Critical Analysis of Extraction in Suncor - Case Study Example

Title Name Institution Critical Report of Extraction in Suncor 1.0 Introduction Suncor Energy Inc is an integrated energy company in Canada with its headquarters in Calgary, Alberta. The company produces synthetic crude using oil sands. Suncor therefore develops and deals in the production of natural gas and oil. This happens in Colorado, eastern Canada and Western Canada (Suncor Energy, 2011). The company has its presence in the North Sea, Libya, Trinidad and Tobago and Syria. It runs refineries in Colorado’s Commerce City, Montreal, Quebec, Edmonton, Ontario, Samia and Alberta. Various types of consumers are supplied by these refineries among them the commercial, retail and industrial ones. It is among the biggest retailers of Petroleum products in Canada (Suncor Energy, 2011). In its corporate sustainability reports, Suncor reports of its commitment and efforts towards matters of environmental and resource conservation as well as the socio economic issues touching on the welfare of the environment. However there is information from other quarters that part of the information contained in the company’s environmental reports could be false. This paper is a critique of the information given about Suncor Energy Inc.’s environmental conservation efforts. 1.2 Industry background The oil sands Industry in which Suncor falls is faced with so many environmental issues about air pollution, water consumption and conservation, land management and socio economic challenges. Production of oil from oil sands requires a lot of water. This water is drawn from rivers which are also used for other purposes. A major problem with policy is the balancing of water use so that the production of oil sands and use by people and the ecosystem are not in conflict. The availability of water for oil sands need and other ecosystem uses has been in doubt. Generally the oil sands activities affect water systems in a negative way. Another issue is that of climate change. The oil sands produce a lot of green house gases which contribute to climate change and these emissions are believed to be on the increase. Public attention has been focused on climate change and the oil sands have come under sharp criticism and the attention is on the rise. The development of oil sands also causes disturbance in forests. An example is the boreal forest in Alberta. There are many environmental problems arising from oil sands production where forests are being destroyed. These problems include deforestation itself, destruction of habitats, and loss of species, road clearing and open pit mines. There are fears that complex wetlands may not be reclaimed back to their original states when the developments are over (Finley, 2012). Issues of social policy also arise in the industry because oil sands impact on social services. Communities living in the areas where oil sands are being produced have problems coping with the developments arising from the oil sands activities. Costs of housing have been observed to go up at a very first rate making it hard for new comers to afford them comfortably. Oil sands production impacts negatively on the physical infrastructure like sewage systems, water and roads. There also arise cases of inadequacy in social services like crime prevention, education and health care. People living in oil sands areas tend to feel that they are bearing the burden of negative effects but do not benefit much from the industry activities. In Canada there is the problem of First Nations seeking to block the approval of new projects because of the effects of the industry on them. Oil sands bring economic growth but there is the issue of income distribution. Inflation and high costs for real estate also cause discontent among communities besides hurting important economic sectors. Investors withdraw from other sectors to invest in the oil sands. 2.0 Environmental categories 2.1 Key air pollution impacts Suncor has made a commitment to maintain high air quality around all its operations. It puts a lot of effort in monitoring the quality of air, sulphur dioxide, nitrogen oxide and volatile organic compounds. It is reported that in 2011 the company reduced its emissions into the atmosphere by around 17 percent. This is attributed to the divestments done in 2010 and 2011 in non core assets. The company has installed a major technology for controlling air pollution. It has made many historic initiatives that are used in controlling emissions in various sites. In 2011 the fire bag in situ facility owned by the company cut down emissions through the use of a unit for sulfur recovery (Suncor Energy, 2012). In monitoring of the quality of air the company supports the management of air quality in the region since it is a member of the Wood Buffalo Environmental Association. It also supports other community based organizations that do the monitoring and reporting on air quality every day. These organizations include Parkland Airshed Management Zone and the Pallisher Airshed Society among others. Suncor took part in founding Alberta Clean Air Strategic Alliance a policy forum that is involved in the management of issues of air quality. All these and many other initiatives show how committed Suncor is in matters of air quality maintenance (Best and Herbat, 2008). The company may be reported to be doing a lot in terms of conserving the environment and reducing its green house gas emissions but this is not the case on the ground. In the year 2007 in Canada, Suncor was reported to have been number 6 in production of green house gases. This is found in the Pollution Watch fact sheet. Due to increased operations in oil sands the production of green house gases by the company has increased. In 2009, the company paid a fine of $675,000 because it had declined to install equipment needed to control pollution in its Firebag operation in Alberta. Another fine of $2.2 million was imposed on Suncor in the United States by the Colorado Department of Health and Environment in 2012 because of the pollution of air (Finley, 2012). Suncor has failed to adhere to its reported commitment on the conservation of the environment especially the maintenance of air quality. In the years 2009 and 2010 the company did not monitor its emissions on several occasions and many of its emissions went beyond the regulations laid down. In 2007, Suncor Energy Inc. was ordered by the government of Alberta to reduce its hydrogen sulphide emissions produced from the Firebag enhanced Recovery site located close to Fort McMurray. After inspection of the site, Alberta environment discovered many violations of its approval conditions. Among them they found out that there was no equipment for controlling pollution, acceptable reporting on emissions and unlawful venting of hydrogen sulphide. 2.2 Water consumption Suncor has been reported as having a keen interest in water conservation. It has managed to cut down its consumption of water in its activities. In 2011, the company achieved a lot in its Water Strategy for the improvement of water quality control in its activities. Suncor has intensified its cooperation with other operators in the oil sands business to manage water in a better way in the Athabaster watershed. Suncor’s operations in Western Canada have a project that is used in recycling flow back water for use in the place of new water. The practice has also been used in the Wilson Creek Cardium program where more than 1.8 million liters of waste water was recycled. In the Kobes field, 2, 400, 000 more litres were recycled in 2012. Suncor is already working on its goals of reducing consumption of fresh water by 12 percent come the year 2012. The company has reduced the amount of water taken from the Athabasca River by 36 percent in the last five years. In 2012 it recorded the lowest gross water harvesting although its production of bitumen have grown tremendously. In the year 2011 its consumption of fresh water from the Athabaster River fell by 22 percent in a span of one year. The company is also reported to have stepped up its water conservation efforts as well as its reuse and recycling in all its operations (Best and Herbart, 2008). The above claims could be faulted though, based on available information about the company’s water consumption and conservation trends. The reason for doubting these reports is that the company’s operations in oil sands are increasing in many areas where it has its presence. Mining of oil sands accounts for the biggest consumption of fresh water from rivers. The company claims to be reducing its demand for water yet it is expanding its operations in oil sands. This is a contradiction since the more the operations the higher the amount of water drawn from fresh water resources. Reports indicate that in 2007, Suncor was required to pay a fine of $ 175,000 imposed on it for releasing raw waste water into the Athabasca River. This waste water was untreated and it was produced in a work cam belonging to the company near Fort McMurry. In addition it was discovered that benzene was leaking into the Sand Creek in 2011. People got exposure to benzene via drinking water. The efforts to clean up the creek and the consequences to the environment resulting from contamination with benzene have been hidden from the community. Suncor has failed to come out clear on the matter yet is purports to conserve water and cut down its use of that water. 2.3 Land impacts In terms of the impacts on land, Suncor is reported to be working to reduce its impacts in areas of solid waste production and treatment and the land being used and offset. Mining of oil sands causes disturbance to the land. The company is said to have a vision which comprises of good management practices for land. Where development causes land disturbance, the company undertakes efforts to reclaim that land. Tailing bonds are also being reclaimed. The company starts to plan for reclamation many days before the development on the land is initiated. Suncor boasts of having reclaimed its tailing pond to the level that the land can be used again for wildlife and vegetation. The Tailings Reduction Operations technique used by Suncor will ensure that mining operations in the future do not need a big pond capacity and that ponds already in existence will be restored only a few years later. The company is also reported to be investing heavily in its in situ operations that make use of not more than 15% of land destroyed by oil sands operations where tailings are not produced. Suncor makes seismic lines that have a lower impact by use of certain specialized equipment (Best and Herbart, 2008). Some of the reported claims above may be true while others are exaggerated and false. The reporting on some of these matters may not be genuine. Suncor boast of having reclaimed one tailing pond to a level that can be compared to its original state. Activists have however pointed out that the level of destruction of the land in that area was less compared to the other places where the company operates. It is also still not clear if the reclaimed land can support trees leave alone the wetland ecosystem that existed there originally. Many of the tailing ponds created by the company are yet to be reclaimed. Any land that has been reclaimed cannot support the vegetation and wildlife that originally existed there. The company’s operations have been reported to be on an expansion program with more oil sands projects being approved. This means more land is under threat of destruction in the future. The company’s involvement in reclamation and land conservation activities cannot be compared to its efforts in oil sands production. The company has also been blamed for not doing enough in its slid waste disposal activities. Many time complaints have been registered by local communities and first class nations affected by the company’s operations in Alberta and elsewhere in North America. 2.4 Health and safety Suncor has a commitment to its workers and the communities in which its operations exist. The company cannot afford to comprise the safety of its workers and the people around. It has initiatives that ensure that the environment is safe and healthy for the sake of its workers, contractors and those living around. The company reports that it is working hard to teach its contractors and employees to be responsible for their safety. Its ‘Journey to Zero’ program is aimed at reducing injuries at the place of work. In its plans, the company includes considerations for health and safety (Best and Herbart, 2008). As much as the company is concerned about its employees and contractors, very little can be said of it about the communities in which it operates. Safety to the community has been neglected since the company has been involved in many activities that endanger the lives of community members. In the year 2008 a scandal rocked the company. It was about the leak of almost 1 million liters of water into the Athabasca River. This happened for around 8 months with no reports being given about the incident. This and other similar incidents were ignored in total disregard to the safety of the public. The company with its air pollution activities, land destruction and water pollution incidents can be seen as one that cares for public safety. Accidents have often been reported at work. An example is a case in 2008 where Suncor was fined C$ 200,000 because its workers in the Oil refinery at Ontario worked under exposure to hydrogen sulfide and hydrofluoric acid. 2.5 Energy conservation Conservation of energy in the operations of Suncor Inc. has also been given priority. This is in pursuit of its environmental conservation goals laid down in its long term plans. The company has adopted the use of energy technologies since the 1990s that have greatly improved the efficiency of energy besides reducing the costs of operation and improving environmental performance. The company’s energy conservation record is however not vey good. Contrary to reports indicating positive performance by the company, there have been reports of excessive use of energy by the company in its operations. With increasing oil production and planned expansions the company is set to increase its energy uses. Since it deals in the production of oil which is a source of energy the excessive use of energy in the company has often been justified by this. 2.6 Socio-economic aspects The involvement of the community in the activities of the company has been another priority. The company has been reported to incorporate community efforts in its conservation efforts in areas where it operates (Suncor Energy, 2012). The company has taken a lot of its labour force from the surrounding communities. This however may not be enough community involvement. Communities such as the First Nations in Canada have raised complaints about the company. In its activities, the company has been blamed of not giving the community first priority. 3.0 Conclusion In this report Suncor Inc., an oil sands company based in Canada has been analyzed in a critical manner. The company’s activities as relates to environmental conservation were the subject of the analysis. Based on the information obtained from the company’s environmental sustainability reports and the three articles analyzed, the company has been very active in matters of environmental conservation. Specific efforts have been directed into the reduction of green house emission, hydrogen sulfide and other gaseous pollutants, water conservation and reduction of the amount of water being consumed, reuse and recycling of water among other things. The company has also developed technologies to help in energy conservation. Land reclamation and restoration has also topped the company’s agenda. The company has had to reclaim its mining areas, increase the level of safety for its workers and involve the community more in its operations. However, the company’s efforts in all these environmental matters are inadequate and some reported activities are exaggerated. The company has had to pay fines for pollution of air and water and the failure to adhere to environmental regulations required of it. Accidents have been reported at the work place and communities living in areas where the company has its operations complain of being sidelined from the company’s operations. This shows that in reporting its environmental activities, Suncor does not emphasize on truth. References Best, J., George H. 2008. Alberta’s Oil Sands: Key Issues and Impacts. Economy and Trade. http://www.mapleleafweb.com/features/alberta-s-oil-sands-key-issues-and-impacts. Accessed 26 July 2012. Finley, B. 2012. Suncor Oil Refinery Backup after Release of Dust Forced Shut Down. July 6 2012. The Denver Post. http://www.denverpost.com/environment/ci. Accessed 26 July 2012. Suncor Energy 2011.Transforming Tailings Management in Alberta’s Oil Sands. Fertile Biodiversity. http://www.miningandexploration.ca/alberta/article/transforming_tailings_management_in_albertas_oilsands/. Accessed 26 July 2012. Read More