Syncrude CanadA ltd.

The energy you need, the benefits you want and the responsibility you expect

2008/09 Sustainability Report contents

The Syncrude Backgrounder Syncrude is a leader in Canada’s oil sands industry, with a production capacity equivalent to over 15 percent of the nation’s crude oil requirements. Located north of Fort McMurray, Alberta, we are also among the top 50 companies in Canada economic for investment in research and development. Our mission is to create wealth the energy you need / 2 for all of our stakeholders from Canada’s oil sands by producing Gordon Jaremko offers his views high quality crude oil in an on why the crude oil energy produced environment environmentally and socially responsible manner. at Syncrude’s oil sands operation is needed to fuel a world that is hungry for energy Syncrude was incorporated in all its forms. the responsibility you expect / 10 in 1964 and began producing crude oil in 1978. Today we Neil McCrank observes are one of the world’s largest producers of light, sweet that Syncrude must continue to focus on dealing crude oil from the oil sands. with its environmental challenges, and make Our cumulative production is meaningful progress, if it is to earn the trust over two billion barrels. and support of Canadians. The Syncrude Project is a Joint Venture undertaking among Canadian Oil Sands Limited scorecards (36.74%), Imperial Oil Resources social See how Syncrude measures up (25%), Mocal Energy Limited (5%), 21 Financial & Operations Murphy Oil Company Ltd. (5%), 26 Economic Impact Nexen Oil Sands Partnership (7.23%), Sinopec Oil Sands the benefits you want / 6 40 Human Resources Partnership (9.03%) and Suncor 46 Safety and Health Energy Oil and Gas Partnership (12%). Paul Marck comments 51 Land Reclamation on the economic, business and community benefits 61 Energy Conservation that accrue from Syncrude’s commitment to share 65 Air Quality wealth generated by our oil sands operation. 69 Water Use We’re taking concrete action towards sustainable development because we expect it of ourselves, but more, Canadians expect it of us.

On the cover: Peat Pond is located in a reclaimed area, once part of our active mining operations.

Letter from environmental 14 Syncrude’s Economic sustainability sustainability About This Leaders 20 48 Our 21 Operational Highlights 49 Land Reclamation Report 18 Sustainability 23 Research and Development 53 Biodiversity This report is a comprehensive Path 26 Economy 57 Tailings Management discussion about the social, economic and environmental The Syncrude 60 Climate Change 72 Operation impacts of Syncrude’s business social 63 Air Quality activities. On the following pages Corporate sustainability 67 Water Management we review our progress toward 74 Governance 28 70 Waste Management sustainable oil sands development, 29 Stakeholder Relations Corporate as well as our plans going forward. 76 Information 31 Aboriginal Relations The majority of the data and 34 Community Involvement this report are subject to either Investor Syncrude’s controls, internal 77 Information 37 Our People audit, external review or 43 Safety and Health Partners in regulatory review. Some data 78 Sustainability also are subject to external benchmarking.

1 Syncrude Canada Ltd. 2009 Sustainability report economic

The Energy You Need

2 Syncrude Canada Ltd. 2009 Sustainability report Gordon Jaremko offers his views on why the crude oil energy produced at Syncrude’s oil sands operation is needed to fuel a world that is hungry for energy in all its forms.

ith one word and a single number it’s easy to tell why oil sands development will continue, including

production growth planned for the 32-year-old Syncrude Canada operation: secure and $62.

The word is a political green light from the United States. The figure is an economic go-ahead signal W from world energy markets to the Alberta industry.

BY Despite the worst global million barrels per day or five The US relies on imports for about Gordon Jaremko financial crisis and economic percent of consumption of half its supplies. The decision recession since the Second World 80 million barrels daily. said the new Alberta connection War, the US$62-a-barrel annual At the same time as markets “would serve the national interest, average oil price for 2009 was the signalled that oil is still worth in a time of considerable political fourth highest on record after the enough money to encourage tension in other major oil $99 of 2008, $72 of 2007 and development, Washington showed producing regions and countries, $66 of 2006. Although oil briefly willingness to pay a political price by providing additional access to slid towards $30, it recovered fast. for secure supplies. US leaders a proximate, stable, secure supply International markets realized risked unpopularity by rejecting of crude oil.” there could be no repetition of international protest campaigns gluts that caused a development that called for striking a blow drought by holding the price down against Canadian bitumen as a Most of the world’s to an average of $19.79 for the symbolic beginning of the end oil is soaked in 15-year period of 1986 through for the fossil fuel era. In the 2000. In the mid-1980s, world name of national security, the political risk or off excess production capacity was US Department of State approved limits to investor- about 14 million barrels a day or construction of the American owned enterprises nearly 25 percent of consumption leg in the new Alberta Clipper of 60 million barrels daily. At the Pipeline for oil sands exports that have predictable mid-2009 bottom of the recession, of 450,000 barrels per day. economic mandates. the global surplus peaked at four

3 The energy you need QUICK FACTS Environmental complaints percent of world oil resources on American markets from Illinois were examined and overruled. and limited entry to 10 percent in to Texas. Canada is already 175 “Concerns have been raised countries that just tolerate them the top source of US imports, BILLION BARRELS about higher-than-average levels as supporting partners for their providing two million barrels Of recognized reserves of greenhouse gas emissions national energy organizations. per day followed by one million associated with oil sands crude,” With 175 billion barrels of barrels daily each from Mexico TOP the state department acknowledged. recognized reserves, or the and Nigeria, 886,000 from SOURCE “The Administration has second-largest inventory after Saudi Arabia and 772,000 Canada provides 2 million barrels per considered these concerns and Saudi Arabia, Alberta’s oil sands from Venezuela. day to US markets considers that on balance they stand out as the top source of No Albertan calls oil sands do not outweigh the benefits the minority of global supplies development perfect and certainly 12% to the national interest.” available to private industry. not Syncrude. Industry nicknames INCREASE Most of the world’s oil is Syncrude alone taps a the 140,200-square-kilometre In projected global oil demand soaked in political risk or off limits 12-billion-barrel deposit, a Alberta bitumen belt its by 2030 to investor-owned enterprises motherlode double the total size technology frontier. For 47 years, that have predictable economic forecast for the highly touted starting a decade and a half mandates, reports the U.S. Energy Bakken Formation of flowing light before it began production, Information Administration. State- oil targeted by drilling innovations Syncrude has operated one controlled national oil companies, across North and South Dakota, of Canada’s biggest industrial serving wider agendas from Montana, and southern Manitoba, research centres, in Edmonton. financing social programs to Saskatchewan and Alberta. Staff chemist Brenda Crickmore providing subsidized fuels for The new Clipper line and a larger, has described in a nutshell the oil sands production problem that makes the science establishment With 175 billion barrels of recognized so durable: “It’s not just add water reserves, or the second-largest inventory and stir.” Indeed, as soon as a after Saudi Arabia, Alberta’s oil sands stand solution to one problem is found, another issue is sure to follow. out as the top source of the minority of That’s why Syncrude’s pursuit global supplies available to private industry. of better ways continues apace. Marathon research programs local use, have about 52 percent two-stage export pipeline project range from compressing and of global output and 88 percent called Keystone will eventually disposing of microscopic floating of reserves. Investor-owned firms put an additional 1.5 million clay particles or “fines” that make have open access to only six barrels per day from the oil sands waste tailings cleanup a notorious

4 Syncrude Canada Ltd. 2009 Sustainability report headache to improving the largest All the free-world mining equipment on the planet. No stone is left unturned by a oil that can staff of about 120 that is studded be produced will with PhDs and has an annual be needed, says budget of about $50 million for devising hardware and systems the International that cut costs, increase efficiency Energy Agency. and fulfill rising safety and environmental standards. The mammoth dimensions of Energy Agency, a Paris arm of oil sands operations amplify the Organization of Economic demands on researchers. Co-operation and Development. Bright ideas, which fill the Even if the tentative agreement research centre’s library of reached on cutting carbon patents, are only the first steps emissions by the United Nations forward on the oil technology climate change summit in frontier. Laboratory breakthroughs Copenhagen late in 2009 leads must be super-sized to work to a binding treaty, the agency reliably on a large scale in the forecasts that economic and plant’s subarctic environment population growth in China, India north of Fort McMurray. and other developing countries When Syncrude was under will increase global oil construction in the 1970s, former requirements by 12 percent to premier Peter Lougheed famously 90 million barrels per day as of dubbed the oil sands the ace 2030. About two-thirds of today’s up Alberta’s economic sleeve. supplies will also have to be The trump card will be played replaced due to depletion of in full if operations like the aging wells. Unconventional Edmonton research centre production is forecast to take keep on earning the acceptance up much of the slack. The world Gordon Jaremko is editor of Alberta Oil magazine. Over his shown by the Alberta Clipper expects the oil sands to shoulder 38-year career as a journalist approval. All the free-world oil as much of the load as Alberta at newspapers, wire services and magazines, he has covered the that can be produced will be and its industry can bear. energy industry, economics needed, says the International and government.

5 The energy you need social

The Benefits You Want

6 Syncrude Canada Ltd. 2009 Sustainability report Paul Marck comments on the economic, business and community benefits that accrue from Syncrude’s commitment to share the wealth generated by our oil sands operation.

f numbers tell a story, then the quest to exploit Alberta’s oil sands is truly the tale of a modern-day gold rush.

You simply cannot overstate the obvious, that with 173 billion barrels of recoverable bitumen

in the oil sands—the world’s second-biggest cache of petroleum next to Saudi Arabia—there I is a wealth of energy riches that benefits all of Canada.

BY Statistics Canada values the sands pioneers like Syncrude, it Syncrude’s actions are a growing Paul marck oil sands at $342.1 billion, or five meant accelerating development testament to a strong social percent of Canada’s total tangible to fully exploit the bitumen potential. and financial commitment to wealth of $6.9 trillion. The company’s economic Canada’s First Nations and Métis The trickle-down of investment impacts over the long term communities. Contracts with in the oil sands tells another story, are manifold. In a typical year, Aboriginal firms average about and it too is substantial. For a Syncrude’s economic contributions $100 million a year, plus there company like Syncrude, the value total $5 billion, including more are investments in education of its efforts in the oil sands has than $2 billion in procurement, from and social-support programs. accrued for more than 30 years, across Alberta and throughout The company’s commitment in terms of royalties and taxes Canada. Syncrude employs more to the communities where it does paid, job creation, procurement, than 5,500 staff in the Wood community support and the Buffalo region, and the company’s company’s pioneering advances Joint Venture participants have In a typical year, in creating business opportunity paid more than $12 billion in taxes in the Aboriginal community. and royalties to government Syncrude’s economic Syncrude’s commitment to since 1978. contributions total sharing the wealth generated by One of Syncrude’s boldest $5 billion, including its operation has been a guiding and most significant achievements principle and become part of the lies in its record of Aboriginal more than $2 billion company’s legacy. hiring and relations. Given the in procurement, from When the provincial and more than $1.4 billion spent with federal governments reached Aboriginal suppliers since 1992, across Alberta and accord in 1997 with long-time oil and with a robust hiring policy, throughout Canada.

7 the benefits you want QUICK FACTS business speaks to an enviable be the key to fully exploiting there can be further processing, $ track record as well. It amounts the oil sands resources. further value added, and where 1 to more than $4 million a year, TRILLION “There will be diversification conditions need to be put in place Economic activity with investments in medical beyond natural resources in if we’re going to succeed in doing by oil sands in the equipment, preschool and the context of leveraging our that,” he said. next decade community programs, classroom abilities and strengths … we’re The acceleration of oil sands $4 tools, infrastructure improvements not going to be able to diversify development is without question, BILLION and charitable contributions. our resource economy with with industry having committed Alberta commitment Underlying its importance to existing technology.” more than $100 billion of to climate change future generations, the resource The result will see resource investments since 1997. initiatives play in Northern Alberta has been extraction taking on a whole new Projections are for much more $80 identified as the cornerstone of dimension as Syncrude and like- future investment. For instance, MILLION Alberta Premier Ed Stelmach’s minded companies invest in the Canadian Manufacturers and Annual industry Council for Economic Strategy. new processes, innovation and Exporters estimate that economic commitment to When this 12-member blue- emerging technologies to meet activity generated by the oil climate change chip panel of global experts the expectations of environmental sands will top $1 trillion in the convened in the spring of 2010, stewardship. The spinoff next decade. chairman David Emerson, former benefits, both ecologically The difference is that new federal minister of international and economically, will have a investment in the oil sands will trade and a distinguished business significant impact for businesses be coupled with developing the executive, said the future could that share this goal of a resource while creating a culture not be clearer. “We are evolving responsible energy industry. of innovation and technology to further the values of ecological Syncrude is a member of the Integrated C0 stewardship. As an industry 2 leader, Syncrude has made that Network, formed to explore the viability of commitment and is acting upon a carbon dioxide capture, transportation it vigorously. and storage network. Investments in environmental remediation will continue to grow in tandem with extracting into a world of global values and Emerson suggests the the bitumen. Syncrude is a

global supply chains,” Emerson oil sands will contribute to member of the Integrated C02 said, noting that environmental Canada’s economic well-being Network, formed to explore the remediation, fuelled by for generations to come. “We’re viability of a carbon dioxide technology innovation, will going to be looking at areas where capture, transportation and storage network.

8 Syncrude Canada Ltd. 2009 Sustainability report As well, Syncrude has long Industry is made investments in energy conservation and greenhouse gas committing abatement, achieving a 39 percent $80 million a year reduction in energy use per barrel towards Alberta’s over the last 28 years. Moreover, the province Climate Change of Alberta has also committed and Emissions $4 billion towards climate change initiatives, including $2 billion Management Fund. for public transit and another $2 billion for carbon capture and storage (CCS). This is the largest Clearly, the new oil sands CCS investment in the world, economy is intrinsically linked and another initiative that to the environmental industry, Syncrude supports. representing new avenues of Additionally, industry is business opportunity. So not committing $80 million a year only are the oil sands providing towards Alberta’s Climate Change Canadians with sound value and Emissions Management based on the worth of the Fund, to which Syncrude is a resource itself, the growth significant contributor. of secondary industries in In June 2010, the first technology and climate change funded projects were announced. is a building block of emerging While some are aimed at economic strength. That’s good efficiency measures, many of news for Syncrude and for all of the projects now and in future us who have a stake in the future. will focus on pilot programs and demonstration projects utilizing new technology to reduce greenhouse gas emissions. Paul Marck is editor of Alberta Venture magazine. He previously spent 20 years at the Edmonton Journal reporting on a diverse range of business issues and interests.

9 the benefits you want environment

The Responsibility You Expect

10 Syncrude Canada Ltd. 2009 Sustainability report Neil McCrank observes that Syncrude must continue to focus on dealing with its environmental challenges, and make meaningful progress, if it is to earn the trust and support of Canadians.

he vast majority of Canadians accepts that for there to be a strong economy there may have to be some

environmental impact. Responsible development will bridge the gap between a vibrant economy

and a sustainable environment. This delicate balance between economic success and acceptable T environmental impacts will drive public interest policy.

BY It is fairly easy to define what we think is an acceptable level emissions from its processing Neil McCrank “economic success” as it generally of environmental impact. facilities. It has invested $1.6 billion relates to the bottom line—growth in The public expects our air, in an Emissions Reduction Project

GDP, profits or other similar indices. water and land to be protected in that is expected to reduce SO2 It is not quite so easy to a manner that allows for economic emissions by approximately 60 get a consensus on a definition of activity but also ensures long-term percent from 2005 levels. While “acceptable environmental impacts.” sustainability. This is normally there will still be emissions, the oil We all know what are accomplished through standards sands industry is attempting to “unacceptable” environmental set by government, through ensure that these are reduced. impacts when they are seen first- its departments like Alberta The same effort is being hand or are visually displayed on Environment or its administrative made to reduce nitrogen oxide, our televisions or in newspapers— agencies like the Energy volatile organic compounds, examples being the recent explosion Resources Conservation Board. hydrogen sulphide and other and oil leak from BP’s deep sea well These standards are usually in the Gulf of Mexico or the nuclear established after full discussion with explosion at Chernobyl, Russia, or industry, the public and government The public expects even on a much smaller scale, the to ensure they are practical tragic incident involving waterfowl standards that will be effective. our air, water and at Syncrude in 2008. From that point, industry must land to be protected However, we must attempt cooperate and be good corporate to define what is acceptable while citizens by meeting these standards in a manner that achieving economic sustainability. and in fact working to exceed them. allows for economic This is where there needs to be a Air Quality activity but also concerted effort by government, Syncrude provides a good example industry and the public to provide ensures long-term through its efforts to reduce standards that attempt to predict sustainability.

11 the responsibility you expect QUICK FACTS emissions. These reductions are a About 15 percent of Syncrude’s conducts extensive monitoring $ result of investing in and embracing total water needs come from the upstream and downstream of oil 1.6 technological improvements. Athabasca River, with the remaining sands operations. BILLION There is also a public expectation 85 percent from recycling. Emissions reduction Land project that good corporate citizens will The public expects to see The public understands that there participate in monitoring air quality technology advancing conservation will be some disturbances during and cooperating with other industry principles. Syncrude has been able resource extraction, but expects 85% and community associations to to reduce the water intensity of these lands to be returned to “a RECYCLED ensure that leading-edge practices its processes by about 60 percent Water use productive capability equivalent are employed. It is to Syncrude’s from levels in the early 1980s. to that of the pre-disturbance credit that it has participated in This is a laudable record; however, landscape.” the Cumulative Environmental with increasing production, 5+ The oil sands industry believes Management Association and the the public expects the oil sands MILLION this is accomplished through its Trees and shrubs Wood Buffalo Environmental industry to continue to find new adherence to the land reclamation planted to date Association as an active member. ways to conserve and protect requirements set out in the Alberta this precious resource. Water Use and Quality Environmental Protection and It is noted that Syncrude Water use has become an issue Enhancement Act. currently withdraws about 0.2 of concern to the public. There is Oil sands mining is a long-term of one percent of the Athabasca a limited amount of fresh water endeavour that may disturb an area River’s average annual flow. and its use must be carefully of land for 20 years or more. To date, The public also expects monitored and protected. Syncrude has disturbed about that no toxic substances are 23,000 hectares and reclaimed close to 5,000 of those hectares, It is clear that what is desirable is not just including the planting of almost six regulatory compliance, but a genuine attempt million tree and shrub seedlings. These efforts have been on the part of the industry to minimize the taken in concert with an Aboriginal environmental footprint and impact. Reclamation Advisory Committee and partnering with four universities In the oil sands area, the on a five-year, $3.8 million project discharged into the rivers from Athabasca River is the main source to understand how to reclaim industrial processing. of fresh water. wetlands more quickly. The oil sands industry funds Syncrude has been issued An example of Syncrude’s a science-based multi-stakeholder a water licence for use in its success is the introduction in 1992 program, the Regional Aquatic processing of bitumen and has of a herd of wood bison onto a Monitoring Program, which not exceeded the limits.

12 Syncrude Canada Ltd. 2009 Sustainability report reclaimed area. The healthy Syncrude and its summary herd has now grown to about The oil sands industry 300 bison that graze on 700 oil sands partners has many challenges ahead to hectares of land. must continue meet and continue to meet the public’s expectations regarding Tailings Management in their quest for environmental responsibility. The public’s expectation new ways to protect These expectations are clearly of “land reclamation” includes connected to the benefit of tailings management. our environment. technological advancements, The public understands and Syncrude and its oil sands that tailing ponds are a necessary partners must continue in their component in the processing quest for new ways to protect of the oil sands. Research and Development our environment. The public understands that In attempting to outline public Syncrude will maintain an tailing ponds are regulated by the expectations on environmental acceptable level of sustainability Energy Resources Conservation impacts, it is clear that what is by continuing to meet the Board (Directive 074) and that desirable is not just regulatory public’s expectations of its attempts are being made to speed compliance, but a genuine attempt environmental responsibility. up the recovery of tailing ponds on the part of the industry to to reclaimed landscapes. minimize the environmental The frustration in meeting footprint and impact. the public’s expectations is in This genuine attempt is not the lack of technological just the use of best practices but is advancements currently being also a concerted effort at making made to improve recovery. technological advancements. It is recognized that there are Syncrude invests more than efforts being made in experimenting $50 million per year to improve with water capping, composite tails knowledge and develop better and centrifuged tails—however, ways through a Research and public expectations are not being Development Centre. While new met at this point in time. production technologies are Neil McCrank is the former Chairman In the meantime, the public patented and licensed, Syncrude of the Alberta Energy and Utilities Board, where he was responsible for directing expects that industry will ensure technologies related to tailings and coordinating the Board’s regulatory that the current regime of tailing management and reclamation mandate governing energy resource development and utility matters ponds will not be a hazard to are published and shared so that in Alberta. He is currently Counsel with animals and waterfowl. others may benefit from them. the Calgary office of Borden Ladner Gervais LLP.

13 the responsibility you expect Letter from Syncrude’s leaders

Compared to 1982, we have reduced energy use by 39 percent per barrel of oil produced and are targeting an 11 percent improvement Marcel Coutu Tom Katinas over 2009 performance Chairman President and Chief Executive Officer by 2013.

n the two years since We have also, for the first time, our oil sands leases, which contain Syncrude last reported included external perspectives from recoverable resources of 12 billion on our sustainability three respected commentators, barrels of crude oil, represent performance—to align with who weigh in with their thoughts tremendous opportunity to feed most other reporters, we on our performance. that demand. And, over our are now on a biennial cycle— So let us begin by describing 31-year operating history, we have theI oil sands industry has gained our purpose, which is to create demonstrated in countless ways that global prominence. wealth for our stakeholders from we can deliver on those three aims. Indeed, the effects of what Canada’s oil sands through the safe, In fact, Syncrude has now we do and the value of our work reliable and profitable production produced more than two billion have never been so widely of quality crude oil (and potentially barrels of Syncrude Crude Oil. discussed or so closely scrutinized. other related products) in an We have consistently generated Hence the need for increased environmentally and socially competitive returns for our Joint transparency from Syncrude, responsible manner. In short, Venture owners, most of which which is well established as one we are producing the energy are publicly traded companies. of the oil sands industry’s largest you need, with the benefits you We have paid more than $12 billion and most experienced producers. want and the environmental in royalties and taxes to various In this report, we provide responsibility you expect. levels of government, dollars that information on key performance In a world that is increasingly in turn have been used to fund indicators for 2008 and 2009. hungry for energy in all its forms, public programs and services.

14 Syncrude Canada Ltd. 2009 Sustainability report We procure billions of dollars in Syncrude Emissions Reduction With reclamation of goods and services each year. Project is operating to specification our former East and And we have provided employment after 2011, we expect total SO2 opportunities for many thousands emissions to be reduced by 60 West mines now well of Canadians. percent from 2005 levels. under way, more land Compared to 1982, we have Some 4,500 hectares of land will be returned to reduced energy use by 39 percent disturbed by Syncrude—22 percent per barrel of oil produced and are of our lease area—have now been nature in coming years. targeting an 11 percent improvement reclaimed, including the first over 2009 performance by 2013. parcel of oil sands land to receive returned to nature in coming years. Air emissions are also being government certification. Water, essential to our production reduced. Sulphur emissions per With reclamation of our former processes, is being used efficiently barrel have fallen by 54 percent East and West mines now well to create a high-value product; since 1983. When our $1.6 billion under way, more land will be even so, we continue to focus on improving water conservation throughout our operation. Tailings management is also a priority. Toward this, we have committed to three key technologies to reduce tailings storage needs and incorporate mature fine tailings into reclaimed landscapes. We are also working cooperatively with other oil sands operators to research additional processes. To protect waterfowl from being harmed by tailings—as happened in a very regrettable incident on our site in 2008—we

15 Letter from syncrude’s leaders have made significant improvements More than 1,900 In the community, we continue to our bird deterrent systems. new employees joined our efforts to support quality-of-life While these indicators show initiatives, most notably for learning that progress is being made, our organization over and health. We are engaging with we understand that even more the last two years, neighbours and others to share our responsible environmental representing a major plans for improvement and growth performance is required in order and to seek input. In fact, we saw to earn our stakeholders’ recapitalization of a significant increase in personal confidence and support. That is why our workforce. contact between Syncrude leaders we invest heavily in research and and leaders of First Nations and development and operate the Métis communities. We also industry’s first and only dedicated In our business, people get continue to learn from Aboriginal research and development centre; us results. To attract the best Elders, whose observations and we have learned that the pursuit and brightest, we strive to create advice are helping shape our of knowledge, combined with a workplace where people can reclamation programs. lessons learned from operating thrive and contribute meaningfully Similarly, our participation in the experience, leads to better ways. to the sustainability advancements sustainability initiatives of various we seek. More than 1,900 new employees joined our organization over the last two years, offsetting retirements and attrition. These people came from across Canada to Syncrude not just for the job opportunity, but also for the opportunity to usher in a new era of oil sands development—one that builds on Syncrude’s long record of overcoming challenge through hard work, innovation and the application of leading- edge technology.

16 Syncrude Canada Ltd. 2009 Sustainability report We understand Our key communities will thrive more responsible thanks to a high level of community involvement and investment. environmental And the environment upon which performance is required we all depend will be respected in order to earn through continued efforts to use resources efficiently and reduce stakeholder confidence. negative impacts. Marcel Coutu Chairman Clearly, we believe that much good is generated by the Syncrude industry groups—such as the operation and that our challenges, Mining Association of Canada’s while significant, can be overcome. Towards Sustainable Mining Tom Katinas We will do our utmost to ensure (TSM) program—is allowing us President and Chief these outcomes are achieved. Executive Officer to learn from the experience of others as they learn from ours. Readers should know we are strongly committed to these programs—they provide both proof of performance and the motivation toward continued performance improvement at Syncrude. As we pursue our mandate to create wealth for our stakeholders from the Syncrude operation, we will continue to ensure this wealth is widely shared in the form of employment, procurement and payments to governments.

17 Letter from syncrude’s leaders Our Sustainability Path

Sustainable growth We understand that we have many stakeholders who wish to stay remains a key objective informed about our operation. In this section, we discuss some of for Syncrude. our current and forward-looking plans. Further information on the work undertaken in 2008/09 and planned for beyond is discussed throughout the balance of this report.

Actions Expected Results

Production n Increase production to current capacity n Sustained production at higher levels through limit of 350,000 barrels per day increased upgrading capacity, long-life mines

n Develop debottleneck plans that further and reliable operations increase production capacity to 425,000 barrels per day by 2020

employment n Create and support strategic education n Workforce sustainability through education and training programs and training initiatives that create qualified

n Implement workforce attraction and new employees and retain current employees retention strategies

n Provide supportive work environment

infrastructure needs n Continued work with regional associations n Governments have information needed and support governments to create public for appropriate infrastructure planning

infrastructure and services needed for n Improved quality of life in the Wood Buffalo a growing local community region

n Ongoing investments in community n Approval from stakeholders and regulators infrastructure and activities, including to expand operations $5 million in 2010

aboriginal relations n Continued focus on six key commitment n Strong relationships with local areas of our Aboriginal Relations program: Aboriginal communities

• Corporate Leadership n Increased Aboriginal representation in • Employment the workforce

• Business Development n Continued development of sustainable • Education Aboriginal business enterprises • Community Development • Environment

n Continued dialogue and cooperation on operations, environmental stewardship and development plans

18 Syncrude Canada Ltd. 2009 Sustainability report Actions Expected Results safety n Continued investment in training, n Progress toward our objective of an awareness activities, incentives and injury-free workplace

other initiatives to facilitate further n Safety performance that continues to lead improvements in workplace safety Alberta industry

land reclamation n Continued land reclamation progress n Successful reclamation of East Mine area with n Continued research collaboration with composite tailings as the landform foundation; other oil sands operators, government full-scale planting expected to begin in three years and academia n Successful reclamation of West Mine area

n Ongoing guidance from and dialogue with into a lake through water capping of mature Aboriginal Elders fine tailings; water capping expected to begin around 2012 n Manage volumes of mature fine tailings by using new technologies, including n Future land reclamation progress consistent centrifuging, by 2012 with closure plans and endorsed by stakeholders and regulators

n A multi-pronged approach to tailings management and reclamation energy and n Investment in technology that will reduce n Reduction in energy intensity of 11% climate change energy consumption and improve bitumen by 2013 from 2009 levels recovery and upgrading yields n Further reductions in emissions of CO2 n Dedicated team that will oversee a 10-year per barrel of production plan of energy conservation initiatives throughout the operation

n Continued assessment of the viability for large-scale carbon capture and storage

n $1.6 billion investment in emissions n Reduction in total SO emissions by 60% air quality 2 reduction technology from current approved levels and reduction in particulate matter by 50% despite increasing production rates, once the Syncrude Emissions Reduction Project is operating to specification after 2011 water n Technology development and process n Optimized and responsible use of fresh improvements to reduce fresh water water resources consumption and increase recycled water use

19 sustainable growth actions and results economic sustainability

By investing in research and development, we are Through our work to produce the crude advancing oil sands science oil needed to supply continental energy and progressing innovative technologies in mining, demands, Syncrude generates significant extraction, upgrading and the environment. economic benefits for Canadians. $50 Million annually in R&D expenditures

Operator Care Program improves mobile equipment reliability The introduction of sensor The technology is helping operators technology on Syncrude’s mobile understand how their behaviour can mine equipment is providing real- improve equipment reliability and time information that operators run lengths, and therefore reduce can use to reduce wear and tear maintenance costs. The program and equipment failure caused by is being rolled out across all mobile overloading and other undesirable equipment at Syncrude. It is a first practices. The sensors provide in the global mining industry and readings for such indicators as complements a Syncrude program payload weight, tire pressure and called Maintenance Decision engine temperature, and even warn Support, which uses sensors to operators when to expect bumps provide technicians with data so in haul roads so they can take they can determine the cause corrective action. of equipment failures.

20 Syncrude Canada Ltd. 2009 Sustainability report OPERATIONAL HIGHLIGHTS

2010 2009 2008 2007 2006 2005 Financial Target and Total Crude Oil Production 1 operating Millions of barrels per year 115.0 102.2 105.8 111.3 94.3 78.1 summary Thousands of barrels per day 337 280 289 305 258 214 Benchmark WTI Price at Cushing—Annual Average (US$ per barrel) — 62.09 99.74 72.37 65.97 56.70 Total Operating Costs 2 Millions of dollars 4,294.1 3,645.8 3,749.6 2,743.8 2,439.6 2,076.7 $ per barrel of production 34.91 35.69 35.44 24.64 26.46 26.59 Capital Expenditures 3 (millions of dollars) 1,473.3 1,198.1 765.9 499.8 845.9 2,293.7 Revenues 4 (millions of dollars) 3,029 2,615 4,169 3,250 2,432 1,967 Retained Earnings 5 0 0 0 0 0 0 Bitumen Recovery (%) 91.2 90.8 90.3 91.8 90.3 89.1 Upgrading Yield (%) 88.5 86.9 85.9 84.3 84.9 85.3 Environmental Fines (millions of dollars) 0 0 0 0 0 0 Environmental Protection Orders 0 0 0 1 1 0 1 Production is Syncrude Crude Oil shipped. 2 Operating costs are costs related to the mining of oil sands, the extraction and upgrading of bitumen into Syncrude Crude Oil and maintenance of facilities. They also include administration costs, start-up costs, research and purchased energy. There is no generally accepted accounting definition as to what constitutes “Operating Costs.” The accounting treatment of certain costs may vary significantly between different producers; some producers may elect to capitalize or defer and amortize certain expenditures that are recorded as an expense by other producers and may segment “Corporate” costs. 3 Capital expenditures include development expense related to sustaining capital and growth capital projects. 4 Production of Syncrude Crude Oil becomes the property of Syncrude’s Joint Venture owners at point of departure from the Syncrude plant. As the operator, Syncrude does not collect revenue from the sale of crude oil or other products. Revenue reported here reflects only that of Canadian Oil Sands Trust, whose subsidiary Canadian Oil Sands Limited is a 36.74% owner, and is solely meant to provide an indication of performance. 5 Syncrude’s annual operating and capital expenditures are funded pro-rata by Syncrude’s Joint Venture owners. Note: These figures may differ from those reported by any of the Joint Venture participants due to differences in reporting conventions and methodology.

21 economic sustainability One artifact unearthed in Syncrude mine, another gets a name In 2009, a 100-million-year-old piece of cedar was uncovered at Syncrude’s Aurora Mine, one of the most important geological discoveries to date at the site. Unlike many discoveries this old, the rare metre-long piece of wood is preserved but not petrified. Syncrude intends to pass the artifact along to the Royal Tyrrell Museum, in Drumheller, for further study and possible display. In a related story, a prehistoric marine reptile known as a plesiosaur discovered in 1994 in a Syncrude mine now has a name: Nichollsia borealis. It was named in honour of the late Dr. Elizabeth Nicholls, the former curator of Marine Reptiles at the Royal Tyrrell Museum. One of the most complete plesiosaurs ever recovered in North America, it’s also one of the oldest yet found from the Cretaceous period, about 142 to 65 million years ago. The skull of the specimen is displayed at the museum, and a replica is displayed at the Above L to R: Lindsay Madden, Todd Jacobs Oil Sands Discovery Centre, in Fort McMurray. and Trevor Finlayson hold up a 100-million- year-old piece of preserved wood from the Through the years, several notable finds have come Cretaceous period. Right: The skull of from Syncrude’s mines. Syncrude aims to be a responsible Nichollsia borealis, a marine reptile that steward of its obligation to protect and preserve any lived around 112 million years ago. fossils discovered during the earth-moving process.

Operator vigilance IntelaTrac data gathering improves increases tire life utilities reliability A concerted effort to educate mobile The introduction of handheld devices that capture electronic readings from equipment operators about the cost Syncrude’s utilities equipment has eliminated the inefficient practice of and benefits of improving tire life recording such readings on paper. The devices allow operators to conveniently helped Syncrude avoid production view current and historical information so they can determine performance impacts related to a sustained global trends and make maintenance decisions. They also alert operators immediately shortage of large off-the-road tires if equipment is not operating as it should. Called IntelaTrac, the devices have that began in 2003. The operators’ the potential to save up to $700,000 annually in maintenance costs through vigilance has led to significant the timely identification of problems before they worsen. improvements. The 2009 record of 10,409 hours for one tire marks a 206 percent improvement over the 2003 benchmark of 3,405 hours. Improved maintenance of haul roads also contributed to the achievement. 2billion barrel milestone reached Cumulative production at Syncrude crossed the two billion barrel threshold on September 20, 2009. The milestone was reached 11 years after the first billion barrels 206% had been produced, an achievement that took 20 years. improvement

22 Syncrude Canada Ltd. 2009 Sustainability report Research and Development

Innovation enabled their efforts are supplemented by a rotating complement of more Syncrude’s by research and than 20 graduate students, who research programS become the next generation of development is n Analytical Research oil sands scientists. n Bitumen Production While new production key to Syncrude’s n Bitumen Processing technologies are patented and sustainability efforts. n Operations Research licensed, Syncrude technologies n Reliability and Maintenance related to tailings management n Tailings and Water and reclamation are published Management For more than 40 years, we have and shared so that others may n Closure and Reclamation been a technology leader in the oil benefit from them. n Technology Development sands industry, developing and Syncrude stewards an annual implementing many innovations that Technology Development Plan. Research Chairs have lowered costs, improved reliability This plan is the base for maintaining supported by Syncrude and reduced environmental impact. an appropriate level of investment n University of Alberta/ Syncrude operates the oil in R & D for continual improvement NSERC Chair in Oil sands industry’s only dedicated in plant operations as well as Sands Engineering research and development centre progressing new and emerging n Alberta Chamber of and invests more than $50 million technologies in the mining, Resources/University of Alberta Mining Industry per year to improve knowledge extraction, utilities, upgrading and Chair in Geo Statistics and develop better ways. We are environmental areas. Syncrude is n University of Alberta/ among Canada’s top 50 R & D continually challenged to develop NSERC Chair in Forest spenders. About 100 scientists new technology to solve current Reclamation and technologists work at the R & D and future operating problems. n University of Alberta Centre, including a growing team Chair in Integrated of experts dedicated to improving Landscape Management environmental performance; n University of Alberta/ NSERC Chair in Pipeline Transport n University of Alberta Centre for Welding and Joining Canadian Oil Sands Network for Research and Development Syncrude is a founding member of the Canadian Oil Sands Network for Research and Development (CONRAD), a network of companies, universities Syncrude invests more and government agencies that facilitates collaborative, pre-competitive oil sands research. Among CONRAD’s working groups is the Environmental than $50 million per year Reclamation Research Group, which comprises representatives from seven oil sands mining companies (operating and planned) and works cooperatively to improve knowledge to advance research and development in reclamation and environmental and develop better ways. sciences. Its priorities are determined by input from regional stakeholder groups such as the Cumulative Effects Management Association and the Wood Buffalo Environmental Association. Syncrude’s Manager of Research and Development is the current CONRAD Chair.

23 economic sustainability

Wetland project an industry first A reclamation research pilot project to create the first constructed fen—a groundwater-fed wetland—is under way at Syncrude. The project is located in a former oil sands mine pit, over a base of sand and consolidated tailings. To create the top layer, we will remove large peat mats from areas being cleared for mining and place them into the study area. Several thicknesses of peat mat cover will be placed, and we will Graduate students study their ability to support plant study peat growth root systems. When complete, we will at a fen reclamation monitor the fen and study water flow research plot at the and quality. It is hoped the fen will Syncrude site. produce peat and sequester carbon, just like a natural fen. The pilot $3.8 million research program re-vegetation process changes the project is expected to be fully focusing on 16 different wetlands development of plant and animal life. commissioned by the end of 2012. restoration projects in areas affected See further discussion in Ongoing Syncrude is also collaborating by oil sands mining. The studies Reclamation on page 50. with 25 researchers—five scientists will examine how re-vegetation and 20 graduate students—from four strategies affect the rate at which Canadian universities on a five-year, wetlands mature and how the

at a cooler temperature. A 10°C Coker pilot reduction in temperature would commissioned increase liquid product yield by about one percent, and the targeted A hot coker pilot plant was 18°C reduction would increase yield commissioned at Syncrude’s by two to three percent. The nozzles Edmonton Research and were installed in Syncrude’s Coker Development Centre in February 8-3 during a 2009 maintenance 2008. The unit is being used to turnaround. Attrition nozzles that test the latest third—generation inject steam are also being tested. of feed nozzles and other Better attrition nozzles will lead technologies. The Gen3 nozzle to reduced steam usage and allow is hoped to improve dispersion more bitumen to be processed in of bitumen feed within the coker the cokers. and allow the coker to operate Feed nozzle testing at the Syncrude Research and Development Centre.

24 Syncrude Canada Ltd. 2009 Sustainability report Syncrude leads creation of Materials and 3 0.8% new research Reliability Consortium laboratories Adapted technology Syncrude leadership has led to the creation of an oil sands promises improved industry­-directed consortium tailings oil recovery that aims to tackle the Adapting technology developed maintenance and reliability for Australian coal mines holds the issues caused by premature promise of a 0.8 percent increase material wear. The group is in overall bitumen extraction called MARIOS, for Materials recovery at Syncrude, and less and Reliability in Oil Sands. bitumen in tailings ponds. Oil sand is highly abrasive, The gain would come by enhancing and processing it quickly a secondary recovery system causes wear on such known as tailings oil recovery via equipment as pipelines the installation of “downcomers,” and valves. The resulting which aerate bitumen. Testing on maintenance shutdowns the downcomers and their are costly and impede application in tailings oil recovery productivity. Three new has been ongoing since 2005. Promising tests at the pilot scale laboratories opened in 2009 led to the creation of a full-scale will support the consortium’s prototype on one of Syncrude’s research studies; they four tailings oil recovery vessels are located at the Alberta in 2009; testing on the prototype Research Council’s began in early 2010. Devon facility.

Role of microbes CO2 Slurry Pipeline being studied Syncrude is participating in a research project exploring the possibility of compressing captured carbon dioxide Syncrude is among several industry partners in a Government of Alberta (CO2) into a liquid that can be used as a pipeline slurry research project that is examining the role of microorganisms in energy agent to efficiently transport materials over large distances. production. Microbes exist naturally in oil sands, and these living organisms The proposed CO2 Slurry Pipeline Project, led by Enbridge, cause the natural breakdown of hydrocarbons. The project will examine would transport sulphur, petroleum coke and limestone how microbial processes could be used, for example, to increase the tailings from the Fort McMurray area to local and international settling rate so water can be recycled sooner. Microbial processes also markets. The CO2 would then be stored underground. can help remediate water affected by oil sands development. Through the The pipeline would use CO2 that would otherwise be emitted project, a database that describes and harnesses the genetic potential into the atmosphere and could offset some costs associated of microorganisms, genes and biological processes will be created. with carbon capture and storage initiatives. Liquefied CO2 The project is called Metagenomics for Greener Production and Extraction has been shown to be a more efficient pipeline carrier of Hydrocarbon Energy: Creating Opportunities for Enhanced Recovery fluid than water. with Reduced Environmental Impact.

25 economic sustainability

Economy

GEOGRAPHIC DISTRIBUTION Total 2009 2008 OF ECONOMIC CONTRIBUTION Expenditures Royalties, Payroll & Municipal Taxes 1,026 1.988 (2009) by Category Purchased Energy 432 878 ($ millions) Payroll (net of taxes) 937 684 Materials and Supplies 1,026 817 Contracted Services 2,509 1,929 Other Expenditures 170 128 TOTAL 6,100 6,424

■ Aboriginal Community 2% ■ Municipality of Wood Buffalo 37% ■ Edmonton Area 23% Geographic Syncrude’s total 2009 procurement The most recent study, done by the ■ Rest of Alberta 24% was $3.5 billion. Of this, 95 percent, Canadian Energy Research Institute, ■ Rest of Canada 11% Distribution of ■ International 3% or $3.3 billion, went to companies found that more than 465,000 jobs Procurement in Canada. Of the Canadian total, across Canada are linked to the oil 91 percent went to Alberta companies sands. For more information, and nearly eight percent went to visit www.ceri.ca. Ontario companies. Firms in the Wood Buffalo region accounted for ANNUAL PROCUREMENT ANNUAL ECONOMIC 43 percent of spending in Alberta. OF GOODS AND SERVICES CONTRIBUTIONS Firms in the Edmonton area ($ millions) ($ millions)

accounted for 30 percent, and 3,535.0 6,424 3,391.7

Calgary companies for 28 percent. 6,100 Procurement from Aboriginal firms 2,746.0 4,872 4,721

in the Wood Buffalo area totalled 2,229.1 4,216 2,100.5 $143 million. Syncrude recognizes that its procurement strategy must benefit all Canadians. While Alberta will remain Syncrude’s primary supply hub, supply chain studies indicate substantial indirect flow-through to other provinces via subcontracting. 05 06 07 08 09 05 06 07 08 09

26 Syncrude Canada Ltd. 2009 Sustainability report Syncrude Syncrude and the Government of January 1, 2016, rates under the $1.25 billion over 25 years (with Alberta agreed in November 2008 to government’s New Royalty Framework interest) to account for deductions and Alberta amend Syncrude’s existing Crown will apply to Syncrude. for previously allowed costs. government Agreement and to transition Syncrude Syncrude’s Joint Venture owners agree on to the government’s New Royalty also exercised their option to pay ANNUAL ROYALTY Framework on January 1, 2016. royalties on bitumen rather than PAYMENTS royalties ($ millions) 1,611 In lieu of transitioning to the rates synthetic crude oil effective January

under the New Royalty Framework 1, 2009. This means that, for royalty 1,320 prior to 2016, Syncrude will pay purposes, Syncrude’s upgrader is no additional royalties totalling longer considered part of its oil sands $975 million over the five years project. As a result, Syncrude agreed

2010 to 2015. Commencing to pay additional royalties of about 654 612

Annual Cumulative CUMULATIVE 2,000 20,000

PAYMENTS TO 55 GOVERNMENTS 1,500 15,000 ($ royalties, payroll 05 06 07 08 09 and municipal taxes) 1,000 10,000 Annual $ millions Syncrude paid $1.6 billion in royalties Cumulative $ millions 500 5,000 to the Alberta government in 2008, and $612 million in 2009. The drop was due mainly to lower oil prices and lower 0 0 1995 1999 2004 2009 Syncrude production.

Future Growth Potential yncrude continues to production expected by the end of The above plans envision Syncrude make progress toward Production 2016. Construction of a second mining broadening production from its current realizing the full of crude oil train is planned to begin around 2014, light, sweet crude oil to include heavy production potential of could grow with first production near the end of and sour blends. Costs have yet to its Stage 3 expansion, to 425,000 the decade. Each mining train is be estimated. It is expected that this Scompleted in 2006. Future plans call barrels designed for capacity of about scenario could realize production growth for further production growth. per day 100,000 barrels per day of bitumen. with less project execution risk and In early 2010, Canadian Oil Sands by 2020. This could bring Syncrude’s total better economics than constructing Trust outlined expansion plans for the bitumen production capacity to greenfield upgrading facilities. Syncrude operation. This includes a 600,000 barrels per day by 2020. Decisions regarding further upgrading series of debottleneck projects that As bitumen volume will exceed the capacity will be considered later, in the could allow production of synthetic processing capacity of Syncrude’s context of evolving heavy/light crude crude oil to grow to 425,000 barrels upgrader, about 115,000 barrels of oil price differentials. Syncrude has per day by 2020. excess bitumen supply will be created. remaining recoverable resources of Bitumen for the upgrader is Syncrude is also considering 12.7 billion barrels. envisioned to come from Syncrude’s new technology at Aurora South Expansion projects and changes Aurora South Mine, which is yet to be to improve bitumen recovery rates, in product types require unanimous developed and received regulatory energy efficiency and product quality. approval by the Syncrude Joint approval in 1998. Syncrude plans to The latter could also allow for Venture participants. More information begin construction of a mining train pipeline transport and sales of about Syncrude’s growth plans is at this site around 2012, with first surplus bitumen. available from Canadian Oil Sands Trust at www.cos-trust.com.

27 economic sustainability

Social sustainability

We work closely with Aboriginal business owners Syncrude is responsible to our people to identify opportunities for and the communities affected by what supplying goods and services to our operations. we do. Together, they help shape our plans and benefit from the outcomes. $1.4 billion in spending with Aboriginal businesses since 1992

Syncrude receives found that TSM meets or exceeds best practice on key sustainability first-ever TSM Award benchmarks. The TSM Award Syncrude received the first-ever recognizes Syncrude’s performance Towards Sustainable Mining (TSM) for the 2007 reporting year and Award from the Mining Association confirms Syncrude’s belief that of Canada (MAC), for meeting industry associations such as MAC performance standards in all have an important role to play in the categories of the TSM program. The promotion and measurement of program is the major sustainability corporate sustainability efforts. stewardship effort of Canada’s mining industry; Canadian Business for Corporate Social Responsibility

28 Syncrude Canada Ltd. 2009 Sustainability report Our Communications and Stakeholder Relations Policy Attaining objectives in social, economic and environmental performance from current operations and potential growth opportunities can be achieved only by earning and maintaining our stakeholders’ consent and support.

Stakeholder relations Syncrude will actively seek to establish long-term relationships with our stakeholders through consultation, collaboration and the provision of information MAC Strengthens Towards and will manage these processes with honesty and integrity. Sustainable Mining Syncrude will foster an environment that actively seeks stakeholder ideas, input and feedback in order to develop mutual trust and cooperation. We will participate in As a member of the Mining Association of Canada, collaborative stakeholder processes to promote sustainable development and manage Syncrude stewards to the protocols set out in the the cumulative impacts of industrial development. In addition, stakeholders will be association’s Towards Sustainable Mining (TSM) encouraged to define the manner in which they wish to be consulted. Those acting program, introduced in 2004. TSM is a corporate on behalf of Syncrude will be receptive to stakeholder input and, where appropriate, social responsibility initiative based on a set of guiding will act on it, even if it necessitates changing our plans. When disagreements occur principles that are in turn supported by performance and remain unresolved, Syncrude and its employees will always demonstrate respect elements and indicators. In 2009, two new protocols for the views presented. were adopted. The Biodiversity Protocol assesses Syncrude will engage with employees, contractors and the public, including performance in managing conservation and biodiversity. governments and media, on a professional level and be responsive to issues and The Aboriginal and Community Outreach Protocol provide information and insight as appropriate. Syncrude will also take a proactive will replace the External Outreach Protocol. As well, approach to these relationships, as required, to ensure necessary information is agreement in principle was reached on a Safety and shared and understanding fostered with our stakeholders. Health Framework and protocol. Protocols also exist Employees are a key stakeholder group for Syncrude. As such, we are committed for tailings management, energy use and greenhouse to fully communicating business-related information that provides employees with gas emissions management, and crisis management an understanding of goals, plans and performance that enables them to function planning. TSM has a three-step verification system effectively in their roles. comprising external verification of company Syncrude is committed to encouraging and sustaining the growth and well-being of self-assessments, CEO letters of assurance and the communities in which we do business and in which our employees live. As such, post-verification review by an external advisory panel Syncrude will make contributions to projects that enhance the quality of life, representing labour, Aboriginal organizations and primarily within the Regional Municipality of Wood Buffalo and northeastern Alberta. communities, non-governmental organizations, mining communities and the investment sector. A key element to Syncrude’s ongoing relationship with stakeholders is a focus For more information, visit www.mining.ca. on relationships with local Aboriginal communities. Syncrude will work with Aboriginal communities to foster a positive working relationship and to ensure effective consultation occurs.

Engagement Syncrude is committed to and encouraging and sustaining Interaction

Issues the growth and well-being Outcomes STAKEHOLDER Identification and ENGAGEMENT and Dialogue Clarification of the communities in which CYCLE we do business and in Resolutions and Key Actions which our employees live.

29 social sustainability

CEMA to The Cumulative Environmental that development. Some of the CEMA representatives, two Management Association (CEMA), of group’s members left CEMA in provincial government regulators Review which Syncrude is a member, began 2008, expressing difficulty with its and two federal government Governance a review of its vision, mission, goals consensus decision-making model. regulators. The desired outcome Structure and organizational structure in 2009. CEMA currently has 44 members is an environment where all parties The association studies the representing a cross-section of can work together on equal footing environmental impact of industrial government, industry, Aboriginal to address the cumulative development in the Wood Buffalo communities and environmental environmental issues regarding region and provides management organizations. The governance the development of Alberta’s recommendations and guidelines for review committee comprises four oil sands.

Advisory In late 2008, the Government of industry, Aboriginal groups and n the identification of land Alberta established the first Regional environmental groups. Syncrude information, monitoring, Council Advisory Council for the Lower is participating in this effort. evaluation and assessment Established Athabasca Region with a mandate The Athabasca region is home to procedures; and for Lower to advise the government on the the growing oil sands industry, and n the process to gather and Athabasca development of a land-use plan the Council is to advise on the consider input from the public, consistent with the vision and following matters: stakeholders and Aboriginal Region outcomes of the Alberta Land-use n trade-off decisions regarding people in the development of Framework. A plan is expected to be land uses; the regional plan. submitted to Cabinet for review and n thresholds to address For more information, visit approval in late 2010. The Council cumulative effects; www.landuse.alberta.ca. represents a cross-section of n strategies to achieve the interests, including governments, vision and outcomes;

Infrastructure At the urging of Syncrude and other In addition, a task force struck in hectares in total, for residential and industry and community leaders, the 2008 by the Oil Sands Developers commercial development. The land Issues Alberta government spent more than Group, of which Syncrude is a member, could eventually accommodate Addressed $2 billion between 2006 and 2009 to is helping deal with chronic traffic 44,000 residents. Development is address infrastructure issues in the congestion on Highway 63 in the oil expected to commence in 2012. Wood Buffalo region. New roads, sands region. Syncrude’s Facilities bridges, schools and other manager serves on the task force, Syncrude commits infrastructure were started or which is focusing on short- and to CAPP oil sands completed. The spending supports medium-term solutions. principles the 20-year strategic plan called for Advocacy by Syncrude and other As a member of the Canadian in the government-commissioned stakeholders also led to the release Association of Petroleum Producers Radke Report of 2007. of two parcels of Crown land, 1,700 (CAPP), Syncrude has agreed to steward to the Guiding Principles for Oil Sands Development 2009 2008 Consultation introduced by CAPP in September Wood Buffalo Environmental Association ($) 2,657,544 2,027,851 and 2009. These principles encompass Monitoring Regional Aquatics Monitoring Program ($) 497,030 754,845 matters related to employees and Cumulative Environmental Management Association ($) 1,130,913 1,229,622 community members, air quality Direct Consultation 1 ($) 1,521,887 1,213,829 and climate change, water use

1 Includes Syncrude funding for Aboriginal Industry Relations Corporations and the and quality, biodiversity, land Athabasca Tribal Council. use and reclamation. For more information, visit www.capp.ca.

30 Syncrude Canada Ltd. 2009 Sustainability report Aboriginal RElations

Consultation Highlights n A significant increase in face-to-face dialogue between Syncrude executives and leaders of First Nations and Métis communities was achieved in 2008/09. n A three-year strategic plan for Syncrude’s Aboriginal Relations team was developed. n Syncrude continued to be an active participant in the Athabasca Tribal Council’s executive group and management committee. n Syncrude continued to be an active participant on the Aboriginal Relations sub-committee of the Oil Sands Developers Group. n A Syncrude vice president served as Executive Advisor to the Northeastern Alberta Aboriginal Business Association (NAABA), and our Aboriginal business coordinator served on NAABA’s industry committee. n Elders advisory tours of reclamation projects were held in both 2008 and 2009, with First Nations participants from Fort McKay and Fort Chipewyan. n Advisory Committee meetings and open houses were held with Mikisew Cree First Nation and Athabasca Chipewyan First Nation of Fort Chipewyan, and the Fort McKay First Nation. n Formal work plans were established with three First Nations, and regular stewardship meetings were held. n Regular consultation meetings were held with all five of the region’s First Nations, with a total of 319 consultation activities in 2008/09. n Work commenced toward the establishment of bilateral agreements with three First Nations. A five-year agreement with Chipewyan Prairie First Nation was signed in April 2009. n A new Aboriginal Employee Advisory Committee was established Instrumentation technician Marty Quintal is one of the over 470 to provide insight and feedback on Syncrude’s stewardship of its Aboriginal employees working at Syncrude. Aboriginal Relations program.

Aboriginal Relations Policy, n attract and retain qualified employees; Progress toward these goals is stewarded Program & Governance n ensure our Aboriginal business development by Syncrude’s Aboriginal Relations Steering program provides value to all parties; Committee, whose mandate is to ensure that Syncrude’s policies pertaining to our Syncrude delivers on its six key commitment n gain support for Syncrude among local relationships with Aboriginal stakeholders Aboriginal communities; areas for Aboriginal Relations: Corporate are incorporated into our overarching Leadership, Employment, Business Development, n target Aboriginal community investment to Communications and Stakeholder Relations Education, Community Development and the areas that support Syncrude’s business Policy and Stakeholder Consultation Guidelines. Environment. The Committee includes senior objectives; See page 29 for the policy guideline statement. managers and advisors from throughout n ensure Aboriginal communities have adequate The goals of our Aboriginal Relations Syncrude who meet monthly to guide and capacity to engage in all areas of oil sands Program are to: champion strategies to ensure positive development; and outcomes for Aboriginal stakeholders. n meet Syncrude’s regulatory n consider traditional land uses and traditional An Aboriginal Relations team of five consultation requirements; environmental knowledge in our professionals supports the Committee, n develop relationships that support environmental program. managing the day-to-day interactions effective consultation; and relationships with local stakeholders.

31 social sustainability

Investing in ■■ The Fort McKay Student Teacher Placement Program Aboriginal This program provides teaching Communities placements at Fort McKay School for Syncrude invested more than education students from the $2.2 million in Aboriginal community University of Alberta. projects during 2008/09. These ■■ The Janvier Elder Home Support projects include: Program This program helps Elders ■■ The Archie Simpson Arena, who need assistance remain in their in Fort Chipewyan The arena was home community and pass along recently rebuilt and expanded after knowledge and traditions to younger its roof collapsed in the winter of generations. 2005. Syncrude sponsored the ■■ The Conklin Summer Student new Syncrude Youth Centre. Employment Program This program

■■ The Syncrude Aboriginal Trades helps young community members Preparation Program at Keyano develop life and employability skills College This program comprises while earning an income. Students Elder Elsie Yanik speaking at the launch of the Syncrude scholastic upgrading, trades also receive guidance in their work Aboriginal Trades Preparation Program. exploration and work placements at placements and learn about safe Syncrude. It is offered at the college’s work practices. main Fort McMurray campus and ■■ A Bison Edu-kit curriculum tool Our Aboriginal also in the region’s Aboriginal for Fort McKay School The kit will We attracted Workforce communities of Fort Chipewyan, help students in Grades 1 to 9 learn 161 new Syncrude was successful in attracting Fort McKay, Janvier and Conklin. about the historical and cultural 161 new Aboriginal employees in Aboriginal Syncrude will offer permanent jobs importance of bison to Aboriginal 2008 and 2009. Attrition among employees to all qualified students upon people. Contemporary lessons about Aboriginal employees was generally during the successful completion of the program. species conservation efforts and Twenty-one students graduated from bison husbandry will also be taught. consistent with overall workforce reporting attrition, at 11.9 percent in 2008 and the program’s first intake. period. 9.4 percent in 2009. As at year-end 2009, our 479 Aboriginal employees Aboriginal comprised 8.4 percent of our people now total workforce. comprise New recruitment initiatives, such as the expansion of Syncrude’s rotational employment program 8.4 in the region’s southern communities percent of and Syncrude’s participation in the Aboriginal Human Resource Council’s our total new Inclusion Works National Career workforce Fair, will help maintain strong levels of Aboriginal hiring. Workforce development initiatives, such as our work to support education and trades training programs, also play an important role in The Syncrude Youth Centre at the Archie Simpson Arena in Fort Chipewyan. developing the next generation of Aboriginal employees.

32 Syncrude Canada Ltd. 2009 Sustainability report Syncrude re-earns Progressive ACCREDITED Aboriginal Relations Certification Syncrude earned Gold Level accreditation in the Progressive Aboriginal Relations (PAR) program in 2008. It marked the fourth time that Syncrude has been recognized for excellence in increasing 4 times Aboriginal employment, assisting in Aboriginal business development, building individual capacity and enhancing relations with Aboriginal communities. The program was developed and is adjudicated by PROGRESSIVE the Canadian Council for Aboriginal Business as a framework for companies to measure progress on developing progressive Aboriginal relations. Syncrude is one of only 11 Canadian companies to hold ABORIGINAL Gold Level PAR distinction. The current accreditation was earned for a term of three years. RELATIONS PROGRAM

Syncrude Syncrude Leaders Aboriginal Review Appointed to Syncrude’s Aboriginal Review, National Boards published annually, provides a Two Syncrude leaders were comprehensive overview of our appointed to the governing Aboriginal Relations work and our boards of national Aboriginal progress in stewarding to our key organizations during the 2008/09 commitment areas of corporate reporting period. Dan Brown, leadership, employment, business manager of process control and development, education, community automation, joined the Aboriginal development and the environment. Human Resource Council, and To read the report, visit Kara Flynn, manager of public www.syncrude.ca. affairs and stakeholder relations, joined the Canadian Council for Aboriginal Business.

Recognition for Over the last Aboriginal Business Alberta Chambers Aboriginal two years, Development Recognize Syncrude Apprenticeships we have Syncrude recorded strong Excellence conducted performance for Aboriginal The Alberta Apprenticeship and The Alberta Chambers of Commerce $251 million procurement in 2008 and 2009, Industry Training Board recognized recognized Syncrude in February in business with a total business volume of Syncrude in 2008 as Alberta’s Top 2010 with a provincial award of with $251 million with companies owned Employer of Aboriginal Apprentices. distinction for best practices in Aboriginal- by Aboriginal entrepreneurs and Syncrude helped establish the Aboriginal Relations. Syncrude was First Nations in the Wood Buffalo Alberta Aboriginal Apprenticeship owned cited for its Aboriginal Relations companies. region. This brought to $1.4 billion Program in 1992 and has been the total cumulative procurement program’s expressed commitments a longtime supporter of other since 1992, when Syncrude and successes toward those apprenticeship programs that established a minimum annual commitments. also provide opportunity to target of $30 million. young Aboriginal people.

33 social sustainability Community Involvement

Corporate Giving POLICY In order to enrich the lives of our employees and improve the well-being of the communities in which they live and where Syncrude does business, funds will be provided to support community activities meeting specific Photo: L to R criteria. These funds will Sid Gautam, assist Syncrude in continuing Anu Ghosh and to earn its social licence to Robert Grigg were operate and enhance its among the many corporate reputation and Syncrude volunteers who ability to attract and retain helped collect food qualified employees. donations for the Food Bank in 2009.

Community Investment Syncrude’s investments outlet for young people in the Highlights northern community. in the community ■■ $62,000 was distributed through Syncrude’s investments in the amounted to nearly Syncrude’s new Good Neighbours community amounted to nearly Busing Grant, which helps youth $7.5 million for 2008 and 2009. $7.5 million for 2008 groups in the Wood Buffalo region A variety of projects were supported. and 2009. offset the cost of travel to out-of- ■■ $250,000 went to the Northern town events such as sports Alberta Institute of Technology (NAIT) tournaments. During the first six as part of a four-year, $1 million months of the program, 32 grants commitment to support expansion ■■ $100,000 went to Compassion of up to $2,000 each were awarded. of its instrumentation technology House, in Edmonton, for the 2008 ■■ $180,000 was distributed through and 2009 Fashion with Compassion program. NAIT is one of Alberta’s Syncrude’s Good Neighbours fundraisers. The facility provides major centres for trades and Program, which provides grants to homelike accommodation and technology training and has been the not-for-profit organizations for support for northern Alberta women pressed to keep up with demand for which Syncrude employees volunteer. with breast cancer who must travel its programs. Syncrude’s support will In 2008 and 2009, 359 grants were to Edmonton for treatment. help build, expand, renovate and equip awarded to recognize volunteer laboratories and classrooms. Syncrude ■■ $95,000 went to the YMCA of Fort service by employees. representatives will also serve on McMurray to build a new indoor advisory committees that help NAIT playground. The playground develop and deliver its technical and provides a year-round recreational apprenticeship programs.

34 Syncrude Canada Ltd. 2009 Sustainability report Five Years of Support to Local Food Bank A December 2009 contribution of $50,000 to the Fort McMurray Food Bank brought to $250,000 the five-year total of Syncrude support for the community agency. The funds go to the annual Syncrude Food Bank Drive, which is the Food Bank’s major annual collection campaign. About 80 Syncrude employees volunteered their time to the effort.

CORPORATE AND EMPLOYEE Employees volunteer Contributing CONTRIBUTIONS TO THE their time at the to the United Way UNITED WAY United Way Days 1,474,448 COMMUNITY INVESTMENT At $1.47 million, a new record was of Caring Project. BY CATEGORY 1,312,000 (2009 — % OF TOTAL) set by Syncrude and its employees for their contributions to the United 1,027,165 Way of Fort McMurray in 2009. Syncrude’s corporate share was 894,590 796,000 $220,000. The workplace campaign also reached new records for employee participation and the average value of pledges. In total, the community agency surpassed ■ Arts and Culture 1% ■ Education 46% its $5 million goal, and Fort ■ Safety, Health and Environment 19% McMurray once again earned status ■ Civic and Community 20% ■ Sponsorships 10% as the most giving community per ■ Good Neighbours Grants 4% capita in Canada. 05 06 07 08 09

46% $250,000 for Childcare Syncrude made a two-year, $250,000 commitment to community childcare community in December 2009. The funds will help create new childcare spaces at two existing childcare centres operated by the YMCA of Fort McMurray and a new funding daycare facility at Greely Road School. In total, about 140 licensed spaces invested in education will be created.

Community 2010 2009 2008 2007 2006 2005 Programs1 Target Corporate Giving2 ($) 5,000,000 4,309,555 3,162,053 4,234,724 4,245,650 2,680,559

1 Includes donations made under the Community Investment Program, Aboriginal Community Investment Program, sponsorships and gifts in kind. 2 Syncrude’s corporate giving program is governed by corporate policy and program guidelines to ensure the funds are administered and expended in keeping with Syncrude business objectives and community need.

35 social sustainability $500,000 for Prostate Health Support for a Prostate Health Clinic and related research was the focus of a multi-year commitment made by Syncrude in 2009 to Edmonton’s Royal Alexandra Hospital Foundation. A total of $500,000 will help the hospital serve patients from across central and northern Alberta.

Child Health Care Supported In December 2009, Syncrude announced a three-year, $150,000 commitment to the Stollery Children’s Hospital in Edmonton to sponsor its annual Snowflake Gala fundraising event. The funds will support children’s health through The first graduates from the Syncrude Aboriginal Trades Preparation Program. equipment, education, research $5 Million for New Programs & Facilities at Keyano College and special services. The Stollery provides medical care to children Syncrude made a five-year, $5 million commitment to Keyano College in September 2008. The funds from across Alberta, including will support the creation of the new Syncrude Aboriginal Trades Preparation Program, a new Power specialized services not available Engineering laboratory and student awards. The Aboriginal Trades Preparation Program will be offered in smaller centres such as at the college’s Fort McMurray campus and in the region’s outlying communities of Fort Chipewyan, Fort McMurray. Fort McKay, Janvier and Conklin.

Sponsorship for Fort McMurray 21 graduates Minor Baseball from the first year of the A June 2009 agreement saw Fort McMurray Minor Baseball secure Syncrude aboriginal trades program as its title sponsor for 2009 to 2011. The sponsorship is valued at $50,000 per year and will support youth recreation in the oil sands city.

36 Syncrude Canada Ltd. 2009 Sustainability report Our people

Our commitment Syncrude’s 5,580 employees are key to our success and as such are our most valued asset. We encourage their achievement of high-quality results by creating an environment that fosters teamwork, mutual respect and measured risk-taking. We make every effort to acknowledge their contributions and celebrate successes through highly competitive compensation, recognition and development programs.

Labour Pool Initiatives Syncrude has a Process Operator Training (external) Two Syncrude employees, fire chief Tom Nash and Syncrude has a multi-staged approach multi-staged approach Syncrude’s Entry-level Process to address its workforce needs. heavy trades leader Jim Operator Trainee Program Coote (pictured), turned It begins by raising awareness of to address its encourages candidates to consider an adventure vacation career opportunities in the oil sands workforce needs. careers as process operators. into a charity fundraising by participating in such initiatives as Developed by Syncrude in association drive when they school and campus presentations, with the British Columbia Institute of successfully climbed career fairs and other special events, Technology, the program consists of to the summit of Mount To address a shortage of available Kilimanjaro, in Tanzania, and trades development programs two months of intensive training, six workforce skills caused by changing in October 2009. like those promoted by CAREERS: months of evaluation in field-training Encouraging other The Next Generation. workforce demographics and a situations and two more months employees to make This is followed by support for robust local economy, Syncrude is in the classroom. The experience pledges per thousand continuing its longstanding work to initiatives that develop the available rewards students by hiring them feet of mountain build workforce capacity. We focus pool of skilled labour, through as paid casual employees climbed, Tom and Jim on collaborative partnerships with college, technical and university- during training. raised more than $8,000 based programs. This then provides educational institutions, businesses, for the United Way of the foundation for comprehensive industry associations and governments. Fort McMurray. recruitment plans to address our ongoing labour requirements.

37 social sustainability Apprenticeships The Syncrude Aboriginal Trades knowledgeable experts. In addition Apprenticeships in recognized trades Preparation Program, launched in to competitive wages, the students and technologies can be accessed 2009 and offered at Keyano College, receive paid transportation to through Syncrude directly or via is a partnership between industry and from Fort McMurray, paid three widely available programs in and educators to prepare eligible accommodation and Internet which Syncrude participates. Aboriginal participants so they can and cable. The Apprenticeship and Industry pursue trades apprenticeship training Syncrude Higher Education Training Initiative links employers and direct employment opportunities Awards Program and Aboriginal apprentices and at Syncrude. The program includes Children of Syncrude employees offers additional assistance to help academic upgrading and work can qualify for up to $2,400 for each them build successful working and experience placements at Syncrude. year of their post-secondary degree learning relationships. Co-op Students or diploma education. A total The Community Cooperative of about $2 million in program Apprenticeship Program is an Every year, Syncrude provides work scholarships was granted to 871 industry-driven education partnership terms of varying lengths for about applicants (returning and new) providing training through annual 200 co-op students, who come in 2008/09. rotating work placements. to Syncrude from post-secondary The Registered Apprenticeship schools across Canada. About Program is offered to high school 60 students are on-site at any students in the form of work given time. During their time with experience courses, Career and Syncrude, the students gain valuable Technology Studies courses and work experience in their field of part-time employment. study and work alongside

Workforce 2009 2008 2007 2006 2005 by the Total Permanent Workforce 5,580 5,284 4,733 4,527 4,327 % under age 20 0.2 0.4 0.2 0.2 0.1 Numbers % age 20–24 7.6 8.0 6.2 5.0 4.0 % age 25–29 13.9 13.1 12.9 11.4 10.3 % age 30–34 13.9 12.2 11.8 11.2 10.4 % age 35–39 11.5 11.6 10.6 10.8 10.7 % age 40–44 12.1 12.3 13.4 13.8 14.0 % age 45–49 14.1 14.3 15.4 17.0 18.7 % age 50–54 15.2 16.4 18.3 19.5 19.5 % age 55–59 9.1 9.4 8.9 8.9 10.4 % over age 60 2.4 2.3 2.3 2.2 1.9 New Permanent Employees—All Categories 805 1,102 761 744 557 Trades and operators 539 817 529 492 384 Administrative, technical and professional 266 285 232 252 173 New Employees—Diversity Aboriginal 87 74 35 54 50 Female 164 225 172 172 129 Recruiting Effectiveness % of job offers accepted 88 80 77 78 78 Local hires (% of all new hires) 68 68 70 64 70 Job Applications Received 47, 302 70,257 54,996 44,815 30,302

38 Syncrude Canada Ltd. 2009 Sustainability report Workplace Development and Retention Initiatives Syncrude offers a variety of education and training opportunities, and incentive programs to our employees. These encourage people to commit to Syncrude and develop the specific skills Syncrude needs to run its operation. Two Syncrude employees, Aboriginal Initial Professional business. It provides a 100 percent business coordinator Development Program (IPDP) refund on tuition, textbooks and Steve Jani (shown) IPDP is a core Syncrude workforce materials, and mandatory fees for and system strategy and opportunity for new approved post-secondary courses. To earn the maximum benefit, administrator Maureen employees to grow. It provides employees commit to stay with Hall, had the honour a better career development Leadership Development Syncrude for 10 years. of carrying the Program experience for the approximately Olympic torch through 120 new graduates who join A new Leadership Excellence Training Impact 21 Incentive Program Fort McMurray in June 2009. A third Syncrude each year. IPDP comprises program was launched at Syncrude Syncrude’s Impact 21 program employee, business networking opportunities with in 2009. This program is delivered in motivates all employees to reach analyst Carrie seven days over five months and business goals by paying financial management and leaders as well Jazwinski, carried aims to provide leaders with the skills as mentoring, orientation and rewards to them when targets the torch through development assignments. needed to lead their departments in safety, reliability, production, the town of Cold Lake. effectively, model best practices and costs, energy efficiency and They were among Process Operator and Heavy attitudes, inspire and communicate environmental performance 12,000 torchbearers Equipment Operator Training shared goals, challenge and improve are achieved or surpassed. during its 45,000- (internal) processes, enable team members kilometre trek Syncrude engages in process by delegating effectively and offer Retention Program for Fort across Canada. operator and heavy equipment timely encouragement and McMurray Employees operator training in its upgrading recognition. The program uses both To help secure and retain the skilled and mining areas. The training is a real and hypothetical situations as workforce required to sustain its student-like experience and involves learning tools. operation, and to reward existing commitments by employees to learn and future employees for their specific skills and qualifications by Housing Support Program for commitment and contributions to a set date. It also includes interim Fort McMurray Employees Syncrude, Syncrude has extended skills assessments and a final exam. Syncrude launched a housing the Retention Program for Fort The aim is to develop employees support program in June 2009 to McMurray employees introduced in their chosen careers, foster a help improve its ability to attract in April 2006 and completed in greater sense of job and facility and retain employees in Fort March 2009. It provides financial ownership and increase reliability McMurray, where the labour market incentives to employees to join or and safety performance. is competitive and accommodation stay with Syncrude. A new three-year costs are comparatively high. term commenced in April 2009. Education Tuition The five-year program provides It will end in March 2012. In addition, Refund Program up to $60,000 to eligible employees all Fort McMurray—based employees This program supports professional to offset the cost of mortgage receive a salary uplift of 14 percent development for regular employees interest. Eligible employees who over employees working in who desire learning opportunities in rent accommodation may receive other locations. fields of study relevant to Syncrude’s up to $30,000 in rental cost offsets.

39 social sustainability

human 2009 2008 2007 2006 2005 resources Diversity Aboriginal representation: Number of Aboriginal employees 1 487 447 415 418 410 Aboriginal employees as (%) of employees 1 8.6 8.1 8.5 9.0 9.2 Aboriginal representation in leadership (%) 1 5.9 5.6 6.0 6.0 4.9 Female representation: Number of female employees 1,036 991 880 853 778 Female employees as (%) of employees 19.2 19.3 19.6 19.4 18.6 Female representation in leadership (%) 9.8 10.6 10.1 11.0 9.7 Leadership Development Leaders completed Diversity Workshop (%) 74 78 84 84 84 Leaders completed Harassment & Discrimination Workshop (%) 61 55 70 88 84 Leaders completed Leadership Training (%) 76 53 79 89 89 Attrition (% of Syncrude Workforce) All employees, including retirements 9.0 10.6 11.7 11.0 8.6 Employee-initiated termination 4.2 7.2 7.4 6.4 4.5 Retirements 3.5 2.1 3.2 3.8 2.8 Aboriginal 9.8 11.9 9.8 9.8 8.0 Female 10.2 12.6 13.1 10.9 7.4 Trades and operators 9.1 10.0 11.3 12.2 13.2 Administrative, professional and technical 8.9 11.3 13.5 11.9 8.7 Employee & Family Assistance Program (EFAP) Utilization # of clients as (%) of Syncrude workforce 13.7 7. 3 11.2 13.0 13.4 Training (%) hours in training per employee per year 2.7 2.9 2.5 2.9 2.4 Employee Productivity Thousand barrels of Syncrude Crude Oil per employee 18,315 20,022 23,516 20,831 18,049 Average employee service (years) 9.4 10.1 11.3 12.2 13.2 Employee Recognition # of recognitions to employees 2 12,143 10,902 9,971 – –

1 Aboriginal employees voluntarily declare their status. 2 New metric established in 2007; includes service and safety awards.

Employee Attraction trades and operating positions. Total employee attrition averaged and Retention 9.8 percent for the two years. Syncrude’s workforce increased by Syncrude will continue to 847 positions over 2008 and 2009, refine its attraction and retention 88% bringing the total to 5,580 people. strategies in support of our overall of job offers Our workforce is non-unionized and workforce needs. This effort the 1,907 new permanent employees includes an annual review of are accepted hired during this time continued a our compensation and benefits multi-year trend of significant packages to ensure that we are recruitment. More than two-thirds competitively positioned. of the new hires were recruited into

40 Syncrude Canada Ltd. 2009 Sustainability report Syncrude sponsors apprentice competition In 2006, Syncrude entered into a three-year sponsorship agreement with Skills Canada for its annual competition for trades apprentices and renewed its sponsorship for 2009. Skills Canada is a non-profit organization that works with employers, educators, labour groups and governments to promote skilled trades and technology careers among Canadian youth. The annual competition brings together the country’s best apprentices. Syncrude’s presence at the 2008 event was enhanced by heavy equipment technician Patricia Nelson, who served as a role model for women in the trades by sharing stories about her chosen career and Syncrude welder Murna MacKinnon is finding a new use for her talents by filling a teaching void at Father the opportunities a trades ticket Patrick Mercredi High School in Fort McMurray. She’s been instructing students in welding since 2009, can lead to. as an employee on loan. As part of its commitment to supporting education in the community, Syncrude is providing her services free of charge.

Quiet Room A quiet room opened in 2008 at Business Conduct to refrain from acts of Syncrude’s Mildred Lake site is discrimination, harassment or To guide employee behaviour, Respects providing a place employees can violence, and to treat one another Syncrude stewards to a suite of Diversity use for peaceful introspection, and all business contacts with policies that cover ethics, business meditation and prayer. The room respect and dignity. All reported conduct and treatment of people. is steadily used, and reflective of incidents are assessed and The Treatment of Employees policy, Syncrude’s commitment to diversity investigated, and appropriate for example, complies with the and employee well-being. Employees action is taken for confirmed Alberta Human Rights, Citizenship of Islamic faith, for example, pray policy violations. Syncrude and Multiculturalism Act and the provides training on these subjects five times daily, and the room Alberta Occupational Safety and on a four-year cycle and at provides them with a proper place Health Act. It calls for employees new-employee orientations. for their observances.

scholarships 2009 2008 2007 2006 2005 and Annual Contributions ($) 978,000 1,018,000 930,000 858,000 961,200 bursaries Employee Student Scholarships (#) 428 443 395 369 409 Tuition Refunds to Syncrude Employees (#) 82 155 53 122 136

41 social sustainability The Alberta Apprenticeship Employee and Industry Training Board recognized Syncrude and Corporate apprentice Kevin Awards Sweetman as the Top Apprentice in the Heavy Syncrude salutes the employees Duty Technician—Heavy whose work received external Duty (Off-Road) trade. recognition during 2008/09. The award recognized We are also proud to have received Kevin for achieving the several corporate awards that highest combined mark in the final period of reinforce our efforts to be a apprenticeship training. responsible oil sands producer. Oilweek magazine named Syncrude Environmental Research Team Leader Ron Lewko a 2009 Rising Star. The magazine cited Lewko for “making a vital contribution to the development of land reclamation, and for his leadership in helping Syncrude earn the first land reclamation certificate External newborn babies at the Northern MediaCorp Canada Inc. in the oil sands.” recognition Lights Regional Health Centre and recognized Syncrude as one of The Royal Canadian Humane at the Traditional Celebration of Alberta’s Top Employers for 2010. reinforces our Association honoured employee Achievement, which honours Syncrude earned this status for efforts to be Mike Sharpe and contractor Aboriginal high school graduates its performance in the areas Chelsea McPhee (of Golosky a responsible in the Wood Buffalo region. of Physical Workplace; Work Trucking) with Lifesaving Awards oil sands The Canadian Institute of Mining, Atmosphere and Social; Health, for coming to the aid of the driver operator. Metallurgy and Petroleum (CIM) Financial and Family Benefits; of an overturned tanker truck whose recognized senior mining specialist Vacation and Time Off; Employee tanker was filled with jet fuel. The Ken Chekerda with the CIM Coal Communications; Performance two were travelling together when Award for outstanding contributions Management; Training and Skills they saw the truck lose control, hit to the industry. It cited his work Development; and Community the ditch and catch fire. The driver in the wider community, such as Involvement. was trapped inside, and Mike suffered participating in the Fort McMurray The Canadian Institute of Mining second-degree burns as he worked to Public Library’s reading incentive awarded Syncrude the John T. Ryan pull the uninjured driver to safety. program. Regional Safety Trophy for achieving Mike is also to receive the Stanhope The Government of Canada and the lowest 2008 reportable injury Gold Medal of Bravery. the City of Calgary honoured project rate among regional mines that The Institute for the Advancement development engineer Justyna Kos do not produce coal or metal. of Aboriginal Women honoured with the Friends of Canada Award. The award recognized employee employee Lana Hill with an Esquao Justyna was recognized for her work safety performance at Syncrude’s Award as 2009 Aspiring Young with students and for developing Aurora and Mildred Lake mines. Woman. Lana was recognized for her an innovative approach to address volunteer work with Girls Inc., a non- industry skills shortages by profit organization that inspires girls facilitating the Student/Engineer- to be strong, smart and bold. Lana also in-Training Travel Scholarship. volunteers as a photographer of

42 Syncrude Canada Ltd. 2009 Sustainability report Safety and Health

2008/09 Safety The equivalent Alberta average rate Our Safety, Health and for 2008 was 41 lost workdays per Performance 100 person-years worked; the oil Environment Policy Syncrude’s safety performance sands industry average for 2008 At Syncrude we are committed to protecting and promoting improved in all main categories was five lost workdays per 100 the safety and well-being of our employees, our during the two-year reporting period, person-years worked. contractors, our communities and our environment. with the notable exception of two We believe excellence and continual improvement in employee fatalities. Prior to these environment, safety and health performance are in the two sad occurrences, Syncrude best interest of all our stakeholders. Our corporate had not recorded an employee RECORDABLE INJURIES VS. EQUIVALENT success depends on it. death since 1995. WORKFORCE HOURS The total recordable injury Our desired outcomes are a workplace where everyone (combined Syncrude and Contractor) frequency rate for both Syncrude upholds Syncrude’s Vision, Values and Guiding Principles, Total Workforce Hours and contractors was 0.59 in 2008 36.4 (millions of hours) a workplace that fosters the emotional and physical and 0.36 in 2009; the latter was Number of well-being of employees, a workplace where incidents Recordable Injuries

our best-ever performance for 27.3 that could harm people or the environment do not occur 23.7

this metric. This performance is 22.5

and a workplace where all employees and contractors 136

markedly better than the average 18.9 demonstrate personal commitment to operational for the oil sands industry (3.22 in

excellence. Toward this: 96 2008), the average for the mining

n 70 we aim for a safe and reliable operation where all and petroleum industry (2.92 in 66

risks that could compromise the safety and health 2008) and the construction and 49 of workers, or the environment, are identified, construction trade services industry understood and managed. (4.65 in 2008). 05 06 07 08 09 n we meet all regulated standards for environment, safety The number of lost-time injuries and health performance as the minimum expectation. was nine in 2008 and five in 2009. In 2009, the number of recordable injuries n we learn from best practices applied elsewhere and Employee injury severity was 0.20 sustained by Syncrude employees and endeavour to incorporate such lessons into our practices lost workdays per 100 person-years contractors declined over previous years, and procedures. worked in 2008 and 4.20 in 2009. even as workforce hours increased. n we integrate environment, safety and health considerations, along with economic factors, into all business decisions. n Syncrude management takes a leadership role LOST-TIME INJURY COMPARISON (injuries per 100 person-years worked) in advocating workplace safety and health, and Syncrude Upstream Oil & Gas Oil Sands Alberta Average environmental sustainability, in appropriate regional, 2.5 provincial and national forums. 2.0 Through the efforts and collective experience of 1.5 our employees and contractors, Syncrude will be an 1.0 acknowledged leader in environment, safety and health 0.5

performance. We will continue to improve by working 2005 2006 2007 2008 together and sharing responsibility for a healthy environment, as well as the safety and well-being Syncrude consistently records fewer lost-time injuries than other Alberta employers. of our co-workers, our families, our communities and ourselves.

43 social sustainability Safety and Health Driver Operations Evaluation

Management System Risk Assessment and Management In late 2009, Syncrude began to Facilities Design and Construction Information/Documentation adopt ExxonMobil’s Operations Personnel and Training Integrity Management System Personnel Safety (OIMS) as our primary tool for Occupational Health Personnel managing personnel and process Training safety, as well as workforce health. It Operations and Maintenance Operations Procedures is being implemented over a four- Management Operations Maintenance and Inspection Procedures year period. Lloyd’s Register Quality Leadership, Integrity Work Permits Commitment Assessment and Assurance has recognized OIMS as Critical Equipment and Accountability Improvement meeting all requirements of the Mechanical Integrity international occupational safety Environmental Protection Regulatory Compliance and health management system Operations Interface Management The Operations specification (OHSAS 18001:2007). Management of Change Integrity Management Third-Party Services Through OIMS, work processes are System is Syncrude’s clearly described, risks are identified Incident Investigation and Analysis Emergency Preparedness primary tool for and mitigated, critical procedures Community Awareness managing personnel are developed, and workforce and process safety, responsibilities are defined. and workforce health.

Contractors Improve Safety Alberta Partnership Alberta Government Contractors on Syncrude’s sites experienced a for Safety and Health Recognizes Syncrude In 2009, Syncrude renewed its significant reduction in recordable injury frequency Safety and Health agreement with the Government of System in 2009, with a rate of 0.37 injuries per 100 person- Alberta, through Alberta Employment and Immigration, as a Partner in In 2009, Syncrude’s safety and years worked. This is less than half the 2005 health management system was Safety and Health. The agreement evaluated by an external auditor frequency rate of 0.77. Toward the improvements, calls for Syncrude to establish, and found to meet established implement and communicate a concerted effort was made to encourage contractors government and Workers’ outcomes of measurable annual goals to implement more effective safety policies and Compensation Board (WCB) and objectives, contribute to periodic standards. Accordingly, Alberta reviews of Partnership standards, procedures. For example, a Contractor Safety Network Employment and Immigration assist other organizations in dealing was established to promote two-way communication issued Syncrude a Certificate of proactively with safety and health Recognition. The certificate allows about safety, health and environment matters, share issues, encourage more widespread Syncrude to earn a financial incentive best practices and improve safety performance. stakeholder participation in the through the Workers’ Compensation Partnerships program and maintain Board Partnerships in Injury Contractors with more worker exposure hours a meaningful and effective safety Reduction program; in fact, Syncrude were also assigned “buddy” managers from and health management system earned a 20 percent rebate on at Syncrude. WCB premiums paid for 2008. Syncrude to help them understand our safety standards, and improve and ensure accountability for safety performance.

44 Syncrude Canada Ltd. 2009 Sustainability report Community Health Concerns Creating and Sharing Safety ngoing concern among residents of Fort Chipewyan regarding cancer Best Practices rates in their community led the Alberta Cancer Board to conduct a Toward sustained excellence in safety performance, Syncrude community study of a rare cancer known as cholangiocarcinoma. continues to draw on the experience The results of the study, released in 2009, found that levels of the rare and expertise of others through its participation in a wide variety of cancer were not higher than expected, but that the cancer rate overall external groups. These groups wasO higher than expected, and that more long-term analysis needs to be conducted to create and share safety best practices, develop training understand the reasons for the higher rates. Fort Chipewyan residents believe that standards and advocate for industrial development such as oil sands operations, uranium mining and pulp mills may enhanced workplace safety regulations. They include: be a factor. Syncrude is working with the local Medical Officer of Health through the Oil n alberta Construction Safety Association Sands Developers Group to fully understand the health issues in Fort Chipewyan. We take n alberta Mine Safety Association seriously the health concerns of surrounding communities and support the people of Fort n american Petroleum Institute Chipewyan in their request for further studies by local, provincial and federal authorities. n canadian Association of Process Safety and Loss Management n canadian Society of Registered Safety Professionals n canadian Standards Association H1N1 Flu Pandemic n centre for Chemical Process Safety To promote worker health and guard n construction Owners Association against the potential for widespread of Alberta absenteeism due to the 2009 H1N1 n Safety and Health Association Network flu pandemic, Syncrude engaged n mining Association of Canada, Towards in a comprehensive workplace Sustainable Mining Initiative awareness and vaccination program. n north American Association of Crane The program involved extensive and Rigging Professionals employee communications focused n oil Sands Safety Association on prevention through personal n oil Sands Developers Group, Health hygiene and vaccinations. The effort Committee was successful in making people n think and take action to prevent rapid Site Access Program infection. Ninety-nine percent of Administrative Committee respondents to a post-campaign n Surface Mining Association for survey saw the campaign, while Research and Technology 85 percent said they learned n university of Alberta, Industry Safety useful tips to avoid getting the and Loss Management Committee flu. The campaign supplemented n wood Buffalo Safe and Healthy Syncrude’s annual vaccination Community Network clinics to prevent seasonal flu. n work Safe Alberta Drug and Alcohol Risk Reduction Pilot Project Committee n work Safe Alberta Minister’s Advisory Committee, 2009–12 Strategic Plan

45 social sustainability safety 2009 2008 2007 2006 2005 and health Lost-time Injury Frequency 1 Syncrude 0.05 0.04 0.06 0.17 0.07 Contractors 0.03 0.10 0.04 0.14 0.04 Combined 0.04 0.07 0.05 0.15 0.05 Number of Lost-time Injuries 1 Syncrude 3 2 3 8 3 Contractors 2 7 2 9 6 Combined 5 9 5 17 9 Recordable Injury Frequency 1 Syncrude 0.35 0.49 0.69 0.62 0.68 Contractors 0.37 0.63 0.71 1.01 0.77 Combined 0.36 0.59 0.70 0.85 0.75 Number of Recordable Injuries 1 Syncrude 20 26 33 29 30 Contractors 29 44 33 67 106 Combined 49 70 66 96 136 Employee Fatalities 1 1 0 0 0 Contractor Fatalities 0 0 0 0 0 Injury Severity Rate 1 Syncrude 4.20 0.20 2.33 5.17 4.41 Contractors 0.95 6.26 1.97 6.62 3.36 Combined 2.32 3.63 2.15 6.10 3.66 Injury-free Performance Maximum hours between lost-time injuries (millions of hours) 14.3 11.7 9.7 5.2 14.1 Employee Health Temporary disability absenteeism (% of Syncrude workforce) 4.3 3.9 3.8 4.0 3.9 New long-term disability cases 14 21 21 17 14 Health centre visits 2 27,871 28,923 25,904 25,049 37,209 Safety and Health Convictions 0 0 0 0 0 Workforce Representation in Joint Management-Worker Safety and Health Committees (Safe Operating Committees) (% of total workforce) 45 n/a n/a n/a n/a Emergency Services Responses On-site 2,117 2,312 n/a n/a n/a Off-site (Mutual Aid Response) 104 123 n/a n/a n/a Safety, Health and Environment Staff Complement 136 137 124 106 101

1 A lost-time injury is an injury that requires medical attention and results in the worker being absent from work; lost-time injury statistics include all lost- time injuries and fatalities. Recordable injury frequency is a rate that includes all injuries requiring medical attention or that resulted in a worker being absent from work (recordable injury statistics include all non-first aid injuries); it is expressed as injuries per 100 person-years of work. Injury severity is the average rate of lost workdays per lost-time injury; only lost-time injuries have days lost. 2 Includes visits by Syncrude employees and contractors for occupational, non-occupational and other reasons. Visits are recorded as in-person visits or chart documentation for surveillance or administrative purposes.

46 Syncrude Canada Ltd. 2009 Sustainability report Emergency Preparation and Response yncrude’s emergency response teams train constantly so they can be prepared in the event of an emergency. In addition to in-house exercises, they participated in several regional and national events in 2008 and 2009 that Stested their mettle in competitive situations. Syncrude teams regularly place among the top performers at these events, giving all stakeholders confidence in their abilities should a real emergency arise. Syncrude’s ER teams responded to more than 4,000 calls for on-site assistance during the reporting period and more than 200 off-site calls as participants in the regional Mutual Aid Agreement. More than 300 employee volunteers and regular members of Syncrude emergency response teams were recognized for their efforts at the company’s annual appreciation banquet in 2009. Syncrude emergency medical technician Leanne Nielsen.

Syncrude Earns Ron Siman (left) and Safety Award Kevin Pollitt (right), Safety performance by Syncrude with Trevor Forest, contractors in 2007 earned a fellow hockey Syncrude recognition from the player who suffered Alberta Petro-Chemical Safety a heart attack while on the ice. Council. The Contractor Safety Award was presented for top performance among member companies with more than two million annual contractor exposure hours. In 2007, Syncrude contractors logged more than nine million work hours with just two lost-time injuries. Workplace training pays off on the ice Two Syncrude employees credit training they received at Syncrude for their successful efforts to save the life of a man who suffered cardiac arrest while playing a recreational hockey game. Ron Siman and Kevin Pollitt learned how to operate a device known as an automated external defibrillator (AED) as part of their training as members of the Emergency Control Team at 300+ Syncrude’s Edmonton Research and Development Centre. Coincidentally, the AED had been employees on emergency recently placed in the hockey arena as part of the Edmonton Heart-Safe Program. response teams

47 social sustainability ENVIRONMENTAL sustainability

We will return the land we use to a Syncrude works to be a responsible productive capability environmental steward through equivalent to that of the pre-disturbed landscape. systems and programs that use resources efficiently and minimize $97 effects on air, land and water. Million spent on reclamation in 2009

Seed collection yncrude is working to increase the diversity of shrub species on reclaimed sites. As part of this effort, we have begun to collect seeds from native plants for future propagation on our reclaimed sites. Seeds are collected fromS plants found in areas adjacent to our operation and include pin cherry, dogwood, blueberry, fireweed, Labrador tea and dwarf birch. The focus is on species that have been traditionally used by local Aboriginal people and that will create more diverse reclaimed habitat.

48 Syncrude Canada Ltd. 2009 Sustainability report Land reclamation

Our Plan Lakeland College environmental Our Policy Syncrude has plans in place sciences student Syncrude’s policy is to adhere to the land reclamation requirements set out in for closure and reclamation of Tracy Piquard our approval under the Alberta Environmental Protection and Enhancement Act. its Mildred Lake and Aurora sites examines peat The approval obliges Syncrude to return the land we use to “a productive that meet the conditions and vegetation at capability equivalent to that of the pre-disturbance landscape.” For Syncrude, expectations contained in our Syncrude’s fen reclamation this means ensuring that the land disturbed by our operation is returned to a operating approvals. Thorough research plot. stable, safe condition capable of supporting biologically self-sustaining communities monitoring of all reclamation of plants and animals. Our long-term vision is to create a landscape that sustains areas allows Syncrude to track an integrated mosaic of land uses that meet stakeholder expectations. and compare performance to To ensure a regional approach to reclamation, and to foster the use of design intent and also provides reclamation best practices, Syncrude regularly consults with other operators and the database for reclamation openly shares the results of our environmental research. In addition, we support certification, which is the formal the Government of Alberta’s Land-use Framework, which will provide a roadmap recognition of reclamation success for future land-use planning in the area. in meeting government standards. continued on next page

49 environmental sustainability

Oil sands mining is a long-term intensively instrumented and endeavour that may disturb an monitored, and several such area of land for 20 years or more. watersheds have been established. LAND RECLAMATION However, rather than wait for all This approach leads to cross- (hectares/year) operations in an area to be complete, coordination between research

our practice is to reclaim land as disciplines as well as better, more 367 soon as it is available. To date, we integrated insights from research 315 304 have reclaimed about 4,600 hectares findings. As part of these efforts, of land and planted over five million Syncrude routinely collects tree and shrub seedlings. information on soil and vegetation Toward excellence in reclamation development, drainage feature

practices, Syncrude’s ongoing performance and wildlife habitat 104 97 reclamation research has evolved development. 85 to emphasize integrated programs within watersheds that are

05 06 07 08 09 10

Ongoing planned to be capped with water around 2012 to form a lake. Wetland research reclamation The lake is the first commercial-scale Syncrude is partnering with Work continues to reclaim our former demonstration of water capping as four universities on a five-year, East Mine, an area approximately a reclamation technology. For more $3.8 million project to understand 11.5 square kilometres, or 1,100 information, see Water Capping on how to reclaim wetlands more hectares, bordered by Highway 63 page 58. quickly. The 25 researchers—five south of our main plant site. In 2008 In support of Syncrude’s scientists and 20 graduate and 2009, we continued to fill the reclamation goals, we stockpile students—are focusing on 16 mined-out pit with composite tails soil material as land is being different wetlands, measuring (CT); the filling should be complete in disturbed, reserving it for future isotopes of carbon, nitrogen 2011. CT is the foundation upon which use. Reclaimed landforms are and other characteristics of the reclamation material will be placed. constructed mainly over the winter organisms living in reclaimed It is expected that full-scale planting period, while planting activities wetlands. This will determine will begin within three years. occur from spring through fall. food sources and provide an At the north end of the East Initial planting includes barley and indicator of the area’s overall Mine area, we are constructing a a mixture of native grasses in order health. Participants include the 52-hectare wetland, including to add nutrients to the soil and Universities of Windsor, Waterloo, the first reclaimed fen in the industry. promote stability. In later years, Saskatchewan and Alberta. Landscape construction began in trees and shrubs indigenous to 2009, and peat vegetation placement the region are planted. Species is slated for 2010. include white spruce, trembling For more information, see Wetland aspen, green alder, wild rose Project An Industry First on page 24. and Saskatoon. Reclamation work on Syncrude’s former West Mine also continues. This area is currently being filled with mature fine tailings and is

50 Syncrude Canada Ltd. 2009 Sustainability report land 2010 2009 2008 2007 2006 2005 reclamation Target Total Land Disturbed 1 (cumulative hectares) 22,932 21,937 21,079 20,565 19,973 19,160 Temporary Land Reclaimed 2 (hectares per year) 0 0 5 69 0 0 Temporary Land Reclaimed 2 (cumulative hectares) 685 685 813 901 832 898 Permanent Land Reclaimed 3 (hectares per year) 367 97 104 85 315 304 Permanent Land Reclaimed 3 (cumulative hectares) 4,934 4,5675 4,616 4,553 4,624 4,357 Reclamation Expenditures 4 ($ millions per year) 180.5 97.0 52.9 31.3 33.5 16.5 Tree and Shrub Seedlings Planted (annual) 380,000 142,970 161,780 459,075 505,438 659,420 Tree and Shrub Seedlings Planted (cumulative) 5,674,179 5,294,179 5,151,209 4,989,429 4,530,354 4,024,916

1 Syncrude has total land lease holdings of 101,061 hectares, which includes hectares of potential development and that approved for development. 2 Temporary reclamation is typically conducted in areas where future re-disturbance is expected. Activities typically include placing a shallow depth of reclamation soils followed by grass seeding. This is often performed in areas where erosion and/or blowing sand may be a concern. Reclamation materials are salvaged prior to re-disturbance of the area. 3 Permanent reclamation is conducted in areas where future disturbance is not expected. Permanent reclamation activities include placing the legislated depth of reclamation soils followed by grass seeding and tree and shrub planting. 4 Includes research and operations expenditures. 5 Cumulative reclamation losses originated primarily from gully repairs at the South West Sand Storage site, coke deposition activities in the Mildred Lake Settling Basin, construction of a mature fine tailings (MFT) research pond and construction of a drainage swale on the W1 overburden structure.

51 environmental sustainability Carbon cycling Syncrude has partnered with the Alberta Research Council to study the effectiveness of carbon cycling in a reclaimed forest as compared to a natural site. Research was conducted on a forest reclaimed with pine, aspen and spruce on the western slope of a tailings settling basin. The landscape has demonstrated very positive trends, with trees showing the same productivity as a natural forest. In fact, a diverse natural plant community has taken hold, with such native species as strawberry, gooseberry and feather moss growing throughout the area. The study concluded that carbon A 4.5-kilometre cycling is occurring at the same trail system invites Gateway Hill receives rate as it does in a natural forest. visitors to explore the Gateway Hill certification area and see n 2008, Syncrude received government reclamation certification for first-hand the results of oil the 104-hectare Gateway Hill area. This area was used primarily to store sands reclamation. overburden from operations, and reclamation activities commenced in the early 1980s. As part of the certification process, wildlife surveys were conducted in 2000 and 2007; they revealed the presence of a number Iof species, including snowshoe hare, marten/fisher, deer, red squirrel, beaver, coyote and various songbirds, raptors, grouse and migratory birds. Government certification takes many years from the time that reclamation activities are complete, as the subject area must demonstrate a self-sustaining ecosystem and habitat capability. Syncrude has not sought certification for some A reclaimed forest on Syncrude’s tailings berm demonstrates the same productivity reclaimed areas, as these are adjacent to land where there is industrial activity, as natural forests in the region. restricting our ability to release the land back to the Crown.

Aboriginal As part of its commitment to Fort McKay and Fort Chipewyan. expectations of First Nations people Aboriginal community engagement, The event included a tour of various for land reclaimed from oil sands Reclamation Syncrude meets every year with Syncrude reclamation sites and development and also Syncrude’s Advisory members of the region’s Aboriginal an information exchange where ability to meet these desires. Committees communities to discuss reclamation participants asked questions progress, challenges and concerns. of Syncrude’s reclamation and In 2009, Syncrude convened a environmental experts. Participants two-day meeting that included felt the gathering helped enable Elders, adults and youth from a greater understanding of the

52 Syncrude Canada Ltd. 2009 Sustainability report Biodiversity

Our Commitment Syncrude’s commitment to environmental stewardship encompasses specific programs aimed at ensuring our operations do not have a long-term, permanent impact on local ecosystems and, upon project completion, re-establishing a diversity of wildlife and fish habitats similar to those that existed prior to disturbance of the area.

Mining Industry Regulatory Compliance Wildlife Movement and Reclaimed land at the Syncrude site. Biodiversity Syncrude operations must adhere to Crossing Structures protocol environmental regulations, including Along with five other oil sands the Alberta Environmental As a member of the Mining companies, Syncrude Protection and Enhancement Act Association of Canada and is participating in a and Alberta Wildlife Act. As well, participant in its Towards program that will Sustainable Mining initiative, every 10 years, Syncrude must obtain examine wildlife Syncrude assisted in the operating approval by submitting a corridors in the region. development of the group’s detailed plan outlining how the The program will biodiversity conservation organization will steward monitor riparian zones standards. These will be formally to government requirements and townships adjacent implemented at our operation regarding environmental protection to the mines, focusing in 2010. Standards include and mine closure. Syncrude also on actual movement, monitoring and evaluation of must submit an updated detailed genetic connectivity biodiversity, avoidance or mitigation reclamation plan to Alberta and habitat of significant adverse biodiversity Environment every three years. effectiveness. Wildlife effects and reclaiming mine sites that will be monitored to viable and diverse ecosystems. includes wolves, deer, moose, For more information, visit coyote, lynx and red fox. www.mining.ca. Information collected will be used to enhance reclamation plans and ensure an effective regional approach to reclamation.

53 environmental sustainability Wildlife Protection yncrude has improved the deterrent system we use to prevent Syncrude operates within a large tract of wilderness in northern Alberta’s boreal forest and employs a waterfowl from landing on our tailings ponds. The changes number of strategies to deter wildlife from our sites. follow an unfortunate event in 2008 when over 1,600 birds These include our waterfowl protection plan (see sidebar) landed on a settling basin during spring migration and died after and restrictions on the handling of food and food waste becoming coated in bitumen. The improved system incorporates to avoid wildlife habituation. As well, no vegetation is Sideas from wildlife scientists, Aboriginal advisors, regulators and deterrent cleared during the migratory songbird nesting and equipment specialists. rearing season unless survey and field checking The enhanced deterrent system focuses on things that can be controlled, indicate an absence of nesting activity. versus historical weather and bird migration patterns, which cannot. Syncrude is required by law to report monthly to the Alberta government any wildlife incidents that occur The system includes: on our sites or adjacent roadways, regardless of cause. In the last nine years, wildlife mortality counts have ■■ year-round deployment of 1 averaged about 10 incidents per year, excluding waterfowl deterrents on areas that are mortalities at our settling basins. Most mortalities occur not frozen; when animals are injured or killed by vehicles on our sites ■■ year-round staffing; or on surrounding roads and highways. They also include ■■ monitoring for open water on natural occurrences, such as the case when a wolf killed settling basins, recycled water ponds a deer on our site. There have been only two incidents— and other water bodies on site, and During the spring, summer and fall seasons, we involving a beaver and a muskrat—in which the mortalities deploy around 200 shore-based noise cannons at responding to any risks; were due to oiling. all tailings settling basins and areas of open water. ■■ deployment of shore-based noise Wildlife monitoring cannons before spring break-up; 2 From 1973 to 1985, Syncrude conducted environmental ■■ around 200 noise cannons; baseline studies to help ensure that reclaimed land is as ■■ scarecrows that have wind motion ecologically productive as it was prior to disturbance. features and reflective ribbons; and Studies continue and we regularly monitor wildlife that ■■ flare and noise devices. inhabits both undisturbed and reclaimed areas in and Staff, including a field wildlife advisor, In addition, we have installed around our leases. This includes aerial moose surveys. are engaged on a year-round basis to a radar monitoring system similar Plans are under way to incorporate amphibian call and observe areas of open water and ensure to those used at many airports. bird deterrents are in place. songbird point-count surveys and to expand monitoring It enables better observation of to include all local wildlife species of concern, as identified bird flight patterns and behaviours. 3 by the 2005 General Status of Alberta Wild Species. Syncrude is currently studying For more information, visit www.srd.alberta.ca. how best to deploy this technology We also monitor the wildlife that has returned to within the bird deterrent program. our reclaimed areas to ensure our restoration practices We seek to minimize losses of are creating attractive habitat for species to return to. water birds and to improve upon Scarecrows are fitted with reflectors Regulators require this data as part of the government historical losses, which averaged and placed in open water to deter waterfowl certification process for these areas. about 35 bird mortalities annually from landing. across our entire Mildred Lake and Aurora sites. 4 Further research is also being conducted on improving bitumen recovery rates. This would reduce the amount of bitumen on the surface of tailings ponds, which is the main risk to waterfowl. A radar-based system will assist us in researching and responding to migration patterns.

54 Syncrude Canada Ltd. 2009 Sustainability report Protecting Waterfowl

Shore-based noise cannon 1

Scarecrows 3

SETTLING BASIN

Radar-based migration tracking 4

Year-round observation and maintenance Mobile pond maintenance crew 2

55 environmental sustainability Regional Involvement and Biodiversity Initiatives Several programs and research initiatives have been established in northeastern Alberta to assess and monitor the cumulative environmental effects of industrial development at a regional scale. This work is undertaken by government and stakeholders such as Aboriginal communities, industry, environmental advocacy groups and health organizations. Syncrude funds and provides staff expertise to the following:

Regional Aquatics Monitoring Wood Buffalo Environmental Program (RAMP) is an Association (WBEA) is a multi- environmental monitoring program stakeholder environmental established in 1997 to assess the monitoring program that operates health of rivers and lakes in the oil similar to and works jointly with sands region. RAMP collects and RAMP. WBEA monitors and reports analyzes data from aquatic on air quality in the region and the environments to better understand effects of air quality changes and the oil sands area and to identify and deposition on terrestrial resources. address the potential impacts of The association operates 15 air- Wood Bison development. www.ramp-alberta.org monitoring stations throughout In 1993, Syncrude introduced a herd of wood bison into the region. www.wbea.org Canadian Oil Sands Network a reclaimed area to assess the capability of the landscape for Research and Development Cumulative Environmental to support large mammals such as ungulates. Today, approximately 300 wood bison graze on 700 hectares (CONRAD) ­ supports a broad Management Association of land. The herd is managed cooperatively with the range of research projects in (CEMA) assesses cumulative Fort McKay First Nation and has been recognized with environmental and reclamation environmental effects from several livestock awards at national competitions. science through its Environmental industrial development and Due to its excellent health and disease-free status, and Reclamation Research Group provides recommendations to the herd is also contributing to a genetic preservation (ERRG). Research focuses on a regulators on how to best manage project headed by scientists from the Universities of variety of disciplines, from wildlife these issues. CEMA ensures long- Calgary and Saskatchewan, the Canadian Food Inspection biology to hydrogeology and term monitoring of selected status Agency, Parks Canada, the Government of the Northwest toxicology. Grants are typically species and species of concern Territories and the Calgary Zoo. used to fund university and and quantifies cumulative impacts research organizations aimed on wildlife and fish populations in Alberta Biodiversity at improving existing practices. the region. www.cemaonline.ca Monitoring Institute www.conrad.ab.ca Syncrude has committed to funding the Alberta Biodiversity These regional initiatives, research projects and biodiversity monitoring Monitoring Institute (ABMI) in 2010. This institute measures programs all use multi-stakeholder and interdisciplinary strategies to and reports on the health of ecosystems in the province and monitor the environment and provide recommendations to government operates at arm’s length from government, industry and for environmental sustainability. The objectives of each regional program environmental groups. It provides peer-reviewed data that include understanding the natural condition of wildlife habitat, reclaiming will be used to improve resource management through wildlife habitat and maintaining biodiversity in the region. the provincial government’s Land-use Framework. For more information, visit www.abmi.ca

56 Syncrude Canada Ltd. 2009 Sustainability report Tailings Management

Tailings Composition is recycled from our settling basins, Our commitment thereby minimizing fresh water use. and Storage The Mildred Lake Settling Basin and Syncrude’s tailings At Syncrude, tailings are a byproduct Aurora Settling Basin are the main management commitment of our process to extract bitumen source of recycled water for our encompasses both existing from oil sand. Tailings are composed operation. of a mixture of water, sand, clay, fine Tailings contain residual operations and future solids, residual hydrocarbon and bitumen that is not recovered in the reclamation plans. We will salts—all of which are naturally found extraction process. As the bitumen responsibly manage our in oil sands deposits. Tailings are is released, it floats temporarily to tailings volumes through stored in mined-out areas and large the top of the settling basin and can above-ground containment appear as an oily slick on the water strategic investments in structures commonly referred to as surface. Bird deterrents are in place technologies and processes. settling basins or tailings ponds. year-round to discourage waterfowl We will also continue to The primary tailings management from landing on settling basins work with industry partners, challenge is the long period of time it (see Protecting Waterfowl on page takes for the fine clay components to 54). Bitumen is a valuable natural regulators and the scientific settle. While the sand settles rapidly, resource, and, while recovery is community to investigate clay and fine solids (together called about 90 percent, we are studying new ways to incorporate mature fine tailings or MFT) can take new technologies and processes to tailings material into several decades to do so. increase this even further. This will During the settling process, water reduce the amount of bitumen lost healthy, self-sustaining released from the tailings is reused to tailings (see Adapted Technology reclaimed landscapes. in the bitumen extraction process. Promises Improved Tailings Oil Over 85 percent of the water we use Recovery on page 25).

1 Tailings are transported via pipeline to the settling basin. 1 2 Sand settles quickly to the bottom of the basin. 6 3 Fine solids, such as clay and silts, create a floating layer called fluid fine tailings.

4 Mature fine tailings, which contain heavier fine solids, 5 form underneath the layer of fluid fine tailings. 3 5 Water is released from the tailings during the 4 settling process.

2 6 Released water is recycled for use in plant operations. 7 7 Seepage and precipitation runoff are collected and pumped into the pond through a series of interceptor ditches and sumps.

57 environmental sustainability Tailings dam safety Settling basins are contained within licensed dam structures and are designed to ensure geotechnical stability as per Canadian Dam Safety Association and Alberta Dam Safety Branch standards. Extensive monitoring occurs through frequent instrumentation and visual inspections. External dam safety and geotechnical reviews also occur regularly. Syncrude’s settling basins have interceptor ditches and sumps to ensure seepage and precipitation runoff are collected and pumped back into the pond. We also maintain a network of surface water sampling points and groundwater monitoring wells to ensure tailings water does not impact local watercourses. For example, there are 81 monitoring 1 Water Capping Water capping wells throughout the area east of the Regulatory compliance of tailings has Water capping involves the been successfully Mildred Lake Settling Basin alone. Syncrude is implementing placement of a layer of water over demonstrated on a Monitoring of the Athabasca River by a multi-pronged approach to a deposit of fine tails to form a lake. pilot scale through government regulators shows oil manage tailings and comply Syncrude has demonstrated this test ponds at the sands development has had no with government regulations technology on a pilot scale through Syncrude site. impact on water quality. as specified in the Energy 20 years of research, including 11 test We recognize there is growing Resources and Conservation ponds of various sizes—the largest public concern about tailings ponds Board (ERCB) Directive 074. being four hectares in area. Results and are vigorously pursuing The ERCB has approved our have shown these lakes successfully strategies to reduce tailings volumes plan, which, after 2015, is evolve into natural ecosystems and incorporate tailings into our expected to exceed the and, over time, support healthy reclaimed landscapes. requirements of the directive. communities of aquatic plants, Toward this, we are developing animals and fish. We are planning What Is Mature and deploying three technologies: to commission the industry’s first water capping, composite tails Fine Tailings? commercial-scale water-capped and centrifuging. Mature fine tailings (MFT) is a lake around 2012. mixture of silt, clay and water that Further information on has the consistency of yogurt. Left Directive 074 and our detailed on its own, MFT takes decades or plan can be found at www.ercb.ca. more to fully settle, prompting work to accelerate the process and enable reclamation.

58 Syncrude Canada Ltd. 2009 Sustainability report 2 (Left) East Mine 3 Composite Tails reclamation includes Centrifuged Tails Composite tails (CT) combines fine tails with gypsum and sand as tailings layering tailings We have successfully piloted the are deposited in a mined-out area. This mixture causes the tailings to sand over composite use of centrifuges to remove the settle more quickly and release water. CT is then capped with sand and soil, tails prior to soil water in fine tails. This technology enabling the development of landscapes that support grass, trees and placement and produces a soft, clay-rich soil wetlands. We are using this technology to reclaim our former East Mine. landscape contouring. that can be used as a landform CT placement began in 2000, and we expect to begin planting vegetation (Right) Centrifuged foundation in oil sands reclamation by 2014. tails creates a areas. We plan to implement this At the north end of this area, we are building a 52-hectare wetland area, material that can technology in three stages: a be used in ongoing including a pilot 17-hectare fen. Fens are an important type of peat land commercial-scale demonstration reclamation projects. found in the boreal forest. This large-scale reconstruction effort, the first of to begin in 2012, the first phase its kind in the region, underscores our commitment to return the land we of a commercial plant in 2015 disturb to a condition similar to that prior to disturbance (see Wetland and a further increase in Project An Industry First on page 24). conversion capacity in 2018.

Other management Thin-lift drying: This remediation technique We are currently working with other involves placing a thin layer of MFT into a oil sands operators to implement a technologies reclamation area. The MFT dries quickly collaborative agreement that allows We are researching a number of additional through dewatering and natural evaporation. broad research and development technologies, which could potentially be used to This process is repeated with consecutive layers. cooperation and helps facilitate faster supplement existing remediation methods for The resulting dry material is capped with sand implementation of tailings management mature fine tailings (MFT): and soil for upland reclamation activities. technologies. Further work is also being

Accelerated dewatering: This process is CO2 addition: Microbes living in our done through the Canadian Oil Sands based on methods used in the Florida phosphate tailings ponds have reduced MFT volume by Network for Research and Development industry. It involves depositing fine tailings in more than 25 percent over the past 15 years (CONRAD). For more information on a shallow containment structure and removing through bio-densification. Syncrude researchers CONRAD, see page 23. the water from the surface as it is released. are now studying how to mimic microbial activity Initial tests have shown a reduction in MFT and replicate this process through the direct volume by 50 percent in three to five years; addition of CO2 into MFT. further study is under way on a larger scale.

59 environmental sustainability climate change

Energy use at Syncrude Syncrude’s operations were built during the energy crisis of the 1970s. To shield Our commitment the project against possible rising energy costs, extensive cogeneration processes The global need for energy is were incorporated into the operation to recover waste heat for reuse. In fact, growing, and all sources, including Syncrude is one of the most thermally integrated industrial facilities in Canada. conventional oil, oil from oil sands Power is produced through six steam generators and four gas turbine and renewable energy forms, will In 2009, generators. Steam is also produced from the waste heat of the gas turbine be needed. As a contributor to this around generators. Bitumen conversion units such as our cokers also produce waste energy mix, Syncrude recognizes 10 percent heat, and this heat is then used in bitumen extraction processes. In 2009, around public concerns related to the of the total 10 percent of the total energy used at Syncrude was produced from waste heat. greenhouse gas emissions (GHGs) stemming from oil sands development energy used While our gas turbine generators require natural gas to produce electricity, and believes every sector of our most of the natural gas we use is for the production of hydrogen, which assists at Syncrude economy needs to do its part to in removing sulphur and nitrogen from our crude oil product. This increases the was produced help Canada realize its objectives quality of our crude oil and helps downstream refineries meet increasingly in reducing our carbon footprint. from waste heat. stringent fuel emission standards. Syncrude is focused on energy efficiency and conservation to Federal In February 2010, the Government of Canada announced its target to reduce minimize the growth of GHGs that Regulation GHG emissions by 17 percent from 2005 levels by 2020. The federal government stem from production of crude oil has released proposed regulations to reduce GHG emissions from new vehicles at our operations. We aim to achieve by approximately 25 percent from 2008 levels by 2016 and has announced that this through operational reliability, it will be moving forward with regulations to require an average renewable fuel as well as continued investment content of five percent in gasoline by September 2010. The federal government in research to develop incremental has also recently announced that it will develop proposed regulations to reduce and breakthrough technologies that GHG emissions from model year 2014 to 2018 heavy-duty vehicles. As the reduce our GHG emissions per barrel. regulations have not yet been finalized and implemented, we do not know the extent to which our current and future operations will be impacted. However, we believe reductions must be shared across all sectors of the economy, with no preference given to any particular industry or business. Global perspective The Syncrude Joint Venture participants actively monitor the evolution of climate change policy in Canada and the United States and report on on GHGs developments through the Syncrude Management Committee. The oil sands account for approximately five percent of Greenhouse 2009 2008 2007 2006 2005 Canada’s total GHG emissions 1 1,2,3 and 0.1 percent—or /1000—of gas GHGs (millions of tonnes) 9.837 9.975 10.867 9.862 7.929 global emissions. Total GHG GHGs 1,2,3 (tonnes per barrel) 0.095 0.093 0.097 0.103 0.100 emissions emissions from oil sands in 1 CO equivalent emissions reported in this table include all Syncrude sources as reported to the 2 2007 were 38 megatonnes— Government of Alberta under the Specified Gas Emitters Regulation (SGER). These estimates have been restated from previous years based on improvements to GHG estimation methodology. equivalent to one percent of Emission calculations for the purpose of federal regulatory reporting will differ, as certain sources emissions from the United of emissions are excluded. 2 Syncrude’s GHG emission estimates were subject to two independent audits in 2009, the first by States power generation sector. the Alberta Auditor General and the second to satisfy the third-party review required by the SGER. 3 As a large producer of electricity, Syncrude exports excess energy to the Alberta electrical grid. In 2009, 260,290 megawatt hours of electricity were exported to the grid. Emissions from electrical power generation are included in the Syncrude total and are part of the intensity calculated on a per-barrel basis.

60 Syncrude Canada Ltd. 2009 Sustainability report Energy 2009 2008 2007 2006 2005 Conservation Total Energy Consumption (billion BTUs) 131,247 131,028 146,647 141,000 113,553 Energy Intensity 1 (million BTUs per barrel) 1.27 1.22 1.30 1.48 1.43 Energy Intensity Improvement (%) compared to year prior -3.5 6.3 11.6 -3.0 -6.0 (%) compared to 1990 baseline 7.0 9.0 5.1 -3.1 -1.1 (%) compared to 1982 baseline 39.1 41.2 37. 3 29.1 31.1 Energy Conversion (%) BTUs contained in Syncrude Crude Oil after deducting % BTUs used to make it 73.3 73.1 74.8 72.3 71.5 1 As a large producer of electricity, Syncrude exports excess energy to the Alberta electrical grid. In 2009, 260,290 megawatt hours of electricity were exported to the grid. Energy conservation Specified Gas ince 1982, Syncrude has implementation of site-wide energy Emitters Regulation reduced energy use per conservation initiatives was The Alberta Specified Gas Emitters barrel by 39 percent. established in 2007. The team is Regulation, established in 2007, This represents a 1.4 rolling out an Energy Management set aggressive intensity targets percent annual Program based on a system for Large Final Emitters of carbon. Simprovement, on average, over developed by ExxonMobil. The team It requires Syncrude to reduce the last 28 years. Moving forward, also conducted a major energy audit its per-barrel emissions of our goal is to increase our energy in 2008 on upgrader and utilities greenhouse gases by 12 percent from the average of its per-barrel efficiency by 11 percent to a target operations and another audit in 2009 emissions between 2003 and 2005. of, or better than, 1.125 million BTUs on the extraction process. If Syncrude does not meet this per barrel by 2013. Syncrude began implementing target in any reporting year, it A significant conservation the team’s 10-year energy plan in must pay $15 per tonne of CO that breakthrough occurred in the 1990s, 2009; it includes specific 2 is in excess of reduction targets into when Syncrude developed and commitments from each operating a government fund dedicated to the implemented a low- area within the organization. development of emissions reduction energy extraction Endorsed by the President/CEO and technology, purchase Alberta-based cogeneration in the process that, when Vice-President of Production, the offset credits, or purchase emission oil sands provides combined with plan is a key business deliverable for performance credits from a approximately hydrotransport senior management. Total energy different Alberta facility. technology, enabled savings to date are estimated at In 2009, Syncrude did not a major reduction in about $32 million. Initiatives have meet the reduction target and bitumen extraction included optimizing furnace offset the remainder by purchasing 18% process temperatures. operations, reducing flaring and 302,734 Government of Alberta of alberta’s total Technology Fund Units at a cost of Subsequent repairing steam leaks. electrical supply. $4,541,010. Although good progress improvements reduced Energy management is also has been made, Syncrude forecasts operating temperatures stewarded through our Impact 21 that it will continue to produce even further. In total, these actions program, in which employees are GHG emissions that exceed the reduced greenhouse gas emissions financially rewarded for achieving government’s reduction targets from our original process, which goals in a number of operational in the near term. operated at 80°C. performance areas. For more To ensure energy conservation information, see page 39. remains a top priority, a new team dedicated to the identification and

61 environmental sustainability Creating and Sharing Best Practices Toward sustained progress in energy conservation and reduced GHG emissions, Syncrude draws on the experience and expertise of others through its participation in the following external groups:

Canadian Industry Program for Integrated CO2 Network (ICO2N) A separate study revealed Energy Conservation (CIPEC) This industry association represents that large-scale reductions of

This collaboration between a cross-section of western Canada’s atmospheric CO2 through CCS government and business is aimed industrial CO2 emitters; Syncrude are feasible starting in 2015, but at improving the energy efficiency is a Tier 2 member. ICO2N provides the cost to capture significant of industries across the country input to government policy about volumes will require government and has helped Syncrude stay in carbon capture and storage (CCS) and industry to work together to the forefront of energy management. and advocates for CCS as a part share risks and rewards to enable Based on energy consumption of Canada’s climate change plans. its deployment. per unit of output, the oil sands The group is also helping shape CO Slurry Pipeline Research industry outperforms the overall a regulatory framework for CCS. 2 Project Syncrude is participating Canadian industrial average at an A study commissioned by ICO N 2 in a research project exploring the energy intensity index of 0.76 to examine various GHG reduction possibility of compressing captured versus 0.89. options in Canada indicates that CCS CO into a liquid that can be used as has the most significant potential for 2 Mining Association of Canada, a pipeline slurry agent to efficiently annual CO reductions, followed by Towards Sustainable Mining (TSM) 2 transport materials such as sulphur, adoption of nuclear and wind power initiative According to the 2009 petroleum coke and limestone over and improvements in vehicle fuel TSM progress report, Syncrude long distances. The project, being led efficiency. The study also notes that earned Level 3 scores in each area by Enbridge, would transport these CCS will be expensive in its early of energy and GHG management, materials from the Fort McMurray stages but cost-competitive with which means that Syncrude has been area to market. The CO would then other reduction options, such as 2 verified to have energy management be stored underground. The pipeline solar power and vehicle efficiency. systems and processes developed would use CO2 that would otherwise and implemented. be emitted into the atmosphere.

Oil sands emissions comparable LIFECYCLE GREENHOUSE GAS About 20 percent EMISSIONS FOR VARIOUS of GHG emissions to other crude oils SOURCES OF CRUDE OIL from a barrel of oil Tank-to-wheels emissions are created during Two independent studies commissioned by the Alberta Energy Wells-to-tank emissions the production,

Research Institute showed in 2009 that the direct emissions Saudi Light refining and Average US transportation Barrel that stem from the production, transportation and refining Consumed to market of the of crude oil from the oil sands are in the same range as those Mexico product, while 80 percent comes of the other crude oil products refined in the United States. Venezuela from consumption Canadian Oil Sands: of the oil, mostly In fact, the studies found that direct greenhouse gas emissions Mining SCO through the tailpipes Angola from the oil sands are lower than direct emissions from other of vehicles. California Heavy Oil types of crude oil, including those from Nigeria and California. Nigeria Country Average Middle East

Heavy Oil Associates Research Energy Cambridge Source:

0 100 200 300 400 500 600

kg CO2 Equivalent per Barrel of Crude

62 Syncrude Canada Ltd. 2009 Sustainability report Air Quality

Regional air quality Construction Our commitment is under way 2010 study by the University of Alberta Department Syncrude is committed to on the of Public Health Sciences concluded that industrial managing and monitoring $1.6 billion development has not had a negative impact on air quality air emissions to protect Syncrude in the Wood Buffalo region. In fact, the region enjoys Emissions the residents and ecological better air quality than that found in many major cities, Reduction health of the region. Aincluding Edmonton, Toronto and Vancouver. Trends in air quality Project. Syncrude appreciates that were examined between 1998 and 2007 in the Fort McMurray, the Wood Buffalo region Fort McKay and Fort Chipewyan areas. For more information, visit enjoys good air quality, www.phs.ualberta.ca/reports.cfm. and we will responsibly The study was based on monitoring carried out by the manage our operations Wood Buffalo Environmental Association (WBEA). WBEA operates 15 continuous air-monitoring stations and 20 passive monitoring toward maintaining this stations. The region has 10 times the number of air-monitoring in the years ahead. stations per capita than the United States.

63 environmental sustainability Sulphur dioxide (SO2) emissions

Emissions from Syncrude of sulphur dioxide (SO2) originate mainly from two fluid cokers built in the 1970s as part of our original plant. A third coker brought on-line in 2006 has emissions-reduction processes built into its operation.

SO2 emissions increased in 2009 compared to the average of the previous four years. This is due mainly to the increased number of operating days for the two original cokers, which had experienced maintenance outages in previous years. We understand that stakeholders expect good air quality and are committed to reducing emissions from our operation. Our $1.6 billion

Emissions Reduction Project is expected to reduce SO2 emissions to an annual average of less than 100 tonnes per day by capturing emissions from the two original cokers. This will constitute an approximate 60 percent reduction from 2005 levels. Emissions of particulate matter will also decline considerably. The new facilities are expected to be operating to specification after 2011.

200 2.0 SO2 EMISSIONS REDUCTION Syncrude Crude Oil Shipments (millions of barrels) 150 1.5

SO2 Emissions (tonnes per thousand barrels Syncrude Crude 100 1.0 Oil produced)

50 0.5

0 0.0 1983 1989 1996 2003 2009

Nitrogen oxide (NO ) activities: fuel quality, engine Odours x selection, operating and Syncrude encourages local stakeholders to report emissions maintenance practices and mine Nitrogen oxide (NO ) emissions are the presence of any odours to the 24-hour Alberta X plan efficiency. We also focus on Environment hotline at 1-800-222-6514. Government created as a result of combustion knowledge-sharing activities such authorities then notify local industrial operators of the required to provide power, heat and as participation in the Surface complaint and require them to assess their operations for steam for process units, as well as Mining Association for Research possible sources of odours and take remediating action. from mining fleet vehicle emissions. and Technology. One of the We have reduced our NO In addition, we use the Wood Buffalo Air Information Line X association’s objectives is to work to update the public on operational upsets or scheduled emissions per litre of diesel fuel used with manufacturers of mobile maintenance that could cause odours or affect air quality. by 17 percent over the last decade. mining equipment to encourage The line also provides the Alberta Environment hotline and Overall emissions from the mining development of engines that Health Link Alberta telephone numbers for residents who fleet have risen, however, due produce fewer emissions. have further environmental or health-related concerns. primarily to increased crude oil The installation of higher-tier This information line, developed by the Wood Buffalo production in recent years, which engines (Tier 2 and Tier 4) and Environmental Association and members such as Syncrude, required more material to be hauled NO /particular matter after- X is accessed by calling 1-866-685-3699. by the mining fleet. treatment devices on the “light duty” Since 2008, odours have become more pronounced Our primary goals with respect on-road category engines is occurring in Fort McMurray and Fort McKay. The Wood Buffalo to minimizing emissions from the as capital stock is replaced about Environmental Association (WBEA) is currently evaluating mining fleet are to move the every 10 years. As the technology new odour-related measurement technology with the maximum volume of material while becomes available and proven for intention to expand its air quality information. consuming the least amount of fuel heavy haulers, we will incorporate and to have engines that continue to newer higher-tier engines into the reduce NO emissions on a litre-of- X mining fleet as part of normal end- fuel-consumed basis. To achieve of-life fleet replacement. these, we focus on the following

64 Syncrude Canada Ltd. 2009 Sustainability report Atmospheric 2009 2008 2007 2006 2005 Emissions Actual Ozone-depleting Substances 1 (kilograms per year) 1,066 1,629 1,366 729 946 Sulphur Dioxide (thousand tonnes per year) 81.31 70.14 82.65 79.64 82.96 Sulphur Dioxide Emission Intensity (tonnes per KBbls Syncrude Crude Oil) 0.78 0.66 0.74 0.83 1.05 Nitrogen Oxides (thousand tonnes per year) 28.41 26.11 25.39 23.95 19.82 Nitrogen Oxides Emission Intensity (tonnes per KBbls Syncrude Crude Oil) 0.28 0.24 0.23 0.25 0.25 Volatile Organic Compounds (VOCs) 1, 2, 3 (thousand tonnes per year) — 13.90 28.16 28.27 28.75 VOC Emission Intensity 1, 2 (tonnes per KBbls Syncrude Crude Oil) — 0.13 0.25 0.30 0.36 NPRI On-site Releases (thousand tonnes per year) 1, 2 — — — — —

Sour Gas Flaring/Diverting (tonnes per day SO2) 5.2 7.9 6.1 11.4 4.8

2010 2009 2009 2008 2007 2006 2005 KEY AIR Target Actual Target INDICATORS Main Stack Sulphur Dioxide Hours greater than 16.4 tonnes per hour 0 0 0 3 3 1 2 90-day rolling average > 245 tonnes 0 0 0 0 0 0 0 Main Stack Nitrogen Oxides (# of hours > 1.5 tonnes per hour) 0 0 0 0 0 0 0 Diverter Stack Usage (hours per year) < 292 266 < 292 129 261 138 25 Main Stack Opacity (# of hours > 40%) < 5 22 < 5 84 27 0 11

Ambient Air Exceedances (H2S hourly) 0 5 0 55 17 20 38

Ambient Air Exceedances (H2S 24-hour period) 0 1 0 9 3 3 8

Ambient Air Exceedances (SO2 hourly) 0 0 0 1 2 0 1

Ambient Air Exceedances (SO2 24-hour period) 0 0 0 0 0 0 0 Odour Incidents # attributable 0 1 0 3 10 40 1 (%) of total incidents 0 4 0 16 67 87 100

1 Detailed breakdown at National Pollutant Release Inventory (NPRI) website: www.ec.gc.ca/pdb. 2 Due to reporting schedule, numbers will be available at NPRI website: www.ec.gc.ca/pdb. 3 VOC values are based on site-wide fugitive emissions surveys conducted by Clearstone Engineering, with the most recent completed in 2008. To ensure data accuracy, stack emissions from major sources are determined from stack surveys conducted per Alberta Environment Stack Sampling Code and from Continuous Emissions Monitoring Systems (CEMS), which are operated per Alberta Environment CEMS code. All data is provided to the regulator per our government operating approval. Information relating to off-site air quality is measured, collected and validated by an independent third party, the Wood Buffalo Environmental Association. During 2009, there were six ambient air exceedances attributable to Syncrude operations; in two of these, there were also other regional contributors.

Exceedances include five instances where the one-hour 2H S Alberta Ambient Air Quality Guideline was exceeded and attributable to Syncrude operations

and one instance where the 24-hour H2S Alberta Ambient Air Quality Guideline was exceeded and attributable to Syncrude operations. Ambient air exceedances can be categorized based on plant status (i.e., normal operation or process unit upset) and prevailing weather conditions (wind speed and direction) at each station. Exceedances occurring during normal plant operation, and when wind speed and direction preclude Syncrude as the source of the contaminant, are not attributed to Syncrude.

65 environmental sustainability The Syncrude Other air emissions Emissions Volatile organic compounds (VOCs) $ Reduction can contribute to poor air quality. Sources of VOCs at Syncrude include Project 1.6 60% naphtha losses to our Mildred BRITISH represents Lake Settling Basin and hydrocarbon Billion reduction a significant vapours from storage tanks. investment to in SO emissions COLUMBIA 2 commitment To reduce naphtha losses, waste reduce emissions after 2011 to pollution water streams are directed through two Naphtha Recovery Units (NRUs), prevention.Slave a technology developed by Syncrude W E S T E R N in the mid-1980s. We remain within C A N A D I A N monitoring air quality government regulations for naphtha Assessment losses and continue to examine SEDIMENTARY of ecosystem how we can improve recovery in BASIN the future. impacts A leak detection and repair program has been in place at yncrude is a member Peace River Syncrude since 1992. As required by of the Wood Buffalo our government operating approval, Environmental this program was modelled to comply Association and Fort Chipewyan with the Canadian Council of participates in its Ministers of the Environment Code STerrestrial Environmental Effects ALBERTA of Practice. The system enables the Monitoring (TEEM) Program. identification and repair of vapour TEEM assesses the impact of air leaks, which minimizes VOC releases. emissions on terrestrial ecosystems Significant efforts are also being and traditional land resources. Athabasca River made to reduce hydrogen sulphide Syncrude is also a member (H S) emissions through a focus of the Cumulative Environmental Fort McKay 2 on improving plant reliability and Management Association and minimizing operational upsets. participated in a three-day workshop Fort McMurray on the state of sulphur and nitrogen Grande Prairie deposition, and its ecosystem Anzac impacts, in western Canada. Workshop attendees included Fraser industry, regulators, environmental groups and Aboriginal stakeholders, as well as academics and scientists from across Canada, the United States and Europe. The outcomes Air Quality Monitor Station

are helpingAthabasca shape River recommendations Passive Monitor Station to government on how emissions Communities Beaver River can be effectively managed in the The Wood Buffalo Environmental Association operates 15 continuous local region. air-monitoring stations and 20 passive monitoring stations throughout the region. Edmonton

66 Syncrude Canada Ltd. 2009 Sustainability report

Saskatoon Calgary

Bow River WILLISTON BASIN WASHINGTON

MONTANA water management

Our Commitment Water is essential to Syncrude’s operation and plays a key role in our production processes. We recognize that water is a limited resource that must be managed carefully. Our commitment is to take prudent steps to manage and conserve the water we use and to protect the health of regional water bodies.

Conservation efforts Syncrude does Releases to the not discharge environment e have taken concerted efforts to increase our water process- Syncrude does not discharge efficiency. Over the last decade, we have reduced affected water, process-affected water, waste water water intake by an average seven million cubic metres waste water or or any industrial runoff into local annually through: any industrial water bodies. The only discharge Wn converting systems to use recycled water instead of fresh water. In many from Syncrude to the Athabasca runoff into River is treated sanitary sewage, cases, recycled water was not being used because it contains sediment that local water similar to that discharged by causes plugging and equipment malfunctions. We found that by increasing bodies. municipalities, as well as clean our maintenance and cleaning frequency, we could use recycled water; surface water/surficial aquifer water, n increased maintenance to ensure water equipment operates at which has been diverted around the peak efficiency; and Aurora site. We have not had any spills n improved operation of our cooling towers. We operate five cooling towers, or releases to any water body over which provide chemically treated water to cool equipment in our upgrader. the reporting period. We conduct First, we installed new booster pumps to improve the flow of cooling water. groundwater monitoring throughout And secondly, we introduced a special organic agent that reduced our operating area to ensure any plugging caused by sediment and chemical ions. seepage of tailings water does not impact the local ecosystem. Additional projects are being explored that could further reduce For more information, see Tailings water import. Dam Safety on page 58.

67 environmental sustainability HISTORICAL 200 20 WATER USE Syncrude Crude Oil Shipments (millions of barrels) 150 15 Water Intensity (cubic metres imported from Athabasca River per cubic metre Syncrude Crude 100 10 Oil produced)

50 5

0 0 1978 1988 1998 2009

Syncrude The Athabasca River is our main one-fifth of one percent of the river’s annually. In 31 years of operation, source of fresh water. It provides average annual flow. At the river’s we have always operated well within water use about 15 percent of our total water lowest flow—during the winter—our these limits. needs. Water imported from this withdrawal is about 0.5 percent. Syncrude is committed to water river is used to cool process water With production growth, we anticipate conservation and has reduced the and generate steam and as potable withdrawals will increase to one-third water intensity of its processes by water. The remaining 85 percent of one percent during average flow about 60 percent from levels in the BRITISH of water used is recycled from and about one percent during low early 1980s. Today, we require only our settling basins, also known flow periods. about two cubic metres of water to COLUMBIA as tailings ponds, and used in Our water licence, granted to produce a cubic metre of crude oil, bitumen extraction processes. Syncrude in the 1970s, permits us or about 0.3 cubic metres to produce

We currently withdraw Saboutlave to withdraw 61.7 million cubic metres a barrel of bitumen.

W E S T E R N C A N A D I A N SEDIMENTARY BASIN Local water quality The Athabasca River courses through the oil sands deposit. As a result, local water bodies have detectable levels of naturally occurring hydrocarbons. Peace River However, the Regional Aquatics Monitoring Program (RAMP) conducts extensive monitoring upstream and downstream of oil sands operations Fort Chipewyan and has detected no impacts to the Athabasca River ecosystem related ALBERTA to development when compared to baseline data. RAMP is a science-based, multi-stakeholder program funded by Syncrude and other industry operators. It oversees environmental monitoring of regional water bodies, including the Athabasca River, the Athabasca River delta,

Athabasca River 11 tributaries and 50 acid-sensitive lakes. Areas of study include climate and hydrology, water and sediment quality, fish populations and health, Water Quality Fort McKay and benthic invertebrate communities. For more information, visit Stations www.ramp-alberta.org. Communities Fort McMurray Syncrude is also a member of the multi-stakeholder Athabasca Watershed Grande Prairie Council, which held its initial general meeting in 2009 and elected its first board of directors. An initiative under the Government of Alberta’s Water for Life strategy, the council will assess the condition of the Athabasca Fraser watershed and advise the government on plans and activities to address issues. For more information, visit www.waterforlife.alberta.ca.

68

Athabasca River Syncrude Canada Ltd. 2009 Sustainability report Beaver River

Edmonton

Saskatoon Calgary

Bow River WILLISTON BASIN WASHINGTON

MONTANA Industry water use This committee included ALLOCATIONS COMPARED TO NATURAL FLOWS industry, government, municipal IN THE ATHABASCA, NORTH SASKATCHEWAN The Athabasca River is the least and Aboriginal stakeholders and AND SOUTH SASKATCHEWAN RIVER BASINS utilized river basin in Alberta. environmental groups. If approved 25 Currently, the oil sands industry by government, regulations will uses about 0.6 percent of the Average Natural Supply be implemented in 2011 to further Total Allocation average flow and five percent 20 stipulate when, and how much, Oil and Gas Allocation of the lowest weekly winter flows. water can be withdrawn from In 2007, Alberta Environment the river. and the federal Department of The committee’s report 15 Fisheries and Oceans introduced proposes that, in order to protect the Water Management Framework the river’s ecosystem, the base 10 for the Lower Athabasca River. flow rate should be established

It set maximum water withdrawals at 87 cubic metres per second. Water of Metres Cubic of Billions for oil sands operators. Syncrude, As a senior water licence holder, 5 as a member of the Cumulative Syncrude has agreed to reduce our Environmental Management licensed maximum withdrawal from Association (CEMA), participated four cubic metres per second to in a committee to develop two when requested by regulators Athabasca South North Saskatchewan Saskatchewan recommendations for the during low flow periods. second phase of the framework. Data based on year 2006: AENV State of the Basin Website

water use 2009 2008 2007 2006 2005 Imported from Athabasca River (millions of cubic metres per year) 37.5 41.2 36.0 33.9 28.24 Imported from Athabasca River (cubic metres per cubic metre Syncrude Crude Oil produced) 2.31 2.45 2.03 2.26 2.28 Treated Waste Water Discharged to Athabasca River (thousands of cubic metres) Sanitary 270.3 232.7 261 314.5 382.4 Other 1 0 0 0 0 0 Process Water Recycled 2 Millions of cubic metres per year 258.0 268.0 256.0 234.5 228.0 Recycled as % of total water used 87 87 88 87 88 Water Diversion/Return 3 (millions of cubic metres) 4.96 2.53 1.99 2.54 4.35 Water Discharge Quality Exceedances (# of incidents) Treated sanitary 0 0 1 0 0 Industrial process1 0 0 0 0 0 Reportable Spills to Natural Water Bodies (cubic metres) 0 0 0 3,150.04 0

1 Syncrude does not discharge any process-affected water to local water bodies or river systems. 2 Recycled water volumes reflect the combined volumes for Syncrude’s Mildred Lake and Aurora facilities. 3 Includes licensed diversion/interception of clean water from the environment, muskeg dewatering and surficial aquifer dewatering. 4 The spill related to a leak of recycle water from a pipeline connecting the Mildred Lake and Aurora sites.

69 environmental sustainability Waste management

Sulphur byproducts from Syncrude’s We recognize that many waste materials We reuse waste by finding new uses bitumen upgrading Waste Management contain substances that could contaminate for it (for example, oily rags collected facilities are now Guidelines the environment and pose risk to human from Syncrude laboratories and shops being used to Syncrude is committed to the proper produce ammonium health if they are not properly managed. are cleaned and reused). As well, our handling and disposal of waste sulphate fertilizer. asset recovery program redistributes materials created as part of our We reduce waste through proper materials that no longer have a use in a operations. The objectives of our inventory management that records and particular area. waste management program are to accounts for raw materials and process continually reduce the quantity of chemicals. Waste reduction is also We recycle waste by gathering waste generated and to critically achieved through process changes, used materials so they can be reclaimed examine each waste stream with a operational changes and equipment and reprocessed by recyclers. Examples view to reducing, reusing or recycling. modifications. Through these means include paper, vehicle batteries, scrap Syncrude also aims to ensure we will, for example, use less hazardous metals, catalysts and beverage compliance with all applicable substitutes for toxic materials, change containers. Used lubricating oil is legislation regarding the disposal procedures that generate waste and recycled on-site. and recycling of waste materials. modify equipment so that hazardous wastes are captured.

70 Syncrude Canada Ltd. 2009 Sustainability report Waste 2009 2008 2007 2006 2005 Management Major Waste Recycled or Reused—Solid1 (tonnes) 20,563 9,150 12,079 17,564 15,593 Minor Waste Recycled or Reused—Solid2 (tonnes) 210 255 219 276 217 Major Waste Recycled or Reused—Liquid3 (cubic metres) 3,439 3,680 2,653 3,070 3,360 Waste—Solid Hazardous or Potentially Hazardous Materials Sent for Off-site Treatment or Destruction4 (cubic metres) 68 11 19 158 48 Waste—Liquid Hazardous or Potentially Hazardous Material Sent for Off-site Treatment or Destruction (cubic metres) 2.1 4.6 4.0 6.5 5.0 Waste Disposal—On-site Industrial, Non-hazardous (tonnes) 21,775 20,431 61,862 32,760 28,680 Waste Disposal—On-site Sanitary Non-hazardous (tonnes) 2,354 2,137 1,712 2,000 2,880

1 Includes catalyst, scrap metal, tires, conveyor belting and batteries. In 2008, less catalyst was recycled due to fewer catalyst change-outs. 2 Includes solid recycled materials such as aerosols, oil/fuel filters, oily rags, refrigerant, plastic and metal drums, electronic waste, fluorescent tubes, kitchen grease, paper/cardboard/newsprint, beverage containers and printer cartridges. 3 Includes used oil and used solvents. 4 2009 volume is higher due to safe disposal of fresh catalyst that was previously stored on-site and disposal of debris that was contaminated by spent catalyst; the debris was stabilized and disposed of in an approved landfill.

Syncrude’s annual hazardous Cardboard and Paper recycling bins mercury recovery; the aluminum Recycling waste roundup collects are located throughout Syncrude to end caps are separated and recycled. Programs hazardous wastes on our site. promote recycling. Aerosols are disposed of or recycled The wastes are transported off-site Cell Phones , cell phone batteries appropriately, and the metal and sent to approved recycling and chargers are collected on-site containers are recycled. and disposal facilities. and sent for recycling. Electronics, including all discarded Oil Filters are shipped off-site, Beverage Containers are returned computers and related equipment, and the used oil in the filters to a recycling depot, and all cash are sent for off-site recycling. is recovered. from container deposits is donated Plastic and Steel Drums are Used Motor Oil is recycled on-site to community charities. returned to the original suppliers and processed into Syncrude Printer Cartridges are donated to for recovery of residual deposits Crude Oil. the Edmonton Food Bank, which sells and recycling of the drums. Other Waste Hydrocarbons and them for cash. Solvents are recycled on-site and Fluorescent Tubes are crushed, and reprocessed into Syncrude Crude Oil. the glass is sent to a retort for

By practicing the 3 R’s, Syncrude: WASTE IDENTIFICATION WASTE MINIMIZATION n saves on raw material and production costs; STRATEGY CAN VOLUME OF WASTE BE REDUCED AT SOURCE? n reduces waste disposal cost;

n CAN WASTE BE REUSED OR EXCHANGED? WASTE REDUCTIONassumes less risk of liability for future cleanup; n reduces movement of waste on public roads; CAN WASTE BE RECYCLED? n encourages resource conservation and recovery; and

OFF-SITE DISPOSAL WASTE CLASSIFICATION ON-SITE DISPOSAL n demonstrates environmental leadership.

71 environmental sustainability The Syncrude Operation

Shaping our plans Operating with excellence

Stakeholder Consultation Mining Syncrude consults with a wide range Shovel and truck operations at Syncrude’s Mildred Lake of interested groups and individuals and Aurora sites mine the oil sand from large surface about our plans. The input and mines. The oil sand is then mixed with warm water expectations of stakeholders are to create a slurry that is pumped using a patented integral to the decisions we make hydrotransport technology to extraction facilities. today and how we plan for the future. Extraction Customer Consultation The bitumen slurry is fed into separation vessels, where Syncrude and its owners work the bitumen floats to the surface as froth. This froth is continuously to understand present diluted with naphtha and then fed into centrifuges that and future requirements for refinery further separate liquids and solids. Finally, the naphtha customers that process our Syncrude is removed, leaving only cleaned bitumen. Crude Oil blend. These requirements Upgrading are influenced by regulators and by Bitumen is fed into either a fluid coker or a hydrocracker. end-use customers. The bitumen is thermally cracked into hydrocarbon gases, Research and Development naphtha and gas oil. The hydrocarbon gases are treated Science and technology provide for use as a refinery fuel, and the naphtha and gas oils the keys to unlocking the potential are treated and blended into a high-quality light, sweet of the oil sands resource. In this area, crude oil. The oil is then transported via pipeline Syncrude leads the way with one of to refineries throughout North America. the few dedicated corporate R & D Utilities programs in the oil sands industry. Syncrude’s utilities operations produce steam, electricity We invest about $50 million annually and air, and treat the water required to run plant in the pursuit of new and better ways operations. Syncrude is self-reliant in electrical power and currently hold 21 active Canadian generation and is a net exporter of electricity to the and US patents. More than 100 Alberta power grid. scientists and technologists work at our Research and Development Centre in Edmonton, and many more are engaged in research at a fundamental level through their work at universities and research institutes. Creating positive outcomes responsible Reclamation After mining is complete, work commences to reclaim the land. Syncrude’s vision is to create a landscape that sustains an integrated mosaic of land uses that meet stakeholder expectations. To date, we have reclaimed about 22 percent of our Mildred Lake site, planted over five million tree and shrub seedlings and achieved the first-ever government reclamation certification in the oil sands. Ongoing research is directed at finding ways to incorporate tailings into reclaimed landscapes. We have also successfully developed wood bison habitat in cooperation with the Fort McKay First Nation. the energy you need Refineries process Syncrude Crude Oil to make high- quality gasoline and diesel fuels, jet fuels and chemical feedstocks. Benefits to People Through our work to produce Syncrude Crude Oil, we directly and indirectly employ many thousands of people. In fact, Syncrude is one of the largest industrial employers of Aboriginal people in Canada. Through our community investment activities, we help support programs and initiatives that are important to our stakeholders. In 2008/09, we contributed nearly $7.5 million to community projects and initiatives. Benefits to the Economy Syncrude helps sustain local and regional economies through the purchase of goods and services. In 2008/09, non-energy procurement amounted to about $6.3 billion. Governments also benefit through Syncrude’s payment of taxes and royalties— $3 billion in 2008/09 and more than $12 billion since 1978. corporate Governance

• to review and approve the Corporation’s pursuant to the Employment Pension Plans Syncrude Canada Ltd. succession plans for its executive and Act (“Act”), including: is a private company senior management team; • to monitor the Retirement Plan assets and • to conduct an annual performance review approve the appointment of the Actuary incorporated under the of the Chief Executive Officer of the and the Trustee & Custodian of the Business Corporations Corporation; and Retirement Plan; • to review and approve annual adjustments • to review and confirm or amend the Act of Alberta. to the compensation of the Chief Executive Statement of Investment Policies and Officer, as well as the other officers of the Procedures (“SIPP”) each year on behalf Corporation, as recommended by the of the Board; Syncrude’s bylaws stipulate that shares Human Resources & Compensation in the corporation may be held only by the • to review and recommend to the Board Committee. shareholders in proportion to their interest that the Board approve the annual audited financial statement of the Retirement Plan; in the Syncrude Project, a joint venture, and Human Resources & and that Syncrude Canada Ltd. may not carry CompensatioN Committee • to review and approve financial on business or activities other than to act The Human Resources & Compensation assumptions and actuarial valuations of as operator of the Syncrude Project on Committee assists the Board in providing the Fund when required by the Act or behalf of the shareholders. corporate direction and oversight for the when the Committee deems that Corporation’s principal compensation and Board of Directors additional Fund valuations are necessary. The Board of Directors of Syncrude benefit programs and human resource policies is responsible for providing corporate and succession plans, including: Safety, Health & oversight and direction. The Board • to review and approve annual adjustments Environment Committee of Directors takes seriously its duties and to the salaries and benefits of the The Safety, Health & Environment Committee responsibilities, and it is the view of the Corporation’s employees; assists the Board in fulfilling its corporate Board that its approach in directing the • to review and approve principal human direction and oversight responsibilities for business of Syncrude Canada Ltd. is resource policies and programs of the the Corporation’s safety, health and comprehensive, effective and consistent with Corporation and significant changes environmental requirements, policies, generally accepted standards of Canadian thereto and to provide advice and direction practices, compliance systems and corporate governance. The whole Board on major human resource issues; performance, and in monitoring current meets at least annually and fulfills all • to approve changes in any benefit plan and future trends in safety, health and statutory and other legal requirements that texts, including the Retirement Plan for the environmental laws and practices, including: have not been delegated to the Committees Employees of Syncrude Canada Ltd. and • to review and approve the Corporation’s of the Board. Member Corporations (“Retirement Plan”), SH&E policy and significant revisions to There are four Committees of the that require Board approval; that policy and the principal programs and Board, which meet on a more frequent • to approve any post-retirement pension processes supporting it; basis: CEO Committee; Human Resources payment adjustments and adhoc increases, • to monitor and assess the Corporation’s & Compensation Committee; Pension and to authorize the Corporation, as performance in complying with its SH&E Committee; and Safety, Health & Environment sponsor of the Retirement Plan, to make policy, procedures, standards and related Committee. The Board and its Committees such payments; and requirements by receiving and reviewing are composed of Directors appointed by • to review and approve changes to regular or special reports from the the shareholders of the Corporation. management structure and senior Corporation outlining such performance; CEO Committee management succession plans of the • to confirm that the Corporation has The CEO Committee assists the Board in Corporation or to provide guidance on implemented and continues to maintain providing corporate direction and oversight significant issues regarding those matters. and audit appropriate policies, procedures, for the Corporation’s business and strategic controls and due diligence systems plans and specific matters pertaining to its Pension Committee with respect to safety, health and The Pension Committee assists the Board in executive and senior management team, environmental requirements and issues providing corporate direction and oversight including: including, without limitation, compliance for the Corporation’s responsibilities as • to review and endorse the long-term with all applicable laws, appropriate plans administrator of the Retirement Plan for strategic plan of the Syncrude Project and or responses to deal with emerging issues, Employees of Syncrude Canada Ltd. and the business plans of the Corporation; or trends, and procedures for notifying the Member Corporations (“Retirement Plan”) Board and Management Committee of the

74 Syncrude Canada Ltd. 2009 Sustainability report Syncrude Project of any significant or • to provide advice and guidance to the • to review and approve the selection and material incidents and, when necessary, to Management Committee and Syncrude on application of accounting principles and recommend to the Corporation revisions each Business Plan and Annual Budget for practices applied to the Syncrude Project; or amendments to such policies, the Syncrude Project, including: • to review and recommend to the Board procedures, controls and due diligence - sustaining capital or significant changes and/or Management Committee for systems; and to operating expenditures; approval all annual financial statements • to review reclamation and closure plans - material regulatory matters, including and/or related information; and receive updates on reclamation those related to reclamation approvals • to review the quarterly and annual activities, including tailings management. and requirements; representations made by Syncrude to the Participants, as well as changes to the Management Committee - procedures and controls for safety, health, environmental and security form of those representations; and Each of the Participants of the Syncrude matters; and • to review and recommend new or Project, a joint venture, appoints two - the Pembina crude pipeline for the additional Syncrude reporting disclosures representatives to the Management Syncrude Project. as a result of changes in and/or emerging Committee, which meets regularly and reporting, accounting or internal control provides oversight and governance for the Growth & Development issues affecting Syncrude Canada Ltd. project on behalf of the Participants. Subcommittee financial statements or Participants’ The weight assigned to each Participant’s The Subcommittee assists the Management respective regulatory reporting vote through the Management Committee Committee of the Syncrude Project on capital requirements. is proportionate to its interest in the growth and development opportunities, Code of Ethics Syncrude Project. including: and Business Conduct The Management Committee reviews and • to identify and evaluate such opportunities Syncrude has a number of Code of Ethics approves the Syncrude Project’s strategic and make recommendations concerning and Business Conduct policies that are plans, business plans, annual budget and same; designed to foster the high level of ethical major capital appropriations. In addition, it • to provide advice and guidance to the conduct expected by our many internal and reviews overall performance, both Management Committee and Syncrude on external stakeholders. The Corporation operationally and financially. each Business Plan and Annual Budget for stewards the application of these policies The Management Committee is chaired the Syncrude Project with respect to and reports periodically to the Audit and by one of its members. The current Chair is growth and development opportunities Business Controls Subcommittee and Marcel Coutu, Chief Executive Officer of and major capital projects in progress; makes representations to the Board to Canadian Oil Sands Limited. • to monitor the status and performance of confirm compliance. The Management Committee has created all major capital projects in progress under In addition to internal processes, subcommittees and delegated the indicated its mandate, including cost and schedule Syncrude has an external system for the powers and duties to support Syncrude and relative to applicable work programs and reporting of concerns about corporate the Participants. Each Participant, as well as budgets; and conduct. Employees, contractors and Syncrude, is entitled to nominate two • to establish appropriate business controls members of the public may file their representatives to each of the for major capital project spending and concerns anonymously and confidentially subcommittees. Each subcommittee reports performance. through EthicsPoint, at www.ethicspoint.com to the Management Committee, which or 1-800-493-1866. This information is appoints the chair and secretary of each Audit & Business available internally and through Syncrude’s subcommittee. Controls Subcommittee external website at www.syncrude.com. Operations Subcommittee The Subcommittee oversees all aspects of Syncrude’s internal control systems The Subcommittee assists the Management and financial and related disclosures as Committee of the Syncrude Project on required by law and good accounting operations matters, including: practice, including: • to monitor the performance of the • to review the adequacy of internal control Syncrude operations and provide advice systems and the scope and adequacy of and guidance to the Management the Corporation’s internal audit program Committee and Syncrude on plans and the results of their activities; designed to address improvement opportunities; • to review the scope, timing and findings of the external audit;

75 corporate governance corporate information

BOARD OF DIRECTORS OFFICERS OF EXTERNAL FINANCIAL AUDITORS SYNCRUDE CANADA LTD. KPMG Canadian Oil Sands Limited Marcel Coutu 1, 2, 3 Marcel Coutu HEAD OFFICE Trevor Roberts 3, 4 Chair of the Board 200, 9911 — MacDonald Avenue Trudy Curran 2 Tom Katinas Fort McMurray, AB T9H 1S7 Ryan Kubik 5, 6 President and Chief Canada Imperial Oil Resources Executive Officer FURTHER INFORMATION Randy Broiles 1 Syncrude Canada Ltd. Gord Ball Chris Ford Public Affairs Vice President, Production Projects Oz Machado 4 P.O. Bag 4023 M.D. 1000 Development and Execution Mocal Energy Limited Fort McMurray, AB T9H 3H5 Pasquale Papaluca Tad Ohmura 1 Canada Chief Financial Officer and Vice Steve Fly 3 Phone: (780) 790-6403 President, Business Services Murphy Oil Company Ltd. Toll-Free: (800) 667-9494 Mike McFadyen 1 Ray Hansen Fax: (780) 790-6270 Cal Buchanan 3, 4, 5 General Counsel and Media Relations: (780) 970-6923 Corporate Secretary E-mail: [email protected] Nexen Oil Sands Partnership Website: www.syncrude.ca Marvin Romanow 1 Gary Nieuwenburg 2, 3, 4 Sinopec Oil Sands Partnership Zhang Lianhua Yin Pengfei Suncor Energy Oil and Gas Partnership Steve Williams 1, 6 Kirk Bailey 3, 4, 5 Ray Floyd Mark Becker

1 CEO Committee 2 Human Resources & Compensation Committee 3 Management Committee 4 Safety, Health & Environment Committee 5 Pension Committee 6 Not a member of the Board of Directors

76 Syncrude Canada Ltd. 2009 Sustainability report Investor Information

Advisory Further information about Syncrude’s In the interest of providing readers of this report with information regarding Syncrude, including management’s business performance and investing in assessment of Syncrude’s future technologies, emissions and production levels and Syncrude operations, certain Syncrude can be obtained through the statements and graphs throughout this sustainability report contain “forward looking statements” under applicable websites listed below. securities law. Forward-looking statements in this report include, but are not limited to, statements and graphs with respect to: the expectation to grow production to 350,000 barrels per day (“bpd”) and eventually to 425,000 bpd by 2020; the expected emission reductions and costs relating to the sulphur emissions reduction project; the Canadian Oil Sands Limited expectations with respect to reducing emissions such as nitrogen oxide and hydrogen sulphide; the expected (COS.UN – TSX) improvement in energy efficiency; the expected reduction in emissions of carbon dioxide per barrel of production; www.cos-trust.com the estimated value and amount of reserves recoverable; the expected production, operating costs, capital expenditures, revenues, retained earnings, bitumen recovery and upgrading yield in 2010; the anticipated cost Imperial Oil Resources savings from Intela Trac; the expectations regarding the proposed carbon dioxide slurry pipeline project; the (IMO – TSX/AMEX) anticipated benefits of carbon capture and storage; the level and timing of growth and production volumes expected www.imperialoil.com from the debottleneck projects, the Aurora South development and other expansion projects; the ability to attract and retain employees with current and future retention policies and programs; the land reclamation plans and Mocal Energy Limited targets for Mildred Lake and the Aurora sites; Syncrude’s tailings management plans, including without limitation, www.noex.co.jp the anticipated benefits resulting from the tailings management technologies and the expectation that Syncrude’s tailings management plan may exceed the requirements of ERCB Directive 074 after 2015; the expected regulations Murphy Oil Company Ltd. stipulating when, and how much, water can be withdrawn from the Athabasca River. (MUR – NYSE) You are cautioned not to place undue reliance on forward looking statements, as there can be no assurance www.murphyoilcorp.com that the plans, intentions or expectations upon which they are based will occur. By their nature, forward looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, Nexen Oil Sands Partnership that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements (NXY – TSX/NYSE) will not occur. Although Syncrude believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Some of the risks and www.nexeninc.com other factors that could cause results to differ materially from those expressed in the forward-looking statements Sinopec Oil Sands Partnership contained in this sustainability report include, but are not limited to: the impact of technology on operations and processes and how new complex technology may not perform as expected; risks inherent to the operation of any (386. HK – HKEX, 600028 – SSE, large, complex refinery units, especially the integration between mining operations and an upgrader facility; SNP – NYSE/LSE) regulatory changes which may impact the penalties on greenhouse gas emitters, or the amount of Crown royalty http://english.sinopec.com or taxes paid to the government; changes in business strategy; imprecision of reserve and resource estimates; regulatory decisions; the effects of competition and pricing pressures; shifts in market demands; changes in laws Suncor Energy Oil and regulations including environmental and regulatory laws; potential increases in costs; timing of completion of and Gas Partnership capital or maintenance projects; various events which could disrupt operations including severe weather conditions; (SU – TSX/NYSE) technological changes and management retention and development; skilled labour shortages and the productivity www.suncor.ca achieved from labour in the Fort McMurray area; the supply and demand metrics for oil and natural gas; the unanimous joint venture owner approval for major expansions and changes in product types; the impact of Syncrude being unable to meet the conditions of its approval for its tailings management plan under ERCB Directive 074; the impact of any decisions rendered by a court in relation to litigation including without limitation, any decision relating to the trial against Syncrude Canada Ltd. relating to the 2008 waterfowl incident; general economic, business and market conditions; and such other risks and uncertainties described from time to time in the reports and filings made with regulatory authorities by Syncrude. You are cautioned that the foregoing list of important factors is not exhaustive. Furthermore, the forward- looking statements contained in this report are made as of the date of this report and unless required by law, Syncrude does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this report are expressly qualified by this cautionary statement. Unless otherwise specified, all dollar amounts are expressed in Canadian dollars, all references to “dollars” or “$” are to Canadian dollars and all references to “US$” are to United States dollars. Jantzi Social Index The Index has included Joint Venture owner Canadian Oil Sands Trust since 2006, recognizing the performance of the Syncrude Project through a set of broadly based environmental, social and governance rating criteria. Jantzi Research is Canada’s leading provider of social and environmental research for institutional investors.

77 investor information partners in sustainability

Syncrude has many partners in its sustainability journey. Together, we are working to address and improve Responsible Canadian Energy™ the economic, environmental and (RCE) is an industry performance Syncrude is accredited at the social performance of Canada’s program developed by the Canadian Gold Level in the Progressive resource industry. In many cases, Association of Petroleum Producers Aboriginal Relations (PAR) Syncrude is a leading contributor (CAPP) with support and leadership Program of the Canadian Council through the provision of staff from across the upstream oil and for Aboriginal Business. PAR expertise and funding. Readers gas industry. The program is about measures corporate performance are invited to learn more by performance and reflects industry’s in Aboriginal employment, business visiting the websites listed below. ongoing commitment to responsible development, capacity development resource development and to Aboriginal Human and community relations. Resource Council continuous improvement in www.aboriginalhr.ca environment, safety and health, and social performance. Alberta Chamber of Resources www.acr-alberta.com Syncrude is a participant in the

Integrated CO2 Network, or ICO2N, Canadian Association which is exploring the viability of Petroleum Producers of large-scale carbon capture, www.capp.ca transportation and storage for a Syncrude is a participant in cross-section of Canadian industry. Canadian Business for the Towards Sustainable Mining Social Responsibility (TSM) initiative of the Mining www.cbsr.ca Association of Canada, which is a strategy for improving Canadian Council for Aboriginal Business the sustainability performance www.ccab.com of Canada’s mining industry.

Canadian Oil Sands Network for Research and Development www.conrad.ab.ca Syncrude is a member of Canadian Mining Association of Canada Editors: Paul Manuel and Mark Kruger www.mining.ca Business for Social Responsibility Contributing Writers: Gordon Jaremko, (CBSR), a business-led, non-profit Paul Marck, Neil McCrank Oil Sands Developers Group Corporate Social Responsibility Design and Production: Karo Group Calgary www.oilsands.cc consultancy and peer-to-peer Primary Photography: Roth and Ramberg learning organization. CBSR provides Additional Photography: Mike Beresford, Frans Brouwers, Jim Coote, Will Gibson, its members with candid counsel and Keyano College, Bob Nyen, Kevin Pollitt, customized advisory services to Merle Prosofsky, Royal Alexandra Hospital, improve their social, environmental Ted Shehinski and financial performance. Printed in Canada by: Blanchette

78 Syncrude Canada Ltd. 2009 Sustainability report Bill’s Lake is found in an area reclaimed from mining operations in the early 1990s.

Printed on FSC-certified Mohawk Options 100% PCW manufactured entirely with wind energy and contains 100% post-consumer recycled fibre. This project resulted in: • 147 trees preserved for the future • 192 kilograms water-borne waste not created • 236,108 litres waste water flow saved • 3,130 kilograms solid waste not generated • 6,163 kilograms net greenhouse gases prevented • 104,006,031 BTUs energy not consumed

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A Syncrude News and Community Update Stay informed about happenings at Syncrude by subscribing to our eNewsletter. Synergy is published several times a year to keep our stakeholders up-to-date with important news about our work in the community, environmental progress, initiatives with Aboriginal communities, employee achievements, major projects and more. Subscribe now at www.syncrude.ca