1. Pierre Alvarez, President Canadian Association of Petroleum Producers
Industry and Communities Working Together to Build Better Communities Inuvik Petroleum Show June 2002
Pierre Alvarez, President
Canadian Association of Petroleum Producers

2. CAPP Profile
Represents 140 “upstream” companies that explore for, develop and produce petroleum
Our industry is active in 12 of 13 jurisdictions across Canada
CAPP members produce over 97 per cent of Canada’s natural gas and crude oil
Our 125 associate members provide services that support the upstream industry
Together, our members are part of a $52-billion-a-year national industry that affects the livelihoods of more than half a million Canadians

3. Industry Capital Spending
$ BILLIONS
Northern Canada
‘99 ‘ ‘01E ‘02F
$0.2 $0.3 $0.4 $0.5
International
‘99 ‘ ‘01F ‘02F
$1.7 $2.1 $3.5 $3.0
Oil Sands
‘99 ‘ ‘01E ‘02F
$2.4 $4.2 $5.0 $5.0
WCSB
‘99 ‘00 ‘01E ‘02F
$11 $17 $20 $16
East Coast Offshore
‘99 ‘ ‘01E ‘02F
$2.7 $1.8 $ $1.0

4. CAPP Members - North of 60º

5. What’s changing in industry?
moving to oil sands, foothills, North, East Coast and coal-bed methane
North American markets consolidating
Technology
deeper, further, faster - with smaller footprint
Government Issues
increasingly complex
competing on a global stage
Stakeholders
more, different, higher expectations

7. What Have We Learned? Understanding the rules and limits
comprehensive claims and federal roles make the North unique - not Alberta north!
Accountability
clarity and certainty help everyone
Sensitivity to local circumstances
industry can and is adjusting
Communication is key
two way street

8. Public Policy is Key to Competitiveness
Key federal decisions in 2002 could have an enormous impact on Canadian investment
federal corporate tax
aboriginal consultation policy (requirements)
market-based procedures (New Brunswick export hearing)
regulatory change (CEAA, Species at Risk, Oceans Act, etc.)
climate change

9. Factors Influencing the Future of Canada’s Oil and Natural Gas Industry
Competitiveness
resource base
costs
climate change
taxation
royalty regimes
Access to the Resource
environmental issues
aboriginal relations
Regulatory processes
multiple jurisdictions
complexity adds time
Enablers
technology and innovation
cooperative approaches
identifying regulatory overlap and duplication
open and regular communication

10. Enablers - Technology and Innovation
Seismic
reduced foot-print
enhanced data collection (3D)
Drilling
improved drill bit technology
horizontal drilling; multi-well pads
improved drilling muds
Pipelines
improved pipe material
improved welding techniques
improved integrity programs (“smart pigs”)
directional drilling of stream crossings

11. Enablers - Cooperative Approaches
Industry has been an active player in ongoing cooperative training, employment and environmental research activities in the North
heritage and biophysical - $800,000
oil spill co-op - $150,000
SHaRE - $200,000
Environmental Studies Research Fund
education and training
in-kind costs
Governments must also make multi-year commitments

12. Enablers - Cooperative Approaches
Need for reliable, trained personnel and equipment
rig training was a good first step
long-term capacity is a serious issue
Need to find ways to improve cost competitiveness for Northern operations
remains very high cost
Accountability
cooperative approach to spending of education and training funds - government, communities and industry

13. Enablers - Cooperative Approaches
Safety, Health and Respect for the Environment Group (SHaRE)
recognition made of industry’s high safety standard
continuous improvement
Compliance and enforcement
recognize zero tolerance for drug and alcohol
need for local regulatory leadership, visibility and accountability with respect to safety
Capturing/documenting safety statistics
important safety management tool

15. Enablers - Identify Regulatory Overlap and Duplication
Regulatory Regime
look for ways to increase efficiency and effectiveness
Regulatory Approvals Guides
Entire NWT roadmaps complete (including offshore, Mackenzie Delta, Beaufort Sea)
appreciate the community involvement in roadmap development
Next step is reform, not watering down

16. Enablers - Open and Regular Communication
Focus has been ISR but may now expand to the Gwich’in, Sahtu, and the possibility of Deh Cho and southern Yukon land sales
CAPP Guide for Effective Public Involvement - expansion to include the North

17. Working Together
We recognize there are many different interests and we value feedback from all groups
We have an interest in working with stakeholder groups across Canada
e.g. regional corporations; tribal councils; communities; AB Synergy Conference; East Coast Fisheries Liaison; etc.
CAPP Stewardship initiative
send out the challenge of continuous improvement
Actions are louder than words
hold us accountable

18. Working Together continue to look for ways...
to make regulatory processes as efficient and effective as possible
for industry, communities and regulators to work together more effectively as early as possible
for industry and contractors to improve cost competitiveness in the North
for CAPP operators to collaborate through a new phase of exploration and development in the North

19. Northern Canada Video