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OIL SANDS & NORTH AMERICAN ENERGY SECURITY February 21, 2012 Florida International University

OIL SANDS & NORTH AMERICAN ENERGY SECURITY February 21, 2012 Florida International University. Janet Annesley, Vice President. Canada is a Global Energy Player. #3 Canada is third in the world in natural gas production. #1 Canada has the world’s largest uranium reserves. #2

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OIL SANDS & NORTH AMERICAN ENERGY SECURITY February 21, 2012 Florida International University

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  1. OIL SANDS & NORTH AMERICAN ENERGY SECURITYFebruary 21, 2012Florida International University Janet Annesley, Vice President

  2. Canada is a Global Energy Player #3 Canada is third in the world in natural gas production. #1 Canada has the world’s largest uranium reserves. #2 Canada is second in the world in hydro-electricity generation. #3 Canada is 3rd to Saudi Arabia & Venezuela in crude oil reserves

  3. Oil Sands Resource, Production, Markets

  4. The Global Energy Context • Significant energy demand growth: • Population, standards of living • Need all forms of energy: • Increasing role for renewables • Continuing reliance on hydrocarbons • Increasing role for non- conventional crude oil & natural gas • Technology is a key lever for sustainable growth • Production • Cost competitiveness • Environmental performance Current Policies Scenario 4

  5. World Oil Reserves Open to Private Sector Canada’s Oil Sands 56% Open to Private Sector Restricted (79%) Other 44% Global Crude Oil Reserves by Country Includes 170 billion barrels of oil sands reserves 5 Source: Oil & Gas Journal Dec. 2010

  6. Top 10 World Crude Oil Producers in 2010 2025 Sources: U.S. Dept. of Energy, Energy Information Administration & CAPP

  7. Oil Sands Projects in Three Deposits Kearl Fort Hills Lake Northern Horizon Lights Joslyn Creek Muskeg River Albian Syncrude Firebag Dover Jackpine Peace River Peace River Suncor MacKay River Fort Seal Seal McMurray Surmont Hangingstone Peace River Peace River Christina Lake Long Lake (ECA) Jackfish White Sands Cold Lake Foster Hilda Lake Creek Cold Lake Wolf Lake/Primrose In Situ Projects In Situ Projects Tucker Lake Mining Projects Mining Projects

  8. Two Methods of Oil Sands Recovery Drilling: 80% of reserves Mining: 20% of reserves Photo: ConocoPhillips - Surmont 8 Schematic: Devon - Jackfish

  9. Canadian Oil Sands and Conventional Production Forecast (2011-2025) Actual Forecast In Situ Mining Conventional Heavy Conventional Light Pentanes/Condensate 9

  10. Canadian & U.S. Crude Oil Pipeline Proposals 10

  11. 21% 16% 15% Canada’s Oil & Products Export to U.S. 11

  12. Prince Rupert/Kitimat 0 4 8 , 3 Los Angeles Jose/ La Cruz Potential Tanker Markets for Canadian Oil Sands Production • Prince Rupert/Kitimat 1,400 N Miles ~ 4,500 N Miles • Korea • Japan Japan • • China Japan Los Angeles Persian Gulf • Taiwan Taiwan 1,790 Taiwan Jose/ • ~ 8,600 N Miles • SantaCruz La Cruz ~ 5,400 N Miles Far East Target Markets U.S West Coast Competitive travel distances for Canadian supply to both markets 12 Source: Enbridge Pipelines

  13. Environmental Performance

  14. Global Energy Related Emissions Global Emissions Canada’s 2% • GHG emissions from oil sands: • just over 1/1000th of global GHG emissions • 6.5% of Canada’s GHG emissions • 29% reduction in intensity from 1990 Sources: 1. U.S. Dept. of Energy/EIA 2. Environment Canada 14

  15. Full Cycle GHG Emissions 105 106 104 114 98 102 102 107 102 Source: Jacobs Consultancy, Life Cycle Assessment Comparison for North America and Imported Crudes, June 2009 15

  16. North American GHG Emissions (2009):Coal-Fired Power and Oil Sands AK ND MT MN OR WY WI MI NH SD NY NE IA NV UT IN OH CO NJ MO KS KY VA WV NC IL AZ NM OK TN Canadian oil sands AR SC AL GA Legend Canadian coal-fired power generating plants 100 megatonnes TX 50 megatonnes MS LA U.S. Coal fired power generating plants 15 megatonnes FL Sources: U.S. DOE/EIA & Environment Canada

  17. Reducing Greenhouse Gas Emissions in Oil Sands Energy Efficiency Using less energy input Reducing energy waste/losses Capturing waste heat Cogeneration power/steam Improved recovery processes Lower temperature extraction Additives to reduce use of both water and energy (steam) Use of electricity rather than steam Underground combustion rather than steam Carbon capture & sequestration Most effective at upgraders Oil Sands GHG Emissions/bbl 29% g co2 eq./mj 1990 2008

  18. Land Use and Reclamation in the Boreal Forest 662 662 16 18

  19. Water Use and Quality Mining 2-4 bbl of water per bbl of oil 80-90% recycle Currently use 0.5 per cent of the annual flow of the Athabasca river To protect during low flow periods withdrawals are restricted Drillable (Insitu) 0.25-0.5 bbls of water per bbl of oil 90-95% recycle No water from Athabasca River Shift to using saline water from sub-surface aquifers Newer projects are using 100% saline water for steam Enhanced monitoring systems Science based, transparent, credible Recent federal and provincial government reviews to enhance monitoring 19

  20. Environmental & Social Performance Focus on both crude oil / oil sands & natural gas Reputation = Performance + Communication Continuous performance improvement More effective messaging (breadth, channels, transparency) Improved industry collaboration Key concerns expressed regarding oil & gas development: Local / regional environmental & social impacts (air, land, water, biodiversity) Global climate change Role of fossil fuels in future energy system

  21. Royal Society of Canada ReportEnvironmental & Health Impacts of Canada’s Oil Sands Industry Science-based, independent analysis of the environmental aspects of Canada’s oil sands Addresses many of the issues and perceptions of oil sands development: Reclamation is not keeping pace, but sustainable reclamation is achievable Water use does not threaten viability of the Athabasca River No impact on Athabasca water quality/ecosystem and no evidence of impact on human health in downstream communities Tailings technologies are emerging, but tailings inventory is growing GHG emissions per barrel are reducing but growing production creates a challenge in meeting international commitments Minimal impacts on regional air quality December 2010

  22. Responsible Canadian Energy Oil Sands Report Principles & Performance Measurement & Reporting Transparency

  23. Oil Sands Advertising -Communicating with the Public To demonstrate that industry takes these issues seriously and what is being done by “real people” to address them.

  24. Success Stories

  25. Summary • “3Es” • Environmental performance • Energy security & reliability • Economic growth • Competitiveness & social license are “must haves” • Reputation = Performance + Communication • Technology is key performance lever • We need to work together & we all need to step up! A great opportunity for Canada and the U.S.……needs innovative, creative, committed, determined people to make it happen!

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