Suncor's Performance Goals

As part of Suncor's ongoing commitment to environmental stewardship, the company recently adopted a series of strategic environmental performance goals. The base year for the planned improvements is 2007. The goals were established in 2009 and our business units will begin to address them in the 2010 planning cycle. The goals take into account improvements to existing operations as well as new technologies.

Suncor is looking at a five-year timeframe for implementation because achieving these performance goals will require significant effort, resources (capital investments and people) and a focus on operational excellence. To succeed, we will need to assign the right resources at the right time.

These goals relate to Suncor's current assets. In March 2009, Suncor announced a proposed merger with Petro-Canada. As this proposed transaction requires shareholder and regulatory approval and review by the Canadian Competition Bureau, Petro-Canada assets have not been included. Assets in the newly merged company will be reviewed if and when the merger transaction is complete.

All of the proposed reductions are absolute, except for energy efficiency which is intensity-based. We are planning to achieve these goals even as our production rates grow. Due to the recent global financial turmoil, the pace of growth over the next five years is difficult to predict. The more we grow, the more challenging it will become to achieve the proposed reductions. But we will strive to do just that.

Each of these goals relate to significant aspects of Suncor's environmental performance. Through a series of planning meetings with senior executives, these goals were identified as priority measures to address business and environmental risks, concerns expressed by stakeholders, and a means to further our commitment to sustainability.

What follows is a brief description of Suncor's four environmental performance goals and what will be required to accomplish them.

1. Reduce water intake by 12 percent by 2015

Suncor's total water use (the amount of fresh water withdrawn minus the amount of water returned to freshwater sources) was 29.7 million cubic metres in 2007. Our oil sands operations accounted for all of this water use (while Refining & Marketing U.S.A. and Natural Gas recorded a combined net use of 1.13 million cubic metres, Refining & Marketing Canada recorded a net return to the St. Clair River of 3.37 million cubic metres).

Suncor's new water management plan is central to the proposed 12 percent reduction in water intake. Equally critical are advances in tailings technologies that will allow us to more quickly reclaim our tailings ponds, significantly reducing the need for fresh water. New water treatment technologies are being developed at our oil sands operations that will ultimately allow us to use all of our wastewater in the most efficient and responsible manner possible. These volumes will either be recycled in our operations or cleaned up and returned to the Athabasca River.

Suncor is also implementing improved training and operating practices that will focus on water conservation and the operation of highly integrated water processes. This proposed water use reduction goal will require a capital investment of approximately $100 million.

2. Increase reclamation of disturbed land area by 100 percent by 2015

Since 1967, Suncor's operations have disturbed approximately 17,749 hectares of land. By the end of 2008, we had reclaimed approximately 1,019 hectares, or about 5.7 percent of that total.

Since 2008, Suncor has reclaimed approximately 55 hectares of disturbed land annually. To achieve the proposed 100 percent increase in land reclamation by 2015, we will have to significantly increase our yearly performance—a major undertaking.

A dedicated reclamation team will focus on realizing this performance goal. They will pursue progressive reclamation techniques that reclaim disturbed lands as they are created. They will also continue to advance new tailings technologies that could allow us to more quickly reclaim existing tailings ponds and potentially eliminate the need for new tailings ponds.

3. Improve energy efficiency by 10 percent by 2015

For every barrel of oil Suncor produces, we consume approximately 0.897 gigajoules of energy, mostly natural gas. Our energy use challenge is compounded by the fact that in situ production, a growing part of our business, is more energy intensive than traditional mining.

We believe we can achieve the proposed 10 percent reduction through better operating practices and improved reliability, which are part of our operational excellence strategy, as well as some capital project investment. Subsequent reductions after 2015 will require further capital investment.

4. Reduce current air emissions by 10 percent by 2015

Suncor's combined emissions of sulphur dioxide (SO2), nitrogen oxide (NOx) and volatile organic compounds (VOCs) totaled 86,450 tonnes in 2007. Oil sands accounted for 86.5 percent of all such emissions.

We believe we can achieve the proposed 10 percent reduction through better operating practices and improved reliability through operational excellence. We will also implement small projects that focus emissions-reducing technologies on key issue areas.

But the proposed goal is challenging. To meet the expectations of regulators and our stakeholders, we have already invested in technologies that have significantly reduced (and, in some cases, almost eliminated) SO2, NOx and VOC emissions in many parts of our operations. To realize further emissions cuts we expect to invest in new equipment such as low NOx burners, low NOx diesel engines for mine trucks, increased leak detection and repair monitoring, technologies to further reduce diluent losses to tailings ponds (a source of VOC emissions), and other innovations as they are developed.

Other Efforts

In addition to the four long-term performance goals described above, we will also work to align our current GHG strategy to address emerging climate change policies by 2010. This, in turn, will help us clarify our long term goals.

Suncor is working to refine our existing climate change action plan to deal with emerging public policies, including the “cap-and-trade” system for reducing greenhouse gas (GHG) emissions supported by U.S. President Barack Obama. Suncor has assembled a team of experts to review the potential implications of these policies and how we will respond to them and clarify our long term GHG targets. It's expected their findings will be reviewed by Suncor's Executive Committee later in 2009 for approval and implementation.

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