Leader's Letter

Chapter 2.1

Leader's Letter

    Our history began in the late 1950s, when a small company of energy pioneers, Cities Services Athabasca, announced its plans to proceed with the most comprehensive research project ever undertaken to tap into a then obscure source of petroleum – the Athabasca oil sands. In 1964, that company transformed into Syncrude Canada Ltd., which we are proud to say today remains as committed to innovation and responsible development as ever.

    Indeed, sustainability has played a part since our very beginnings. For example, environmental research began in 1969, nine years before operations officially started up. We also brought on board some of the top scientists in the environmental field who would help establish the Alberta Oil Sands Environmental Research Program. This government-managed program, which ran from 1975 to 1985, concentrated its efforts on identifying potential long-term impacts of oil sands development on land, air, water and human health.

    Our efforts weren’t focused on research alone. In 1974, we established the Syncrude Action Plan for Native Training and Counselling Program and, two years later, signed the Syncrude Indian Opportunities Agreement with the Indian Association of Alberta and the federal government. This agreement launched a policy for Aboriginal recruitment and business opportunities that became a role model for companies across Canada.

    As society’s expectations continue to grow, so does our commitment to meeting them. We recognize we can’t rely on past achievements for acceptance or approval – rightly so, we must be judged on our performance today. Towards this, we are guided through a material sustainability risk assessment which has identified the following high priority focus areas: land and biodiversity, water, tailings, Aboriginal relations, and regulatory and government relations. Short- and long-term strategies to address these areas are stewarded through our Board of Directors Safety, Health, Environment and Corporate Sustainability Committee. An outline of our challenges and goals are included in the Our Sustainability Path chapter, and, as you will read in this report, progress continues to be made.

    We recognize we can’t rely on past achievements for acceptance or approval – rightly so, we must be judged on our performance today.

    Regarding land and biodiversity, we’ve permanently returned over 3,400 hectares back to nature. Wildlife is returning to these former mine areas, with evidence of lynx, moose, bear and wolves, in addition to smaller creatures such as the Sharptailed Grouse, Boreal Chorus frog and Western Wood Peewee, to name just a few. While we are an industry leader in reclamation, we aim to make further progress on this front through cuttingedge research on wetland restoration and watershed performance.

    As for tailings management, cumulative capture of fine tailings particles at our Mildred Lake and Aurora mine sites combined exceeded our overall commitment to the regulator in 2013, and we are on track to start up a commercialscale centrifuge treatment facility in 2015. We understand stakeholder concerns regarding industry’s performance on tailings management and are unwavering in our perseverance to meet the long-term intent of the regulator’s directive. At the same time, our Sandhill Fen watershed research project – the first reclaimed area in the industry built on a foundation of dewatered tailings – continues to perform well, with many plants as healthy as you would find in a non-disturbed natural area.

    In terms of water use, Syncrude continues to perform better than the industry average but we are taking significant steps to improve our efficiency and take advantage of better reduction, re-use and recycling opportunities over the next five years. As well, we continue to research safe and acceptable alternatives to treat process affected water for closure and incorporation into the final reclaimed landscape.

    Our commitments in Aboriginal relations continue to guide numerous aspects of our operations, from employment to local procurement. As of 2013, employees of self-declared Aboriginal heritage comprised around nine per cent of our workforce and procurement with local Aboriginal businesses had increased by 27 per cent over the previous year, reaching a cumulative $2 billion milestone. Efforts are now underway to explore how best to increase our Aboriginal retention and recruitment, while carving out new opportunities for engagement and business development.

    We also recognize the need to work constructively with government and regulatory bodies to manage issues or policies that could impact present or future operations. Towards this, in 2013, we continued to prepare our environmental impact assessment and regulatory application for an extension of our Mildred Lake mine.

    Collaboration continues to play a key role as well. Through initiatives like Canada’s Oil Sands Innovation Alliance, the entire industry is sharing knowledge and research to foster new breakthroughs in environmental performance together. Syncrude is also engaged on other fronts, such as various multi-stakeholder initiatives to address labour workforce supply, training, Aboriginal engagement and safety.

    While great progress continues to be made, Syncrude experienced some setbacks during the year. We were especially saddened when a field mechanic suffered a fatal injury while working for a contractor at our Aurora mine. This serves as a sober reminder we can never relax our commitment and attentiveness to a safe workplace. The health of residents in local and downstream communities also continues to be of concern. Environmental and health monitoring have not linked oil sands development to human health issues. However, we recognize communities have concerns and we advocate for further science-based studies that are supported by residents and government.

    Throughout our 50 years of applying research and innovation to the development of the oil sands, we have experienced many challenges all the while acquiring a broad base of knowledge and expertise. However, we know there are many more years of learning ahead of us. Collaboration and feedback from stakeholders and communities of interest are integral to how we operate our business and essential to how we will evolve. We ask you to join us on our journey and provide your perspectives on what we are doing well and where we can improve. It can start today and we encourage you to check out the survey included with this report.

    The oil sands are a tremendous resource for all Canadians, creating wide-ranging benefits and opportunities. Through a progressive and principled approach to development, Syncrude will ensure you can be proud of this resource now and in the future.

    Mark Ward
    Chief Executive Officer

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