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This is like a declaration of war on Justin Trudeau who is surrounded by environmentalists. This will blow up as a battle between Alberta's Premier, Danielle Smith, and Trudeau. Unfortunately, it's a good position for Trudeau to be in.
Suncor has been too focused on energy transition,
must get back to fundamentals: CEO
'We win by creating value through our large integrated asset base underpinned by oilsands,'
Rich Kruger says
Amanda Stephenson · The Canadian Press ·
Posted: Aug 15, 2023 2:54 PM PDT | Last Updated: August 15
Rich Kruger is the chief executive of Suncor Energy. He had retired from the same position with Imperial Oil in 2019.
(Kyle Bakx/CBC)
The man hired to turn around the flagging fortunes of Suncor Energy Inc. said Tuesday he believes the company has been too focused in recent years on the energy transition and must get back to an oil-centred business strategy.
CEO Rich Kruger, who took the reins at the Calgary-based energy giant this spring, told analysts on a conference call that the company's board of directors agrees with him that a "revised direction and tone" at the company is necessary.
He said he believes Suncor must not neglect "the business drivers of today" in favour of future-focused, clean and low-carbon energy pursuits.
"We have a bit of a disproportionate emphasis on the longer-term energy transition," Kruger said, adding that while lower emissions energy is important, it is not what is going to make money for shareholders today.
"Today, we win by creating value through our large integrated asset base underpinned by oilsands."
Kruger, the former CEO of ExxonMobil's Canadian subsidiary Imperial Oil Ltd., was lured out of retirement this year to lead a restructuring at Suncor in the wake of a spate of high-profile operational and financial challenges at the company.
His stated goal to refocus Suncor's efforts on its oilsands assets comes even as the company has publicly committed to achieving net-zero greenhouse gas emissions by 2050.
'Squeezing every last drop of oil out of the ground'
His comments also come at the tail end of a summer in which global temperatures have soared to never-before-seen heights and wildfires exacerbated by climate change have wreaked devastation across the planet.
But she added Kruger appears to be blindly doubling down on business as usual in the face of an increasingly urgent need to rapidly transition to renewable energy.
"It's hard to understand how anyone who has seen the absolute devastation of this summer's fires, floods and (oilsands) leaks could continue pushing for the expansion of fossil fuels," Ullman said in an email.
'Absolutely focusing on their short-term balance sheet'
Suncor is not alone in its strategy, said Duncan Kenyon, director of corporate engagement with shareholder advocacy group Investors for Paris Compliance. Ever since crude prices spiked in the aftermath of last year's Russian invasion of Ukraine, he added, energy companies have been laser-focused on maximizing profits from oil.
After all, what's a war for?
European energy giant Shell, for example, angered climate activists earlier this year by effectively abandoning its plan to cut oil production by 1 to 2 per cent per year until the end of the decade.
British energy giant BP has also scaled back its greenhouse gas emission reduction targets in the wake of last year's record profits from oil, while ExxonMobil's CEO has boasted of "leaning in" to the petroleum products that are in demand today.
"(Suncor's move) is really consistent with where almost every major oil company globally is going," Kenyon said.
"They are all absolutely focusing on their short-term balance sheet performance."
Wind and solar assets sold off
Last year, Suncor sold off its wind and solar power assets, getting out of the renewable energy business it had been involved in for more than two decades.
Instead, the company said at the time, it would focus on advancing the development of low-carbon fuels (including sustainable jet fuel) as well as the commercial-scale deployment of carbon capture technology.
The company also increased its presence in Canada's oilsands this year, acquiring 100 per cent ownership of the Fort Hills oilsands mine in northern Alberta by buying out previous partners Teck Resources and TotalEnergies.
Kruger said Tuesday the company remains committed to Pathways, adding the group is hoping to finalize talks with the federal and Alberta governments about a fiscal framework for carbon capture projects as early as this fall.
However, Kenyon said he thinks Suncor's focus on oil ignores the "demand erosion" risk the company faces as the pace of electric vehicle adoption picks up and buyers seek out lower-cost, lower-emission barrels in the future.
"They're trying to cash in, in the short-term," he said. "But I don't see any acknowledgment of the risk of doubling down on 'business as usual.' "
Job cuts
On Tuesday's conference call, Kruger said investors can expect to hear more on Suncor's new direction in the months to come. But he said already in the second quarter, the company has made "material progress" towards its new goal of focusing on the fundamentals.
In June, Suncor announced it would reduce its employee head count by 20 per cent, or 1,500 people, by the end of the year in order to eliminate unnecessary or "unaffordable" work.
As of Aug. 1, 535 of these job reductions have already occurred, Kruger said, resulting in a cost reduction of about $125 million so far.
"These actions, they aren't easy, and they certainly aren't taken lightly, but they are necessary for our competitiveness," he said.
$1.9B earned in Q2
Suncor said Tuesday it earned $1.88 billion in the second quarter of 2023, down from approximately $4 billion in the same period last year when oil prices were higher.
The Calgary-based energy giant says it took a $275-million restructuring charge in the quarter related to the previously announced job cut plans.
As a result of this restructuring charge, Suncor said its adjusted funds from operations for the three months ended June 30, 2023, amounted to $2.7 billion or $2.03 per share, compared to $5.3 billion or $3.80 per share in the prior year's quarter.
The company suffered a high-profile cybersecurity incident in June but said the breach did not have an effect on its financial results for the quarter.
Ten years ago, environmentalists were crying that polar bears would disappear from the Canadian North. This hysteria has been proven to be absurd, again.
Churchill on track for record number of polar bear reports
this season, conservation officers say
There have been 76 calls reporting polar bears this season, up from 18 last year
Bartley Kives · CBC News ·
Posted: Aug 16, 2023 3:00 AM PDT |
Conservation officers in Churchill, Man., say they're on track to respond to a record number of calls about polar bears wandering into the Hudson Bay town or just outside of it this season.
As of Aug. 15, Manitoba Conservation officers had responded to 76 calls about polar bears in and around Churchill and were forced to move three of the large carnivores into a holding facility east of the town.
That compares with 18 calls by the same date a year ago. And officers didn't have to capture, sedate and house any of those bears in the former military facility — a catch-and-release program that normally does not start until October.
"There are so many polar bears in and around the town of Churchill we are looking at record numbers this year and that's heavily influenced by where the last ice in the Hudson Bay melts," said Churchill conservation officer Chantal Maclean, speaking in her office on Tuesday.
During a regular spring, the estimated 616 polar bears who live along the western coast of Hudson Bay make landfall in many locations across several hundred kilometres of coastline, stretching from southeastern Nunavut to northwestern Ontario.
Only half the bears tagged by scientists usually spend their summers in Manitoba, Maclean said.
"This year, every single bear that we have tagged, except for four down in Ontario and one in Nunavut, is sitting right in Manitoba, which likely means we are going to have a very busy bear season."
Manitoba conservation officers Ian Van Nest and Chantal Maclean helped move the 910-pound polar bear west of the town of Churchill to a holding facility. The bear will be released to the wild in several weeks. (Submitted by the Government of Manitoba)
Churchill, unofficially known as the polar bear capital of the world, sits in the middle of a natural polar bear corridor. To the east of the town lies Wapusk National Park, which protects summer denning areas for the bears.
To the west of the town is Button Bay, which is often the first patch of Hudson Bay's western coastline to freeze up every fall.
During a normal season, polar bear reports pick up in the fall, allowing bears who are placed in the holding facility to remain there until freeze-up.
The three bears captured already this summer will be released after 30 days, Maclean said. The most recent guest in the facility was a 910-pound creature captured west of the town of Churchill on Aug. 8.
Conservation officers said they first try to shoo problem bears away from town in the direction of Button Bay, using shotgun shells packed with soft projectiles akin to bean bags or the noise and wind from helicopter rotors.
If that doesn't work, polar bears are sedated and then driven or flown to the holding facility. It took 10 people to move the bear sedated on Aug. 8 into the flatbed of an RCMP truck.
The polar bear was moved to this holding facility east of Churchill, which now has three bears.
Usually, the facility doesn't get any bears until October. (Bartley Kives/CBC)
"We are a predator coexistence program. It's a bad day for us when we have to go hands-on with a bear," Maclean said, adding she and her colleagues only move bears when they are in danger of becoming habituated to people or their food, or otherwise pose a threat to people, property or themselves.
"Down in Charleswood, where I'm from, you have a white-tailed deer walking down the street. Up here, you look out the window and you might see an 800-pound bear trying to get into your neighbour's window."
Minutes after she uttered those words, a call came in about a polar bear spotted by the beach behind Churchill's municipal complex. The previous week, a mother and her cub were observed swimming in the direction of three teens who were wading into Hudson Bay, said Ian Van Nest, the manager of Manitoba Conservation's Polar Bear Alert Team.
He and Maclean jumped into their trucks and made the short drive to the beach, where lifelong Churchill resident Alex Bennett said he spied a bear on the rocks.
He said bear sightings are so common this year, he can't enjoy the summer.
"We used to go down to the Flats and have a picnic, you know? You can't even [expletive] do that any more, there's so many [expletive] bears," he said.
Van Nest and Maclean, however, could not locate the creature. Carrying shotguns, they walked on to the beach just to make sure no apex predators were hiding behind rocks.
Conservation officers Ian Van Nest and Chantal Maclean return from checking the beach behind Churchill's municipal complex. They were responding to a report of polar bear wandering into town but did not find one. At the same time, seven polar bears were being monitored near the shore of Hudson Bay, slightly east of the town. (Bartley Kives/CBC)
Back in his truck, Van Nest said his team is monitoring the progress of seven bears along the coast further to the east. As he drives in that direction, a cluster of vehicles full of rubber-necking tourists parked on the side of the road serves as a telltale sign at least one of those bears is nearby.
About 50 metres between the road and the bay, a roughly 440-pound bear is sunning herself on a rock. The tourists are behaving, remaining in their vans and pickup trucks. One has a camera with a telescopic lens as wide as a frisbee.
"We're for sure shaping up to be quite the season," Van Nest said. "We're going to have lots of calls, and it's only going to pick up in October and November."
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