Encouraging a healthy debate about energy solutions – read about Suncor’s stance on various public policy issues in the 2014 Report on sustainability

Suncor’s participation in public policy development – 2014 Report on sustainability

Suncor is an active participant in public policy development, from environmental and economic issues to social policies – find out more in the 2014 Report on sustainability

Encouraging a healthy debate about energy solutions – read about Suncor’s stance on various public policy issues in the 2014 Report on sustainability

View the latest Report on Sustainability

Public policy participation

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We are active participants in public policy discussions on energy and the environment, and regularly communicate with governments in the jurisdictions where we operate.

As part of this communication, we are required to comply with all political contribution and lobbying regulations, and report government interactions consistent with the law and company policies.

We support governments taking a reasoned approach to policy development. We believe policy should be built on evidence-based information and perspectives.

Education and the development of clear solutions are critical in our interaction with government. These activities ultimately promote the responsible development of existing and new energy sources. By working to reduce the current level of polarization, we decrease the probability for ad hoc or reactive policy development.

Relevant topics in our communication with governments include:

  • encouraging a healthy debate about energy solutions
  • understanding the role of advancements in research and innovation
  • considering the cost and benefit of energy development and distribution
  • meeting demand for skilled labour by matching skill development with job requirements
  • encouraging Aboriginal economic collaboration and capacity building
  • developing vibrant, sustainable communities
  • supporting Canada’s long-term prosperity

The following is a snapshot of some of our thoughts and opinions.

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Economic policy

Royalties and taxes

Royalties and taxes should deliver a fair return to government while providing industry with a competitive, stable and predictable fiscal framework on which to base long-term investment decisions. Policies should recognize market factors, such as the challenges faced by corporations competing in a global economy. Levies added over and above current royalties and taxes need to be holistically considered and understood in terms of costs, outcomes and competitiveness.

Transparency

Governments are demanding that resource companies start to report payments they make to foreign governments. We advocate for rules that are consistently applied and respect agreements with First Nations.

Cumulative impact of policy changes

We are currently studying the expected cost increases that result from recent and proposed policy changes. The findings from this study will be used to inform our perspective in the energy debate. They will also help us reflect on opportunities from a more holistic standpoint, allowing us to fully consider policy benefits and focus on how to incent constructive outcomes.

Market access

There are several proposals for new or expanded pipelines across the country and into the United States that would take oil sands supply to markets. They face significant public scrutiny with concerns being raised about pipeline and marine safety, First Nations rights and their strong relationships to local ecosystems, and broader objections about enabling the North American economy’s reliance on fossil fuels. We are working with stakeholders to address many of these concerns from a producer’s perspective and are engaged with governments to the same extent.

There is a comprehensive and robust regulatory framework in place that governs the development and operation of pipelines and other large infrastructure projects. The key is to ensure infrastructure development is done responsibly and that the respective regulatory bodies are resourced and empowered to deliver this result within an efficient, transparent and effective process.

Social policy

Local community capacity

We, in co-operation with industry partners and local business associations, have been working with the Regional Municipality of Wood Buffalo in northeast Alberta to better forecast future population growth and infrastructure needs. Building non-profit capacity and supporting key community initiatives – such as the MacDonald Island Park expansion and the 2015 Western Canada Summer Games – continue to be an important component of our work in the region. We also actively participate in the Athabasca Oil Sands Area Transportation Coordinating Committee, where infrastructure needs, funding and financing options are discussed and prioritized.

Read more about community investment

Skilled labour

Demand for skilled labour in the resource sector and across Canada has continued to grow. We believe finding the right people to meet this need involves a balance of employer-led strategies, industry-led programs, government programs and investment in training and educational partnerships. We continue to work with policy developers to optimize relevant programs. When optimizing programs and/or developing new ones, our priority and the priority of the government should be:

  • hiring available and skilled Canadians
  • enabling the mobility of labour within Canada
  • creating opportunities for under-skilled Canadians and for those under-represented in our sector

Over the past year, new policies related to temporary foreign workers and the Canada Job Grant have begun to emerge. We would like to see these policies offer greater incentive to improve labour mobility and promote increased use of non-traditional labour sources.

Read more about skilled labour

Aboriginal consultation in Alberta

A new consultation protocol was legislated across Alberta in 2013. A new consultation office was also established. We support these actions and expect they will benefit both industry and First Nations communities impacted by development.

Read more about Aboriginal relations

Environment policy

Lower Athabasca Regional Plan

In 2007, the Alberta and Canadian governments introduced the Phase I Water Management Framework for the Athabasca River, which set new restrictions on how much water the oil sands industry could cumulatively withdraw from the river during varying flow conditions – in particular, during low flow periods in the winter.

The Lower Athabasca Regional Plan Surface Water Quantity Framework, announced by Alberta Environment and Sustainable Resource Development in November 2013 (and scheduled to come into force in late 2014 or 2015) includes an ecosystem base flow (EBF), which defines a flow rate of 87 cubic metres per second as the level at which most water withdrawals would cease if there is significant risk of harm to river biodiversity.

The EBF would require operators to cease withdrawing from the Athabasca River and rely entirely on stored water to continue operating. The exceptions are us and Syncrude, which due to legacy plant designs are unable to store the water required to completely cease water withdrawals. However, we have both agreed to reduce our withdrawal rate by 50% at the prescribed base flow rate.

The reason for the exemption for Canada’s two oldest oil sands operators is that our licences were granted in the 1960s and 1970s based on the way plants were designed then, without on-site water storage facilities. So our mining operations as well as Syncrude’s, as conducted currently, cannot operate without at least some fresh water intake, especially in the winter. On-site water storage facilities are part of newer oil sands mine licences, as well as planned ones.

In 2012, the Government of Canada and the Government of Alberta launched the Joint Canada-Alberta Implementation Plan for Oil Sands Monitoring. The plan, to be jointly managed by the two governments, strengthens existing environmental monitoring programs for air, water, land and biodiversity in the oil sands region. We strongly support the Joint Oil Sands Monitoring Program and are working with governments, industry peers and other stakeholders to ensure the new monitoring system is implemented effectively and efficiently as we pursue the shared goal of minimizing the impact of oil sands development on the Athabasca watershed.

On an ongoing basis, we participate in technical discussions that lay a foundation for future policy and regulation on issues such as tailings management, water return, biodiversity and wetlands.

We continue to encourage and engage in public discussions on oil sands environmental issues – including those listed above – in addition to wider energy policy.

Read more about water quality monitoring

Greenhouse gas (GHG) emissions

Specified Gas Emitters Regulation

Under the current Specified Gas Emitters Regulation, large final emitters (LFE), like Suncor, must either purchase Alberta-based offset credits or contribute to Alberta’s Climate Change and Emissions Management Fund (CCEMF) for all emissions that exceed previously identified targets. Money collected through the CCEMF is managed by the Climate Change and Emissions Management Corporation, an independent not-for-profit organization with a mandate to establish or participate in funding initiatives that reduce greenhouse gas emissions and improve Alberta’s ability to adapt to climate change.

We believe it is important for government to find opportunities to link progressive carbon markets in a way that balances environmental performance, energy development and the economy. We also support the CCEMF in applying money contributed from LFEs to energy efficiency opportunities, provided the investment is limited, disciplined and ensures the greatest, most cost-effective GHG impact possible (i.e., immediate and real reduction opportunities).

Currently, CCEMF funding is applied only to the industrial/LFE sector. It is our belief that new programs should be informative, accessible to all Albertans, administratively effective and focused on residential, commercial and institutional energy efficiency projects. The province should look at multiple ways to fund energy efficiency programs including apportionment of utility revenues dedicated to improving energy efficiency.

Read more about our energy efficiency initiatives as part of our performance goals and progress

Read more about the CCEMF in our blog, OSQAR

Proposed climate change regulation

We are a strong voice in the call for credible policy to address the Canadian oil and gas industry’s GHG emissions. In our view, this includes a carbon price signal that incents the right behaviour and a practical regulatory architecture. Our perspective is that a carbon price would be most effective if it was to be applied economy-wide, and in a manner that addresses the end use of carbon-emitting products.

We are engaged with all levels of government to establish a carbon policy regulatory framework for the oil and gas sector in Canada. Our position is that Canada's oil sands are a world-class resource that needs to be responsibly developed to meet growing global energy demand.

We support a regulatory design that:

  • drives best achievable performance from existing facilities
  • provides clear support for innovation and technology development that enables game-changing solutions
  • positions Canada as a leader in energy innovation
  • sets challenging but achievable reduction goals with a process that allows for an increase in ambition as technology develops
  • provides for multi-jurisdictional compliance pathways

Our continued investment in technology and innovation has allowed us to reduce our per barrel GHG intensity. We expect our ongoing commitment to research and development initiatives will reduce our emissions to be on par with, or lower than, other sources of oil.

Read more about our GHG performance

Cap and trade in Quebec

As of Jan. 1, 2013, our Montreal refinery is required to cover its Quebec-based GHG emissions. The Quebec regulations are based on those guiding the Western Climate Initiative (WCI), an economy-wide emissions trading system. The WCI partners (which also include Ontario, Manitoba, British Columbia and California) have agreed to cut GHG emissions by at least 15% below 2005 levels by 2020. Quebec, with annual average GHG emissions of about 80 million tonnes, has its own target to cut emissions by 20% below 1990 levels by 2020.

Consistent with an approach taken by California, Quebec will include transportation emissions (the tailpipe emissions from vehicles) under its emissions cap in 2015. Fuel suppliers will be accountable for covering those emissions through the purchase of allowances. We support a carbon price on tailpipe emissions and continue to express concern that covering this liability under a cap-and-trade program will impose a variable and volatile cost of compliance on fuel distributors, making cost management challenging for the sector. Instead, we have proposed a fixed-cost approach for transportation sector emissions.

Low carbon fuel standards

We continue to monitor initiatives to establish low carbon fuel standards (LCFS), like those in California, and are actively involved in reporting and compliance in British Columbia.

An LCFS is designed to reduce the GHG intensity associated with the production, transport and combustion of transportation fuels. An LCFS regulation requires a percentage reduction in the intensity of GHGs emitted from the production and use of transportation fuels relative to a baseline fuel (i.e., gasoline and diesel).

What distinguishes a low carbon fuel standard from other regulations is the requirement that regulated entities conduct a full life cycle accounting (LCA) of GHG emissions for fuels regulated under the program. Exploration, refining and distribution of transportation fuels (well-to-tank) account for approximately 20% of the total life cycle GHG emissions. The combustion of transportation fuels (tank-to-wheel) accounts for approximately 80% of total life cycle GHG emissions.

Our view is that LCA is a useful and appropriate tool for policy development and evaluating carbon reduction decisions, as well as measuring progress over time. However, when LCA is used as a basis for regulation, the need to simplify an extremely complex analysis that is specific to boundaries, assumptions, site and inherent processes makes it both less relevant and less accurate.

We advocate that the most effective place to regulate well-to-tank emissions is in the jurisdiction in which they occur. In addition, we advocate for a comprehensive transportation sector strategy that addresses each of the three areas of transportation sector emissions – vehicle efficiency, vehicle miles travelled and the carbon intensity of fuels.

A proposal by the European Commission Fuels Quality Directive

Data transparency and independent validation is critical to accurately ascertain the carbon intensity values of different fossil fuel pathways. We support international regulation that promotes transparency to the same degree as those applied under Canadian laws.

We advocate against a discriminatory proposal by the European Commission Fuels Quality Directive to assign one average carbon dioxide (CO2) intensity value for all diesel and gasoline, with the exception of an alternate “default value” focused solely on “tar sands and oil shale feedstocks.” That is, all crudes would be deemed to have the average intensity with the exception of crude derived from oil sands and oil shale.

Recent studies demonstrate that the refined products supplying the European markets have a wide range of carbon intensities and that oil sands-derived refined products sit at the high end, but within that range.

Read ICF International’s Independent Assessment of the European Commission’s Fuel Quality Directive’s “Conventional” Default Value report (PDF)

Read Jacobs Consultancy’s A Greenhouse Gas Reduction Roadmap for Oil Sands (PDF)

Read more about our Climate Change report

Renewable energy

Wind power policy activity

We remain active in progressing wind energy policy discussions. Current activities are focused on supporting efforts through the Canadian Wind Energy Association (CanWEA).

In Alberta, we were a member of the Alberta Clean Electricity (ACE) coalition, a collaboration of five wind power industry members, as well as The Pembina Institute. The coalition examined various clean electricity policies already in place in other jurisdictions and conducted work toward a made-in-Alberta solution, tailored to Alberta’s deregulated electricity market.

As CanWEA is progressing similar policy work in Alberta, a decision was made by ACE members to work within the CanWEA framework. We view the work of ACE as beneficial in supporting necessary policy discussions and look forward to continuing to support these discussions as a member of CanWEA.

Biofuel policy advocacy

Canada’s renewable biofuels industry is quickly maturing, and is working to improve its long-term viability as current government support programs directed at first generation biofuels decline. New policy support is critical to attracting the investment required to develop advanced renewable energy options and build a self-sustaining advanced biofuel industry in Canada to complement the existing biofuel industry.

As one of Canada’s largest biofuel producers, we are an active voice in biofuel policy advocacy. Through the Canadian Renewable Fuels Association, we have supported key policy instruments to ensure market access and incentives for first generation, as well as advanced biofuels investment and production.

Read more about our renewable energy projects

National sustainable energy strategy

We continue to be a strong advocate of a national sustainable energy strategy for Canada.

Our vision of a sustainable energy future is about harnessing existing strengths, while preparing the way for new opportunities. The future is not about limiting choices; it is about expanding them. The oil sands industry can help to achieve the objectives of a national plan. This industry can mobilize capital and technical expertise, and generate the wealth needed to enable a necessary transition in our energy system.

We continue to support framing a strategy as a process rather than a prescriptive end product. There will be significant energy infrastructure development and replacement needs over the next few decades. There is a critical role for an advisory agency to play – bringing deep expertise and consensus-building capability – for Canada to successfully navigate the complexities of transitioning our energy system.