DUG Canada Conference Environment & Operating Excellence Panel

Earning & Maintaining Social License

Dave Collyer, President Calgary, Alberta June 22, 2012

N.A. Natural Gas Supply – The Opportunity

• Shale gas supply a game-changer.

• Technology breakthroughs.

• New producing regions.

• 100 years + supply.

• Market growth opportunities (power generation, transportation, LNG exports).

Industry Key Success Factors

• Key success factors: • Attract capital (supply & infrastructure) • Maintain / enhance support from stakeholders & public

• Competitiveness

• Fiscal • Regulatory • Market Access (infrastructure & tolls) • Costs

• Social License = Performance + Communications

Industry Reputation / Social License – Framing the Issues

● Local / Regional: Environment (air, land, water, biodiversity impacts) Social (noise, dust, activity levels, impact on local services, infrastructure

& wages, local benefits, employment, etc.) … … .The primary focus of landowners, communities, many Aboriginal peoples, many in public.

● National / Global (first oil sands, now shale gas): Global climate change Oil and gas infrastructure Role of fossil fuels in future energy system … … .The primary focus of most ENGOs, some in the public.

Industry Reputation / Social License – Key Elements

Performance + Communication ● Performance Continuous industry improvement:

• Technology is the key lever.

• Industry operating practices…..to raise bar on industry performance.

Solutions-oriented advocacy for balanced policy. Robust & credible regulatory framework. Science-based monitoring, 3rd party validation, transparent reporting.

● Communications & Outreach: Messaging – balanced, fact-based, solutions – oriented, “high road”. Delivery – diversity of mediums, approaches, spokespersons. Strong focus on outreach / engagement – local / regional / national. Grounded in performance improvement.

• People Health effects of hydraulic fracturing chemicals.

• Land Surface footprint. Induced seismicity. Wildlife disruption.

• Air Air quality during extraction, processing, delivery

and end-use.

• Water Groundwater contamination – migration of

methane gases and fracturing chemicals. Volumes of water used. Handling and disposal of fluids.

• GHGs Emissions from production & processing.

Public Concerns About Shale Gas

CAPP Guiding Principles for Hydraulic Fracturing

1

2

5

We w ill safeguard the quality and quantity of regional surface and groundwater resources, through sound wellbore construction practices, sourcing fresh water alternatives where appropriate, and recycling water for reuse as much as practical.

We w ill measure and disclose our water use w ith the goal of continuing to reduce our effect on the environment.

3 We w ill support the development of fracturing fluid additives w ith the least environmental risks.

4 We w ill support the disclosure of fracturing fluid additives.

We w ill continue to advance, collaborate on and communicate technologies and best practices that reduce the potential environmental risks of hydraulic fracturing .

CAPP Operating Practices for r Hydraulic Fracturing

Guide development. Expected practice, but not

mandated by CAPP. Inform / complement

regulations. Contribute to safe, responsible

operations.

Implementation of Operating Practices

CAPP Operating Practice Implementation Status

Fracturing Fluid Additive Disclosure

• Mandatory disclosure in BC on FracFocus.ca • Mandatory disclosure in AB expected this year • Advocating for mandatory disclosure across Canada

Fracturing Fluid Additive Risk Assessment & Management

• Developing CAPP chemical screening tool to increase awareness of risks and drive selection of ‘greener’ products

Baseline Groundwater Testing • New West Partnership overseeing development of regional groundwater monitoring policies/protocols

Well Construction & Quality Assurance

• Drafted procedures for conformance with the practice, for individual company modification and adoption

Water Sourcing, Measurement & Reuse

• Procedures to be developed this year

Fluid Transport, Handling, Storage & Disposal

• Procedures to be developed this year

2012 Communications Strategy

Bifurcated approach: • Primary Focus – Securing social license to operate (unconventional gas development) • Secondary Focus – Promoting the positive attributes of natural gas to increase

domestic use and raise awareness of new uses and new markets for Canadian natural gas..

Mea

sure

men

t Sc

orec

ard

Strategy

Education & Engagement

Issues Management & Media Web & Social Media Issues Management

Advertising Data & Reporting

An integrated, long-term

communications plan.

Research

Communications Focus

• Advertising (TV & Print) Raise awareness, promote positive attributes Promote broader use Line of sight to economic benefits Provide a cleaner energy choice for Asian markets Targeted print advertising for producing areas - focus on

safe and responsible shale gas development

• Engagement and Outreach • Natural Gas Dialogues across Canada • Community engagement • Outreach via web and social media

• Media Relations Continue with rapid-response, zero-tolerance Media tours

Advertising - Upstream

Summary

● Shale gas - a game-changer for N.A. across value chain.

● Key success factors: Competitiveness Social License

● Social License = Performance + Communications ● Highly regulated industry

Leading regulators CAPP’s Operating Principles and Practices –

progressive initiative complementing regulations ● Industry commitment to responsible energy

development Excellent track record Environmental performance improvement Increasing transparency Consulting with our stakeholders

● Strong industry commitment to communications & outreach…..for the longer term.