Oil Sands – An International Asset

1. Oil Sands – An International Asset CCEMC – an Alberta-based, independent, not-for-profit organization focused on discovery, development and deployment of clean technology Climate Change and Emissions Management (CCEMC) Corporation

2. To Synthetic Crude Oil (low viscosity, low Sulfur, low V, Ni, N, O) To Bitumen (high viscosity, 4.5% Sulfur, contains Vanadium, Nickel, Nitrogen, Oxygen) Oil Sands: Technology Oil Oil Sands – combination of • Bitumen (3 - 18%) • Water (2 - 10%) • Sand (50 - 75%) • Clay (10 - 30%) From Oil Sands

3. Global Energy Demand World Energy Outlook • Global energy demand will increase by 36% between 2008 and 2035 • 80% of this demand will be fossil fuel based • Best case for US still requires 9Mbbl/day in 2025 • Alberta has second largest proven reserves next to Saudi Arabia • Most of the oil the US imports from Canada comes from oil sands

4. Alberta’s Abundant Energy • Canada (Alberta) is a source of strategic supply • Second largest proven reserves next to Saudi Arabia • Production increasing to +3Mbbl/day • 30% of Alberta’s GDP • US consumption – 20M BBL/day - more oil than any other nation in the world • Alberta is the largest global supplier to the US • The share of crude oil imports coming into the United States from Canada has increased from 13 per cent to 22 per cent over the past decade • By 2030 Alberta’s oil sands alone should supply fully one third of USneeds

5. North American Impact Oil Sands – A Powerful Economic Engine • Canada-U.S.: World’s largest trading relationship • 900 U.S. companies supply oil sands, 69 in Illinois alone • Every U.S. $ spent on Canadian products returns 91 cents to the U.S. economy • Over next five years oil sands will • Contribute $34 billion to US GDP by 2015 • Create 343,000 new jobs (person years) in the U.S. • In Illinois, over the next five years oil sands will: • Contribute $3 billion increase in industry output • Add more than $1.5 billion to GDP • Create more than 14,000 new jobs (person years)

6. Liquid Pipelines

7. Proposed and under construction

8. The Environmental Challenge • Responsible development will drive the realization of this economic potential • Three major environmental challenges • Reduce carbon emissions from energy production • Reduce water use and improve water quality • Reduce tailings ponds and enhance reclamation • Alberta is taking decisive action in all areas.

9. 305 246 0.4 77 7 1.6 63 70 25 72 232 21 110 197 86 2007 GHG Emissions 2 12 27 10 2 2020 GHG Emissions 19 28 21 A climate for change MT GHG Emissions

10. We share a common challenge

11. Alberta’s reduction commitments

12. Government Programs and Initiatives

13. Carbon Capture and Storage • Alberta is investing more in CCS, on a per capita basis than any other jurisdiction in the world • Province plans to produce a 70 per cent reduction in emissions through CCS • Carbon Capture and Storage Council – Makes recommendations to facilitate the immediate implementation and long-term success of CCS in Alberta • recommended $2B allocated • EES has 29 CCS projects underway

14. Alberta – CCS Investments • • CCS expected to achieve 139MT (70% of 2050 reduction targets) • $2B have been invested in four projects • Quest (Shell, Chevron, Marathon)- Upgrader C02 captured, transported and injected • Pioneer (Transalta) – 450MW coal fired plant • Alberta Carbon Trunkline (Enhance) – C02 pipeline • Swan Hills SynFuels – Insitu Coal gasification • 5MT target by 2015

15. CCS Legislation in Alberta • Carbon Capture And Storage Statutes Amendment Act (Dec 2010) • Designed to enable CCS • General provisions • Alberta owns the pore space – crown will approve sites • Enables tenure agreements – the Minister can grant the right to inject C02 • The Crown accepts liability after a closure certificate • A Post-closure Stewardship Fund is established

16. Closing the cost gap may well be the single largest task unless / until the international price of carbon increases Hypothetical Economic Profile

17. Alberta’s Technology Fund CCEMC - a tool to advance clean technologies Government of Alberta Policy Evolution • • Climate Change Strategy (02/08) • • Climate Change and Emissions Management Act (03) • • Climate Change and Emissions Management Fund • Specified Gas Emitters Regulation (07) • • Climate Change Emissions Management Regulation (09) CCEMC Mandate - to establish or participate in funding for initiatives and other measures related to actual and sustainable reductions in greenhouse gas emissions and improve the ability to adapt to climate change

18. Climate Change and Emissions Management (CCEMC) Corporation • Unique model • Independent not-for-profit organization • Dedicated, sustainable funding • Funding is collected from industry that annually produce more than 100,000 tonnes of GHG emissions • Legally required to reduce their greenhouse gas intensity by 12 per cent. • Companies have three options to meet their reduction target: • improve the efficiency of their operations, • buy carbon credits in the Alberta-based offset system, • pay $15 dollars into the Climate Change and Emissions Management Fund for every tonne they emit over the • reduction limit.

19. A Continuous Cycle of Innovation • Announced nearly $100 million in funding for clean technology initiatives in less than 12 months. • 2 RFPs approved • Next RFP approval – May • Latest RFP announced in April • Support innovations that can be applied worldwide with the potential of game-changing outcomes • Leverage 4:1 – more than $ 465M total project investment • Total resources available to date - $260M • Expect >$1B worth of projects by end of next year • Funds are renewed annually – approx. $60-80M

20. Energy and Environment Solutions • One of four new corporations launched in January 2010 • Technology arm of GOA in energy and environment • Position Alberta as an international leader in energy and environmental technologies – low carbon & efficient water economy • Visionary leadership to shape the future • Balanced portfolio focused on the key technical, environmental and economic challenges • Initiatives focused on converting Alberta’s natural and renewable resources to clean fuels and chemicals while reducing: • Capital costs • Energy demand • Fresh water consumption • CO2 and environmental emissions

21. EES Strategic Focus • Bitumen Upgrading • Clean Carbon/Coal • Improved Recovery • CO2 & Emissions • Water Use • Enhanced Ecology • Sustainability Index • Renewables • Alternative fuels • Water

22. EES Long Term Targets

23. R&D and Human Capital • In response to needs expressed by industry, over the past 15 years the University of Alberta has hired > 50 faculty members & established centers with programs focused on: • Environmental footprint (land, water, air, CCS, non-aqueous extraction, remediation/reclamation, etc. • Extraction / mineral processing • Upgrading processes • Control of operations / processes • Safety and risk management • Construction engineering and management • Welding and joining • 700 researchers at the U of A

24. Building Human Capital - 1995 • >

25. Building Human Capital - 2010

26. Institutional Capacity • Significant investment in institutional capacity throughout the province • National Nanotechnology Institute • Devon Research Facility • Ingenuity Centers • Oil sands mining • In-situ • Helmholtz Institute • Carbon Management Canada • Canadian School for Energy and Environment • A host of others • A solid commitment by industry, government and academic/research institutions to address existing and emerging challenges

27. Addressing Myths with Facts

28. Addressing Myths with Facts

30. Conclusion • We are building a secure North American energy supply that is managed to minimize the negative environmental impacts. • Canada’s oil sands are an essential resource to address North America’s energy needs as we begin a long transition to cleaner energy. • We’re advancing the development of clean technology and reducing the environmental impacts of operations. • As we address the world’s growing demands for energy and clean technology, we will produce jobs, economic opportunities and environmental benefits for all of North America. Climate Change and Emissions Management (CCEMC) Corporation