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Oil Sands Collectively, Canada’s oil sands hold the world’s second largest proven oil reserves, after Saudi Arabia. Companies including Shell, Marathon, Devon, Chevron, ConocoPhillips, ExxonMobil and BP have already announced plans to spend as much as $125 billion to expand operations with the goal of tripling oil production over the next 10 to 15 years, potentially supplying 20% of America’s oil needs by 2020. As investors, the time to shape these plans and mitigate risk is now.
Oil sands development impacts climate, biodiversity, water and air quality. Mining, upgrading and refining bitumen from oil sands is highly resource-intensive and requires the draining of wetlands, diversion of rivers, and the removal of trees and vegetation. Operations in the oil sands are energy intensive, and their unmitigated development and expansion will mean a substantial increase in GHG emissions. Furthermore, operating in a Canadian context, these oil sand companies must recognize the rights and title of indigenous First Nations being upheld in Canada’s highest courts or face costly legal battles.
Estimates state that a typical oil sands project in Alberta involves billions of dollars of capital investment, has an operations workforce of over a thousand people and a lifespan of over 50 years. By virtue of long capital horizons, these companies are exposed to unique economic, competitive, litigious and regulatory risks. Educating Investors About Oil SandsBackground on oil sands and associated investment risks
On September 11, 2008, Ceres and the Ethical Funds Company organized a web-based briefing to educate investors about the oil sands resource of Alberta, Canada. The purpose of the briefing was to give investors a better understanding of the scale and scope of oil sands development; the environmental and social impacts of this development; what risk these impacts, if not properly managed, pose to companies and their investors; and what constructive role investors can play in engaging companies active in the oil sands. Investors need to determine if companies are prepared for and proactively managing the risks inherent in developing the oil sands. Download the following presentations for more information:
Strategy Session on investor engagement in the oil sandsOn October 22, 2008, Ceres and the Ethical Funds Company organized a strategy call for investors interested in engaging with companies active in the oil sands. Investor briefing on oil sands infrastructure and proposed Enbridge Gateway Pipeline
In April 2009 Ceres and the Ethical Funds Company organized a briefing for investors on the transportation of output from the oil sands, with a specific focus on Enbridge’s role and key risks the company is facing with respect to the Northern Gateway Project. Enbridge’s proposed Northern Gateway Pipeline is a critical link in opening the Asian market for Canada’s oil sands. The project faces substantial risks with respect to consent from the 42 First Nation and Metis Associations along the transport route. In the Canadian context the rights and title of indigenous First Nations are being upheld and reinforced in Canada’s highest courts. The proposed Northern Gateway Pipeline would cross, terminate and result in oil tanker transport through the world’s last large intact tract of coastal temperate rainforest, known as the Great Bear Rainforest.
- Download notes from the call
- Download presentations from the speakers:
For more information, please contact Andrew Logan, Director, Oil Industry Program at logan@ceres.org
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