DUG Canada ConferenceEnvironment & Operating Excellence PanelEarning & M aintaining Social License Dave Collyer, P resident Calgary, Alberta June 22, 2012
N.A. Natural Gas Supply –The Opportunity• Shale gas supply a game- changer.• Technology breakthroughs.• New producing regions.• 100 years + supply.• Market growth opportunities (power generation, transportation, LNG exports).
Industry Key Success Factors• Key success factors: • Attract capital (supply & infrastructure) • Maintain / enhance support from stakeholders & public• Competitiveness • Fiscal • Regulatory • Market Access (infrastructure & tolls) • Costs• Social License = Performance + Communications
Industry Reputation / Social License –Framing the Issues● Local / Regional: Environment (air, land, water, biodiversity impacts) Social (noise, dust, activity levels, impact on local services, infrastructure & wages, local benefits, employment, etc.) … … .The prim ary focus of landow ners, com m unities, m any Aboriginal peoples, m any in public.● National / Global (first oil sands, now shale gas): Global climate change Oil and gas infrastructure Role of fossil fuels in future energy system … … .The prim ary focus of m ost EN GOs, som e in the public.
Industry Reputation / Social License –Key Elements Perform ance + Com m unication● Performance Continuous industry improvement: • Technology is the key lever. • Industry operating practices…..to raise bar on industry performance. Solutions-oriented advocacy for balanced policy. Robust & credible regulatory framework. Science-based monitoring, 3rd party validation, transparent reporting.● Communications & Outreach: Messaging – balanced, fact-based, solutions – oriented, “high road”. Delivery – diversity of mediums, approaches, spokespersons. Strong focus on outreach / engagement – local / regional / national. Grounded in performance improvement.
Public Concerns About Shale Gas• People Health effects of hydraulic fracturing chemicals.• Land Surface footprint. Induced seismicity. Wildlife disruption.• Air Air quality during extraction, processing, delivery and end-use.• Water Groundwater contamination – migration of methane gases and fracturing chemicals. Volumes of water used. Handling and disposal of fluids.• GHGs Emissions from production & processing.
CAPP Guiding Principles forHydraulic Fracturing W e w ill safeguard the quality and quantity of1 regional surface and groundw ater resources, through sound w ellbore construction practices, sourcing fresh w ater alternatives w here appropriate, and recycling w ater for reuse as m uch as practical. W e w ill m easure and disclose our w ater use2 w ith the goal of continuing to reduce our effect on the environm ent. W e w ill support the developm ent of fracturing3 fluid additives w ith the least environm ental risks. W e w ill support the disclosure of fracturing fluid4 additives. W e w ill continue to advance, collaborate on and5 com m unicate technologies and best practices that reduce the potential environm ental risks of hydraulic fracturing .
CAPP Operating Practices for rHydraulic Fracturing Guide developm ent. Ex pected practice, but not m andated by CAP P . I nform / com plem ent regulations. Contribute to safe, responsible operations.
Implementation of Operating PracticesCAPP Operating Practice Implementation StatusFracturing Fluid Additive • Mandatory disclosure in BC on FracFocus.caDisclosure • Mandatory disclosure in AB expected this year • Advocating for mandatory disclosure across CanadaFracturing Fluid Additive Risk • Developing CAPP chemical screening tool toAssessment & Management increase awareness of risks and drive selection of ‘greener’ productsBaseline Groundwater Testing • New West Partnership overseeing development of regional groundwater monitoring policies/protocolsWell Construction & Quality • Drafted procedures for conformance with theAssurance practice, for individual company modification and adoptionWater Sourcing, Measurement • Procedures to be developed this year& ReuseFluid Transport, Handling, • Procedures to be developed this yearStorage & Disposal
2012 Communications StrategyBifurcated approach:• Primary Focus – Securing social license to operate (unconventional gas development)• Secondary Focus – Promoting the positive attributes of natural gas to increase domestic use and raise awareness of new uses and new markets for Canadian natural gas.. Data & Reporting Advertising An integrated, Measurement Issues Management long-term Scorecard Web & Social Media com m unications plan. Issues Management & Media Education & Engagement Strategy R esearch
Communications Focus• Advertising (TV & Print) Raise awareness, promote positive attributes Promote broader use Line of sight to economic benefits Provide a cleaner energy choice for Asian markets Targeted print advertising for producing areas - focus on safe and responsible shale gas development• Engagement and Outreach • Natural Gas Dialogues across Canada • Community engagement • Outreach via web and social media• Media Relations Continue with rapid-response, zero-tolerance Media tours
Summary● Shale gas - a game-changer for N.A. across value chain.● Key success factors: Competitiveness Social License● Social License = Performance + Communications● Highly regulated industry Leading regulators CAPP’s Operating Principles and Practices – progressive initiative complementing regulations● Industry commitment to responsible energy development Excellent track record Environmental performance improvement Increasing transparency Consulting with our stakeholders● Strong industry commitment to communications & outreach…..for the longer term.