1. OIL SANDS & NORTH AMERICAN ENERGY SECURITY February 21, 2012 Florida International University Janet Annesley, Vice President

2. Canada is a Global Energy Player #3 Canada is third in the world in natural gas production. #1 Canada has the world’s largest uranium reserves. #2 Canada is second in the world in hydro- electricity generation. #3 Canada is 3 rd to Saudi Arabia & Venezuela in crude oil reserves

3. Oil Sands Resource, Production, Markets

4. The Global Energy Context Significant energy demand growth:  Population, standards of living Need all forms of energy:  Increasing role for renewables  Continuing reliance on hydrocarbons  Increasing role for non- conventional crude oil & natural gas Technology is a key lever for sustainable growth  Production  Cost competitiveness  Environmental performance Current Policies Scenario 4

5. Global Crude Oil Reserves by Country Source: Oil & Gas Journal Dec. 2010 Includes 170 billion barrels of oil sands reserves Restricted (79%) Open to Private Sector Canada’s Oil Sands 56% Other 44% World Oil Reserves Open to Private Sector 5

6. Top 10 World Crude Oil Producers in 2010 Sources: U.S. Dept. of Energy, Energy Information Administration & CAPP 2025

7. Oil Sands Projects in Three Deposits

8. Two Methods of Oil Sands Recovery Photo: ConocoPhillips - Surmont Schematic: Devon - Jackfish Drilling: 80% of reservesMining: 20% of reserves 8

9. Canadian Oil Sands and Conventional Production Forecast (2011-2025) ActualForecast In Situ Mining Conventional Heavy Conventional Light Pentanes/Condensate 9

10. Canadian & U.S. Crude Oil Pipeline Proposals 10

11. Canada’s Oil & Products Export to U.S. 16% 21% 15% 11

12. Potential Tanker Markets for Canadian Oil Sands Production China Persian Gulf Japan Taiwan ~ 8,600 N Miles ~ 4,500 N Miles Prince Rupert/Kitimat Jose/ La Cruz Los Angeles Japan Taiwan Target Markets ~ 5,400 N Miles 1,400 N Miles Far EastU.S West Coast Japan Taiwan Korea SantaCruz 1,790 Competitive travel distances for Canadian supply to both markets Source: Enbridge Pipelines 12

13. Environmental Performance

14. Global Energy Related Emissions GHG emissions from oil sands:  just over 1/1000th of global GHG emissions  6.5% of Canada’s GHG emissions  29% reduction in intensity from 1990 Global EmissionsCanada’s 2% 14 Sources: 1. U.S. Dept. of Energy/EIA 2. Environment Canada

15. Full Cycle GHG Emissions Source: Jacobs Consultancy, Life Cycle Assessment Comparison for North America and Imported Crudes, June 2009 98 102 106 102 114 107 104 105 15

16. North American GHG Emissions (2009): Coal-Fired Power and Oil Sands 15 megatonnes 50 megatonnes 100 megatonnes FL GA TX NC MI AL MO KY INOH NE NM ND CO SC KS IA TN WV WY VA MN UT OK WI AZ AR AK LA IL NV OR MT SD NJ NY NH MS Legend U.S. Coal fired power generating plants Canadian coal-fired power generating plants Canadian oil sands Sources: U.S. DOE/EIA & Environment Canada

17. Reducing Greenhouse Gas Emissions in Oil Sands Energy Efficiency  Using less energy input  Reducing energy waste/losses  Capturing waste heat  Cogeneration power/steam Improved recovery processes  Lower temperature extraction  Additives to reduce use of both water and energy (steam)  Use of electricity rather than steam  Underground combustion rather than steam Carbon capture & sequestration  Most effective at upgraders Oil Sands GHG Emissions/bbl 29% g co2 eq./mj 19902008

18. Land Use and Reclamation in the Boreal Forest 662 16 18

19. Water Use and Quality  Mining  2-4 bbl of water per bbl of oil  80-90% recycle  Currently use 0.5 per cent of the annual flow of the Athabasca river  To protect during low flow periods withdrawals are restricted Drillable (Insitu)  0.25-0.5 bbls of water per bbl of oil  90-95% recycle  No water from Athabasca River  Shift to using saline water from sub-surface aquifers Newer projects are using 100% saline water for steam Enhanced monitoring systems  Science based, transparent, credible  Recent federal and provincial government reviews to enhance monitoring 19

20. Environmental & Social Performance Focus on both crude oil / oil sands & natural gas Reputation = Performance + Communication  Continuous performance improvement  More effective messaging (breadth, channels, transparency)  Improved industry collaboration Key concerns expressed regarding oil & gas development:  Local / regional environmental & social impacts (air, land, water, biodiversity)  Global climate change  Role of fossil fuels in future energy system

21. Royal Society of Canada Report Environmental & Health Impacts of Canada’s Oil Sands Industry Science-based, independent analysis of the environmental aspects of Canada’s oil sands Addresses many of the issues and perceptions of oil sands development:  Reclamation is not keeping pace, but sustainable reclamation is achievable  Water use does not threaten viability of the Athabasca River  No impact on Athabasca water quality/ecosystem and no evidence of impact on human health in downstream communities  Tailings technologies are emerging, but tailings inventory is growing  GHG emissions per barrel are reducing but growing production creates a challenge in meeting international commitments  Minimal impacts on regional air quality December 2010

22. Responsible Canadian Energy Oil Sands Report  Principles & Performance  Measurement & Reporting  Transparency

23. Oil Sands Advertising - Communicating with the Public To demonstrate that industry takes these issues seriously and what is being done by “real people” to address them.

24. Success Stories

25. Summary “3Es”  Environmental performance  Energy security & reliability  Economic growth Competitiveness & social license are “must haves” Reputation = Performance + Communication  Technology is key performance lever We need to work together & we all need to step up! A great opportunity for Canada and the U.S.……needs innovative, creative, committed, determined people to make it happen!