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Illustration of Rick George, founder of Novo Investment Group and former CEO of Suncor Energy (ANTHONY JENKINS/THE GLOBE AND MAIL)
Illustration of Rick George, founder of Novo Investment Group and former CEO of Suncor Energy (ANTHONY JENKINS/THE GLOBE AND MAIL)

THE LUNCH

Rick George: The reincarnation of Mr. Oil Sands Add to ...

Rick George calls it “the afterlife.”

It is life after Suncor Energy Inc., the company Mr. George joined in 1991, took public in 1992, transformed into an oil sands giant and, made into a Canadian champion – a description one can employ straight-faced about a company that has flirted with top spot on the Toronto Stock Exchange – by swallowing Petro-Canada.

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Over those two decades, he became one of Corporate Canada’s most recognized faces, a square-jawed executive with a gleaming smile, a commanding presence and an undying allegiance to his industry.

So it’s a bit surprising to learn that Mr. Oil Sands is not only preparing to recede from the limelight – though the afterlife has given him a new frankness – but that he’s suddenly developed an affection for natural gas, that other fossil fuel he spent years pruning from Suncor’s portfolio. And that he’s going to have plenty of time, space and money to invest in new playgrounds, with a new private equity company – Novo Investment Group – that he is working to stock with $200-million to $300-million. Some of that money will go to start-ups with good ideas for oil sands technology.

But “we’re looking beyond oil, for sure,” he says. Not to renewable energy, after his experience at Suncor, whose wind investments generate some of the lowest returns in its corporate stable. But “gas is the first step, absolutely.” So are small players. He is moving from the yacht that was Suncor – or was it an oil tanker? – into the speedboats that are junior companies, where the ideas come fast and furious and the future is something to be moulded rather than endured.

Mr. Oil Sands is “not starting over,” he says, as he sips sparkling water at Calgary’s Centini, a downtown Italian spot high on his list of go-to restaurants. But he will be “using experience I’ve had over the last 40 years in a different way completely. Hopefully it’s kind of an energetic, creative process.”

‘Crazy good’

 

The afterlife began in May, when Mr. George left behind 21 years of battling costs, fighting against failure, tussling with environmental critics and navigating thorny first nations issues. It would be a stretch to say his mark on northeastern Alberta stands almost as large as the gaping mines he helped to build. But not much of a stretch.

You could call it all a pretty unlikely story for a kid from Brush, Colo., population 5,000 – a Prairie town with dim prospects and limited horizons. The son of a TV repairman, the young Mr. George climbed towers to help the family business. He and his brother made a pact to leave town as soon as they could, but Mr. George didn’t step on a plane until he was a fourth-year university student at the University of Colorado, in his early 20s.

Two decades later, he had degrees in law and engineering, had helped to build a massive floating production platform in the North Sea and had accepted a job in Toronto, to run the oil sands division for Sun Oil Co., Suncor’s owner at the time. Two decades after that, Mr. George had transformed Suncor into a Canadian corporate icon, had taken Canadian citizenship, been named an officer of the Order of Canada and penned Sun Rise, a book coming out this weekend that traces his own journey and sets in print a manifesto of sorts for the oil sands.

One of the hallmarks of Mr. George’s latter years at Suncor was his ardent defence of the oil sands’ environmental record. “If you look at the last decade, improvements on air, land and water emissions, it’s crazy good,” he says. “On every single count – CO2, water use – they’re all dropping like a stone.”

A desire to “hopefully move the dialogue a little bit on the environmental side” of the oil sands was one of his key motivators in writing about the industry. There’s some settling of scores, too, including a scalding attack on James Cameron, the helicopter-owning director who came to the oil sands to preach hydrocarbon restraint. Mr. George calls him a hypocrite, and has choice words for the media, who “fondle themselves over these Hollywood types coming up out of the U.S. and trying to lecture Canadians on how to live.”

He doesn’t have much time, either, for those who would stand in front of the Northern Gateway project to bring Alberta crude to the West Coast for export: “The right thing should be done for Canada. This can’t be a system where the minority view controls everything,” he says. Besides, he charges, northern B.C. communities suffer their own share of conflicted viewpoints: “If you look at the number of the aboriginal communities on that West Coast that are opposed – they move diesel by water in and out,” he says. “So there’s a lot of hypocrisy to the whole system.”

He tenders his own solution to some environmental woes. Politicians, he says, could have done a lot of good by quickly setting a carbon tax at $5 a tonne and pouring the money into urban rapid transit. “Governments are behind the curve,” he argues.

Mr. George doubts the root science behind much of the environmental movement: The finding that the consumption of fossil fuels is warming the earth. Investing in emissions reduction makes good business sense for companies attempting to stay ahead of the political winds and cut energy costs. But personally, he has doubts.

“It’s not a debate that I’d really care to get into because for a lot of people it’s like religion. What I don’t really like is when people say the science is settled,” he says.

He adds: “This globe has been extremely warm and it’s been extremely cold over the last several hundred thousands of years. So to think you’re going to make that much difference in an overall cycle – I’m skeptical.”

An appreciation for cycles, it turns out, is fundamental to Mr. George’s understanding of the world. One of his most-lauded moves was the decision to pour money, two decades ago, into an oil sands operation drenched in red ink at a time of high operating costs and low oil prices. So why did he do it? He makes it clear in his book: “No one in the business asked me how I could justify committing the company to such high spending when prices were so depressed. If they had, I would have answered: cycles.”

Oil prices go down. Then they go up. Reading the inflection points is an art, because some swings are lengthy and others are brief. Mr. George attributes his appreciation for cycles to his interest in macroeconomics. He attributes his ability to see them coming to something far less academic: intuition. Even early in his career, “I always did have this thing where I was feeling I could make better decisions than some of the ones [other executives] made.”

He was not always right. An attempt to extract oil from underground shale in Australia went sufficiently wrong that Suncor wrote off $100-million. Its adventures in Syria and Libya – the latter of which resulted in another writedown, this one $514-million – weren’t great either. The decisions to stay in those countries, which Suncor entered after acquiring Petrocan properties there, made sense at the time. In retrospect, “obviously it probably would have been better if we tried to sell.”

Yet Mr. George says a finely tuned gut is more often right than wrong. “If your intuition is sufficiently strong,” he writes, “and you’re brave enough to assume an attitude contrary to the rest of the herd, that’s the route you follow.”

 

The smell of opportunity

 

Mr. George orders the seafood cakes, served with a roasted-red-pepper aoili and pickled vegetables. This seems like a reasonable time to ask the question: What kind of cycle are we in now?

Perhaps not surprisingly, his answer helps to explain where he is going next. In today’s market, oil is roaring while gas is an also-ran, its prices mired in a deep funk. It won’t last, Mr. George believes.

“There’s plenty of oil in the world today. I don’t think the price of crude should be at $90 [U.S.],” he says. A more reasonable price, looking just at the basics of supply and demand, might be $75 or $80. The path for Canada will be particularly tough. Alberta’s oil is inland, far from ports, dependent on pipelines that become full and costs that spiral. “We the industry are still on the high end of the production cost curve,” he says.

Gas, on the other hand? There, he is “a little more bullish.” Coal-fired power plants are switching to gas to generate electricity. Vehicles, he believes, will follow. If “you moved more and more of your truck fleet from using gasoline to some kind of a natural gas system, you’d see emissions drop, you’d see costs drop,” he says. “There’s lots of infrastructure that has to go in to make that happen.”

In that, he smells opportunity.

And at 62 years old, he still has time to leave his imprint on the oil patch outside of Suncor.

Still, Mr. George is not wedded to work. He has a house in Big Sky, Mont., and grows nearly euphoric when he talks about the quality of skiing there. When he’s in Calgary, he works out every morning. He owns a Harley, but rarely rides it. Instead, he is an active cyclist. Every year, he and his wife Julie join several other couples on cycling trips. They have been to Vietnam, India, Morocco, Croatia, France and Italy. Next year, they’re looking to Eastern Europe. He recently returned from Turkey, where he took his family – including his three kids and a grandchild – for a 20-40-60 tour: 20 years as Suncor chief, 40 years of marriage, a 60th birthday for his wife.

It’s clear that relinquishing his position atop Canada’s oil sands has not been difficult. Unlike many retiring chiefs, he did not retain a seat on the board, and he practically exhales with relief when he talks about giving up the public advocacy duties that come with being Mr. Oil Sands.

“In this next life, I’m not going to be as public about what we’re doing,” he says. “Getting out of the spotlight after 20 years is not a bad thing.”

That’s not to say he will be inactive. Novo Investments will not be a passive fund. It will, instead, take “a very active approach” in the companies it chooses. Mr. George has a lifetime of executive experience. He’s not about to let it go to waste.

For now, though, it feels good being free of Suncor, a place whose culture inevitably changed as it grew. Mr. George, in his book, describes Exxon Mobil Corp. as a company whose “employees will agree that working there can be very rewarding, but I doubt many would say it’s fun.” Suncor, especially after swallowing Petrocan, had started to become that kind of place, where procedures began to rule over personal initiative.

Mr. George declines dessert, opting instead for a cappuccino. “Surprisingly,” he says, he doesn’t miss Suncor. The afterlife isn’t such a bad place to be.

“Life’s been full, actually,” he says. “I haven’t been resting on my laurels at all. And I’m quite excited about what we’re doing next.”

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