CALGARY – Building pipelines to connect Alberta crude to West Coast ports is a matter of Canadian sovereignty, says the former CEO of Canada’s biggest oil company.
Rick George, who retired from the top job at Suncor Energy Inc. (TSX:SU) in May following a two-decade tenure, makes the argument in his newly released book “Sun Rise: Suncor, the Oil Sands and the Future of Energy.”
George was born and raised in Brush, Colo. – “population around 5,000 people with maybe an equal number of cattle and horses” – but he has long called Calgary home and considers himself a “Canadian nationalist.”
Currently, the United States buys virtually all of Canada’s energy exports – and that gives our southern neighbour too much power, writes George.
“It’s not inconceivable to imagine the United States insisting that Canada alter various standards to match its own,” he writes.
“Why would we let another country dictate environmental policy and commercial terms to us? That’s what happens where energy is concerned, and it’s a breach of Canada’s sovereignty when it occurs.”
Two proposals are in the works to ship oilsands crude to lucrative Pacific Rim markets via the B.C. coast: Enbridge Inc.’s (TSX:ENB) $6-billion Northern Gateway project, which would end up at the northern port of Kitimat, B.C., and Kinder Morgan’s $4.1-billion Trans Mountain line expansion, which heads to the Vancouver area.
Both have been controversial.
There are concerns a spill from a pipeline, or from enormous tankers moving along the coast, could have dire environmental consequences. B.C. Premier Christy Clark has said her province will block the proposals if conditions related to the environment, First Nations and – most contentiously – economic benefits aren’t met.
George acknowledges no project is risk free, but notes oil tankers have long sailed from Scotland, Norway and Canada’s East Coast safely.
While it’s important to ensure the environment is protected, George argues the implications for Canada-U.S. relations should be a big part of the discussion, too.
“We won’t have to be nearly as concerned about American criticism of our policies. The Canadian prime minister and every Canadian official visiting Washington will be treated with new respect, and the country’s voice will be heard more loudly and more clearly.”
In an interview with The Canadian Press from his office just outside of Calgary’s downtown core, George said his book is not a springboard into politics or some other move into public life.
“What I’m hoping is the book actually kind of would provoke a better dialogue across Canada, where the dialogue is richer than people just taking sides without thinking about what’s best for this country,” he said.
George, who holds both Canadian and U.S. citizenship, is eligible to vote in the upcoming presidential election, but says “I don’t exercise that right.”
Though George says he tends to lean Republican, he expressed no strong preference for either Mitt Romney or Barack Obama.
No matter who wins, George said he wants to see more predictability in U.S. policies so that businesses big and small are more comfortable spending their money.
“The most important thing I think is that somehow Washington D.C. changes out of this acrimonious kind of rhetoric. I don’t think it’s doing anyone any good.”
A proposal by Calgary-based pipeline giant TransCanada Corp. (TSX:TRP) to ship Canadian crude to U.S. refiners has been one of the bigger U.S. political flashpoints. After a string of delays, the U.S. State Department is expected to make a decision on the Keystone XL pipeline early next year.
In the book, George said he considers Keystone XL to be a “double-edged sword” for Canada.
“While it will boost this country’s crude oil sales to the United States, it also will bind Canada more tightly to the U.S. market. This prospect brings some inherent dangers with it, yet I rarely heard that discussed in the exchanges between the two sides.”
The book traces Suncor’s rise from a small company struggling to profitably squeeze oil from the crude-soaked sands of northern Alberta to Canada’s dominant oilsands name.
A big step in that journey was Suncor’s 2009 takeover of former Crown corporation Petro-Canada – a deal that was years in the making.
A decade earlier, the two companies were on the verge of announcing a deal, but the Petro-Canada board’s 11th-hour demand to own a bigger share of the combined company scuttled the transaction.
When the idea was resurrected, a handful of top executives hammered out the deal during secret meetings at Calgary’s Fairmont Palliser hotel.
While George says completing the largest transaction in Canadian history was a big personal achievement, it was also a “period of intense sadness” for him. During the negotiations, his father was diagnosed with brain cancer. He died four months later.
“He was a very small town business guy,” said George in the interview.
George said his dad would be proud of his accomplishments – “but also kind of surprised, I guess.”
“My dad had a high school education, no university. I think it was a long ways from his world. But the basic values of hard work, of optimism, of how to get through challenges – lots of that I learned from him.”
Aside from writing the book and vacationing with his family in Turkey, George has been spending much of his post-Suncor life setting up a new fund to invest in small oilpatch companies.
“I’m not retiring to the farm or the ranch. You’ll see me around town a lot. I’m going to stay very active in the industry.”
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