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Scott Meakin: Earning & Maintaining Social License for the Upstream Oil and Gas Sector
1. Commission for Environmental Cooperation
Joint Public Advisory Panel
Public Forum on
Greening North America’s Energy Economy
Earning & Maintaining Social License for
the Upstream Oil and Gas Sector
Scott Meakin, Manager, Corporate Responsibility
Calgary, Alberta
April 25, 2013
3. To enhance the economic sustainability of the
Canadian upstream petroleum industry in a safe and
environmentally and socially responsible manner,
through constructive engagement and
communication with governments, the public and
stakeholders in the communities in which we operate.
Balancing the “3 „E‟s” – Advancing environmental
performance, economic growth, and energy and
reliability to achieve balanced outcomes
Canadian Association of Petroleum Producers
Mission Statement:
•3
4. Industry Key Success Factors
• Key success factors:
• Attract investment capital (supply & infrastructure)
• Maintain / enhance support from stakeholders & public
• Competitiveness
• Fiscal Process
• Regulatory Process
• Trade and Market Access
• Workforce Availability
• Social License = Performance + Communications
• Building trust with Communities and Stakeholders
•4
5. 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 primary focus of landowners, communities, many
Aboriginal peoples, many 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 primary focus of most ENGOs, some in the public.
•5
6. Industry Reputation / Social License –
Key Elements
Performance + Communication
● Performance
Continuous environmental & social performance improvement (across
the value chain)…..including monitoring, timely & transparent reporting:
• 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, emotive, solutions – oriented, “high
road”.
Delivery – diversity of mediums, approaches, spokespersons.
Strong focus on outreach / engagement – local / regional / national.
Grounded in performance improvement.
•6
7. Responsible Canadian Energy Program
● Responsible Canadian Energy represents a collective
commitment by CAPP’s members to:
Measure our performance
Find new and innovative approaches to reduce our environmental footprint
Ensure every worker returns home safely every day
Continue to improve the ways in which we communicate and engage the
public and other stakeholders;
Resulting in continuous performance improvement
7
8. Global GHG Emissions
• GHG emissions from oil sands:
just over 1/1000th of global GHG
emissions
6.9% of Canada’s GHG emissions
26% reduction in intensity from 1990
Global Emissions Canada’s 2%
China
24%
U.S.
18%
European Union
13%
Other
26%
Russian
Federation
6%
Australia/New
Zealand
1%
India
6%
Japan
4%
Canada
2%
Other Energy -
Stationary
31.2%
Other Oil & Gas
15.2%
Industrial Processes
7.4%
Agriculture
8.0%
Energy Transport
28.0%
Oil Sands
6.9%Waste
3.2%
Solvent & Other
Product Use
0.0%
•Sources:
•1. United Nations Statistics Division (2008 Data)
•2. Environment Canada (2010 Data)
8
10. Leveraging Technology and Innovation
● Accelerating environmental technology &
innovation in the oil sands:
Canadian Oil Sands Innovation Alliance (COSIA)
Focus on water, tailings, land, GHGs
● Alternatives to reduce the need for both
water and energy (steam):
Cogeneration – steam and electric power
Solvent / steam injection
Alternative well configurations for SAGD
Reduce water temperature 80 to 35 degrees Celsius
Electro-thermal technology
Carbon Capture & Storage
● Reducing water use, increasing water
recycle:
Use of saline (non-fresh) water for steam
Faster waste water recycle
Water technology development centre
•Ceramic membranes for water treatment
•10
11. 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).
•11
12. Top 10 World Natural Gas Producers in 2011
0 5 10 15 20 25
US
Russian Federation
Canada
Iran
Qatar
China
Norway
Saudi Arabia
Algeria
Indonesia
Trillion Cubic Feet
• Source: BP Statistical Review 2012
•Canada, is the 3rd largest producer
of natural gas in the world.
•12
13. Public Perceptions About Shale Gas Development
•13
• “Frac fluids
contain dangerous
chemicals that
aren’t disclosed to
public”
Disclosure
• “Fracking can have
adverse effects on
drinking water”
Water Quality
• “Fracking uses enormous
amounts of water”
Water
Quantity
• “Fracking & associated
waste-water disposal
cause earthquakes”
Seismicity
13
14. • 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.
Public Concerns About Shale Gas
14
15. CAPP Guiding Principles for
Hydraulic Fracturing
1
2
5
We will safeguard the quality and quantity of
regional surface and groundwater resources,
through sound wellbore construction practices,
sourcing fresh water alternatives where
appropriate, and recycling water for reuse as
much as practical.
We will measure and disclose our water use
with the goal of continuing to reduce our effect
on the environment.
3
We will support the development of fracturing
fluid additives with the least environmental
risks.
4
We will support the disclosure of fracturing fluid
additives.
We will continue to advance, collaborate on and
communicate technologies and best practices
that reduce the potential environmental risks of
hydraulic fracturing.
•15
16. Operating Practices for Hydraulic Fracturing
•16
Guide development.
Expected practice, but not
mandated by CAPP.
Inform / complement
regulations.
Contribute to safe, responsible
operations.
17. Implementation Status of
Operating Practices
● Expansion of Practices to Include
Tight Oil
Completed December 2012
● Mandatory reporting of fracturing
fluid additives in BC and AB
● Reporting on Member Conformance
with Practices
Conformance with first six Practices will be
reported through CAPP‟s Responsible
Canadian Energy Program in 2013
● Additional seismic monitors being
added in NE BC
● Many supporting studies ongoing
18. In Summary
● Oil Sands and Shale gas extremely important for
North American energy security
● 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.
•18