Perhaps the biggest challenge facing a company like Suncor is: how do we continue to be a profitable, growing business in a world that demands a much stronger focus on environmental performance and social responsibility?
There’s no single answer to that question, but there is, I believe, a clear path forward. We need to leave the era of fixed and polarizing positions behind and move boldly into the solution space.
Doing so requires a degree of compromise to ensure the perfect does not become the enemy of the good. And it requires a bias to action.
A bit of discomfort shouldn’t deter us from acting in pursuit of a shared ambition to develop Canada’s energy resources in ways that foster economic growth while protecting a healthy environment and advancing social well-being.
Tackling climate change
As a company, as an industry and as a larger society, we have already made some progress in moving into the solution space.
Consider the global challenge of tackling climate change. We know climate change is happening. Clearly, we all have a shared interest in finding solutions.
At Suncor, we’ve moved on several fronts – internally and externally – to reduce our greenhouse gas (GHG) emissions intensity while providing the energy the world needs.
We came very close to meeting our 2015 energy efficiency improvement target (first set in 2009) and, in 2016, we announced an ambitious new sustainability goal: to reduce the total GHG emissions intensity of our oil and petroleum products by 30% by 2030. It’s a target we believe puts us on the path to ultimately bending the curve on our absolute GHG emissions as well.
Along with other oil sands producers, we’ve collaborated with our peers, with environmental leaders, with Aboriginal Peoples and with other governments, to help advance climate change policy that has made Alberta a global leader in this area.
We did so by collectively recognizing we can’t, at this point, affix a permanent solution to a long-term challenge like climate change. But we can lead in a way that moves us in the right direction. That collaboration helped inform a policy plan that couples a broad-based carbon-pricing regime with an overall emissions limit for the oil sands.
Why would we, as energy producers, support public policy that imposes a first of its kind, emissions limit on our resource basin? And why would Suncor, as a company, commit to an ambitious program to reduce its own GHG emissions?
The answer to both questions is rooted in two interrelated convictions.
The first is our belief that bold, ambitious action will be required by all of us to effectively tackle the climate change challenge. The second is our conviction that technology will continue to transform our industry to a place of global cost and carbon competitiveness.
Transitioning to a low carbon economy
Some look ahead and predict fossil fuels have no place in a sustainable energy future. I respectfully disagree.
Whether it’s about providing food, heat or transport, modern society draws on reliable and affordable oil and gas as its primary energy source. And despite the advancement of alternative and renewable energy sources, fossil fuels will continue to provide a concentrated and efficient source of energy for the foreseeable future. It’s also evident that to remain a central part of the energy equation, oil and gas producers need to be carbon-competitive and cost-competitive.
We are moving aggressively towards the goal of harnessing new technology that transforms the GHG footprint of our operations and our impact on the life-cycle of our product. Technology and innovation are taking us there.
Technology has always been key to the oil sands industry, which Suncor pioneered exactly a half-century ago. It’s allowed us to develop this vast resource on a commercially viable basis while continually improving our environmental performance.
Today, Suncor invests in a range of strategic technologies, including next-generation in situ extraction processes that could dramatically reduce energy costs and GHG emissions. In fact, we’re currently evaluating the potential to advance these in situ technologies at commercial scale through the development of an in situ demonstration facility (ISDF) at our MacKay River lease.
We also collaborate with peer companies and external partners through organizations like Canada’s Oil Sands Innovation Alliance (COSIA) and Evok Innovations on clean technology solutions that will help us thrive in tomorrow’s lower carbon economy.
On the policy side, we continue to collaborate with the Ecofiscal Commission, where I serve as a member of the Advisory Board. The commission brings together economists who provide a perspective on efficient economic policy to tackle environmental challenges. The Advisory Board brings together diverse actors – including from across the political spectrum, from industry, and the environmental community – to provide a practical perspective and advocate for policy that most efficiently helps trigger practical environmental solutions and grow the economy.
I believe our investment in step-change technologies and commitment to progressive ecofiscal policies puts Suncor in a very strong position going forward. As long as the world needs fossil fuels, we intend to be a cost-competitive and carbon-competitive supplier of choice.
That’s why we’re comfortable operating within the boundaries of an emissions limit and an economy-wide carbon price. With certainty on price and emissions, we can plan, innovate and invest in ways that will allow us to grow our business and successfully compete in the global marketplace as a low carbon source of oil.
As we make this transition to a low-carbon economy, Suncor is committed to the principle of transparency. That’s why, in response to a shareholder resolution by NEI Investments, we recently produced our first stand-alone report on the resilience of our strategy on this path to a low-carbon future. We intend to update this disclosure practice annually as part of our Report on Sustainability.
Social innovation and collaboration
Innovation is not limited to technology or environmental performance. The way the world views energy development has changed and part of responding to that is through social innovation and collaboration. Suncor’s recognition of this evolving dynamic is reflected in the strong emphasis we place on sustainability and embedding it throughout our organization.
In 2016, we launched our first long-term sustainability goal to address our social performance. That goal, to be pursued over the next 10 years, sets us on a new path toward strengthening our relationships with Canada’s Aboriginal Peoples and increasing the participation of Aboriginal Peoples in resource development.
We took a good first step on that path by signing two historic partnership agreements with the Fort McKay First Nation and the Mikisew Cree First Nation that will see them become equity partners in the East Tank Farm synthetic crude terminal when the agreements are finalized in 2017. Both First Nations will share in the benefits as the terminal receives bitumen from the Fort Hills oil sands mine and ships product to market.
Another key social collaboration for Suncor is the work we do, along with several other companies, as members of the United Nations Global Compact (UNGC) Local Network in Canada. This is part of our support for the UNGC and its 10 Principles, which guide our approach to human rights, labour, environment and anti-corruption – wherever in the world we operate.
In everything we do, one value stands above the rest: safety above all else. And as we learned again in our response to the 2016 Fort McMurray forest fires, ensuring safety sometimes requires collaboration of the first order.
The fires forced more than 85,000 people, including our employees, to leave their homes. For the first time in our history, we shut down and then restarted our oil sands base and in situ operations – and did so safely and without incident. Our facilities were also the first point of refuge for community members fleeing northward for safety. We sheltered, fed and moved more than 10,000 people.
I’ve never been prouder of a collaborative effort than the one undertaken by the community, first responders, aid organizations, government and industry. Observing kindness, perseverance and optimism in the face of an extremely difficult situation was a powerful experience for me.
Succeeding in the solution space
Leadership starts with knowing where we want to go over the long term. It’s about making courageous decisions that will stand the test of time. At Suncor, we have the track record, the economic strength, and the commitment to execute on that vision and collaborate across diverse interests to find solutions to shared challenges.
As we’ve taken some critical first steps into the solution space, I’ve had the chance to reflect on what we’ve learned so far. What works and what doesn’t?
I believe the road to success begins with setting ambitious goals. It’s a good thing if your reach exceeds your grasp; it means you always aspire to something more.
Focus on the possible. It’s easy to find reasons why something won’t work; it’s much more difficult to imagine ways that it could.
Listen more than you speak – and avoid the trap of trying to sell each other on pre-conceived solutions. Making progress on complex issues requires setting egos aside. Arrogance is the enemy of collaboration.
The path forward will be challenging, but this journey is worth the effort. I urge you to join us in ensuring we shape a positive and sustainable shared energy future.
president and chief executive officer