Canada’s Oil Sands: Prospects and Challenges for 2014

Peter MacConnachie 2014 March 13

Institute of the Americas Webinar PMacConnachie@suncor.com

Outline

• Current Views on Energy projects – Energy literacy – Energy as context – A crowded campaign

• What do you know about Suncor and the Oil sands? • Suncor’s Track Record • Rational Discussion about Energy

Calgary Herald Sunday Feb 22, 2009

It’s all about education about energy sources and our use of energy

Globe and Mail, 2010

A typical day at Suncor - List of Challenges

• Dirty Oil many misconceptions in public - Fastest growing source of GHG - Toxic emissions - Little / no reclamation • Impact on boreal forest; impact on wildlife habitat • Tailings Ponds > • Athabasca River impacts > • Downstream health > • No GHG Target or Federal regs • Market Access – concerns about P/L & rail

– Keystone XL – Northern Gateway – Line 9 & Energy East

• Renewable spending – small % of total capital • “No regulations” in Alberta • Economic & Social protests – Neil Young • etc, etc

• Canadian navel gazing in media?

Water Use – fundamental

to OS operations

Oilsands Review November 2011

The challenge is that we each have to develop our own opinion on oilsands and energy topics.

Energy Literacy

• Low interest in energy matters (except NIMBY) – Regional vs. national

• Energy companies are not: - good at responding to reports - good at writing headlines - good at getting our “story” out - very credible

Same event – 2 different approaches

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Brief Overview of Suncor and Oil Sands

• Suncor Strategy • Myths vs. headlines

– Balanced perspectives • Use sustainability as context

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Suncor strategy

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Oil Sands production technologies have significantly evolved

In Situ Example: Steam Assisted Gravity Drainage (80% of resource)

Mining (2% of area, 20% of resource)

Mining SAGD In-situ

Ore is close to surface (<200 m) Ore is deeper

Intensive land-use Extensive land-use

High yield per disturbed hectare Lower yield

High capital demands ($12-16 B) Lower capital ($3-5 B)

Access to H2O 2-4 bbl/bbl Approx 0.5 bbl/bbl

Land Disturbance & tailings ponds

Higher GHG per bbl; Cumulative effects

Oil Sands Industry Outlook Data

Source: CAPP 2013 Crude Oil Forecast, Markets and Transportation

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A look at rankings • We are Number 1 in Hockey • We are Number 1 in Curling • We are number 1 in Maple Syrup • We are number 1 in Donut shops/capita

• And ….

And now for some industry data

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Oil Sands: a significant resource

The Alberta oilsands contain total reserves of between 1.7 and 2.5 trillion barrels of crude bitumen. Approx. 171.3 billion barrels can be recovered using current technology.

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Source: Oil & Gas Journal Dec. 2013

Oil Sands vs. overall Canadian GHG emissions

Consumer consumption -> Majority of GHG emissions from life-cycle perspective

Crude Production 4 – 6 %

Refining 4 – 8 %

Distribution & retail 2%

Combustion 85%

Well to Tank

Total 15-25% of Life Cycle GHGs

Tank to Wheel

75-85%

*Adapted from Imperial Oil

Consumer/ vehicle

Issue

Oil Sands vs. global GHG emissions

Oil Sands GHG emissions compared to coal

We are in the midst of a transition away from fossil fuels, but it will take a long time

Cf. 50 years horse rails

60 years candles gas

Suncor’s Track Record

• Approach towards Sustainabilty • Reporting • Our goals and targets

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I’ve always believed the best conversations start by listening to the other person’s point of view. And though we may not agree on everything, we must agree on this: no one has a monopoly on good ideas. With a commitment to excellence and innovation, together we can build the sustainable energy future we all desire. - Steve Williams, 2012 Suncor Report on Sustainability

… our stakeholders want Suncor to be candid about our sustainability challenges and forthright about potential solutions. This report is one way we attempt to meet those expectations.

Another is Suncor’s longstanding willingness to engage in a dialogue with industry critics. We believe no one has a monopoly on good ideas and we will work with anyone who has constructive proposals for improved performance.

- Rick George, 2010 Suncor Report on Sustainability

I believe the key to meeting this challenge lies in substantially increased and improved collaboration. As an industry, we need to work together, and with our respective stakeholders, to ensure we develop energy in ways that enhance social and economic benefits for society, while minimizing cumulative environmental impacts.

- Rick George, 2011 Suncor Report on Sustainability

Heiltsuk First Nation

Why bother with Sustainability?

• Eliminate Waste / reduce expenses • Enhance Risk Management

– Companies assess risks through 3 lenses – Provides Internal and External perspectives

• Focus Innovation efforts • Increase understanding of Social Trends

– Helps companies inform and engage with stakeholders

Track record of excellence – External recognition

• Have issued 11 SD reports since 1997 • Used to issue separate CC report since 1995 • A constituent of the Dow Jones Sustainability Index for 12 consecutive

years. • Suncor has been a participant on the Carbon Disclosure Project (CDP)

since its inception. • A member of the FTSE4Good Index since 2001 • Winner of the President’s Award in the Canadian Association of Petroleum

Producer’s 2011 Responsible Canadian Energy Awards for TROTM tailings management process

• Named to Maclean’s /Jantzi-Sustainalytics’ 2010 list of Top 50 Socially Responsible Corporations in Canada

• Award of Excellence from the Canadian Institute of Chartered Accountants for Suncor’s 2009 Report on Sustainability. Suncor won the same award for the 2010 Report on Sustainability.

• IR Award for Corporate Social Responsibility three years in a row (2008/2009/2010)

• Ranked first among seven companies in Stratos’ 2008 Best Practices in Canadian Corporate Sustainability Reporting

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• The base year for the planned improvements is 2007. The goals were established in 2009, and our business units address them in the annual business and capital allocation planning cycles.

• ** Suncor has developed a 2015 energy efficiency performance target and a complementary longer term energy intensity goal.

Environmental Performance

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Collaborative efforts

• Tailings Collaboration – 7 companies sharing technology and collaborating on future

technology • Boreal Leadership Council

– protect at least 50% of the Boreal region – state-of-the-art stewardship practices in the remaining landscape – Issues include FPIC, Caribou, Shale Gas

• OSQAR http://osqar.suncor.com/ – Weekly newsletter and blog to provide perspective on OS issues.

• COSIA www.cosia.ca – 12 companies collaborating on environmental performance

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http://osqar.suncor.com/

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Why has COSIA been created? Our vision is enable responsible and sustainable growth of Canada’s Oil

Sands while delivering accelerated improvement in environmental performance through collaborative actions and innovation

Accelerate the pace of environmental performance through collaboration and innovation

Capture and implement the best thinking to address environmental challenges for the benefit of all companies in the oil sands sector

Break down barriers such as intellectual property (IP), human resources, and funding that would otherwise impede progress

Simplify the super-structure of environmental monitoring & amalgamate the work of existing innovation organizations into a single innovation entity

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Collaboration on Environmental Priorities

Collaborate

Choice Compete

Tailings Land

Recovery Process Alternative Energy Fundamental Research

Water Use & Quality Greenhouse Gases

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