It’s an era of change for Canada’s oil and gas companies as producers come under increasing regulatory, environmental and social pressure to reduce greenhouse gas emissions and improve the sustainability of their operations.
One company meeting that change head on is Suncor Energy Inc., which is pursuing a ‘parallel path’ of energy development — building today’s oilsands, offshore oil and natural gas resources while also bringing along new sources of energy for tomorrow.
Suncor began blending ethanol in the gasoline it sells in 1996, a decade ahead of most ethanol regulations. Since 2006, it has operated Canada’s largest biofuels production plant, while also investing in wind energy.
Today, the company is involved in six wind power facilities across Canada, with a total capacity of about 290 megawatts. In addition, Suncor is exploring the opportunity to develop the first utility-scale solar photovoltaic facilities in Alberta.
Against the backdrop of the company’s recent commitment to cut by 30 per cent the emissions intensity of its oil and gas operations by 2030, Jim Provias, vice-president of renewable energy, shared his thoughts with the Daily Oil Bulletin about the future of renewables in Alberta, and Suncor’s reasons for investing in renewable energy projects.
Why do oil companies also make good renewable energy developers?
The decision for any company to enter the renewable energy business is complex but we believe that the core capabilities that exist in developing carbon-based energy can be leveraged to participate in the renewable energy sector.
Suncor has been involved in renewable energy development since the late 1990s and has invested and constructed eight wind power projects and Canada’s largest ethanol facility over the last 15 years — three of these wind power projects are located in Alberta. (Note: In 2015, the company reached an agreement with TransAlta Corporation to exchange Suncor’s Kent Breeze wind project in Ontario and its 51 per cent interest in the Wintering Hills wind project near Drumheller, Alta., for TransAlta’s Poplar Creek cogeneration facilities. The Poplar Creek facilities provide steam and power for Suncor’s oilsands base site in Fort McMurray.)
We believe that new technology and innovative thinking remains fundamental to how we do business.
What is [Suncor’s] perspective on the current policy developments on renewables in Alberta at this time?
Alberta is well positioned with its leading climate framework. We believe that the plan — with both an economy-wide price on carbon and an emissions limit on the oilsands — is the best climate regime in North America. We are looking forward to the finalization of the renewable energy procurement plan as we consider growing our renewable energy business.
Alberta’s Climate Leadership Policy demonstrated the energy sector’s commitment to doing the right thing and to taking action. Collaboration with environmental non-government organizations and the Government of Alberta provided a unique opportunity for Alberta and the energy sector to show leadership in addressing climate change.
Do oil companies have any competitive advantages they can reap in the renewable energy field?
Oil companies have extensive experience developing and operating large complex assets. The combined years of industry experience are expected to be beneficial in improving the capital cost structure, the project execution metrics and the operating efficiencies for any type of renewable energy project.
The industry has also built strength in technology development processes and execution, which could further improve renewable energy project development economics.
Does Suncor have any power generation targets from renewables? Five years forward? Ten years forward?
We have not disclosed targets for our renewable energy business.
Suncor has proven that wind farms in Alberta can be a great business. Now, Suncor is exploring building three large solar farms in Alberta. This is uncharted territory for renewables in our province. Why did Suncor decide to jump into solar?
We continue to pursue our ‘parallel path’ for energy development — building today’s oilsands, while also working towards bringing along new sources of energy for tomorrow, like wind and solar energy.
Solar costs have become more and more competitive and its profile complements consumer demand; as a result we have increased our activity in the solar power space to complement our experience in developing, constructing and operating wind power projects.
How would you characterize opportunity cost between investing in a renewable energy project versus an oil project?
Suncor is Canada’s leading integrated energy company. Our operations include oilsands development and upgrading, conventional and offshore oil and gas development, refining and marketing of a wide range of products under our Petro-Canada brand and a renewable energy portfolio. We continue to review all project portfolio options with project economics, sustainability considerations and future business scenario strategies in mind. We believe all our operations have the ability to make a significant difference in the need for sustainable energy sources.
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