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Imperial chairman and CEO Bruce March talks about corporate citizenship, the company’s key achievements in 2008, and ways to address the challenges of oil sands development.
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“There’s no question that the environmental issues associated with oil sands development are pressing. However, tough issues have a way of getting solved when we apply human ingenuity and technological innovation.
How does corporate citizenship fit with business at Imperial?
It’s integral to the way we conduct our business, whether developing new projects or operating our base businesses. Our commitments to corporate citizenship show up in a wide variety of areas including environmental protection, safety and health initiatives, corporate donations, community engagement, human resources, corporate governance and our Standards of Business Conduct.
In your view, what were Imperial’s most significant corporate citizenship achievements during 2008?
We had one of our best years in terms of employee safety. Our incident rate was 17 percent better than 2007 levels. In addition, the number of serious incidents involving employees was very low.
We also continued progress on the environmental front. Over the last five years, our greenhouse gas emissions have decreased by seven percent. We’ve invested significantly in emission controls at the Cold Lake operation and our Sarnia and Dartmouth refineries to meet air quality targets. We also continued to maintain efficiencies in our energy use. Company-wide our operations use five percent less energy today than they did five years ago, and our refineries are 15 percent more energy efficient than they were in 1990.
Finally, in the area of corporate donations, in 2008 we contributed more than $12 million to support hundreds of community initiatives across Canada.
What were the year’s disappointments in terms of corporate citizenship performance?
One disappointment was contractor safety. Last year, our incident rate for contractors was 34 percent higher than 2007 and 15 percent higher than 2004. This upward trend is a concern and an area of increased focus. As a result, we’re intensifying efforts to address contractor safety, for example, by improving the way risks are identified before work begins and involving contractors more extensively in safety programs. We’ve also placed special emphasis on reducing contractors’ tolerance for risk and making firms more accountable for performance.
Another disappointment was the relatively high number of incidents that occurred as a result of slips, trips and falls while carrying out routine job activities. This pointed out the need to continually maintain high awareness among all workers of potentially hazardous situations.
What about other areas of performance?
An area where we invested much time and effort was community engagement. During the year, we carried out community outreach programs in 18 operating areas across our company. We also conducted consultation in support of five growth projects, including our Kearl oil sands project and our seismic program in the Beaufort Sea.
Another important milestone was the introduction of our enhanced corporate principles for Aboriginal relations. Imperial has a long and successful history of working with Aboriginal communities, and today positive working relationships with these communities are more important than ever before. The principles will create a renewed focus on bringing consistency and best practices to the way we work with our Aboriginal neighbours.
What is driving the company to increase dialogue with stakeholders?
The recognition that our business environment continues to evolve, along with changing stakeholder expectations. It’s also driven in part by regulatory requirements as we pursue growth projects in new areas of the country.
While we’ve long recognized the importance of having good relations with our neighbours, the need to engage stakeholders is more important than ever. We’re discovering that Canadians want to be involved more to learn about our company and our projects, what we are doing and what the impacts are. How we communicate information and how we engage stakeholders and utilize their feedback is key.
Outside our operations, our company sees a need for industry to have more balanced dialogue with Canadians on oil sands development.
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Why is dialogue on oil sands development important?
There’s no doubt there has been quite a bit of controversy surrounding oil sands development and its impact on the environment. We want to see a more balanced dialogue on this issue, one that focuses on energy, the environment and the economy.
The oil sands are an enormous energy opportunity for Canadians. This is underlined by the latest energy outlook studies, which show that world demand for energy continues to grow. And even with rapid increases in renewable energy, the world will depend on hydrocarbon fuels to satisfy most of its demand, at least for the foreseeable future. We will need oil – and more of it.
Canada has the good fortune of having a world-class resource in the oil sands. We are a resource-rich country in a resource-hungry world. And oil sands development is an essential part of the solution.
What about public concerns about the environmental impacts of this development?
These are legitimate concerns and ones that industry shares. Certainly, producing oil sands is energy-intensive and has a large environmental footprint during operations. As an industry, we are steadfastly committed to reducing our environmental footprint.
Take the issue of greenhouse gases. One way to make improvements is through energy efficiency. Imperial Oil, for example, is a founding sponsor of the Imperial Oil-Alberta Ingenuity Centre for Oil Sands Innovation (COSI) at the University of Alberta. This centre brings together some of the best scientific and engineering minds to seek breakthrough technologies associated with all aspects of oil sands development, including more energy-efficient ways to extract and upgrade the resource.
Extracting oil sands consumes large amounts of water, but we’re steadily improving our efficiency. For example, nearly 40 years of technical innovation have helped Imperial pioneer water recycling techniques at our Cold Lake operation. Today, Cold Lake recycles more than 95 percent of the produced water that is recovered with the oil, helping to reduce requirements for fresh water. And research is ongoing to develop new solvents-based processing techniques that will allow companies to further lower freshwater use.
A lot of attention has also focused recently on operations that involve open-pit mining. This recovery method is used when deposits are found near the surface. Certainly, these projects do have a visible impact on the land. But the impact is localized. It’s also temporary since regulations require all mining lands be completely reclaimed. As an industry, we are working hard to minimize this impact, reclaiming the land as we go. And here our goal is simple: In 100 years, we want no evidence that we were ever there.
Are you optimistic that the challenges of oil sands development can be met?
Absolutely. We believe that technological advances will be the key to developing the oil sands in a responsible manner, enabling us to improve the way we recover the resource while using less water and energy, reducing emissions and minimizing our footprint.
There’s no question that the environmental issues associated with oil sands development are pressing. However, tough issues have a way of getting solved when we apply human ingenuity and technological innovation. Throughout our industry’s history, technology has enabled us to resolve many environmental challenges. From directional drilling that lightens our footprint to world-class systems that identify new energy efficiencies to advanced catalysts that convert heavier crudes into cleaner fuels, our industry has long operated at the technological frontier.
In the future, we will continue to face tough challenges when it comes to developing oil sands. Certainly, our work is not done. We must constantly look for ways to do things better, especially with regard to our environmental footprint.
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