THE TURNAROUND AT SUNCOR
When Suncor first invested in the oil sands in 1967, oil sands were considered a so-called 'alternative' energy source. At the time, many people believed that the technology could not be made economic. And for quite a long time, the skeptics seemed to be right.
In the mid-1980s, plunging world oil prices made Suncor's oil sands production uneconomic. Our company's mining technique, based on giant bucket wheels and conveyor belts, was prone to breakdowns. Suncor was also burdened by underperforming operations in the conventional upstream and downstream businesses.
The crisis surrounding the future viability and sustainability of our operations caused Suncor to make important changes. In the early 1990s, under newly appointed CEO Rick George, we embarked on an ambitious program to significantly enhance operations, with the aim of improving our long-term financial picture. George and his new leadership team recognized that to succeed, the company would have to grow, and the biggest opportunity was Suncor's unprofitable oil sands business.
The company moved from expensive and unreliable bucket-wheel mining equipment to giant trucks and shovels. By investing in new technologies, we generated higher and more reliable rates of production, and drove down operating costs. So much so, that by the mid-1990s, Suncor was able to bring its costs per barrel to a point where, for the first time in the company's history, oil produced from our Fort McMurray plant was cost-competitive with conventional sources of oil.
Suncor's new low-cost business model sparked an era of exponential growth that saw the company setting — and exceeding — a goal of doubling its production, earnings and share price every five years.
As the company grew, it also began to pay closer attention to environmental performance.
SUNCOR'S VISION OF SUSTAINABILITY
Suncor's vision statement says: 'Suncor's vision is to be a unique and sustainable energy company, dedicated to vigorous growth by meeting the changing expectations of our current and future stakeholders.' It also says that: 'Being a sustainable energy company means managing our business in a way that enhances social and economic impacts to society, while striving to minimize the environmental impacts associated with resource development.' In other words, growth — and generating value for Suncor's shareholders — calls for sustainable approaches that are broad in scope, long-term in vision, and responsive to the inevitability of change. And these three elements, in essence, are what sustainable development at Suncor is all about.
So what does this vision mean in practical terms to our future? It means that investments — not just in steel and pipe but also in people and ideas — reflect Suncor's vision of becoming a sustainable energy company — a vision that sees the links between economic, social and environmental objectives. We believe that striving to meet social and environmental goals as we grow our business is not only possible — it helps ensure we remain profitable in the long term.