By Philip Mattera
Production at Canada’s largest petroleum company is dominated by the highly controversial process of extracting crude oil from the tar sands of northern Alberta. Suncor has invested billions of dollars in the name of making North America more energy independent but has used methods that generate large quantities of the greenhouse gases responsible for global warming. Suncor has also been responsible for a series of toxic releases both in Alberta and at its refineries in Ontario and Colorado.
Suncor had its origins in the decision by Sun Oil Company (Sunoco) to establish a Canadian subsidiary in 1917. After originally selling lubricating oil and kerosene, Sun began to open Sunoco-branded service stations in major Canadian cities and later added exploration and refining operations.
Talk of developing the Athabasca oil sands began in the 1940s, and by the early 1950s Sun was taking concrete actions. It acquired some leases and formed Great Canadian Oil Sands (GCOS) Limited. Things progressed slowly until 1963, when Sun placed a major bet on a still largely unproven method of oil extraction by investing some $250 million in GCOS. At the time it was the largest single private investment in Canada.
The funds were used to build the GCOS plant in Fort McMurray, Alberta that opened in 1967 as the first commercial-scale oil sands processing facility. The following year crude oil began to flow from the facility through a pipeline to Sun’s refinery in Sarnia, Ontario.
In 1979 GCOS was merged with Sun’s other Canadian operations to form Suncor Inc. Two years later, a 25-percent stake in the company was sold to the Province of Ontario. Suncor became a publicly traded company in 1992 through an initial offering of stock that reduced Sun’s share of the company to 68 percent. Over the following three years, Sun spun off the rest of its holdings and Ontario divested its stake as well. In 1998, after it changed its name to Suncor Energy and began trading on the New York Stock Exchange, the company announced Project Millennium, a C$1.6 billion plan to more than double capacity at Fort McMurray to 225,000 barrels per day by 2002.
In 2000 Suncor unveiled Project Firebag, which envisioned an increase in output to as much as 450,000 barrels per day in 2008. The following year it upped the ante with Project Voyageur, an effort to boost production to 550,000 daily barrels by 2012. By 2008 the estimated cost of that effort exceeded C$20 billion.
Although authorities in Alberta approved Suncor’s expansion plans, the company tried to avoid paying higher royalty rates to the province on its new operations. In 2004 the company filed a C$250 million lawsuit against Alberta over the issue. (The case was dropped in 2006.)
In 2003 Suncor established a U.S. presence with the purchase of a suburban Denver oil refinery and 43 Colorado service stations from ConocoPhillips; two years later it purchased an adjacent refinery owned by Valero Energy.
In 2009 Suncor made itself a more formidable player in the global oil business by carrying out a C$20 billion takeover of Petro-Canada, a former state company that had been privatized in the in the early 1990s. The merged company became Canada’s largest energy producer. To receive approval for the deal from antitrust regulators, Suncor had to sell some 100 retail gasoline outlets in Ontario. In 2010 Suncor formed a joint venture with the French energy giant Total S.A. to pursue its Voyageur project, but that initiative was cancelled in 2013.
For years Suncor has been a target of environmental activists seeking to highlight the enormous role that the company’s oil sands operations play in exacerbating the climate crisis.
Suncor’s environmental issues are not limited to greenhouse gas emissions. Since the company’s creation, environmental groups have warned of risks associated with the large waste ponds generated by the oil sands operation. These ponds have been frequently cited for violations of Canada’s Clean Air Act in connection with excessive levels of pollutants such as sulfur dioxide. There were also problems with the pipeline that carried finished product from Fort McMurray to Edmonton. For instance, in 1994 the company was fined C$100,000 for a pipeline leak that spilled 7,600 barrels of diesel fuel and naphtha into the House River.
In the late 1990s Suncor found itself under attack by environmental groups in Australia after the company joined an oil shale joint venture in that country. In 1998 Greenpeace staged a 36-hour occupation of the Queensland construction site of the project, and then carried out other protests after the facility had been completed. Actions continued in subsequent years, and in 2001 Greenpeace declared a victory when Suncor decided to withdraw from the Queensland project.
Greenpeace was also at the forefront of protests against the Alberta operations, including a 2000 action in which a dozen activists tied themselves to equipment and unfurled a banner reading “Climate Villains.” The company, nonetheless, continued to announce plans for large increases in output. These plans were routinely approved by the government of Alberta, which in 2002 was cited by a federal judge for failing to live up to its responsibilities under the Canadian Environmental Assessment Act.
To give itself a greener image, Suncor began investing in clean, renewable energy sources such as a $100 million move into wind power. Apart from public relations, the renewable venture provided offsets for the greenhouse gas emissions of the oil sands business. The company also purchased credits from other companies including U.S. utility Niagara Mohawk, and from forestry conservation projects in Belize and other places.
Suncor bragged about its success in reducing greenhouse gas emissions per barrel of oil produced, but because the oil sands operation was being continually expanded, the company’s overall emissions kept rising.
In 2008 there was a scandal over reports that a leak of nearly 1 million liters of waste water from a Suncor containment pond into the Athabasca River went unreported for up to eight months. (Alberta Environment later charged the company with being out of compliance with its Water Act license but fined it only C$275,000.)
In 2009 there was a bigger scandal over reports that a Suncor contractor, Compass Group Canada, had failed to properly treat human waste from a company work camp before dumping sewage into the same river. Suncor was fined C$175,000 for failing to properly supervise Compass, which was fined C$225,000 for failing to report the problem.
At the same time, Suncor was fined C$675,000 for failing to install pollution control equipment at its Firebag oil sands facility. In July 2009 Suncor was fined C$625,000 for excessive discharges of sulfur dioxide at its Sarnia oil refinery in Ontario.
After acquiring Petro-Canada in 2009, Suncor said it would keep its oil sands operations and downsize its natural gas assets. This move created additional potential targets for environmental groups, which continued to protest Suncor’s commitment to oil sands. Starting in September 2009, Greenpeace carried out a new round of actions at Suncor’s operations. Suncor responded with a C$1.5 million lawsuit against the group.
In 2010 Environment Canada ordered Suncor to pay C$200,000 after it pleaded guilty to two violations of the Canadian Fisheries Act in connection with a 2008 incident in which wastewater overflowed from a containment pond into the Steepbank River in Alberta.
In December 2011 an accident at Suncor’s refinery in Commerce City, Colorado resulted in the seepage of hazardous waste into Sand Creek and the South Platte River. Tests by the U.S. Environmental Protection Agency found that the contamination included the carcinogenic substance benzene. The drinking water at the refinery was also found to contain high levels of benzene. Meanwhile, the refinery continued to spread contamination into surrounding groundwater sources. Six months after the spill, Colorado officials were saying that a complete clean-up could take years.
In April 2012 the Colorado Department of Public Health and Environment announced that Suncor would pay $2.2 million in negotiated fines in connection with the airborne benzene releases at the Commerce City refinery unrelated to the accident four months earlier.
In October 2012, the Canada-Newfoundland and Labrador Offshore Petroleum Board announced that Suncor had admitted to regulatory violations in connection with a spill of lubricating fluid at its drilling platform in the Jeanne d’Arc basin the year before; the company was ordered to pay C$130,000 in penalties.
In March 2013 the Alberta government ordered Suncor to take correction actions related to its wastewater treatment system at its tar sands operations in the wake of a spill into the Athabasca River at the same site where a previously unreported toxic release occurred two years earlier.
In April 2012 Canada’s Competition Bureau announced that a Suncor subsidiary had pleaded guilty to fixing the price of retail gasoline and had been ordered to pay a fine of C$500,000.
Suncor’s oil sands operation was the site of a bitter labor dispute in 1986 after workers represented by the McMurray Independent Oil Workers Union were locked out for rejecting what the company said was its final offer in contract negotiations. That offer included reductions in overtime, vacation, and layoff benefits. After more than five months during which the operation was run by management and non-union employees, the company and the union reached agreement on a new pact.
The workers later became members of the Communications, Energy and Paperworkers Union (CEP), and labor relations grew less contentious as the company agreed to relatively generous contract terms that became the pacesetter for the Canadian oil industry. Good working conditions and remuneration were necessary to attract workers to its Fort McMurray oil sands operation, which featured cold and dirty work in a remote location.
Despite union presence, there have been numerous cases of serious accidents on the job. For example, in 2008 the company was fined a total of C$250,000 for two 2006 incidents in which workers at the company’s Ontario oil refinery were exposed to hydrofluoric acid and hydrogen sulfide. In March 2009 the U.S. Occupational Safety and Health Administration announced that it had found 26 serious violations at Suncor’s operation in suburban Denver and was proposing $130,500 in penalties.
In 2012 Suncor instituted random drug and alcohol testing of workers. The CEP denounced the policy and took the company to court. An Alberta judge issued a temporary injunction that forced the company to suspend the testing.
Other Information Sources
Violation Tracker summary page
Watchdog Groups and Campaigns
Key Books and Reports
Big Oil’s Oily Grasp: The Making of Canada as a Petro-State and How Oil Money is Corrupting Canadian Politics (Polaris Institute, December 2012).
Dirty Oil: How the Tar Sands are Fueling the Global Climate Crisis (Greenpeace Canada, September 2009).
Tar Sands Refineries: Communities at Risk (ForestEthics, September 2012).
Note: This page draws from a corporate profile originally prepared by the author for the Crocodyl website in October 2009.
Last updated April 4, 2013