News

OIL AND GAS
The industry has substantially reduced its emissions of carbon dioxide and other greenhouse gases per unit of oil and gas output over the past decade. Some companies have also invested in wind power and other renewable sources of clean energy. Both strategies may help producers cope with declining conventional oil and gas reserves, and with any government limits on greenhouse gas emissions. Several oil sands producers are also trying so-called sequestration of carbon dioxide emissions—injecting the gas underground to permanently capture it. But total emissions of greenhouse gases are still climbing and will continue to do so, largely due to the expansion of the vast oil sands projects in and around Fort McMurray. Those projects also use massive amounts of water, most of it taken from the already-depleted Athabasca River, and virtually none of the land stripped to extract oil has been reclaimed.

Petro-Canada                            A-
Petrocan scores well on employee and social issues such as work/life balance and diversity. The company has expanded parental leave, job sharing, flexible work hours and paid days off for family care, and offers on-site daycare at its Calgary headquarters. In 2005, Petrocan committed itself to providing equal access to employment for First Nations peoples (currently, about 1% of Petrocan's employees are aboriginal). Three of the company's 12 directors are women—the highest proportion of any major producer. The company's governance record is also excellent, as is its CSR reporting.

Suncor Energy                                  A-
Suncor is a world leader in investing in renewable energy, and plans to develop a new wind farm every 12 to 18 months. It now has wind farms in Alberta and Saskatchewan, and another in the works in Ontario. Suncor's aboriginal relations and CSR reporting are both strong. Despite environmental progress, Suncor was the seventh-largest emitter of greenhouse gases in Canada in 2005.

Nexen                                          B+
Nexen has distinguished itself as a CSR pioneer since 1997, when it helped develop the International Code of Ethics for Canadian Business, a set of voluntary standards endorsed by Ottawa and several leading corporations and academics. Nexen has also adopted an aboriginal strategy that includes community business development, cultural awareness training and employment programs. Over the past five years, Nexen has significantly reduced emissions of methane and nitrogen oxide from its Canadian oil and gas operations.

Shell Canada                                     B
Shell is committed to working with aboriginal communities, but its involvement in the proposed Mackenzie Valley gas pipeline has drawn criticism from environmentalists.

Syncrude                                            B-
The company has a strong aboriginal employee development program and scores well on employee health and safety. But it is the largest oil sands producer, and environmental issues abound.

Talisman Energy                                   B-
Talisman is a leader in human rights policies, and wins points for a wind-power project off the coast of Scotland. However, CEO Jim Buckee's compensation is high—he ranked No. 6 in 2005 in Report on Business Magazine's executive pay ranking.

EnCana                                               C+
EnCana's environmental performance is improving, but it's still one of the most penalized firms in our rankings. Its environmental, social and corporate governance reporting is improving.

Imperial Oil                                           C-
Imperial has the best health and safety record among the ranked firms. But it's also the most penalized for environmental infractions, and is not developing renewable or alternative energy.

Husky Energy                                        D+
The company was a pioneer in developing and marketing ethanol-blended fuels, but loses marks for poor environmental reporting.

Canadian Natural Resources                         D
The company is working to improve relations with aboriginal communities. However, its CSR reporting is limited.

Critical Issues for Oil and Gas

Labour
Within three years, oil sands projects will likely require double the number of skilled workers employed today. In 2005, Canadian Natural Resources ran afoul of unions when the Alberta government gave it permission to use non-union labour and foreign workers on its Horizon oil sands project. Last February, the firm announced it would bring about 500 Chinese workers to Horizon.

Water
Producing one barrel of oil from the oil sands requires 2 to 4.5 barrels of water. Water flows in the Athabasca River decreased by about 20% between 1958 and 2003. Downstream ecosystems are threatened.

Greenhouse gases
Syncrude's and Suncor's oil sands operations were two of Canada's seven largest single sources of greenhouse gas emissions in 2005. Oil and gas producers are forecast to generate half of the projected growth of Canada's greenhouse gas emissions between 2003 and 2010. The oil sands producers' average emissions per unit of output have declined by 26% over the past decade, but increased oil and gas output has more than offset that.

Other emissions
Alberta leads all provinces and territories in discharges to the air from industry. Air pollutants such as nitrogen oxides, sulphur dioxide and volatile organic compounds are the most common pollutants released by burning fossil fuels. Extracting oil from the oil sands requires far more processing than does conventional oil and gas production.

Urban Sprawl
In 1996, there were only two active oil sands projects and Fort McMurray's population stood at 34,000. Today, there are eight projects on the go, and the population is about 64,000. At least six more projects are being planned, and the population could reach 100,000 by 2010. In 2006, apartment vacancy rates dipped as low as 0.7%, and the average cost of a single-family

home was $370,000. The health system is overburdened, and homelessness, drug

use and alcoholism are on the rise.