ADAPTING TO CLIMATE

CHANGE: THE CASE OF

SUNCOR ENERGY
AND THE ALBERTA OIL
SANDS
GROUP 5
DM17132-R. PRASHANTHI
DM17138- ROHITH DAS
DM17159- VISHNU V UNNI
DM17244- SAI VISHNU M N

INTRODUCTION

CCS would require Suncor to invest $25 million

documentary, An Inconvenient Truth, had raised public awareness of the

magnitude of the issues.

Lambert - CCS because it offered a viable approach to containing greenhouse

gas emissions for the companys oil sands operations.

George -not completely convinced of a heavy investment should be made,

especially in light of the current political uncertainty and shareholder
demanding immediate returns

CLIMATE CHANGE

long-term changes in climate leads to increase in global average air and ocean
temperatures

Climate change was the result of both human activities and natural causes

increased concentration of greenhouse gases, such as (CO2) and methane.

Greenhouse gases (GHGs) trapp solar heat in the atmosphere, keeping the surface of the
earth warm enough for life.

(IPCC), recently predicted that the earth would likely warm by 2C by 2080

1997-159 countries signed the Kyoto Protocol, which quantified the limits of GHG
emissions

Canadas GHG emissions in 2005 were 747 megatonnes (Mt), representing an increase
of 25.3 % over the 1990 level and 37% above Kyoto protocol

GREENHOUSE GASES AND THE OIL AND

GAS INDUSTRY

Out of net GHG emissions between 1990 and 2005 151 Mt, of which the energy
industries and the transportation sector contributed about 137 Mt

oil sands were undergoing an extensive development, adding to Canadas

levels of GHG emissions.

Alberta had been one of the biggest contributors to GHG emissions. In 2005,
Alberta totalled about 235 Mt in GHG, more than 30 per cent of Canadas GHG
emissions that year.

oil sands are the single largest contributor of GHG emissions in Canada,
accounting for 41 to 47 per cent of the countrys GHG emissions growth

CARBON MANAGEMENT STRATEGIES

Energy Efficiency- Energy efficiency reduced the energy input, to produce a

barrel of oil. This energy efficiency was achieved through new technologies,
upgraded equipment, and improved maintenance and process controls.

Carbon Emission Trading for Offset Credits-this plan considered emissions

trading to provide a market-based option for companies to manage and
reduce the costs associated with carbon emissions reduction.

Carbon Capture and Storage (CCS)

(CCS) captured carbon emissions at the source from coal or natural gasfired
power plants, oil and natural gas processing facilities, chemical and fertilizer
plants

The CO2 was then transported to storage sites through high pressure, large
diameter pipelines. The captured CO2 was stored in depleted gas reservoirs
and deep geological formations, such as deep unmineable coal formations and
saline aquifers.

CCS

Costs of CCS

Average cost of CCS varied between 9$ per tonne to 120$.

The entire process would require between 75 200 million dollars for the first two years and 60 100
million dollars in the subsequent years.

ICO2N

An initiative by Suncor Energy comprising of 12 other firms from the industry investing time and
money into research on CO2 capture, transport and storage in Canada.

Its purpose was also to work with government to frame policies that corroborates the efforts and
investments that the companies would require to make.

Five anchor participants shared the planning costs and initial studies. The initiatives challenge was to
in justification of such huge investment that the industry has to undertake and the development of
markets for EOR.

It is also important that the government should work with the industry to make the investment worthy
enough for everyone involved.

Suncor Energy Incorporation

Primary operations in oil sands and also operated in natural gas production,
downstream refining, marketing and retail businesses.

Return on investment to common stock holders outperformed S&P by a factor of five.

Core components Social welfare, Economic benefits and minimizing carbon

footprint.

Supported Kyoto protocol and also made heavy investments in alternative energy
manufacturing such as ethanol and wind power.

Notable contributions to local community development through its foundation and

was included in Dow Jones sustainability Index and FTSE4Good Index.

Due to its increased production volume, the carbon footprint have doubled over this
period inspite of its energy efficient equipment and processes deployed in oil
production.

 Strategic

Decision

Support for ICO2N as it would give an first mover advantage and legitimacy among the local
authorities.

The first likely return from CCS would be in the year 2013 which would be after the Kyoto
protocol time period for first commitment.

Risks involved in terms of technology required, weak market for carbon trading and EOR.

Swaying public opinion and the chance for the fall of ruling government.

Investment required to integrate and reengineer the plants of Suncor would be 25$ million.