Renewable Energy

Suncor is one of the largest players in renewable energy in Canada. By the end of 2012, we expect our existing and planned investments in renewable energy to total approximately $750 million.

Suncor Ripley Wind Power Project (Ripley, Ont.), renewable energy

Wind Power

Installed Wind CapacitySuncor is a Canadian pioneer in wind power, with six wind farms in operation. Two of those projects — the Kent Breeze wind farm in southern Ontario and the Wintering Hills wind farm near Drumheller, Alta. — came on-stream in 2011. We continue to evaluate new opportunities to build our wind energy portfolio, with projects in various states of development.

Ethanol

St. Clair Ethanol plant (Sarnia, Ont.), alternative energyWe also operate Canada’s largest ethanol production plant, near Sarnia, Ont. In February 2011, Suncor completed a $120 million expansion of the St. Clair ethanol facility, doubling its capacity to 400 million litres per year. In May, the plant achieved a production milestone of one billion litres of ethanol. And in December, Suncor received a Green Fuels Industry Award 2011 at the eighth annual Canadian Renewable Fuels Summit. The award recognizes outstanding Dedication to the Advancement of Renewable Fuels in Canada.

Our Commitment to Renewable Energy

It is estimated that Suncor’s combined renewable energy portfolio currently displaces about one million tonnes of carbon dioxide per year — the equivalent of the annual tailpipe emissions of about 200,000 cars.

“Developing renewable energy is a critical part of Suncor’s long-standing climate change action plan,” says Gord Lambert, vice-president sustainable development. “It is also part of our ‘parallel path’ approach to energy production. In other words, we are committed to responsibly developing the oil sands and other conventional sources of oil and gas, while investing some of our revenues in bringing along new sources of energy for the future.”

The company’s commitment to alternative energy is also a strategic business decision. Wind power and biofuels are some of the energy sources for the future — and Suncor wants to be among the providers as renewable energy becomes more commercially viable.

“The fact is investments in renewable energy don’t make the same economic rate of return as a pure oil play,” says Lambert. “But because we are in the energy development business very much for the long term, these investments make sense. As Wayne Gretzky once observed, success is about skating to where the puck is going to be, not just to where it has been.”

Perspectives: The Pros and Cons of Ethanol

Suncor has been blending ethanol in our retail fuels since 1992. Suncor opened the St. Clair Ethanol Plant in Mooretown, Ont., in 2006 and completed a $120 million expansion of that facility in 2011. The St. Clair plant has the capacity to produce 400 million litres of corn-based ethanol annually — double the facility’s original capacity.

The ethanol produced at the St. Clair plant is blended into Suncor’s Petro-Canada branded gasoline, providing a lower environmental impact than regular, non-ethanolized gasoline and ensuring Suncor meets government mandated blending standards.

In Canada, the Federal Renewable Fuel Regulations requires an average of 5% renewable ethanol content in gasoline across Canada, and more recently an average of 2% renewable fuel content in diesel fuel and heating distillate oil (compliance is required for renewable diesel by December 2012).

Industry Concerns

Some of the provinces have their own mandates for biofuel blending requirements, which necessitates Suncor to purchase from third parties to compliment our supply from our St Clair Ethanol Plant in Ontario. In 2011, Suncor blended an average of approximately 8% ethanol into our gasoline across Canada.

In recent years, some observers have raised concerns:

  • Creating ethanol-blended gasoline using corn feedstock could actually be more carbon and energy intensive than sticking with conventional petroleum
  • Corn production consumes unsustainable amounts of water and, by using corn for fuel, poor countries lose out on food as world prices are driven higher
  • Ethanol-blended gasoline has drivers re-fuelling more often because of reduced mileage per gallon

Environmental Benefits

However, there is growing evidence that biofuels such as ethanol are proven energy sources with demonstrable benefits.

The Conference Board of Canada concluded in a report titled “Ethanol’s Potential Contribution to Canada’s Transportation Sector” that:

  • ethanol reduces greenhouse gas (GHG) emissions relative to gasoline by between 40 and 62% depending on agricultural and production practices
  • improved farming techniques have significantly increased the average bushels of corn produced per acre, positively impacting water and fertilizer efficiency
  • today’s corn production is also more energy efficient and most of the corn produced is not suited for human consumption

Although 10% ethanol-blended gasoline has about 3% lower energy content than pure gasoline, it is an oxygenated fuel that has the ability to improve combustion efficiency in many vehicles. For most vehicles, this increased efficiency helps to offset the slightly lower energy content in the ethanol-blended gasoline. Using a 10% ethanol blend (E-10) does not significantly affect a vehicle's fuel economy. Overall, use of E-10 increases fuel consumption by an average of 2% compared with pure gasoline while driving at 120 kilometres per hour (km/h) rather than 100 km/h increases fuel consumption by an average of 20%.

Suncor believes it is appropriate to look at the full life cycle of ethanol production when discussing environmental benefits. In the case of Suncor's ethanol plant, we asked the Pembina Institute to conduct two Life Cycle Assessments (LCA), which looked at all of the energy inputs from the corn field to the gas pump.

From its assessment, which was independently verified by the U.S. government's Argonne National Laboratory, Pembina estimated that overall C02 emissions could be reduced by up to 300,000 tonnes per year by blending 10% ethanol from the original St. Clair plant into gasoline. With the completed expansion of the plant, that environmental benefit is expected to double. These estimates were more recently reconfirmed by internal calculations.

The type of corn used as feedstock at the St. Clair plant has traditionally been used to feed livestock. Once the sugars and starches are extracted from the corn to make ethanol, the remaining elements are used to make premium cattle feed.

Suncor believes the St. Clair plant's ethanol production is best-in-class. This is based on the feedstock, technology and energy used to manufacture ethanol, and the fact that we produce an environmentally friendly by-product (i.e., material left over in the production process is used as animal feedstock).

That said, as technical advances allow us to make ethanol from plants we don’t typically eat, biofuels are destined to get even better. The goal is to make bio ethanol from non-food crops or, better still, from marginal or non-edible plants such as grasses. Using so-called cellulosic ethanol, it is estimated E85 fuel would emit 63% less greenhouse gas emissions than conventional gasoline.

Suncor is at the leading edge of the biofuels industry in Canada. We recognize it is an evolving field, with technological advances being made every day. We remain committed to our renewable energy business and believe that the biofuels industry is here to stay.