Adapting to climate changeBy

Suncor Energy Incorporation

Group 3
Gautham Ravi DM17112
M M Sahana DM17120
Varun Kumar DM17156
Vishal Gopal DM17158

Issue in hand: Should Suncor invest in CCS ( 25 million $)

Proponents: VP (Lambert) Sustainable development.
Reason : Containing emission gases for oil sands operation.
Leadership position would create a change in drilling practices.
Doubt in mind: CEO George
Reason :
Fluctuating political stance on the issue.
Difficulty that would be involved in justification.
Co-ordination required between oil and gas sectors.

Greenhouse gases and global warning.

High amount of heat energy entrapped on earth due to quick rise in

the level of noxious gases.

Various human activities and to some extent natural calamities led to

the rise of global warming.

Various number of plants and animals are endangered.

Analysts predict that earth would by warmer by 2 degrees by 2050.

Kyoto Protocol

Quantified limits of GHG were set industries and developed economies should
reduce their emission by 5 percent by the years 2008-12 compared to 1990s.

Liberal government had committed to reduce by 6 percent instead it rose by

25.3 percent.

Conservative government retracted the commitment made by the liberal

government.

Greenhouse gases and Oil & Gas Industry

Significant increase in the demand for fossil fuels due to the poor fuel
efficiency of cars in USA.

Increase in oil prices made the industry an attractive one considering

the ROCE of 21% and other subsidies by government.

Northern Alberta accounted 30% of Canadas GHG emission.

Energy industry dependent economy.

Carbon management strategies

Energy Efficiency.
Carbon emission trading for offset credits.
Carbon capture and storage

CCS in Canada
BC, Alberta and Saskatchewan to serve as hubs considering the availability
of geological storage sites and considerable number of sites.
Weyburn was attracting investments worth a billion dollars due to the
venture between EnCana and International Energy Agency.
Average cost of CCS varied between 9$ per tonne to 120$.
The entire process would require between 75 200 million dollars for the first
two years and 60 100 million dollars in the subsequent years.

ICO2N
An initiative by Suncor Energy comprising of 12 other firms from the industry investing
time and money into research on CO2 capture, transport and storage in Canada.
Its purpose was also to work with government to frame policies that corroborates the
efforts and investments that the companies would require to make.
Five anchor participants shared the planning costs and initial studies. The initiatives
challenge was to in justification of such huge investment that the industry has to
undertake and the development of markets for EOR.
It is also important that the government should work with the industry to make the
investment worthy enough for everyone involved.

Suncor Energy Incorporation

Primary operations in oil sands and also operated in natural gas production,
downstream refining, marketing and retail businesses.
Return on investment to common stock holders outperformed S&P by a factor of five.
Core components Social welfare, Economic benefits and minimizing carbon
footprint.
Supported Kyoto protocol and also made heavy investments in alternative energy
manufacturing such as ethanol and wind power.
Notable contributions to local community development through its foundation and
was included in Dow Jones sustainability Index and FTSE4Good Index.
Due to its increased production volume, the carbon footprint have doubled over this
period inspite of its energy efficient equipment and processes deployed in oil
production.

Strategic Decision
Support for ICO2N as it would give an first mover advantage and legitimacy
among the local authorities.
The first likely return from CCS would be in the year 2013 which would be after
the Kyoto protocol time period for first commitment.
Risks involved in terms of technology required, weak market for carbon trading
and EOR.
Swaying public opinion and the chance for the fall of ruling government.
Investment required to integrate and reengineer the plants of Suncor would be
25$ million.

CCS
Considering the fact that Suncor has been able to reduce the intensity of C02
emission from their production, energy efficiency might not give long term
sustainability as this would again require huge investment into R&D.
Energy trading and offset credits are good options but it is nowhere in the
picture for the subsequent years.
CCS although would not yield results in the near future, considering the core
component of Suncor, the sustainability of business and environment, the
investment should be made.

THANK YOU