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Oil sands industry tries to move past the ducks

The Alberta oil sands are an industrial marvel and a public relations disaster. That's captured in images of ducks dying on Syncrude's tailing ponds and Greenpeace protesters shutting down production sites. No one feels the pain more than Marcel Coutu, CEO of Canadian Oil Sands Trust, Syncrude Canada Ltd.'s largest shareholder. He is part of a campaign, he says, to expand the conversation beyond the message from the environmental non-governmental organizations such as Greenpeace and the Sierra Club. Recently, he discussed his mission, while in Toronto for a meeting with The Globe and Mail's editorial board.

Why are you visiting The Globe?

We have not been an industry that deals with public relations generally. ... Now we find ourselves with a reputational issue with the public that we never had to deal with before. All we did before was sell a commodity into an open market.

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Were you told, "Marcel, you have to go East and tell the story?"

Well, my board certainly had that idea. ... The oil sands operators, of which there are eight big ones, formed an oil sands task force and the federal and provincial governments joined that task force so we can work together to educate the public.

But you can't get over the ducks.

We're just trying to get beyond the ducks.

But how can producers find visual images that match oil-soaked ducks at Syncrude?

It was such an unfortunate event because we had been deterring them from landing on these ponds for 30 years - so it had been very successful ...

The whole thing is going to play out in court so I can't have much of a conversation about the ducks. What we have told the public is we've upped the game in terms of deterring waterfowl. We have more propane-fired cannons, which is the main deterrent, and now we run them year-round and not just in the migratory period, so that way we won't miss anything.

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Do people accost you all the time about this?

No, actually people have been very good. I can't think of a situation where people have pointed at me and said, "You're a bad guy."

We just did a bear-pit session at McMaster University with a whole classroom of students, mostly earth science and engineering students and with a business background.

Not arts students, I guess.

The school made the selection. They wanted people with some technical background. They were very constructive but they were probing, for sure.

We try to tell people, "Listen, this a Canadian world-class asset; this is not an Alberta backyard money-making operation." More than half the revenues from the [oil sands]in royalties and taxes go to the federal government, even though the province owns the resources. The federal taxes are going to general coffers and paying for health, education, infrastructure. I don't think people appreciate that.

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On top of that you get these periods when oil prices are very high, and the Alberta government gets tremendous revenues out of this. And transfer payments now include a portion of resource revenue which they didn't before.

Basically, we want to bring the environmental conversation back to centre. My personal objective is to instill this sense of pride in Canadians about what this asset really is to us.

But give me the visual that works for the oil sands.

The way people think about the oil sands is mining operations. Mining has led the way in technology - that's the easy stuff, and it represents 15 per cent of the resource. Then 85 per cent is too deep for mining and that will require well-drilling technologies, which they are doing today with steam-assisted gravity drainage.

The way to think about the visual is to go from the easiest to the toughest. We are mining through the ore body and reclaiming the land as we go. People see the mining which is highly visual. They hardly see the reclaiming because it looks like the area around it that hasn't been touched.

You could actually put up two photos of a boreal forest in the Fort McMurray area and you would say, "This is a boreal forest; this is an oil sands mine." It would be the same photograph. It's just that the mine has been reclaimed and the forest is back.

Will we see $200-a-barrel oil?

By 2050, no question. I think we could see $100 oil in the next five years. Getting from $100 to $200 is going to require adjustments in everybody's economy. We're not going to be importing stuff from all over the place; we've got to regionalize what we do to reduce transportation costs. Oil is almost only used for transportation and the transport cost is going to become a big component of everything we consume.

What's the final message?

The environmental guys have created their own data, their own definitions. We're trying to change that. We're going to try to use [Natural Resources Canada]as the adjudicator on data points and definitions that people should be looking at, so we are all dealing with the same vocabulary.


Marcel Coutu

Title: president, CEO, Canadian Oil Sands Trust;

chairman, Syncrude Canada Ltd.Born: Oct. 14, 1953, Welland, Ont.

Education: 1976: Bachelor of science (geology), University of Waterloo 1980: MBA, Ivey School of Business, University of Western Ontario

Career highlights: First job: mining geologist in Northern Ontario and Quebec.

Post-MBA, five years investment banking, mainly Burns Fry.

TransCanada Pipelines, rising to senior vice-president, international, and vice-president, finance.

Served as chief financial officer of Gulf Canada.

September, 2001: Canadian Oil Sands president and CEO.

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Senior Writer, Report on Business

Gordon Pitts is an author, public speaker and business journalist, with a focus on management, strategy, and leadership. He was the 2009 winner of Canada's National Business Book Award for his fifth book, Stampede: The Rise of the West and Canada's New Power Elite. More

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