The story of oil
President & Chief Executive Officer
The Canadian Club
Check against delivery
Thanks Gordon. And thanks to all of you for being here.
Today, I’d like to start a conversation that I think Canadians should be having from coast to coast. It’s a conversation about energy – the role it plays in our daily lives and the role we as Canadians play in producing it.
This country is blessed with an abundance of resources. It’s part of what makes us strong. It also makes us a target. Because we produce oil the world needs, special interest groups have accused Canadians of being lax when it comes to the environment. They’ve implied that we have weak morals and soft laws. Nothing could be further from the truth. Canadians should be outraged by these allegations.
Access to reliable, affordable energy is a defining characteristic of developed society. We’re lucky to have it in this country. It affords us a standard of living that billions of people in Asia and other parts of the world aspire to. Every day we flick a switch and the lights come on, our computers boot up. We have heat in our houses and food from around the world in our grocery stores. The very quality of our lives in Canada depends on energy sources that we take for granted every day, until we don’t have them.
This winter, hundreds of thousands of Canadians have had a bitter taste of what life is like without access to heat or power. That probably includes people in this room. Now imagine what life would be like without reliable access to gasoline, jet fuel, diesel, plastic and all of the other oil-based products we depend on.
Oil is the form of energy that’s consumed more than any other in the world. It’s also one of the most controversial. People get emotional about oil. Wars have been fought over oil. Protestors turn out in the thousands to fight pipelines that will transport oil.
Like a character in a Hollywood movie, oil has been cast as a villain. It’s no coincidence celebrities like Robert Redford have been trash-talking oil. In Hollywood - the land of make believe - everything is black and white, good or evil. It makes for a compelling story, but the real world doesn’t work that way. And when it comes to energy, Hollywood stereotypes are unhelpful and often dead wrong. So it’s time to inject a little reality into the energy debate.
I’m proud to work for an oil company. We make people’s lives better. Oil allows farmers to increase production using equipment instead of animals or human labour. Oil runs the machines that make everyday products like smart phones, clothing and furniture. Above all, oil fuels our transportation system, allowing us to go to work, travel abroad, and trade our Canadian goods and services around the world.
Shockingly, almost 40 percent of the world’s population lives without access to affordable energy1, like oil. They simply subsist. These people deserve more, and they’re demanding more. According to the U.S. Energy Information Administration, global energy demand is expected to increase 56 percent over the next three decades2. So what does that mean for oil?
You might think oil will soon be replaced by wind, solar, or other forms of energy labeled as “alternative” and “clean.” I completely agree that we need all forms of energy to meet the world’s growing demand. But no other energy source comes close to matching oil’s versatility – and affordability.
That’s why Canada has such a clear advantage. Our country has the third largest oil resource on the planet. One hundred and seventy-three billion barrels that can be recovered using today’s technology. And 97 percent of that resource is in the oil sands3.
Over the next decade, oil sands production in Canada is expected to double. And that has our critics screaming. They want you to believe the planet is doomed if oil sands production continues. They say new oil pipelines must be stopped at all costs. They call it “dirty oil,” “the most destructive project on earth.”
Those accusations are baseless, yet they make front-page news. As I said earlier, Canadians should be outraged by these allegations.
It’s time we all started thinking more critically.
The fact is, oil from the oil sands is being produced responsibly. The Canadian oil and gas industry is among the most highly regulated in the world, with strict operating standards.
It’s also a fact that the oil sands make a huge contribution to the Canadian economy. They employ thousands of people across the country directly and indirectly through new manufacturing, service and supply jobs. Oil sands producers pay billions of dollars in taxes that fund Canadian health care, education, roads and much more.
Despite these clear economic benefits, critics say oil sands development should be slowed or stopped to protect the environment. I absolutely agree the environment has to be a key consideration in all that we do as an industry. And, I assure you, it is, despite what those critics are saying.
Take greenhouse gas emissions. It’s one of their favourite topics, and one of our biggest challenges. The critics would have you believe that emissions from the oil sands are melting the arctic and even killing polar bears. The truth is, the oil sands account for 1/700th of the world’s greenhouse gas emissions4. That’s the equivalent of about a tablespoon in a 10-litre bucket of water.
Does that mean we don’t have to do better? Of course we do. All human activity, whether it’s resource development, manufacturing, tourism or home building, has an impact on the environment. We all have to do better. And in the oil sands we’re working on improvements every day, using innovation and technology.
Cenovus is a great example of Canadian innovation and technology in action. When most people think of the oil sands they imagine open pit mines with giant trucks and shovels, and tailings ponds. That’s not what we do at Cenovus. We’re “next-generation oil sands producers.”
Using techniques pioneered in Canada, we drill into our oil sands reservoirs hundreds of metres underground. We inject steam into them to soften the thick oil so we can pump it to the surface. From a single well pad, we can access a huge underground reservoir, with relatively little surface disturbance. Eighty percent of the oil sands will eventually be developed with these kinds of techniques.
Two or three decades ago, nobody thought this was possible. Today we’re doing it, and getting better at it every day. And when we encounter challenges, like greenhouse gas emissions, we don’t throw up our hands and say “shut it down.” We find solutions. Canadians should be proud of the way this resource is being developed. I’m proud, but that doesn’t mean I’m satisfied. We don’t have all the answers yet, but we’re working on them.
Let me leave you with a challenge. I’m asking you to get informed about the oil industry and the oil sands. There are some great resources on the internet. Check out what the critics are saying. But get the rest of the story from industry, government, academics. Start with the Canadian Association of Petroleum Producers. Or go to Cenovus’s information microsite – More2theStory.com.
You don’t have to be an engineer. Just set aside the stereotypes and get the facts before making up your mind. And the next time you hear someone making sensational comments that seem inaccurate or unfounded, question them. Because the energy industry is a big deal for Canada – too big to be ignored or taken for granted.
Thanks and I look forward to continuing this conversation with you.
1 United Nations Development Programme Human Development Report 2011 Sustainability and Equity: A Better Future for All. p.67
2 U.S. Energy Information Administration International Energy Outlook 2013 (July 2013)
3 Canadian Association of Petroleum Producers
4 Canadian Association of Petroleum Producers: Environment Canada 2013 / United Nations Statistics Division