Sharing the Road

As the Pembina Institute's sixth executive director in 25 years, Ed Whittingham believes in the organization's ability to work with industry to improve sustainability. This article appears in the February issue of Oilweek

By Peter McKenzie-Brown

Twenty years ago the Newmarket Ontario Rotary Club offered 17-year-old Ed Whittingham the opportunity to become an international exchange student for one year – a privilege reserved for young men and women who will represent their country well, and who can clearly articulate themselves and their interests. In Whittingham’s case, he could already articulate a deep concern for the environment.

Assigned to a small city in Japan, his experience was transformational. “Rotary sent me at a formative time in my life, and I came of age there. I will always be grateful for that experience. I loved the people and the culture.” He studied for a year there as an undergrad, and went back on other occasions. “I worked on an assembly line there, in a lumber yard and as a clerk in a convenience store. I also fell in love with my wife Yuka there.” Today he can communicate fluently in spoken and written Japanese, and he and Yuka have two young children – Beck (age six) and Alice (age four).

Whittingham received his BA from McGill University and an MBA in international business and corporate sustainability from York University’s celebrated Schulich School of Business. Yet virtually all his professional experience in Canada has been with not-for-profit environmental organizations.

Such is the cosmopolitan background of the Pembina Institute’s sixth executive director, who began his term on January 1st of this year, as the organization began preparing to celebrate its 25th anniversary. His unusual background is appropriate, given the unusual nature of the organization he leads – an organization now celebrating its 25th anniversary.

Pembina was the first environmental organization to express concern about the oilsands, back in 1986, but it has always supported the notion of oilsands development. “I think there’s a real opportunity to responsibly develop the oilsands – to develop it in a way that doesn’t impair key environmental thresholds – for example, the Athabasca River, critical air sheds, and critical habitat.” Doing all this, he says, “can and should provide healthy jobs for Albertans.” He says he opposes “command and control regulation (like that used during) the National Energy Program. It unnecessarily and unfairly destroys people’s livelihoods.” Whittingham believes a collaborative, business-friendly model “is doable. I meet with industry people a lot and I find that many of them think it’s doable, too.”

He acknowledges that these views “put us offside with some other environmental groups,” but doesn’t much care. It’s consistent with the organization’s mission to “advance sustainable energy solutions through innovative research, education, consulting and advocacy.” The organization’s vision is “a world in which our immediate and future needs are met in a manner that protects the earth’s living systems; ensures clean air, land and water; prevents dangerous climate change; and provides for a safe and just global community:” not much there to argue about.

The Pembina Institute is a unique Alberta success story. Founded in 1986 by Rob McIntosh – a high school teacher living in the rural community (population 7,000) of Drayton Valley – that small town on Alberta’s Cowboy Trail is the homeland of an organization which now employs 60 “faces” in Whittingham’s word – 50 fulltime – in offices in Vancouver, Yellowknife, Drayton Valley, Calgary, Toronto and Ottawa. Pembina even has a US policy bureau in Washington, DC.

The institute focuses on four key issues. “In internal parlance we call them rocks” he says, as in the rocks upon which they build their organization. The oilsands are one rock. “Our position is one of responsible oilsands development, not shutting down development.” Another is climate change: “How can we help create a low-carbon economy?” The others are transportation – looking at lower-carbon transportation systems, an effort that includes policies on optimal community organization, for example. “We also do a lot of work around renewable energy and energy efficiency,” which together represent the fourth rock. The institute prepares policy documents, serves as an advocate and has a strong educational mandate.

There is more, however. “Every one of these rocks involves policy research and advocacy, but they also involve consulting.” And this is one of the curious features of the Pembina Institute: it is a not-for-profit organization, but only half of its revenue comes from the Pembina Foundation (chaired by Rob Macintosh, who founded the Pembina Institute) and other such organizations. “The other half comes from consulting provided by our content staff. (Our rocks) provide consulting services to federal and provincial governments, to corporate clients and to municipalities and first nations.”

Most of Pembina’s consulting staff are “passionate and talented engineers.” Since he joined the institute about six years ago, Whittingham has been the principal exception. This is not to say he isn’t passionate and talented; he just isn’t an engineer. In a self-effacing way, he says his BA stands for “bugger-all,” while his MBA is a “masters in bugger-all.”

Ask Whittingham what he’d like to accomplish during his term as executive director, and he’s pretty straightforward. Most people move on from this job after about five years. Marlo Raynolds (who just finished his term) was the exception – he was the ED for seven years. “At the end of five years I’d like to leave behind a healthy organization – that’s number one. Secondly, each year in our planning we develop a list of goals; I’d be very happy if we achieved half of our ambitious policy goals. In a broader sense, I’d like to be able to believe I had made a difference on the climate change issue” – the notion that CO2 emissions from human activity are heating up the planet. At the end of his term he’d “like to see Canada firmly on the path to making realistic cuts in CO2 emissions – cuts that are in line with the science.”

On the question of the views of climate-change sceptics, who reject much of this thinking for the first time in the interview he deviates from his characteristic mild-mannered ways. “Twelve thousand refereed journal articles support the science,” he says. He was a delegate at the global CO2 conference in Cancun late last year, where “the US Department of Defense gave a major presentation on it. Using their own science, they told us they recognize it as a problem, and they are looking for ways to protect the US from its effects.” One potential problem they identified was change in global fish stocks – a major source of protein for the world’s growing population. Another was major migrations of refugees in response to deteriorating farming in rural areas. This could have a serious impact on the US border with Mexico. Reflecting another concern addressed in that presentation Whittingham asks, “What are the military implications if melting ice in the Arctic opens up sea lanes?”

“What I would like to say to the sceptics is this: ‘Climate change is real. Get over it. It’s happening.’” He stresses again that the presenters at that session “were not dreadlocked, Birkenstock-wearing, pot-smoking pinko commie liberals. They were commanders from the American military, and they were telling us how they are planning to protect the US from the effects of climate change.”

When you walk away from a discussion with Whittingham, you have a lot to chew over. The organization is clearly committed to carbon emissions as a deep and immediate concern. But as an organization it is tremendously practical: The Pembina Institute preaches low carbon outcomes but it also teaches how to achieve them in economically sensible ways.

In print, this writer has occasionally taken exception to the institute’s facts and to its interpretations of the facts. However, there is no gainsaying the organization’s collective commitment, intelligence and talent. As importantly, the Pembina group of environmental organizations – several are now affiliated with the Pembina Foundation – in general take a practical and somewhat business friendly approach to environmental concerns.

In this 25th anniversary year it is appropriate not only to salute Whittingham as the Pembina Institute’s new executive director. It is equally appropriate to salute the organization’s founder, Rob Macintosh, who after two and a half decades is still at the wheel. Differences notwithstanding, one can only hope that Pembina’s second quarter century will be as successful – and as provocative – as the first.

Fighting Words: Oil Sands Antagonists Square Off

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Big Business and environmental activists square off over the oil sands. Has the truth been caught in the crossfire? This article appears in the November issue of Alberta Venture.

By Peter McKenzie-Brown

It has been a year in which Alberta’s oil sands have gotten attention for all the wrong reasons, itsl environmental record under attack from seemingly every possible direction. In addition to the usual rabble of environmental organizations and activists, the oil sands have been the subject of consumer campaigns from communities and corporations south of the border, each claiming to be greener than the next. Worse still, there’s no reason to believe the war of words will die down anytime soon between non-government organizations and crusading retailers on one side and their targets in industry and government on the other.

Early last summer, the small city of Bellingham, Washington, passed a resolution saying the city would boycott fuels derived from Alberta bitumen. As it ended, Walgreen – a large American retailer – did the same. These were just the latest of many efforts over a number of years to stop or slow down oil sand development by boycotting fuels that come from the oil sands. Although these campaigns got a lot of press, they were small potatoes in the big scheme of things.

For example, the US Congress has already passed a law banning some government agencies from directly promoting energy projects that will emit greater greenhouse-gas emissions over their entire life cycle than conventional oil. US legislation from 2007 prevents some federal agencies from entering into fuel contracts that encourage unconventional energy development. And California regulations require fuel suppliers to reduce the emissions from the fuel they sell – and to account for those emissions right back to the original source of production, including emissions in Alberta.

Returning to the small potatoes, a particularly robust attack recently came from Lush Cosmetics – a UK-based franchise which, according to its website, “offers over 300 luxurious, ethical and indulgent bath and beauty products made by hand with fresh, organic ingredients.” In July, the company’s North American operations took on the oil sands.

According to Bruce Anderson, an Ottawa-based senior associate with Harris/Decima Research and a senior advisor to NATIONAL Public Relations, this was part of the company’s effort “to present its own brand credentials to the marketplace.” Lush has embraced a series of environmental issues – for example, they also ran a short campaign on sealing. “What is remarkable about (these campaigns) is that they are less about the specific issue than about Lush as a brand.”

Prepared by an American advertising firm, the company’s website video describes the oil sands as “the largest and most destructive project on Planet Earth” – a “toxic sacrifice zone the size of England.” “The tar sands suck water, suck money, suck energy,” it continues. “The tar sands poison water, poison wildlife, poison forests. The tar sands destroy coastal cities. The tar sands destroy Canada’s rep(utation). The tar sands kill native people. The tar sands kill old people. The tar sands kill young people.” The culprits, the video explains, include big oil, big banks and the politicians in bed with them. The company’s preferred solution is to “Shut the f*cker down.”

Not surprisingly, this incendiary attack attracted the attention of representatives from government and industry. In a statement, Canadian Association of Petroleum Producers (CAPP) president Dave Collyer said “activities like this protest blur the lines between fact and fiction and add nothing to the serious dialogue occurring among reasonable people seeking solutions to our energy challenges.”

Alberta cabinet minister Iris Evans called the company’s North American head office in Vancouver to straighten out CEO Mark Wolverton on the facts of the matter. The soap company then put out a news release saying that “Minister Evans acknowledged that today’s industry has the technology to pull oil from the tar sands without creating toxic tailings ponds yet continues to issue permits for development that include new tailing pond projects.”

The Lush Cosmetics campaign illustrates the action/reaction nature of the public relations battles that the oilsands tend to provoke, but it also underscores the dilemma the industry is facing. “The oilsands campaigners are looking for situations in which corporations are facing some kind of reputation risk,” according to Bruce Anderson. “What I have found is that companies want to lighten their environmental footprints, like consumers do, and they do regard their reputations carefully. But at the same time they need to make information-based and practical decisions.”

The emotional and divisive battles over the oil sands reflect, in part, fundamental changes in our society. New technologies have made inexpensive media campaigns not just possible but powerful, and people are more receptive to green messages. The general decline in public regard for the first and second sectors of society – business and government – has been well documented. And the third sector, which includes the ENGOs leading the charge, is growing rapidly. To a large extent this is because of the proliferation and growth of ENGOs – not-for-profit environmental enterprises which have grown in number and financial strength over the last 20 years. And the third sector includes the environmental non-government organizations (ENGOs) which, at their best, represent knowledgeable, concerned citizens who are passionate about such issues as pollution and the environmental impact of industrial development; it is growing rapidly. Combined, these ingredients make up a recipe for conflict.

Who are the players, then? On one side there is government and industry, who argue that oil sands development contributes to energy security, economic growth and the trade balance, and that the stewardship of the environment is effectively being looked after by provincial and federal regulatory bodies. Somewhere in the middle are critics like the Pembina Institute and the Alberta Wilderness Association, which have focused mandates and take credible steps to improve oil sands development. At the other end of the spectrum are organizations like Natural Resources Defence Council, the Sierra Club and Greenpeace, which want fundamental social and environmental change.

And despite the preponderance of plaid and patchouli oil among their more militant members, these activist organizations aren’t necessarily short on resources. Jerry Bellikka, director of media relations for the premier’s office, argues that many anti-oil sands organizations work with significant budgets. “They are often well funded. (Some ENGOs) have told us that when they do one of their campaigns they get lots of donations. Whether it’s accurate or not, we don’t know; they don’t give us access to that sort of information directly. But what we do know is that these are very well-funded campaigns. Greenpeace is an excellent example.”

Last year Greenpeace had total worldwide income of about US$267 million, and directed about US$35 million to off-oil climate and energy campaigns. To illustrate the rapid growth of ENGOs, it is worth noting that global income for Greenpeace in 1993 was only US$34 million. Like other third sector organizations, ENGOs are rapidly proliferating in number.

Not all ENGOs are created equal, though. For example, Corporate Ethics International gained a great deal of media attention within Canada by creating a misleading website video and making a miniscule advertising buy – a few billboards in four American cities followed by even less advertising in Britain. Their message was that prospective tourists should punish Alberta for developing the oil sands by not visiting the province. News stories, talk shows and editorials agonized over the story, which proved to be riddled with inaccuracies.

In contrast, Greenpeace has used published reports, boots on the ground and a flair for the dramatic to become a distinctive protest voice in the province. The organization conducts at least one high-profile public relations event each year. Most recently it involved unfurling from the Calgary tower a banner with the message: “Separate Oil and State.” According to Jerry Bellikka, a spokesman for the premier’s office, “we in the provincial government are not really sure what their motivations are. It’s another silly stunt from an organization known for silly stunts.”

Greenpeace activist Mike Hudema begs to differ. “We hung the banner in Calgary because that’s where the industry is headquartered. Our message is that the relationship between the industry and government is too close. Industry shouldn’t be allowed to regulate itself. Companies are allowed to have endless (environmental) exceedences without being punished.”

Surprisingly, says Simon Dyer, the director of the Pembina Institute’s oil sands program, the warring statistics around oil sands development are mostly “accurate. Some will speak to the fact that oil sands operators are investing billions of dollars trying to deal with tailings waste (true), while others will say that successful reclamation of these toxic lakes…has never been demonstrated (also true).” Dyer represents the middle ground among the critics, and he’s concerned that PR has taken over the debate.

“As long as this is framed as a public relations battle the debate is going to continue to deteriorate,” he says. “Mudslinging is going to continue from both sides. Reputationally, Alberta and Canada and the oil sands are going to receive scrutiny and the issues are going to continue to grow.” The Pembina Institute’s position is that “There are issues around oil sands development that need to be addressed. The best way to allay criticism is to engage the critics, find the root of the problems that are causing those concerns, and demonstrate through actions how those are being addressed.”

“Right now,” Dyer says, “the public relations machine is ramping up on both sides of the debate, and those of us who are actually interested in ensuring that oil sands development is conducted in a responsible way are finding that our voices aren’t being heard. (The protagonists should) demonstrate that you are willing to solve the problems associated with oil sands development with action.”

Environmental specialist Carolyn Campbell with the Alberta Wilderness Association tells a similar tale. “Our approach is to work through public awareness, discussion and persuasion, but we don’t hesitate to use legal recourse where that’s necessary,” she says. “We are very dissatisfied with some of the environment-related actions going on in this province. I think the government needs to look at itself to see why stunt-oriented organizations are focusing on Alberta. Other paths (to environmental change) have not been effective.”

There are a lot of “pressing issues” around the oil sands, she says. “The province made a cumulative-effects commitment in the late 1990s focused on the Wood Buffalo municipality area,” she says. The idea was “to set up multi-stakeholder groups to manage the effects of oil sands development, to set thresholds and limits that the fairly fragile boreal ecosystem in northeast Alberta can sustain…. We don’t feel that’s been honoured. The pace of leasing and project approvals has completely swamped the recommendations of that cumulative effects group.” The Pembina Institute’s Dyer agrees. “I think the Alberta government is getting bad advice by the people who are telling them just to spend more money on public relations. The oil sands do not have a PR problem (but) a problem around management and cumulative environmental effects.”

The ENGO third sector has been vocal and articulate. What about the other two sectors, business and government?

Given the size of the prize, business and government are wagering relatively little on public relations, but that is changing. CAPP launched a $10-million campaign in the spring. Earlier this year the Oil Sands Leadership Initiative (OSLI) – a consortium of Suncor Energy Inc., ConocoPhillips Canada, Nexen Inc., Statoil Canada and Total E&P Canada – formally invoked a mandate to improve the oil sands industry’s reputation by “demonstrating and communicating environmental and social and economic performance and technological advancements.” This year, OSLI’s budget is $10 million.

These initiatives are the exception, however. Except for highly-focused campaigns directed at public consultation sessions and other constituencies when they are applying for development licenses, the sectors with the most to gain have done little PR. Resource developers, energy companies, construction firms, trade councils and other parts of the industrial sector that identify with the oil sands have largely remained silent. So controversial have the oil sands become that producers forbid rank-and-file employees to talk to media about the business, even when they are technical experts.

That lack of engagement provoked a stinging rebuke from retired EnCana CEO Gwynn Morgan, highly respected as a progressive voice of industry. In a Globe and Mail column in September titled “leaders must counter bogus oilsands spin” Morgan, based on his years as a CEO, concludes that corporations need to ensure that what they say stands up as truthful in the face of intense scrutiny, while ignoring the critics’ innuendo and distortions.

“But,” Morgan wrote, “I also learned that you don’t win games back on your heels playing defense. Industry leaders need to do more than sitting behind the blue line trying to block shots. They need to take their oilsands story and skate hard up the ice.” And if industry remains reluctant to move the plate into the other end of his own, the provincial government is doing what it can to record the puck in the meantime. One sign: the Alberta government’s recent $268,000 advertising campaign, which included two series of newspaper ads – one for the dailies, the other for community papers. Of course, that is only part of the province’s effort. “In a way silly stunts (like those of Greenpeace) work in our favour,” says provincial spokesperson Jerry Bellikka, “since traditional media respond to that kind of thing with calls to reliable sources like us.”

Bellikka describes two prongs of Alberta’s response to the attacks on bitumen development. “We have developed a campaign aimed at Albertans themselves, many of whom have worked in the energy industry and we want them to (help us) tell it like it is.” That’s the newspaper advertising campaign.

In addition, he says, “Where there is an outright misrepresentation, we attack it directly. When they say the oil sands are destroying an area the size of England, we say ‘No, (the amount of land being directly affected is) smaller than London. In fact, it’s 0.016% of the boreal forest in Alberta.’ It’s true that oil sands production is the fastest-growing source of CO2 in Canada, but the air around oil sands plants is much cleaner than, for example, the air in Ontario’s Golden Horseshoe.”

For its part, the industry sounds like it’s ready to stop playing defence. The industry is the other. According to CAPP vice president of communications Janet Annesley, “We have spent a long time being framed as villains by environmental organizations, and we have been trying to prove them wrong. That was not an effective approach. We have to show Canadians our business. We have to show them the kinds of people who work in our companies and the solutions we find to problems in a difficult business. We need to exit the discussion about who is right and focus on doing good work.”

Harris/Decima’s Anderson agrees. “Most customers and consumers these days – at least in in the world I live in – understand that energy has some environmental impact somewhere. For them, the only wrong answers about the environment are intransigence and indifference on the matter of environmental impact. You need to show them how you are mitigating the problems.”

Annesley describes the off-oil NGOs as being driven by an agenda, but says she doesn’t fully understand what that agenda is. “They really seem to think that Big Oil is the only thing standing between society and a renewable energy future. That doesn’t make any sense, but they do seem to believe it.”

She continues, “We fundamentally beg to differ. The solutions are not available today. We know that energy demand is increasing, that energy resources are declining and that much of the conventional energy available is in countries that are very difficult to do business with. We know that energy supplies must diversify. We know that energy development is under greater scrutiny than ever before. And we know that the industry has to meet the planet’s growing energy needs in ways that are increasingly environmentally accountable. That is the rock and the hard place in which we sit.”

Given its precarious position, Roger Gibbins, the president and CEO of the Canada West Foundation, thinks a little humility would serve the industry well. “The oil sands proponents will to some degree always be on the defensive on the environmental front,” he says. “The oil sands industry has a lot of negative images to deal with. The industry has to acknowledge that its work has had an adverse environmental impact in the past, and begin there. I think that if the industry is a bit repentant, and admits it hasn’t done the best job in the past, it will be in a better place to win people’s minds and hearts. Just arguing with environmentalists doesn’t have that effect.”

That’s a message that seems to be finding an audience. In September, Marcel Coutu, the CEO of Canadian oil Sands and the chairman of the board at Syncrude, reached out to the grandfather of Canada’s environmental movement, David Suzuki, and asked him to broker a truce between the two sides. “Instead of having this polarized discussion about (non-governmental organizations) thinking we’re this, and industry thinking we’re that,” Coutu told the Edmonton Journal, “why don’t we get together and find out what the common ground is, and agree to what is best practice and go forward that way, instead of wasting so many resources on both sides, with the media in the middle trying to communicate messages?”

Suzuki scoffed at the offer, though, declining the invitation to play go-between. Which side will take the next step remains to be seen.

Perception, Reality and Transparency

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Industry is working to improve its communications, but more importantly its actual performance

This article appears in the October issue of Oilsands Review

by Peter McKenzie-Brown and Deborah Jaremko

The oilsands industry is under near-constant attack from environmental groups and other non-governmental organizations (NGOs) bent on putting an end to “the most destructive energy project on earth.” The phrase “stop the tar sands,” and the moniker “dirty oil” are well known, and not taken lightly. The Alberta government and various industry organizations are taking on the challenge of battling negative perception with the facts about existing development, but also with something even more powerful — commitment to do better, and to prove it.

The “Big Lie” and the Age of the Internet
As Adolf Hitler was dictating his book Mein Kampf in 1925, he coined the term “the Big Lie.” A propaganda technique, the Big Lie refers to a falsehood so “colossal” that no one would believe that someone “could have the impudence to distort the truth so infamously.” Hitler used the technique to good effect through his years of tyranny. However, in established democracies things are different. Government, media, academia and business are all held to account, and among those organizations anything like the use of the Big Lie encounters widespread derision.

“Government tends to be constrained by fact,” says Alberta government spokesman Jerry Bellikka, with withering irony. “We are held to account for what we say. If we were to knowingly put out misinformation, academics, environmentalists, opposition politicians, the public and traditional media would hold us to account. When the premier is talking about emission reductions in the oilsands, if he does not say ‘per barrel,’ he is called on it right away.”

But in emergent web-based media, accountability is self-imposed. Most of the influential NGOs use reasoned arguments and collaborate with government and industry as they advocate for their causes; the Pembina Institute comes to mind. However, some major environmental groups use those media without much regard for facts. Therein we may find the 21st Century version of the Big Lie.

“[Some] people are making pretty outrageous claims,” says Bellikka. “What they want is a reaction. It’s one thing to have a discussion based on fact and current data. It’s another thing to put out inflammatory material, not much of which is accurate...it’s to get a reaction and that’s what these campaigns are designed to do. They are based on emotions, on wild accusations. Yet these same groups call governments the propaganda machines.”

The message presented by anti-oilsands groups in various forms — from feature-length documentaries and short YouTube videos to online games and protest actions — is one of environmental and social degradation that has been called as much as “Armageddon.”

“We want to lift the lid on the horrors of oil exploration taking place in a country that has a reputation for being the cleanest in the world,” says Michael Marx, executive director of Corporate Ethics International, the group behind the recent ReThink Alberta campaign. The initiative, spread through the web and via billboards in four U.S. cities as well as London, England, encourages potential tourists to Alberta to reconsider their travel investment until the tar sands industry is no more. “Tar sands mining in Alberta has not only caused irreparable damage to the environment but the health of local communities which have seen a dramatic rise in rare cancers linked to the same compounds found in tar sands operations.”

The dramatic proliferation in the number of groups like Corporate Ethics International, and the growth in public and private grants and contracts flowing to them, have enabled NGOs to become powerful political forces. In a sense, they are now filling a credibility vacuum that has been developing for 20 years. Poll after poll has shown declining confidence in such institutions as government, business and traditional media. This has created great demand for independent information and analysis, which NGOs can easily deliver through web-based communications.

“They do not work with small budgets. They are often well-funded,” notes Bellikka. “[Some NGOs] have told us that when they do one of their campaigns they get lots of donations. Whether [that is] accurate or not, we don’t know; they don’t give us access to that sort of information directly. But, what we do know is that these are very well-funded campaigns. Greenpeace is an excellent example.” Last year Greenpeace had total worldwide income of about €200 million ($272 million), and directed about €28 million ($38 million) of that to off-oil climate and energy campaigns.

From Defence to Proactive Discussion and Education
Although often characterized by highly exaggerated and even inaccurate claims, it is more than big budgets and social media wizardry that grants off-oilsands groups a position in public perception. The truth is that the concerns are not entirely unfounded — oilsands development undeniably does negatively impact the environment. It is communicating the actual extent of this impact that has been the challenging burden of industry and government, but now that mission is being taken a step further.

“We have spent a long time being framed as villains by environmental organizations, and we have been trying to prove them wrong. That was not an effective approach,” says Janet Annesley, vice-president of communications for the Canadian Association of Petroleum Producers (CAPP). “We have to show Canadians our business. We have to show them the kinds of people who work in our companies and the solutions we find to problems in a difficult business. We need to exit the discussion about who is right and focus on doing good work.”

She says that according to CAPP polls, 74 per cent of Canadians say that the industry should be developing the oilsands. “Our strategy should be to say, ‘Yes, Mr. and Mrs. Canadian. You are right. And that is exactly what the industry is doing today.’ The advertising campaign we launched last June is simply following that plan.”

Annesley describes the off-oil NGOs as being driven by an agenda, but shares some consternation about what that agenda is. “They really seem to think that Big Oil is the only thing standing between society and a renewable energy future. That doesn’t make any sense, but they do seem to believe it.”

She continues, “We fundamentally beg to differ. The solutions are not available today. We know that energy demand is increasing, that energy resources are declining and that much of the conventional energy available is in countries that are very difficult to do business with. We know that energy supplies must diversify. We know that energy development is under greater scrutiny than ever before. And we know that the industry has to meet the planet’s growing energy needs in ways that are increasingly environmentally accountable. That is the rock and the hard place in which we sit.”

The industry is widely understood to offer economic benefits to Canadians, she says, and “we are widely understood to be reliable suppliers of energy. However, we are not widely understood to be providing environmental solutions. That’s where we need to focus. We need to be talking about the issues of economic benefits; energy security and environmental care in a balanced way, but that conversation shouldn’t begin with someone dangling from the top of the Calgary Tower [a recent Greenpeace action].”

Roger Gibbins, president and chief executive officer of the Canada West Foundation, sums up the problem nicely. “The oilsands proponents will to some degree always be on the defensive on the environmental front,” he says. “The oilsands industry has a lot of negative images to deal with. The industry has to acknowledge that its work has had an adverse environmental impact in the past, and begin there. I think that if the industry is a bit repentant, and admits it hasn’t done the best job in the past, it will be in a better place to win people’s minds and hearts. Just arguing with environmentalists doesn’t have that effect.”

CAPP’s Responsible Canadian Energy program
In announcing the winners of its Steward of Excellence awards this spring, CAPP launched a new program dubbed Responsible Canadian Energy, which is designed to be a platform from which the industry, unified, can demonstrate and communicate its commitment to responsible resource development.

“The way the world sees us is defined by our performance. The linkages between stewardship and the reputation of the energy sector have never been clearer,” says CAPP president David Collyer. “This is not at all about communicating our way out of a problem. It never has been and it won’t be in the future. We certainly need to focus on communications to improve awareness and understanding, but it is essential that this be underpinned by ongoing improvement. In a world that is always moving and changing, we can’t stand still. We have to do better, and we will.”

Collyer continues that, “For some, the oilsands is the economic saviour of a recession-weary country. For others, oilsands development symbolizes a world that has grown far too dependent on fossil fuels. In reality, the oilsands is neither. The truth, as they say, is somewhere in between. CAPP and its members fully recognize that the reputation of this increasingly important industry is determined by two things: performance and communication. We also know that both must be delivered consistently and authentically over time.”
CAPP says a performance report based on the Responsible Canadian Energy initiative will be issued this fall, with 2010 serving as the baseline year as producers “refine and advance” the program. The report will include data on environmental and social performance, and will be followed by a white paper in December 2010 based on an energy dialogue series in Canada and the United States.

The Oil Sands Leadership Initiative
One of the worst-kept secrets in the oilsands industry is under wraps no longer — that is, the Oil Sands Leadership Initiative (OSLI), a consortium of five major players with a self-described “laser focus” on improvements in environmental performance.

With a $10-million budget for 2010 (expected to double or triple in the coming years), Suncor, ConocoPhillips, Nexen, Statoil and Total have a mind to change the bitumen game.

Gordon Lambert, Suncor’s vice-president of sustainability, explains that OSLI has been up and running for about a year and a half, with 2010 as its first official operational year. He says that the group’s genesis was a recognition of the need to accelerate the pace of environmental performance measurement and improvement, while understanding that in order for continued success in this particular space, the needs of the whole outweigh the needs of each individual company.

“We compete in some areas of the business. We don’t compete in reducing our environmental footprint,” says Lambert. “We felt we could make more progress by working collectively than by working individually. The more ideas you get on the table, the better the chance of success.”

The OSLI charter outlines working groups designed to address water management, carbon management and energy efficiency, land stewardship, sustainable communities, technology breakthroughs and other focus areas as agreed on by its steering committee.

One of the first initiatives that OSLI is working on is a $2.5-million feasibility study into a potential new water distribution plan for the Athabasca oilsands region. Dubbed the Regional Water Solutions Study, Lambert says the idea is to work out whether it is environmentally and economically viable for oilsands producers in the area to reuse water left in mining tailings as steam generation source water for local in situ projects. The notion is not as “blue-sky” as it may sound — Suncor itself already uses its tailings water from mining operations to supply its Firebag steam assisted gravity drainage project. However, Lambert says applying it on a regional scale would require a broad consensus — the subject of the feasibility study.

Another key OSLI initiative is OSTECH, a “technology identification structure based on a web portal.” The group says that through this portal, inventors, entrepreneurs and the general public will be able to submit projects and ideas that can be further developed within OSLI. Lambert says it will be a one-window system for the member companies to share in evaluation of the new technology ideas that are presented to them, reducing duplication of due-diligence efforts.

“Innovation and the oilsands go hand in hand. It has always been that way,” he says. “New ideas are coming forward all the time.”

A key part of OSLI’s mandate is transparency around advancing its performance improvement efforts, which is one of the reasons it did not publicly herald its initial creation.

“We’ve been cautious of waiting to communicate on results and action versus intent,” says Lambert. “In 2011, you will see us stepping out more visibly.”

Redrawing Mining Boundaries

Alberta's Regulator increases the size of the province's surface mineable area by 40 per cent.

By Peter McKenzie-Brown
Last year Alberta’s Energy Resources Conservation Board report rebalanced the provincial agency’s estimates of oilsands reserves, shifting them somewhat in the direction of surface mineable reserves. This raises questions about environmental impacts, for which the inimitable Pembina Institute have happily provided at least one group of answers.

The oilsands are a vast geological mystery, but last year the ERCB put into place a piece of the underlying puzzle 14.5 townships (1,350 square kilometres) in size. Mineable reserves are those with overburden of 65 metres or less. Based on an analysis of more than 2,000 exploratory wells drilled in recent years, the Board’s analysis increased the boundaries of the mineable Athabasca oilsands by almost 40%. The mineable oilsands area of north-eastern Alberta now measures 51.5 townships.

The first change in the surface mineable area since the Board first drew the boundaries in the early 1980s, this change increases total established mineable reserves – in many jurisdictions called “proved” reserves – by 11%, or about 3.5 billion barrels; more than Britain’s total reserves. These are new reserves. Previously, the Board had not done a resource calculation for the area.

While the mineable sands did well, deeper sands did not. As part of its report, the Board reduced established in situ reserves in the Peace River area on the principle that some previously booked reserves in the Bluesky-Gething deposit were too thin to be economic. As a result, the ERCB reduced the in situ component of established oilsands reserves by about 5.5 billion barrels. The net outcome was that Alberta’s established reserves of bitumen totalled about 170 billion barrels. About 20% of that resource is theoretically mineable. The balance will require in situ recovery procedures like SAGD.

Rick Marsh, a senior geologist with the Board, stresses that this report makes no differences for planning by individual companies, although he observes that landowners have posted this new assessment on their websites. “The purpose of this is to determine on a global or provincial basis what the bitumen reserves of the province of Alberta really are. There is no connection between the regulatory side and the (ERCB’s) resource assessment side. Whether regulatory approval to develop is given will determine whether our resource estimate is correct or not. If development doesn’t take place for environmental or economic reasons, or for any other reason, then we will have to de-book some of those reserves, adjust them downward.”

Marsh notes that there are spots within the boundary expansion that are not appropriate for mining (they would require in situ development) and stresses that, in any case, the new ERCB boundary has no regulatory effect. Leaseholders in the surface mineable expansion area include Shell, UTS Energy, Total S.A. and Synenco Energy; they can propose whatever approach to development they want, whether surface mining or in situ techniques. It’s up to regulators (primarily the provincial Department of Energy) to approve developments.

Economic and Environmental Implications
It isn’t difficult to figure out the energy implications of this analysis. From an economic and technical perspective, the ERCB report enlarges the technically more accessible sources of bitumen. The availability of more mineable reserves, if developed, would mean a lot more economic activity in Alberta, more royalties to the province and greater energy security to the world. Greater production would contribute greatly to Alberta’s status as an energy power. It would enable the industry to develop larger export markets – whether in the United States or, if a pipeline to the west coast is ultimately constructed, to East Asia. And, of course, the Canadian balance of trade would benefit. In a higher-oil-price world, the economics of oilsands development are terrific.

But what are the environmental costs? Especially in respect to air pollution, the balance of costs is well worth considering. According to an important 63-page Canadian Energy Research Institute (CERI) study, Green Bitumen, SAGD production generates 1.3 times the emissions of conventional oil. By contrast, integrated mining and upgrading projects produce 0.6 times the level of emissions. (Emissions from older plants are much higher than these averages.) As we shall see, this could dramatically change.

First, however, consider the notions of the Pembina Institute, which will always have an axe to grind in respect to bitumen production. “The technologies used to mine, extract and upgrade bitumen to synthetic crude make the product among the most environmentally costly sources of transport fuel in the world,” the organization proclaims.

In May, Pembina issued a report summing up its view of the relative environmental impacts of the two oilsands production systems as follows. In situ oil sands production generates more greenhouse gases and sulphur dioxide emissions per barrel. Oil sands mining affects habitat more from land clearing, generates more nitrogen oxides and uses more water during production.

This report follows Pembina’s release in March of a “report card” on nine non-mining plants in the oilsands. In that report Pembina observed that in situ plants are responsible for greater air pollution than mining plants. “When the land disturbance and fragmentation effects associated with natural gas production are considered,” the authors added, “the influence on wildlife habitat of in situ operations can reach (environmental impact) levels that are equal to and sometimes greater than mining.” According to Simon Dyer, the institute’s oilsands program director, “both mining and in situ oil sands development produce significant cumulative environmental impacts and those remain unaddressed.”

Plain Facts
It’s easy to find yourself flinching at the organization’s messianic sense of its own rightness. However, the Pembina Institute plays an important gadfly role within the oilsands industry. As an advocate for better environmental performance, it brings public and governmental pressure to bear on the industry.

Pembina does confirm its raw data with producers before conducting its analysis and releasing its publications, and that is to the ENGO’s credit. However, the organization then invariably puts its collective boots to the necks of lesser environmental performers – or, when justified, damns exceptional performers with faint praise. In one presentation on its website, Pembina labels statements from the Alberta government and the industry as “Spin” but describes its own biases as “Plain Facts.” Perhaps a reality check is in order. To use just one example from the table above, in situ projects mostly use non-potable groundwater, 90% of which they recycle, and then re-inject that water into underground formations. In the interest of spin, Pembina forgets to mention this plain fact.

The good news about the ERCB’s expansion of the surface mineable area in the Athabasca sands is that it describes a huge volume of petroleum that can be developed safely and, as technology and production practices improve, in more environmentally sustainable ways. Especially if your biggest concern is air pollution, oilsands mines are the way to go. Where to go is a plain fact of the ERCB report.

According to the highly-respected Canadian Energy Research Institute, combining carbon capture and storage or using nuclear energy as a component of production could create oilsands plants producing fewer greenhouse gas emissions per barrel than conventional crude oil. In the study noted earlier, CERI describes an astonishing scenario. “The oil sands could pave the way as a bold new energy system,” CERI argues, “producing hydrocarbons to power our economy with almost zero GHG emissions being released into the atmosphere.” Looking forty years into the future, the institute suggests that “by 2050 the reduction from CCS coupled with nuclear energy would enable the oil sands to produce at 2030 rates with zero emissions being released, creating the cleanest sources of produced crude oil on the planet.”

The irony, of course, is that in this case the real visionary is a research institute with ties to the University of Calgary and funded by industry and government. Like the Pembina Institute, most ENGOs are just gadflies. They have a role in the ecosystem, but revolutionary change is taking place without them.

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