SYNCRUDE SUSTAINABILITY REPORT 2017-18 ABOUT THIS REPORT This report is a highlights summary of the environmental, social and economic impacts of Syncrude’s operations during 2017. More information about the topics in this book can be found online at www.syncrude.ca. Based in Fort McMurray, Alberta, Syncrude operates technologically-advanced oil sands mines, extraction and upgrading facilities, as well as Syncrude is utilities plants. A large research and development facility in Edmonton one of the largest supports operations and has pioneered many of the technologies used today operators in in the industry. Current production capacity is 350,000 barrels per day Canada’s oil sands of high quality light sweet crude oil and cumulative shipments now industry, with over exceed 2.6 billion barrels. 50 years of responsible operations and ongoing innovation. Indigenous plant species are grown for use in reclamation programs in areas that were previously mined. TABLE OF CONTENTS 1 Leader’s Letter 3 2017 Highlights Wetlands are a key component of our ongoing 5 Our Sustainability reclamation strategy. Approach Pictured here, the reclaimed Sandhill Fen 6 2017 Corporate wetland research area. Performance Summary 9 Environmental Sustainability 10 Land 13 Biodiversity 18 Tailings 20 Water 23 Climate Change 26 Air 29 Social Sustainability 30 Health & Safety 33 Aboriginal Relations 36 Community Relations 39 People 43 Economic Sustainability 44 Operations & Economic Value 50 Key Performance Indicators BC Contact Information 2HECTARES15 OF FORMER MINE AREAS RECLAIMED IN 2017 1 LEADER’S LETTER People are the heart and soul of any organization. And at Syncrude, the determination, resolve and mindfulness of our people is forging the path to a truly sustainable company. Our journey began over 50 years ago with some of the greatest minds in the energy industry and their achievements helped pave the way for a dynamic, economically-viable Canadian oil sands industry. Today, as we enter the next stage of our journey, our focus more than ever is to ensure our success in an increasingly competitive world. This will be realized through innovation in technology and thinking, through reliable and responsible operations, by working Syncrude’s focus collaboratively with other industry members, and by addressing the expectations of our stakeholders and neighbouring communities. on sustainability While Syncrude has faced a number of challenges over the last few “touches every single years, the remarkable tenacity and resiliency of our employees has aspect of our helped us overcome these and we continue to make great progress on our commitments. operation – from facilities and Looking back to 2017, for example, once we recovered from the March process event, we operated exceptionally well. Production equipment to averaged 340,000 barrels of Syncrude Sweet Premium per day, environmental delivering about 4.6 million barrels above plan of our high quality performance to our product between August and December. Also, our commitment to a safe workplace in the year was reflected in our lowest-ever total relationships with recordable injury rate. These achievements highlight the amazing stakeholders and perseverance of Syncrude’s people and the tremendous potential neighbours.” in a stable and reliable operation. On the environmental front, we surpassed our reclamation target by more than 200 per cent, planting over 400,000 tree and shrub seedlings and returning 215 hectares of land back to nature. Our tailings management technologies enabled the removal of over nine million cubic metres of fluid fine tailings from our settling facilities and their treatment for incorporation into reclamation sites. As well, we continued our measured approach toward developing a corporate climate change strategy which decreases our greenhouse gas emissions per barrel. SYNCRUDE 2017-18 SUSTAINABILITY REPORT 2 Syncrude also continues to work with local communities to identify opportunities that enable them to share in the benefits of our oil sands operation. In fact, at $342 million, Aboriginal procurement in 2017 was double that of the previous year, reaching a cumulative $3 billion. Aboriginal direct workforce representation increased to 10.1 per cent – one of the highest levels in our history – and people from the local region accounted for 90 per cent of all new hires. Our commitment to innovation through research and development is improving current operations and helping ensure we can meet the challenges of the future. Syncrude is recognized as one of the top innovation leaders in Canada with over $1.1 billion in R&D investments between 2001 and 2015. We invested $74.5 million in 2017 alone and continue to partner with other industry players through Canada’s Oil Sands Innovation Alliance (COSIA) to develop leading-edge technologies and solutions. Syncrude’s focus on sustainability touches every single aspect of our operation – from facilities and equipment to environmental performance to our relationships with stakeholders and neighbours. And much like 50 years ago, when we began our long, proud and accomplished journey in the oil sands, we will rely on our people to deliver the competitive, world-class operations required throughout the next stage of our journey. Our Vision and Values continue to guide us and I’m confident we have the knowledge, heart and commitment to achieve Syncrude’s highest potential. Doreen Cole Managing Director 2017 HIGHLIGHTS LOWEST EVERLOWEST OVER OVER 100 PLANT & MOSS SPECIES 400,000 & PEAT-FORMING VEGETATION SUPPORTED BY OUR RECLAIMED FEN WATERSHED EMPLOYEES AND RETIREES CONTRIBUTE OVER SEEDLINGS 9,800 VOLUNTEER HOURS PLANTED TOTAL RECORDABLE INJURY RATE OF OVER 9 MILLION M3 OF FLUID FINE TAILS ABORIGINAL PROCUREMENT REMOVED FROM % 0.45 TAILINGS FACILITIES DOUBLES AND TREATED FOR FUTURE FROM PREVIOUS YEAR TO RECLAMATION ACTIVITIES $ SO2 EMISSIONS 342 MILLION $ R REDUCED AND OVER MORE THAN $ 6.2 87OF ALL WATER USED WAS 50 PERCENT 3 BILLION MILLION RECYCLED FROM TAILINGS FACILITIES FROM 2013 CUMULATIVE TO DATE INVESTED IN COMMUNITY PROJECTS & INITIATIVES 2017 TOTAL PROCUREMENT GHG 39% EMISSIONS Municipality of Wood Bualo 38% Rest of Alberta 10% Aboriginal-owned Companies ABORIGINAL $ 8% WORKFORCE Rest of Canada REPRESENTATION 90 INCREASES TO 5% 215HECTARES PER CENT 0.11 TONNES CO2e International OF ALL NEW EMPLOYEES % OF LAND HIRED FROM LOCAL REGION 10.1 PER BARREL PRODUCED RECLAIMED LOWEST EVERLOWEST OVER OVER 100 PLANT & MOSS SPECIES 400,000 & PEAT-FORMING VEGETATION SUPPORTED BY OUR RECLAIMED FEN WATERSHED EMPLOYEES AND RETIREES CONTRIBUTE OVER SEEDLINGS 9,800 VOLUNTEER HOURS PLANTED TOTAL RECORDABLE INJURY RATE OF OVER 9 MILLION M3 OF FLUID FINE TAILS ABORIGINAL PROCUREMENT REMOVED FROM % 0.45 TAILINGS FACILITIES DOUBLES AND TREATED FOR FUTURE FROM PREVIOUS YEAR TO RECLAMATION ACTIVITIES $ SO2 EMISSIONS 342 MILLION $ R REDUCED AND OVER MORE THAN $ 6.2 87OF ALL WATER USED WAS 50 PERCENT 3 BILLION MILLION RECYCLED FROM TAILINGS FACILITIES FROM 2013 CUMULATIVE TO DATE INVESTED IN COMMUNITY PROJECTS & INITIATIVES 2017 TOTAL PROCUREMENT GHG 39% EMISSIONS Municipality of Wood Bualo 38% Rest of Alberta 10% Aboriginal-owned Companies ABORIGINAL $ 8% WORKFORCE Rest of Canada REPRESENTATION 90 INCREASES TO 5% 215HECTARES PER CENT 0.11 TONNES CO2e International OF ALL NEW EMPLOYEES % OF LAND HIRED FROM LOCAL REGION 10.1 PER BARREL PRODUCED RECLAIMED 5 OUR SUSTAINABILITY APPROACH We are guided by our corporate Vision and Values, which speak to how we operate and the principled and ethical approach toward achieving our goals. This is supported through internal systems such as our Code of Ethics and Business Conduct and our Stakeholder Relations Policy. External inputs, such as materiality risk analyses and community of interest feedback, provide perspectives on performance and direction on priorities. REGULATORY OVERSIGHT AND ENVIRONMENTAL MONITORING Environmental compliance is primarily governed by the Alberta Environmental Protection and Enhancement Act. Independent environmental monitoring is conducted through the Alberta Environment and Parks Science and Monitoring Division. Syncrude provides funding to support their activities. TOWARDS SUSTAINABLE MINING PROGRAM We are committed As a member of the Mining Association of Canada (MAC), Syncrude participates in its Towards Sustainable Mining (TSM) initiative. This program to the responsible specifies measurement criteria in protocols for tailings management, energy and greenhouse gas emissions management, Aboriginal and community and sustainable outreach, crisis management and communications planning, safety and health, development of and biodiversity conservation. Protocols are self-assessed using a bond rating (C, B, A, AA, AAA) and reported annually. Every three years, assessments are Canada’s oil sands. externally verified to ensure accuracy and transparency. Syncrude underwent an external verification for the 2016 reporting year and was confirmed to have high performance, and minimum Level A ratings, in all areas. INDUSTRY BEST PRACTICES Syncrude participates in a number of associations committed to responsible business. In addition to the Mining Association of Canada, these include the Canadian Association of Petroleum Producers (CAPP), Canadian Council for Aboriginal Business (CCAB), Canada’s Oil Sands Innovation Alliance (COSIA), Alberta Chamber of Resources (ACR), Indigenous Works and the Oil Sands Community Alliance (OSCA). REPORTING ETHICAL CONCERNS An external system is in place through EthicsPoint