Canadian Natural’s Joy Romero on
sustainability
and supply chain capacity building
A metallurgical engineer by training, Joy Romero
joined Canadian Natural Resources in 2001 to participate in the development,
construction, commissioning and operation of CNRL’s Horizon project. When
complete, that project will deliver 110,000 barrels per day of upgraded oil
(CSO).
Now headquartered in Calgary, she is Vice President
of Technology Development for the company’s oil sands operations. She says
she believes strongly in environmental protection, but is well aware of the
widespread cynicism toward corporate executives who claim to really believe
in the environment. So she takes a different tack: good environmental practice
is good economics.
“At least believe that [business is] driven by
economics,” she says. “It’s our responsibility to use that resource to the
best of our ability. How do we get the most from that barrel [of bitumen]
both during production and by the people who use” petroleum products?
In Romero’s view, environmental practices improve
with technological innovation. Asked about the “tragedy of the commons” – the
idea that unregulated self-interest on common resources can end up in
destruction of the resource – she is adamant that this issue is “not even a
probability,” given both public and industry attitudes. “We want our industry
to be sustainable over many generations. There is a place for fossil fuel in
the world, but it needs to be used responsibly. Can you imagine if everybody
recycled and re-used waste heat, how much further a barrel of oil would go?
We’re pretty darn good at recycling and reusing. If we could get the whole
world to do that, there’d be a much smaller footprint out there and lower
demand for energy of any kind.”
“If you don’t believe that we want to improve the
environment because it’s the right thing to do,” she says, “just look at the
economic benefit good environmental practice brings. Our tailings pond is
half the size of a conventional tailings pond because reducing the amount of
water we take in reduces the amount of water we have to treat and recycle.
You don’t have to be a rocket scientist to figure out that it is good
business to have a smaller tailings pond. [Developing] heat integration
between our upgrader and our extraction plant means that facility won’t use
gas. It’ll use waste heat from the upgrader.”
“When you look for flares on-site you
basically can’t see them,” she says. “We use fuel gas to fire our furnaces. We
recycle all of that.” These environmental innovations are possible, of
course, because of recent technological innovations that simply weren’t
available to earlier oil sands plants. But a key benefit for CNRL is that
they lower the company’s operating costs. Then, Romero adds a new element to
the discussion: “You can’t create a strong oil sands project that isn’t
focused on the environment and building human capacity.”
Worried that future production is at risk because of
“the social interpretation of our product” is putting the industry’s social
licence to operate in jeopardy, she says public
education that stresses the rapid improvements in the industry’s
environmental trajectory since the beginning of this century is critical. “Up
until now, one of the things that I’ve always been involved in and really
enjoyed since I actually started is collaborative technology development
within the industry.” She has been active in CONRAD – the Canadian Oil Sands
Network for Research and Development, which recently shut its doors – and
with OSLI, the Oil Sand Leadership Initiative, both of which focused on the
environment.
These industry organizations looked for ways to work
together to reduce the sector’s environmental footprint. “When it comes to
producing oil and the various technologies that we use, we compete. But, when
it comes to safety and the environment, we don’t. It is very important for us
to work together. Producing companies CEOs have met together, especially
since the advent of the social licence to operate.”
CAPP has created a series of environmental ads, one
of which features Romero. To some extent they have been controversial, with
anti-oilsands groups spoofing and mocking them, but the industry supports
them as accurate and necessary antidotes to misinformation.
“We have done other things to promote education and
try to help people understand,” she says. But, the proof is in the pudding.
People need to see something more concrete. So, even though we are not
exceeding any of the regulations, we understand that we can do it better.
And, under the guidance of CEOs representing 95% of production, we formed
Canada’s Oil Sands Innovation Alliance, COSIA. If we thought we were
collaborating before, this is collaboration on steroids. We’re focusing on
tailings, greenhouse gases, land and water. Inside COSIA, best practices with
respect to land, water, greenhouse gases or tailings are shared,” because “we
are judged not by the environmental performance of our best operator out there.
We’re judged by the environmental performance of those who are not as strong
as others. So, it’s really, really important to bring the industry as a whole
to the best level that we can be.”
One of the most important academics to catch Romero’s
eye is Professor Michael Porter of Harvard Business School; his work on the
“social progress imperative” is taught around the world. “Social progress,”
according to Porter, “is the capacity of a society to meet the basic needs of
its citizens, establish the building blocks that allow citizens and
communities to enhance and sustain the quality of their lives, and create the
conditions for all individuals to reach their full potential.”
Porter has parsed that key idea into numerous
sub-indexes and concepts, one of which, according to Romero, is “a continuum
of philanthropy.” She elaborates that “at the beginning, companies just give
stuff away. Then, you develop corporate social responsibility.”
Porter’s ideas on shared value refer to the ways in
which companies and communities live, interact and operate. “When he found
out what we were doing in the oil sands, he actually came and visited us, and
toured and took a look. He said we were probably the most advanced form of
shared value that there is the world. [Prior to his visit,] Porter’s
impression of what is out there was completely different than what he found
when he toured our operations and met our people, and our communities.”
Porter’s ideas on community relations are an
important part of his notions of good corporate strategy, and in this area
too CNRL fit the bill. “We don’t count minorities and we don’t hire women or
men,” according to Romero. “We hire the best people for the job. They are
treated the same whether they are Aboriginal People, local small businesses
from Fort McMurray or smaller-sized companies from around the world. We
generate the project and we generate scopes of work that allow people to
learn and to participate. Fort McMurray, Fort McKay, Fort
Chipewyan: those are our nearest neighbors, and we make sure the best
performers participate in this through a strategy of shared value.” The
company’s business systems allow people to be part of a multi-billion dollar
project at their right level, and we ensure that they to learn the safety
standards and all of the other components needed to be successful.
Romero stresses that companies owned by the Fort
McKay community, for example, bid for work to earn it. “If they are
qualified, they earn that work. I often hear people speak about these things
as handouts,” she says. “Not on our site, they’re not. That is not the way
that we work. People are there because they add value. And, they are an
integral part of what we need to be successful on our site.”
Whether the company is dealing with “Aboriginal or
small business owners within the Fort McMurray region, smaller engineering
companies, construction companies within Alberta or companies from the US or
Poland or Spain, we package work so that it can create that capacity in the
region, in the province, in Canada and in the world. Literally everybody can
have shared value from our project.”
Stressing that CNRL is the only Canada-based company
with a mega-mining project in the oil sands, Romero
adds that the company has done capacity building across the country. “We’ve
done that with respect to companies from the Maritimes, companies from
Quebec, companies from Ontario.” CNRL has flown its
people to locations in Newfoundland, Nova Scotia, New Brunswick, Quebec
Ontario, Saskatchewan and BC to find construction workers. “We’re picking up
construction again now and we are again going to look for people to fly in
from across the country. So, when we say that we [at CNRL] are Canada’s Oil
Sands, we literally are Canada’s Oil Sands.”
These efforts are part of the company’s need to
build capacity. “There will be a pipefitting company that we let a contract
to in Newfoundland or in Nova Scotia or in Quebec, and we literally go and
fly their workforce from that community to our site. You will have a plane
that picks people up in communities in Newfoundland and Nova Scotia and New
Brunswick and then it flies west. [By doing this], we basically build the
capacity of those companies to be able to work. And, so, wherever there’s a
level of underemployment we will look for opportunities to bring people to
work. Now, when they come and work in the oil sands, often their safety
standards are less than what we need them to be. So, there is that capacity
building at that time for those companies. That is when their safety
standards come up to snuff. They may not be used to building inside our kind
of structure, so we help them understand just how to interface with our
building practices. That’s what we do to build capacity within the country.”
In a few summary comments, Romero stresses that the
industry needs to do two things. First, she says, “we have not communicated
nearly as well as we need to and part of our problem is people simply don’t
understand what we are doing in those areas. It’s a critical failing on our
part…. Whenever we [communicate well], we recognize right away that people go
away from the discussion with a different impression than they might have
come in with.”
A second and more important part is to continuously
improve performance. According to Romero there is an “absolute need to
continuously improve, hopefully at an accelerated pace. So, we don’t say
we’re good enough, we’re regulated enough, our performance is good enough; we
know that’s not the case. We’re under the microscope and for good reason.
[The oilsands sector] is a very high-footprint industry which is going to get
the scrutiny it deserves. Our performance has to match or exceed people’s
expectations.”
