There is plenty of business and news coverage of the Suncor decision to spend $20.6B…that is right Billion with a “B” in oil sands operations and expansions. Full disclosure, I hold shares in the company and have done work for Suncor in the past but not presently.
This company continues to show quality leadership and management and a demonstrable commitment to improved corporate social responsibility. They are not perfect but they get it and they work hard on getting it right taking to heart an integrated triple bottom line approach. In addition to this increased investment announcement, I see Suncor has also renegotiated its royalty contract with Alberta. Some business writers and industry commentators said the Alberta government was “tearing up contracts” with Suncor and Syncrude as part of the royalty changes. Not so and never was. This negotiated agreemetn revision proves that such hype was misleading and perhaps even intentionally by some.
Last October and November in response to the “Our Fair Share” Hunter royalty review expert panel recommendations “Big Alpha Oil” used intimidation tactics on workers, suppliers, communities and the Premier. The were saying that recommended royalty increase that merely put Canada and Alberta as the second lowest takers on the planet would devastate the industry and they would be leaving the province.
Well for a few weeks some actually did cut capital and exploration budgets but not nearly as drastically as they threatened and those decisions were made in light of market realities and taken long before the “Our Fair Share” report came out anyway. They moved some activity to Saskatchewan, which a good thing. They seemed to think it was their oil and gas and not Albertan’s oil and gas. That is a big mistake.
This company continues to show quality leadership and management and a demonstrable commitment to improved corporate social responsibility. They are not perfect but they get it and they work hard on getting it right taking to heart an integrated triple bottom line approach. In addition to this increased investment announcement, I see Suncor has also renegotiated its royalty contract with Alberta. Some business writers and industry commentators said the Alberta government was “tearing up contracts” with Suncor and Syncrude as part of the royalty changes. Not so and never was. This negotiated agreemetn revision proves that such hype was misleading and perhaps even intentionally by some.
Last October and November in response to the “Our Fair Share” Hunter royalty review expert panel recommendations “Big Alpha Oil” used intimidation tactics on workers, suppliers, communities and the Premier. The were saying that recommended royalty increase that merely put Canada and Alberta as the second lowest takers on the planet would devastate the industry and they would be leaving the province.
Well for a few weeks some actually did cut capital and exploration budgets but not nearly as drastically as they threatened and those decisions were made in light of market realities and taken long before the “Our Fair Share” report came out anyway. They moved some activity to Saskatchewan, which a good thing. They seemed to think it was their oil and gas and not Albertan’s oil and gas. That is a big mistake.
Now we see the most aggressive of the ENGO's shifting focus away from forestry and on to big oil, Alberta's oil sands in particular. We knew this was coming as early as the spring of 2005 when we did some work for the Alberta forest industry. The ENGO's we worked with then said that was their new strategy...and it is now happening.
With these announcements, Suncor steps up and shows leadership and wisdom - once again. This is not the first time Rick George has shown competence and class as a major corporate CEO. When the energy and manufacturing industries got twisted out of shape over the potential dire impacts on the economy due to the Kyoto Protocol, Suncor stayed out of the silliness. After a few months however, Suncor’s CEO said that they had calculated the cost impact of Kyoto in its Canadians operations and it was pennies on the barrel. Suncor said it could absorb that level of additional cost. Within days the din of dire consequences from the other aggitators and fearmongers, who were playing politics more than economics, were silenced and they slide quietly into the background and off the radar screen.
There are lots of examples of why big business has trust, respect and credibility issues with the public. But when we see a good example of a corporation and leadership that shows it is worthy of trust and respect, we have to applaud it. Suncor is consistently such an entity and an exemplar for others to emulate. Good on them!
With these announcements, Suncor steps up and shows leadership and wisdom - once again. This is not the first time Rick George has shown competence and class as a major corporate CEO. When the energy and manufacturing industries got twisted out of shape over the potential dire impacts on the economy due to the Kyoto Protocol, Suncor stayed out of the silliness. After a few months however, Suncor’s CEO said that they had calculated the cost impact of Kyoto in its Canadians operations and it was pennies on the barrel. Suncor said it could absorb that level of additional cost. Within days the din of dire consequences from the other aggitators and fearmongers, who were playing politics more than economics, were silenced and they slide quietly into the background and off the radar screen.
There are lots of examples of why big business has trust, respect and credibility issues with the public. But when we see a good example of a corporation and leadership that shows it is worthy of trust and respect, we have to applaud it. Suncor is consistently such an entity and an exemplar for others to emulate. Good on them!
Curious data coming out on well licensing. Year to date, well licencing activity (first 4 weeks of Jan this year vs same period last year) is down less than 1% in Alberta, but is down 24% in Saskatchewan and down 19% in B.C.
ReplyDeleteI think it is too early to make a definitive statement given only four weeks of data, but so far the data just does not support a wholesale evacuation of drilling activity out of Alberta and into our neighbours lands.
As an aside, for what work is being done in SW Sask, a lot of the rig-hands live on this side of the border, and are paying their taxes here. Wonder why that is? ;-)
Brad Wall is a welcome improvement over 12 years of NDP government in Sask, but he has a long row to hoe before he can claim a "Saskatchewan Advantage".
Check out the Strategic Counsel's poll on the oil sands.
ReplyDeleteIf the Liberal Party of Canada gets into power, they will sink Suncor as they will be forced to either pay a carbon tax or buy carbon credits.
ReplyDeleteTell all of this to my dad who lost his job because of the royalty report.
ReplyDeleteIt's now $1.26 billion on the Ed spending meter and counting. You can bet there will be a flood of Eddie money spending announcements today as well. He is the Premier who can't stop spending. But he is spending my money and he doesn't have a mandate to do so!!!!
ReplyDeleteI guess Ken doesn't care about the massive increase in GHG emissions that will occur through this investment on a hard cap basis (even if they have some more efficient technology). Typical liberal talking outside both ends of his mouth.
ReplyDeleteeric - what on earth are you talking about?
ReplyDeleteExplain please. What you are trying to say?
At least clarify what orifice are you using to “emit” this comment?
I am saying that increased oil production in Alberta will obviously lead to increased GHG emissions.
ReplyDeleteNot necessarily so ... CO2 capture and sequestration is proven technology and ready to go...needs fed/prov and private sector to get serious about it.
ReplyDeleteIf they don't voters will punish the politicians and the poohbahs