Suncor Energy CEO Rich Kruger sought to defend his company’s pivot away from renewable energy, touted his own 40-year career as a fossil industry executive, and largely avoided a Member of Parliament’s questions on oil and gas companies’ liability for climate impacts in an hour-long appearance yesterday before the House of Commons Standing Committee on Natural Resources.
The discussion had Kruger, a relatively new arrival at Suncor who previously spend 31 years at ExxonMobil and as CEO of its Canadian subsidiary, Imperial Oil, doubling down on what he previously described as a “revised direction and tone” for Suncor during a call with industry analysts in August.
“We have a bit of a disproportionate emphasis on the longer-term energy transition,” Kruger said at the time, adding that while those pursuits are important, they won’t make money for shareholders today.
“Today, we win by creating value through our large integrated asset base underpinned by oil sands,” he declared.
Kruger’s committee appearance began just half an hour after two environment groups warned that the expansion plan for Suncor’s Fort Hills oil sands mine in northern Alberta will produce an estimated 732 million cubic metres of new tailings waste over the project’s lifetime, enough to fill 60 square kilometres of new tailings ponds. That’s “an area large enough to cover the island of Manhattan,” the Canadian Parks and Wilderness Society-Northern Alberta and the Alberta Wilderness Association said in a release.
“If this project moves forward, we will be forced to watch the destruction of a place that took 10,000 years to develop and only a few years to destroy,” said Gillian Chow-Fraser, boreal program manager at CPAWS-NA. “The company plans to destroy an ancient wetland and fill it with tailings ponds, not only losing important habitat and stored carbon but also replacing it with even more dangerous hazards to communities, wildlife and water.”
“Recent incidents, such as the leak and spill at Imperial’s Kearl mine, show that the tailings situation has reached a crisis point in Alberta,” added AWA conservation specialist Phillip Meintzer. “New and expanded oil sands mines mean the destruction of more wildlife habitat, while also adding more tailings to the landscape. The risk of environmental catastrophe is already too great.”
No Change in Plans
Responding to the wave of reaction his remarks provoked two months ago, Kruger told MPs the “revised direction and tone” he introduced at the time really meant no change at all in his company’s long-term plans. In his opening statement to the committee, he said global energy demand continues to rise, with affordable, reliable energy “at the centre of every human development index.”
Even with rising temperatures and growing concern about the effects of climate change, “all plausible global energy outlooks forecast oil and gas remaining among the world’s largest sources of energy for decades to come,” he asserted, notwithstanding International Energy Agency analysis that shows oil demand falling 75% and gas demand 55% between 2020 and 2050.
(The IEA styles its annual World Energy Outlook the “gold standard” of energy analysis, and the fossil lobby was all too happy to quote the Paris-based agency’s findings until it began to align with a net-zero future in May, 2021.)
Kruger said Suncor’s goal in keeping its oil and gas business healthy today is to keep the company healthy over the longer term, to deliver on a 2050 net-zero promise that hinges on speculative but fossil-friendly technologies like carbon capture and storage, hydrogen, and small modular nuclear reactors. “But that requires a shared vision, including public policy support, technology advances, competitive investments, and effective leadership,” he declared. “In other words, a collective effort is required between government, industry, and society.”
Over the last year, Suncor and the other five members of the Pathways Alliance have taken sharp criticism for refusing to invest significant dollars in that collective effort, despite record profits driven in part by Russia’s war in Ukraine. Exactly a year ago, Pathways announced a C$24.1-billion investment in a major carbon capture hub. But even after a $7.1-billion carbon capture tax credit announced in the 2022 federal budget, the companies demanded further subsidies before committing their own funds.
“Over the life of the project, probably two-thirds of your costs are operating costs. And so the (tax credit) helps enormously on the construction side, on the capital side, but we’re still working with governments on ways to shore up some support on that operating cost side,” Pathways Alliance President Kendall Dilling said at the time.
4% for Decarbonization Investments
During the committee hearing, British Columbia MP John Aldag (L-Cloverdale-Langley City) cited the industry’s “massive profits” alongside the wildfires and floods his province has faced in recent years. “I think Canadians are asking, my constituents are asking, where are those profits going, in helping us deal with the effects of climate change?” he asked. “Because what you’re doing now is, essentially, not enough.”
Kruger replied that Suncor has taken in $9 billion in profits over the last three and invested $13 billion in health and safety, operational integrity, and environmental responsibility. Of that total, he said $540 million—or just over 4%—went to decarbonization projects.
Aldag invited Kruger to explain “what I would consider a fairly aggressive move away” from the wind and solar projects Suncor invested in two decades ago, asking him why the company is “doubling down on a revitalized oil and gas sector” when current projections show oil and gas peaking before 2030, then declining. Kruger replied that oil wells deplete at a rate of 7% per year, gas wells at about 5%, “so just to continue at today’s demand levels requires ongoing investment.”
But “I think oil and gas has a long life ahead of it,” he maintained. “It’s how we do it that will make it more socially acceptable, and more socially acceptable within Canada.”
When committee vice-chair Shannon Stubbs (CPC-Lakeland) asked Kruger about obstacles to the Canadian industry’s competitiveness, he said capital markets look for “a reasonable return for a reasonable risk” and “a level of predictability and stability and certainty.” He seemed to suggest the level of regulation or taxation is less important than whether investors can anticipate and plan for it.
“If the hurdle is set at a certain height, that’s fine,” he told MPs. “We just want to know it’s not a moving target. And one of the challenges I’ve faced here for some time now is the unpredictability and uncertainty which then, quite frankly, it scares away capital.”
Responsibility for Climate Catastrophe
MP Charlie Angus (NDP-Timmins-James Bay) opened a line of questions on fossil companies’ legal liability for climate impacts, asking Kruger whether he would use the word “catastrophic” to describe a devastating summer of wildfires, floods, and hurricanes. “It’s been a tragic year,” Kruger replied. “I think it’s horrible what Canadians across the country have experienced.”
Angus pointed out that internal science reports produced by ExxonMobil, where Kruger worked for more than three decades, had warned in as many words that future climate impacts would be catastrophic, until the company changed course and spent decades obstructing climate action. Noting that “lawsuits against your industry are in the hundreds,” he asked whether companies are at higher risk of legal action “for having known the damage and refused to do anything about it.”
Kruger said he could no longer speak for Exxon and declined to discuss active lawsuits against Suncor.
Responding to questions from MP Heather McPherson (NDP-Edmonton Strathcona), Kruger said Suncor has laid off 1,500 workers this year, and declined to say how many will be cut over the next five years. Asked what proportion of the shareholders that benefit from Suncor’s record profits are Canadian, Kruger initially said the “vast majority”; under further questioning from McPherson, he said the specific number is 52%.
Later in the session, MPs heard from author John Vaillant whose recent book, Fire Weather, chronicled the wildfire known as The Beast that ravaged Fort McMurray, Alberta in 2016. Vaillant who was seated beside Pathways Alliance Vice-President Mark Cameron during his five-minute presentation, acknowledged the “extraordinary gifts” humanity has received from petroleum, but cast the fire that destroyed whole subdivisions in Fort Mac as a “shock” that will only be repeated in a rapidly-warming world.
‘Fire Weather’ Comes to Alberta
When the fire hit, Vaillant recalled, winter was barely over, local lakes were still frozen, yet the temperature in northern Alberta was 33°C and the relative humidity was 11%. “Do you want to know where 11% humidity is normal?” he asked MPs. “Death Valley. In July.” Transpose those conditions to the Canadian boreal forest, he said, and “other-worldly things are going to happen, and they did.”
Radiant heat travels at the speed of light, Vaillant added, and in early May, the radiant heat from a fire that was 10 kilometres wide and producing 100-metre flames was 500°C, hotter than Venus. Under those conditions, a house burns down to the basement in five minutes, and “a firefighting operation becomes a lifesaving operation” because there’s no time to do anything else.
But long before any of that happened, “Exxon knew, and so did Suncor,” Vaillant stated. “Then in 1989 they turned their backs on their own science” because they knew their industry “is in essence a fire industry, which means it’s a carbon dioxide industry.”
Against that backdrop, he concluded Canadian leadership does matter, and for its renewable energy potential “Canada really is a superpower. Right now we are perfectly poised to embrace the greatest, greenest energy opportunity the world has ever known. So who’s stopping us?”
Before the hearing began, a small group of protesters gathered outside the House of Commons entrance on Ottawa’s Sparks Street Mall, holding banners and urging MPs to “hold Suncor accountable; make polluters pay”. One of the protesters, longtime climate activist David Beddoe, said campaigners need a new narrative.
“Demanding that [fossil] CEOs and investors stop being greedy doesn’t work,” he told The Energy Mix. “It’s fundamentally impossible in a system geared to profit-taking.” So while more and louder public protests are needed as the climate crisis deepens, Beddoe said, messaging should expand to include alternatives like steady-state economics that “encompass human and ecosystem needs.” At present, “we’re written out of that scenario, and it has to be brought back.”
Environmental Defence Canada, which organized the protest, accused Kruger of greenwashing after the presentation was over. “Despite the rhetoric at today’s committee hearing from CEO Rich Kruger, Suncor has doubled down on oil and gas by expanding production and divesting from renewable energy,” Energy Transition Program Manager Emilia Belliveau said in a statement. “Suncor has consistently lobbied to delay, weaken, and kill any policies that would limit oil and gas emissions or production.”