Larraitz Irastorza(11135411), Gloria García(11135393), Maite Ainhoa Ugalde(11135461), Leire Esther Rodríguez (11135440), GuanHua Wang (11135581) | HE C
Table of Contents
1. Introduction 3
2. Suncor Energy Corp. & Its Business Environment 4
2.1 Selected Financial data 6
Oil Sands 6
Natural Gas 6
East coast Canada 7
Refining and Marketing 8
The CompanyOverall 8
2.2 Overview of the Regulatory Environment in Canada’s Energy Industry 9
3. The Political Institutions and Regulations in Canada’s Energy Industry 11
3.1 The Institutions 11
3.2 The Laws and Regulations 13
British Columbia: 14
4. Shift Towards Clean Energy 17
4.0 Renewable energy policies: 17
4.1 Suncor in action: 20
4.2 Suncor fined: 22
5. Conclusion 24
The energy industry is one of Canada’s most important economic contributors. Given the country’s vast resources, the exploration and production of petroleum products have provided the country much of its wealth, especially in the resource-rich regions. As a result, many would argue that this industry should be left with as much freedom as possible so it can operate ina fully market-driven environment and realize the maximum level of profits. However, despite their significance, the impacts of externalities, such as environmental destruction, are unaccounted for in a free-market economy and the degradation to society and the environment is dramatic and usually irreversible. As such, the energy industry requires necessary government regulations and oversight.This report attempts to analyze this issue by examining Suncor Energy Corporation, a prominent business in the Canadian energy industry, its operation given existing government regulations, and its actions in anticipation of regulatory changes. The report will begin with a description of the company, followed by a description of the current political institutions and laws that govern thecompany in its areas of operations, and finally by examining the ways in which the company’s operations take into consideration and react to both existing laws and upcoming changes to it.
2. Suncor Energy Corp. & Its Business Environment
Founded in Montreal, Quebec in 1919, SUNCOR ENERGY Corp. has been one of Canada’s biggest and most well known integrated energy companies. Traditionally,Suncor’s operations included the drilling, production, development, and refining of petroleum products. The company had always focused on the conventional oil and natural gas sources but had more recently moved into the offshore arena and been a pioneer in the oil sands business. Last year, with the purchase of Petro-Canada, the company has also moved into the sales and marketing areas of the energybusiness. Finally, due to the current global focus on environmental responsibility and green energy, Suncor has increased its focus on the sustainable development of petroleum resources and developing a growing renewable energy portfolio.
After the changes over the decades since the founding of the company, Suncor’s success is dependent on the company’s performance in the following areas (takendirectly from the Company’s 2009 Annual Report):
• Oil Sands – located near Fort McMurray, Alberta, this area of the business produces bitumen recovered from oil sands through mining and in-situ technology and upgrades it into refinery feedstock, diesel fuel and by-products. The company has a 12% ownership interest in the Syncrude oil sands mining and upgrading joint venture, also located nearFort McMurray, Alberta.
• Natural Gas – located primarily in Western Canada, this area of the business explores for, acquires, develops and produces natural gas, natural gas liquids and crude oil. The sale of natural gas production offsets Suncor’s purchases for internal consumption at its North American operations.
• East Coast Canada – this area of the business is comprised of oil development...