News Articles | The Globe and Mail | Nathan VanderKlippe | February 26, 2010
Tom Stephens still remembers the day, a few weeks after signing on to the top job at Canada’s most-embattled company, when he came upon a protester in downtown Vancouver.
It was 1996, and Mr. Stephens had been named chief executive officer of MacMillan Bloedel Ltd., whose clear-cutting of old-growth forests had stirred global anger and provoked the single-largest act of civil disobedience in Canadian history at Clayoquot Sound.
So it was no surprise that Mr. Stephens spotted a protester in Vancouver with a sign pillorying MacMillan Bloedel. The surprising part was what Mr. Stephens – and the forestry industry as a whole – did. Rather than continuing to fight the protesters, they decided to engage with them, setting in motion a transformation of forest practices that not only assuaged opponents, but also led to more profits.
The forestry leaders couldn’t have known it at the time, but those actions created a model for how to do battle in the green trenches that may prove crucial to a different industry in a similar situation.
The leaders of Canada’s oil sands, faced with global scorn and protests that have interrupted their operations, are turning to the country’s foresters – as well as its miners, who had similar experiences – for guidance on how to respond.
Over the past year, they have quietly spoken with forestry executives and hired consultants who’ve worked with the forest industry. They have considered radical moves that might involve following the example of forest companies.
The forest industry now certifies that their wood meets certain environmental standards.
The oil sands companies have also discovered that calming criticism will require both a major outreach effort, and possibly major change. As the industry struggles with what to do, it will have to confront critics who have taken aim at the oil sands’ high greenhouse gas emissions, landscape-scarring open pits and heavy use of water. It will also have to unseat skepticism among those critics that change will ever happen.
Because there is strong disagreement on basic facts – are greenhouse gas emissions three times worse in the oil sands than in other forms of oil production, or just 10 per cent worse? – it is clear that even if reconciliation is possible, it won’t be easy.
But both sides have drawn inspiration from that day in Vancouver when Mr. Stephens decided that a hot drink was a better weapon than angry words. Instead of walking past the protester, "I said to him, ‚ÄòWhy don’t you come up to the office? We’ll have a cup of coffee and talk about it.’ That was one of the beginnings," Mr. Stephens said. "Get off the streets, get off the pickets, come up and let’s see what we can come up with."
Two years later, MacMillan Bloedel renounced clear-cut logging. It discovered that it actually made more money by selective harvesting. Clayoquot Sound went back to being a tourist gem. Canada’s global environmental image began to heal.
Then, and now
The parallels between forest companies in the 1990s and oil companies now are marked. Not only do Clayoquot Sound and Fort McMurray share an international profile, they also represent key Canadian industries. At the time of MacMillan Bloedel’s crisis, forest exports were worth more than any other Canadian resource export, and more than half of all employment income in British Columbia was rooted in trees.
Today, both Canada and Alberta are similarly dependent upon energy. Governments and oil sands companies are environmental targets, just as MacMillan Bloedel was. Anti-oil-sands groups spent last fall staging protests that temporarily shut down several oil sands operations, while shareholders have driven the issue onto the agendas of Statoil, Royal Dutch Shell and BP. Canada has become an angry target among online commentators who see the oil sands as an egregious and greedy foray into the production of "dirty oil."
Among industry leaders, there is a broad recognition that something needs to change. Deciding on a strategy isn’t easy, but the forestry industry’s experiences with environmental challenges seemed a natural source for guidance.
Janet Annesley, now vice-president of communications for the Canadian Association of Petroleum Producers, remembers campaigning for Greenpeace on the Clayoquot Sound issue. "I went door to door when I was in eighth grade soliciting funds for Greenpeace and selling memberships," she said. "For me, that issue has resonance."
As she and others looked back at those days, they realized solutions don’t come by stonewalling or shouting. They come by sitting down with critics for tough talks that result in mutual agreement on how to alter an industry’s approach to the environment.
"The challenge is that unless you’re engaging with a purpose, you’re just talking," said Ms. Annesley, who recently presented some of her findings to industry leaders.
"The lesson that is consistent in the forestry and the mining experience is that you cannot sloganeer, you cannot ‚Äòspin’ your way out of these types of issues," she said. "The ultimate solutions are rooted in performance."
MacMillan Bloedel, after all, managed to mollify its critics only when it pledged major change to the way it did business.
But given that oil sands criticisms strike at the heart of current industry performance – its use of energy and heavy landscape footprint – is industry willing to change?
Ms. Annesley says the answer is yes, especially as technological improvements allow it to clean up its act.
But environmental groups – including ones that have met with CAPP officials in the past six months – have their doubts. Simon Dyer, oil sands program director for the Vancouver-based Pembina Institute, recalls a catchphrase once used to describe forestry companies: "Talk and log" – a strategy that involves paying lip service to problems while continuing business as usual. He has seen energy companies use it, too.
One issue matters more to groups like Pembina than any other: How quickly Alberta develops its oil sands. The want the province to slow down, and have been begging the province to do so for nearly a decade. But the idea remains essentially off limits to oil sands backers.
"In many instances, the solutions are there. But there’s a lack of political will to implement them," Mr. Dyer said.
For its part, industry says it’s willing to broach the issue – but within limits that may constrain the effectiveness of any dialogue. "We must … discuss the pace of oil sands development in terms of energy demand, other supply options and other societal goals such as benefiting from a growing economy," Ms. Annesley said.
"Looking at oil sands issues through one lens is easy. Balancing our need to protect the environment, grow the economy and ensure reliable sources of energy is not."
Back to the future
Little more than a decade after Mr. Stephens sat down with that protester, he finds himself in a new environmental battle. He is a director of TransCanada Corp., whose pipelines serve the oil sands and whose fortunes ride on their success.
His knows the value of an industry confronting its environmental demons.
"This is of primary importance to the future of the industry and [TransCanada] ... We spend a great deal of time talking about it," Mr. Stephens said.
"Capital is a coward and it runs away from risk," he noted. "If [the oil sands] is perceived to be ‚Äòrisky,’ if it is perceived to be a candidate for losing its social licence, capital will go someplace else. And the jobs and the economic impact will go with it."