, the industry, and its people are resilient, and that resilience will allow the industry to return to full production and provide Canada and North America with the energy they need. In the weeks and months to come, industry will continue to work with governments, communities, first nations, and others to restore a thriving community in Fort McMurray.

I think the response to the fire brought out the very best qualities in Canadians. Their generosity in supporting those affected has been and continues to be tremendous. In the days, weeks, and months ahead, the residents of Fort McMurray will need our help and support. Based on the response so far, I know they will get it.

Finally, I know I speak for my colleagues when I say how very proud we are of the determination, spirit, and commitment that our employees and contractors have shown throughout this difficult period.

Now, let's turn to the big picture.

The oil and gas industry is vital to Canada's economy. It creates jobs, generates taxes, and provides for our energy needs. The magnitude and duration of low oil prices are having a significant impact on producers, suppliers, partners, and the wider economy. These effects are being reflected in impacts to real people, their families, and their businesses. It will take years to fully recover. We have all seen the very real effects of the downturn on the Canadian economy, and the knock-on effects of lower revenues to governments. At Suncor, our strategy continues to focus on being a low-cost, low-carbon oil sands producer.

There are two parts to this economic story: the immediate term and the medium-to-longer term.

The immediate term is about survival for the industry, and it is not one the industry will be coming out of soon. I believe we need to see global crude inventories significantly decrease over an extended period of time before oil prices recover.

At Suncor, our integrated business model, our strong focus on capital discipline, and a healthy balance sheet have positioned us to weather this difficult phase. To be frank, we believe that we are in a better position than many others, and we continue to maintain a relatively healthy balance sheet.

In the medium-to-longer term, the challenge will be growth. As I think everyone appreciates, growth equals job creation. Prior to the recent fire event, many producers had cut growth investment to zero.

At Suncor, however, we have maintained our commitment to advance two significant projects: the new Fort Hills mine in Alberta and the Hebron production facility off the coast of Newfoundland. In addition, we increased our ownership in the Syncrude oil sands operations earlier this year.

For this new construction, our goal is to avoid the value destruction associated with stopping and starting projects, and to take advantage of a lower-cost construction environment to ensure that these projects remain economically sustainable. This commitment has meant continued employment for many of our contractors and suppliers. For example, over the next number of months, Fort Hills will employ approximately 5,000 to 6,000 people as it moves into the peak construction period.

Unfortunately, others in our industry with higher debt or limited cash flow have had to defer or cancel long-term investment decisions for future growth projects. Both the price environment and the lack of market access have contributed to these decisions. There are real and long-lasting impacts. For example, all upstream producers lost money in the first two months of this year and, collectively, the industry data shows 40,000 direct job losses and something like 100,000 indirect job losses across Canada.

Also, let us not forget that pipeline capacity is still required to support the existing operations and current in-flight projects. The production and projects across the industry that are currently idled hope to be restarted, and the need for new pipelines has not been diminished. Quite simply, future job creation and new investment will depend on project economics, of which price is the single biggest factor.

Other factors, such as regulatory and fiscal certainty, market access, and the overall policy burden costs from different levels of government, play a key role. To illustrate this situation, the capital investment of Suncor's interests in the $15-billion Fort Hills project is $6.5 billion, and Suncor's investment in Hebron is over $3 billion. Construction on both of these projects is expected to be completed in the fourth quarter of 2017. Once these two projects are substantially complete, the order books for firms across Canada supplying products and services to these projects will be largely clear, and there are few new megaprojects, if any, on the horizon.

While the price environment has been challenging, Suncor has preserved its commitment to research and development and new technology. I know this is an area of interest for the committee.

Suncor spends approximately $200 million annually on new technology and innovation. These investments are aimed not only at improving economic competitiveness by reducing costs, but also at helping to minimize our environmental footprint related to water management and at reducing our greenhouse gas emissions.

We are unlikely to see new growth projects without the adoption of new technology, and governments and industry need to work to together through a robust R and D effort to reduce the carbon footprint and improve the economics of future oil sands development. In fact, in support of further technology and innovation development, Suncor has publicly supported a broad-based price on carbon.

In particular, we have actively supported the Alberta climate leadership plan, and our chief executive, Steve Williams, was part of the Canadian delegation in Paris for the COP21 discussions.

We look to government to continue to support a culture of innovation. This support should be in the form of direct investment in R and D, and ensuring an adaptive regulatory framework to allow for technology adoption.

Fortunately, the approach required for today is also relevant to the medium-to-longer term. For the industry to be viable in the longer term, our actions today must be part of a lifestyle change, not a crash diet. To be successful, we will need to work together with governments. This means ensuring that strong cohesive policy frameworks are in place to facilitate future development, particularly in securing market access.

We are increasingly in direct competition with our largest customer, the United States, and it is through this lens that we need to consider regulatory efficiency of our industry. Improving our takeaway capacity will improve the ability for corporations to continue to focus on growing, ultimately providing jobs and economic growth.

We want to work with government to ensure there is public confidence in the regulatory process. By addressing these issues and enabling infrastructure projects, we can finally start getting full value for Canada's resources.

Suncor remains committed to working with all governments on moving forward to a low-carbon future. We would encourage the government to consider how we can avoid double counting when setting targets in provincial jurisdictions, where efforts are already under way to reduce greenhouse gases.

With that, Mr. Chairman, I'd be pleased to answer any questions and elaborate on any points I have made.

Thank you very much for the opportunity.

[The Chair, Liberal, James Maloney]

Thank you very much, Mr. Reynish.

I'll turn it over to either one of you gentlemen.

Mr. Brennan.

[Jordan Brennan, Economist, Research Department, Unifor]

On behalf of Unifor, I want to thank the standing committee for allowing me to speak to you today.

Unifor is Canada's largest private sector labour union. We have over 310,000 members in 36 or so industries. We have 13,000 in oil and gas, all the way upstream in the extractive process, midstream in refining and manufacturing, and downstream in natural gas distribution.

We're in the process right now of developing a comprehensive national energy policy, but it is not yet finalized so I can't give you specific policy recommendations. But I want to bring some pertinent facts to your attention, and also some principles and the policy orientation that we're using to think about energy development in Canada.

Hydrocarbons—that's crude oil, natural gas, and coal—together make up 87% of global energy consumption. It's almost all of it. It's all fossil fuels. Renewable energy is only 2% right now. The single largest and most important fuel source is oil, and that's 33% of the global total. When Stephen Harper said that Canada was an energy superpower, he meant it in the context of world energy demand. We have the third-largest global reserves of oil, we're the fourth-largest producer of crude oil, we're the fifth-largest producer of natural gas, and the fourth-largest exporter of natural gas, so he wasn't lying when he said that.

If you look at Canada's actual production mix, nearly half of it is crude oil, 45%, and natural gas makes up a further third, at 34%. That's what we produce domestically. Again, overwhelmingly, it's hydrocarbon-based.

Our energy consumption is a little different. Again, the single largest fuel source is oil at 31%, and then natural gas at 28%. Those two, those industries we're describing here, constitute 60% of our consumption. Only 1.5% is renewable energy.

Now, Canada is actually uniquely blessed in our energy mix in that we have such a high degree of hydroelectric potential. When you look at hydroelectric, nuclear, and renewable energy, those three areas together are 35% of our consumption. Those are non-emitting fuel sources, and that proportion, 35%, is much higher than the global average. Globally, only 13% of consumption is non-emitting. In the EU, which is the champion for renewable energy and non-emitting, they're only at 24%. So even though we consume more than the EU, our consumption mix is much more tilted towards non-emitting sources.

I just want to bring the population of each jurisdiction in Canada, the proportional primary energy production, and the proportional consumption to your attention because 65%, two-thirds, of our energy is produced in Alberta. A further 22% is produced in Saskatchewan and British Columbia.

What do these facts mean? They mean three things at least. The world currently has an enormous appetite for hydrocarbons. Second, Canada has an abundance of these resources. Third, any talk of decarbonization is going to have a differential effect on people who live in western Canada, because decarbonization, effectively, means their economy, as most of it is produced up there. These are just the facts we're dealing with right here. I'm just trying to lay out some factual context.

Those three things are significant. When we look at the energy sector's contribution to Canadian prosperity, it's enormous. Ten per cent of our GDP is energy-related, so that puts it on par with manufacturing. When you restrict the focus to oil and gas, it's 7%. That may sound small small, but that's the whole finance and insurance industry, roughly 7%. That's the whole health care and social assistance sector—health, 7%. That's roughly the size of education.

Oil and gas is a major contributor to Canadian prosperity. It's outsized in terms of business investment. It constitutes roughly one-quarter of all business investment in Canada, and it is also outsized in terms of well-paying jobs. From a labour perspective, the average industrial wage in Canada is $23 an hour, so annualized you're looking at $46,000 a year. That's the Canadian average. In natural gas distribution, it's more like $36 an hour, so you're looking at more than a 50% premium on those jobs. In oil and gas extraction, in the extractive activities, it's fully double. You're looking at more like $45 an hour.

I say this because the energy industry is an important source of good-paying jobs.

Canada is a major exporter of oil and gas, of energy, but we're also dependent on foreign sources for our imports. We export 3.6 million barrels of oil per day, almost all of it going to the United States. Most of it goes unrefined. It's either bitumen or unrefined petroleum products. Only 15% of our exports are actually refined petroleum products.

We also import 1.2 million barrels of oil per day and that reflects the fact that our energy grid is positioned on a north-south axis. Western Canada ships most of its energy resources south to the United States, and central and eastern Canada import a lot of their energy. The United States is the single largest supplier, but also Saudi Arabia, Nigeria, Norway, and so on.

Canada's energy resources are of world historical significance. They're a source of geostrategic influence. This is part of the starting point of any conversation about decarbonization. Our civilization is built on this energy source, and there's no getting around that. Nearly 90% of our energy is fossil-fuel based. Unifor does recognize the severity of the challenge we face in terms of carbon emissions, pollution, and other forms of ecological devastation.

At the lowest level of resolution, Unifor believes that we can responsibility develop these energy resources, while respecting aboriginal treaty rights, and that would include, of course, consultation and full socio-economic participation, and we can meet our emissions targets as set out in Paris at the COP21.

The current development model for energy will not get us there. During the upswing of the commodities super cycle, during the energy boom, we dug this stuff out of the ground as fast we could, we shipped it off to whomever would buy it, mostly unprocessed, mostly unrefined, often purchasing it back in finished form.

To Unifor's way of thinking, every time we build a pipeline or expand pipeline capacity of unrefined, unprocessed energy resources, we are exporting good jobs. I'm going to circle back to that in just a moment. This gold rush mentality that we've had, you see the negative consequences of this in Alberta and you see it in Newfoundland. When prices are rising, everyone thinks this model looks good, when prices crash, as they inevitably do, everyone gets their second thoughts going.

I'm going to speed up a little bit here.

The key point I want to make is this. If the world is going to decarbonize, and if Canada is going to decarbonize along with it, we need to extract as much economic activity from these resources as possible. We should be trying to spin out as much as possible in the way of job creation and GDP growth if we're going to shrink our resource economic base.

If you look at Canada's refining capacity, just a few more facts, we have 10% of global reserves, 5% of global production, and 2% of refining capacity. We have been shutting down refineries. Between the early 1980s, at the end of the last boom, and the late 1990s, we shut down, on average, one refinery per year.

Even during the energy boom, we shut down four refineries. Our production has tripled since 1978 and our refining capacity today is lower than it was in 1978. We are shutting down all the good-paying jobs associated with refining these resources and just shipping them out as fast as possible. This represents a lost opportunity.

Unifor believes we should develop a national strategy to develop our resources responsibly. We should be drawing on the best practices of other energy jurisdictions in terms of conservation and efficiency, in terms of public ownership and regulatory oversight, consultation, security of supply, and maximal economic community benefit. I'll leave it at that.

Thank you for your attention.

[The Chair, Liberal, James Maloney]

Thank you very much.

Mr. Boivin, the floor is yours.

[Chris Boivin, Vice-President, Investments, Sustainable Development Technology Canada]

Thank you very much for having me here today.

I'm representing Sustainable Development Technology Canada. I am the vice-president of investments at SDTC. I have brought along with me some handouts. Hopefully, you've received copies of those, which I will be referring to at several points during my presentation.

I will apologize upfront. We did not have the time to translate them in advance. It was a bit short notice, but we will follow up with a translated deck for you, so you have that at your disposal.

In terms of what I'd like to cover today—

[The Chair, Liberal, James Maloney]

Just so committee members know, it has not been distributed because it has not been translated. We received it just before the meeting.

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

Do we have an English copy of it? We could ask for permission from members of the committee.

[Candice Bergen, Conservative, Portage—Lisgar, MB]

We can do that. We can ask for permission.

[The Chair, Liberal, James Maloney]

Is there any objection from the committee members if we get it copied while the presentation is being made and then distribute it?

Okay.

Mr. Boivin, perhaps you can proceed. We'll get this copied and distributed as quickly as possible.

[Chris Boivin]

Great. Thank you.

To begin, I'd like to provide a brief overview of SDTC. I'm not sure how many folks are familiar with us as a foundation. I'd also like to talk about some of the drivers we see in the sector, in the oil and gas sector specifically, for innovation. Finally, I'd like to give you an overview of some of the investments SDTC has made over the past 15 years in the sector, to get at some of the issues raised by some of my peers here.

SDTC was created in 2001 with the mandate of being a policy instrument of the government to deliver environmental and economic benefits to Canadians. We're to do that by fostering the development and demonstration of technological solutions that address climate change, clean air, clean water, and clean land or clean soil. We're also to forge innovative partnerships and build a sustainable development technology infrastructure within Canada, which is more than just the hardware, it's also the ecosystem. We're also to ensure timely diffusion—that is, increase the number and rate of uptake of technologies into the marketplace across Canada to provide national benefits. That's national economic and environmental benefits.

As our primary instrument in delivering on our mandate, we use the SD Tech Fund, which is essentially a granting instrument that has received allocations of $955 million from the federal government to date since 2001. That has been largely deployed to date or allocated to projects. We are sitting at roughly $850 million of investments across Canada's economic sectors.

We're registered as a not-for profit and we operate at arm's length but we are accountable to Parliament, formerly through the Minister of National Resources but now accountable through the Minister of Innovation, Science and Economic Development. We are governed by a board of 15 directors, seven of whom, including our chairman Jim Balsillie, are nominated by the Government of Canada.

Essentially the role of SDTC is to financially de-risk the development and demonstration of technologies. It has been studied for a long time and identified that a lack of capital flows into high-capex development and demonstration of technologies. SDTC's role within that is to buy down some of the financial risk and draw in some of the other financial parties so that these technologies can mature, become market-ready solutions and drive benefits to Canadians.

To date that $850 million from SDTC has been invested in 304 projects. That $850 million has leveraged $2.3 billion from partners. That's government and industry, but about 85% of that is industry. So it's primarily industry.

In terms of the sectoral spread of our funding, a significant portion has been deployed to the oil and gas sector. I would say an estimated 15% has been deployed to what we refer to as cleaner fossil fuel technologies. These are advanced extraction technologies, but also technologies that address some of the waste streams from production. We've also invested in some of the support infrastructure, significant investments in pipeline leak detection technologies, other safety measures associated with production and the pipelines, as well as technologies that are used in the service industry that support the oil and gas sector.

What do we see as the trends or the challenges for the sector and some of the issues we should have top of mind when we look at innovation going forward in that sector?

First I would refer to the OECD green growth indicators study from 2014, which ranks Canada's competitiveness on multi-units on a GDP basis. They looked at GDP productivity per unit of CO2, GDP productivity per unit of energy used, per unit of water withdrawal, and per unit of material consumption in production. Canada ranked not so well, not so favourably, according to the study, when compared with peers such as the United States, the U.K., France, Germany, Ireland, etc. We ranked 14 out of 15 on CO2 productivity, 15 out of 15 on energy productivity, nine out of 11 in water withdrawal productivity, and 11 out of 15 in terms of material consumption productivity on a GDP unit basis.

Furthermore, the world is getting increasingly competitive, as we all know, and there are some megatrends out there that will impact the competitiveness of the sector going forward. The IPCC estimates that we need to reduce emissions by 40% to 70% to avoid the significant impacts of climate change. There's an expectation of 90 trillion dollars' worth of infrastructure investment to achieve significant reductions in carbon emissions over the next 15 years.

China is launching a carbon market in 2017 addressing eight of its sectors. That's just around the corner and they are working closely with the EU to align their policy framework for their market with that of the EU's. It is expected to create a consolidated market in the five- to 10-year time frame.

Finally, a recent McKinsey study estimates that 25% to 40% of the world will be facing shortages in water, energy, and food. Obviously I'd like to highlight energy in that we sit on a lot of energy resources. We need to deploy them effectively.

What does that mean for the oil and gas industry, particularly in Canada?

Many of the speakers before me have indicated the estimates from NRCan are in the range of 8% of our GDP. It's therefore critical to adopt innovative and sustainable solutions to stay competitive. We need to continually improve and drive performance margins to maintain our position in the global competitive landscape, but resilience in the sector to ride through these big macroeconomic blips that we're seeing, particularly on the price of oil, will be tied to a triple bottom line. It's more than just cost-competitiveness. It's environmental and social competitiveness.

You can see globally that externalities are playing an increasing role in determining the viability of business opportunities. Whether it's the perceived carbon liability or social licence issues delaying the rollout of projects, which all adds to the capex and the deployment cost of new business opportunities, these are all coming to bear. For economic prosperity to be maintained in this fast-changing world, we'll need to address those three pillars: economic, environmental, and societal.

We've all seen just how dramatic the highs and lows of oil prices have been over the past 10 years. There's a lot of volatility. It's very difficult for any industry to navigate that kind of volatility. In terms of a different breakout of Canada's position within that volatility, we're looking at how we can hold on to market share within that volatility. What price point do we require to have significant margins and to retain Canadian economic benefits?

This chart illustrates the cost bands for different producers of oil across the world from different resource stocks, as well as the GHG emissions per barrel for the different production pathways. The grey blocks are the cost band. Horizontally, you have the volume of production attributed to each production source and then the I-shaped bars give you the spread of the GHG emissions for the respective sources of production routes of oil.

I would like to highlight the oil sands block, which clearly shows it has the highest range of cost of production, but also the highest range of GHG emissions per barrel of oil. This is obviously not an ideal position to be in when you deal with volatility and drastic price drops. The red line across the horizontal is roughly the current price point, the green line being the average production cost across those various grey blocks. We're well above both the average and the current price point.

SDTC's investment thesis in this space is all about driving that cost range down. The next chart essentially illustrates where we're targeting, both from a cost of production point of view but also from a GHG intensity point of view per barrel. We've made quite a few investments in this space since our inception to achieve those objectives, and we're open for business to invest in more.

In terms of an overview of SDTC's investments across the value chain, they go from exploration all the way to marketing and distribution. As I said, this represents roughly 15% of our funds, so about 150 million dollars' worth of investments in this space. When I say investments, I mean grants. We're are a non-dilutive instrument. We do not take an equity position in the companies that we fund.

A significant portion of our investments in the value chain has been in production, obviously. We've looked extensively at solvent-based extraction. We've looked at enhanced steam operations. We've looked at downhole steam production, which also drives significant efficiency advantages, but we've also looked at tailings management, reducing the net yield of tailings but also remediating them completely, as well as extracting more value out of those tailings, minerals, and other co-products.

Finally we've look at addressing the balance of plant, driving efficiency throughout the operations of production. We refer to upgrading and refining. SDTC also sees this as a very important space to play, all with the objective of retaining value for Canadians but also driving up efficiency. The more refined the product is before it gets in the pipeline, the more efficient its transport. The investments we've made in companies like MEG Energy, Fractal Systems, and Field Upgrading, are all targeted at partial upgrading to enhance the amount of margin retained by Canadian entities at the end of the day.

Also we've made significant investments in pipeline, pipeline integrity, pipeline leak detection, and even pipeline repairs in sensitive ecosystems as well as investments in downstream refining in companies such as Quantiam, lmtex, and Paradigm Shift Technologies, which are drastically reducing the energy intensity of creating chemical building blocks for industry.

[The Chair, Liberal, James Maloney]

Mr. Boivin, I'm going to have to ask you to wrap it up quickly.

[Chris Boivin]

My apologies. I can close it there and open to questions if we're really tight on time or I could go just a few full bullets on concluding remarks. It's up to you.

[The Chair, Liberal, James Maloney]

Just under a minute. How is that?

[Chris Boivin]

Sure, will do.

I'll just summarize what we think is important. Innovation we think is very important, but innovation that addresses the triple bottom line. Canadian oil sands are in a precarious position because of the cost and the GHG intensity. It's imperative that we continue to drive performance in that sector.

We strongly encourage investments in innovation, but we must recognize that it's not easy in the oil and gas sector. We're looking at significant capital that's already been deployed, sunk cost, so to speak. It's very difficult to change the practices of those facilities, but the timeline for new facilities is also very long, and the opportunity is now to build innovation into those new facilities going forward.

Thank you.

[The Chair, Liberal, James Maloney]

Thank you very much.

I'm going to open it for questions.

Mr. Lemieux, over to you.

[Denis Lemieux, Liberal, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Chair.

I'd like to thank the witnesses for their excellent presentations.

The committee is currently studying the relationship between the oil and gas industry and sustainable development. My questions are for Mr. Reynish, from Suncor.

Mr. Reynish, Suncor was a key industry contributor to Alberta's climate leadership plan and has made no bones about the fact that it supports putting a price on carbon.

Why is Suncor in favour of carbon pricing? In addition, where does your company stand on the repercussions of a carbon tax on Canada's oil and gas sector going forward?

[Steve Reynish]

You're right that we do support a general carbon pricing mechanism because we think this supports the proper market reaction in assessing how carbon affects the whole of our economy. We do think measures need to be taken. We think a broad-based carbon tax is the right way to do that, and we think Alberta is taking a leading role in putting that in place, so we're very supportive.

[Denis Lemieux, Liberal, Chicoutimi—Le Fjord, QC]

I also know that Suncor is present in Norway's energy market. I have personally studied Norway's energy management practices and Statoil's business model.

Why do you think Norway has become a model in getting its oil and gas resources to the marketplace? What is its recipe for success?

[Steve Reynish]

Yes, you're quite right. We do have upstream production facilities in Norway, so we are part of the Norwegian oil and gas sector. I'm afraid I don't have any quick insights into why Norway is so successful at doing what it's doing there, but we are part of the upstream part of that business.

I'm afraid I don't know the answer to your question. We'll have to get back to you on that one, with respect to the distribution of products.

[Denis Lemieux, Liberal, Chicoutimi—Le Fjord, QC]

Do you think the fact that Norway's government is so heavily involved in the oil and gas industry plays a role in the sector's ability to distribute oil products with ease?

[Steve Reynish]

Yes. I think the European situation is, perhaps, quite a bit different from the geographical challenges that we have. I think I would agree with you that participation from the Norwegian government in their oil and gas sector—and I understand it's a very close participation—does make them very knowledgeable and able to help and participate where appropriate. I think I'm agreeing with you on that.

[Denis Lemieux, Liberal, Chicoutimi—Le Fjord, QC]

Suncor is without a doubt a pioneer in Canada's oil sands development, operating three refineries in Canada.

Is Suncor directly involved in transporting its oil and gas products to the marketplace? If so, what involvement does it have? If not, why does the company not play a role in the transportation of its oil and gas products?

[Steve Reynish]

We are involved. We're involved in the full value chain of oil and petroleum products in Canada, and to some extent, in the U.S. We are an upstream producer of products. We upgrade that product. We transport it, either through some of our own pipes, or more generally, the pipes that are open to public participation.

We have three refineries in Canada and one in the U.S., as you rightly point out. We participate in the wholesale and retail markets in Canada through our Petro-Canada brand.

We operate right across the value chain. We also trade volumes across that chain, so we're very knowledgeable and participate in all aspects of that value chain, if I can put it that way.

[Denis Lemieux, Liberal, Chicoutimi—Le Fjord, QC]

Does Suncor export refined oil outside Canada?