The economic downturn that began in the fall of 2008 — depressed demand for oil, low commodity prices, and increasingly tight credit markets — required Suncor to carefully examine our spending priorities, particularly around our growth projects.

After careful review, Suncor announced in January 2009 a reduced capital spending plan of $3 billion (down from a previous plan of $6 billion) to ensure the company lived within our means during this period of market uncertainty.

Approximately one third of the 2009 budget is targeted for growth projects and the remainder for base business operations. With the revised plan, construction on Suncor's largest growth project, the Voyageur upgrader, and Firebag Stage 3 were wound down and the projects put in “safe mode” pending resumption of expansion work.

We are confident that in making this difficult but necessary strategic spending decision, we gain an opportunity to focus on getting full value from existing assets, as well as position the company for future growth. Safe, reliable, cost-effective and environmentally responsible performance will be key throughout this period as we watch for sustained energy prices and increased credit availability, among other signs, to signal opportunities for further growth.

Engaging our stakeholders

Suncor makes it a priority to engage stakeholders, helping them to learn more about our operations through a variety of means, including community newsletters, meetings and open houses. Our natural gas operations serve as a good example of working with stakeholders.

Wildcat Hills Sour Gas Well

After a year-and-a-half of meeting with stakeholders and completing regulatory requirements, Suncor received its license from the Alberta Energy Utilities Board (now Alberta Energy Resources Conservation Board) in late July 2007 to drill a horizontal critical sour gas well roughly 80 kilometres (50 miles) northwest of Calgary, Alberta. We received our license for the Wildcat Hills well without having to go to a hearing.

The well is located four kilometres (2.5 miles) northwest of the Summer Village of Waiparous and about 20 kilometres (12 miles) northwest of the town of Cochrane.

Due to the high interest in the project, Suncor held five public meetings in addition to many individual meetings with local residents, workers, government officials and local media to go over the drilling project, the environmental impact assessments and Suncor's emergency response plans.

Members from Suncor's asset team, facilities and production staff, geologists, surface land, and construction team all supported the stakeholder communication effort. Stakeholder relations staff gathered information from each of these areas and continued to meet with residents over the course of the drilling and completions period to help foster relationships with the community.

Suncor also provided assistance to the Summer Village of Waiparous in the development of the village's own emergency preparedness and response plan.

Taking a new look at stakeholder engagement at oil sands

With the increase in activity in the oil sands business and the concentration of development in the region in recent years, requests from industry to stakeholders to become engaged in consultation activities has become more of a burden for many stakeholders.

Stakeholders have struggled with time and capacity for meaningful discussions about individual projects, cumulative impacts and ongoing consultation activities. After the conclusion of the regulatory approval process for Suncor's Voyageur Upgrader and North Steepbank Extension Projects, Suncor revisited its stakeholder engagement strategies to examine opportunities to:

• introduce new processes that could potentially improve the quality of relationships and timeliness of its engagement activities
• maximize the benefits of limited time and resource availability for stakeholders

This analysis helped us consider some new approaches to some of our stakeholder engagement activities. We believe these new ideas are consistent with our guiding principles of stakeholder engagement and will help us:

• better fulfill our consultation requirements
• meet the needs and expectations of stakeholders
• improve the relationships and trust levels of stakeholders
• address the reality of the work load currently being faced by stakeholders

We are currently working with our key stakeholders on details as to what this approach might look like.

Seeing the possibilities by supporting research

Suncor's commitment to sustainable development extends to its support of research. Along with other oil sands developers, Suncor is supporting the Industrial Research Chair in Forest Land Reclamation at the University of Alberta in Edmonton.

The Chair, Dr. Simon Landhausser, will focus on finding ways to return disrupted sites to totally self-sustaining forest ecosystems, by redeveloping the forest canopies and the soils that support and maintain their growth. One of the main challenges of this initiative is to rapidly create an aspen tree canopy that in turn may accelerate reclamation of disturbed sites such as our mined-out areas.

Suncor is particularly interested in this research as it applies to our reclamation efforts. We have successfully reclaimed mined-out areas using boreal tree species like jack pine and white spruce, which are relatively slow to establish and grow to maturity. Using aspen may allow us to speed up the process by serving as a nurse crop for forest reclamation. A nurse crop protects slower-growing species, helping to establish a self-sustaining mixed wood boreal forest community.

Suncor is also providing land for field studies, equipment for planting and landscaping, and soil sampling and plant growth data.