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Canada’s Energy FutureCanadian Responsible Investment Conference
Victoria – June 20, 2011
Dave Collyer, President
The Global Energy Context
• Significant energy demand growth:§ Population, standards of living
• Need all forms of energy:§ Increasing role for renewables§ Continuing reliance on
hydrocarbons § Increasing role for non-
conventional crude oil & natural gas
• Technology is a key lever for sustainable growth§ Production§ Cost competitiveness§ Environmental performance
Current Policies Scenario
Global Primary Energy Demand
Canada’s Energy Circumstances
• Abundant resources. • Energy development / production key economic
driver. • Competitiveness challenges.• Large exporter (particularly compared to OECD).• Regional diversity in energy production &
consumption.• High per capita energy consumption.• Relatively “clean” electricity generation sector.• Mixed track record on value added and “clean
tech”.• High level of connectivity with U.S.
Global Crude Oil Reserves by Country
Source: Oil & Gas Journal Dec. 2010
25 20 19303746
60
92102
115
137
175
211
260
0
50
100
150
200
250
300
Saud
i Arab
ia
Vene
zuela
Cana
da Iran
Iraq
Kuwait
Abu D
habi
Russ
iaLib
ya
Nigeria
Kazh
akhs
tanQata
rCh
ina
Unite
d Stat
es
billi
on b
arre
ls
Includ
es 170
billion
barre
ls
of oil s
ands re
serves
Restricted(79%)
Open to Private Sector
Oil Sands 56%
Other 44%
World Oil ReservesOpen to
Private Sector
Canadian Oil Sands and Conventional Oil Production Forecast (2011-2025)
Atlantic Canada
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
thou
sand
bpd
Actual Forecast
In Situ
Mining
Conventional Heavy
Conventional LightPentanes/Condensate
Canadian & U.S. Jobs & Economic Benefits
• Construction & operations§ Upstream§ Pipelines§ Upgraders & refineries
• Employment§ Direct & indirect
• Supply of goods and services• Economic benefits (CERI study - over 25 years)§ Economic impact generated $2.1 trillion (Canada) & $520 billion
(U.S.)§ Employment 11.7 million person-years (Canada) & 5.7 million
person-years (U.S.) § Federal & provincial tax ~ $400 billion; provincial royalties $300
billion
Canadian Public Opinion - Oil & Gas
Is it in Canada’s best interest to have a strong oil and gas sector?
78% - Yes, in Canada’s Interest
14% - Not in Canada’s Interest
8% - Don’t Know
78%
58%
65%
79%
78%
74%
20%
38%
31%
12%
4%
2%
4%
4%
9%
18%
9%17%
0% 20% 40% 60% 80% 100%
BQ
Green
NDP
Liberal
Conservative
Total
To develop the oil sands with an effort to limit the environmental impactsTo stop the development of the oil sands altogetherTo focus on maximizing the full economic benefits of the oil sands resource
Canadian Public Opinion
Which is the best goal when it comes to the oil sands?
Social License & Oil Sands
Oil Sands Social License =Performance + Communications
• “3E” policy framework
• Robust regional planning:
ü System-wide metrics
ü Effective monitoring
ü Transparent data
ü 3rd party validation
• World class regulation
• Technology & innovation
• Collaboration
• Proactive
• Transparent
• Verifiable
• Visible leadership
• Broad portfolio:
ü mainstream
ü social media
ü directly & via 3rd parties
ü Canada, U.S., Europe, Asia
Responsible Canadian Energy
• Oil Sands Report§ Principles & Performance§ Measurement & Reporting§ Transparency
Global Energy-Related GHG Emissions
GHG emissions from oil sands:§ ~ 1/1000th of global GHG emissions§ 6.5% of Canada’s GHG emissions
Global Emissions Canada’s Emissions
11
United States
China
OECD Europe
Non-OECD Europe & Eurasia
Japan
India
Other
Canada
Australia/New Zealand
Manufacturing, Commercial & Construction
Residential
Transport
Industrial Processes & Waste
Agriculture & Forestry
Oil Sands
Other Fossil Fuel
Electricity & Heat Generation
North American GHG Emissions (2009):Coal-Fired Power and Oil Sands
15 megatonnes50 megatonnes100 megatonnes
FL
GATX
NC
MI
AL
MO KY
IN OHNE
NM
ND
CO
SC
KS
IA
TN
WV
WY
VA
MN
UT
OK
WI
AZ
AR
AK
LA
IL
NV
OR
MT
SD
NJ
NYNH
MS
Legend
U.S. Coal fired power generating plants
Canadian coal-fired power generating plants
Canadian oil sands
Sources: U.S. DOE/EIA & Environment Canada
Reducing Greenhouse Gas Emissions
• Energy Efficiency§ Using less energy input§ Reducing energy waste/losses§ Capturing waste heat§ Cogeneration power/steam
• Improved recovery processes§ Lower temperature extraction§ Additives to reduce use of both water
and energy (steam)§ Use of electricity rather than steam§ Underground combustion rather than
steam
• Carbon capture & sequestration § Most effective at upgraders
0
5
10
15
20
25
Oil Sands GHG Emissions/bbl
29%
g c
o2
eq
./m
j
1990 2009
CAPP Climate Policy Principles
• Principles§ Balance - “3Es”§ Efficiency – efficient actions
§ Technology – stimulate investment§ Predictability & stability – support investment
§ Competitiveness – compatibility w/ major trading partners§ Distributional Fairness – share cost burden equitably
§ Harmonization – across jurisdictions in Canada
§ Administrative simplicity
• National carbon policy framework consistent with above principles
Canada’s Energy Future
“Parallel Paths Approach” - Prosperity from growth in responsible hydrocarbon production and renewable energy…….
Why?• Recognizes need for change• Recognizes Canadian reality• Takes “best of both” approach • Keeps options for future open• Provides an opportunity to find common ground among diverse interestsMarket- Based Principles• Primary reliance on market forces to drive energy production and
consumption (targeted intervention to address barriers to entry and enable market-based solutions)
• Costs of transformation of energy system should ultimately be borne by consumers making informed choices
Key Enablers for “Parallel Paths”
• “3E” policy framework – environment, economy, energy• New paradigm in technology & innovation - collaboration• Fiscal competitiveness and regulatory reform• Market diversification & growth (commodities + technology)• Unwavering commitment to continuous improvement in
environmental and social performance across the energy system
• Progressive shift to lower carbon domestic energy supply and use - enabled in part by a balanced, pragmatic carbon policy
• Action on energy conservation and efficiency• Broad and sustained commitment to energy education• A step change toward developing the workforce of the future
Royal Society of Canada ReportEnvironmental & Health Impacts of Canada’s Oil Sands Industry
• Science-based, independent analysis of the environmental aspects of Canada’s oil sands
• Addresses many of the issues and perceptions of oil sands development:§ Reclamation is not keeping pace, but
sustainable reclamation is achievable§ Water use does not threaten viability of the
Athabasca River§ No impact on Athabasca water
quality/ecosystem and no evidence of impact on human health in downstream communities
§ Tailings technologies are emerging, but tailings inventory is growing
§ GHG emissions per barrel are reducing but growing production creates a challenge in meeting international commitments
§ Minimal impacts on regional air qualityDecember 2010
0
20
40
60
80
100
120
Saudi Mexico Iraq Venezuela Nigeria ImportedWtd. Avg.
US GulfCoast
CaliforniaHeavy
Oil SandsAvg
g CO
2e/M
J ga
solin
e
GHG Emissions fromProduction and Refining
GHG Emissions from GasolineConsumption
Full Cycle GHG Emissions
Source: Jacobs Consultancy, Life Cycle Assessment Comparison for North America and Imported Crudes, June 2009
98 102 102 102 106 102 107
Range of CommonU.S. Imported Crude Oils
• On a life cycle basis, oil sands have similar GHG emissions to other sources of oil
• Full cycle emissions or “wells to wheels” is the appropriate measure to use in setting carbon policies
104 114