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ONE AFTERNOON LAST AUGUST, my computer suddenly shut down and the lights in my office went off. Little did I know at the time that millions of other people in central Canada and the eastern United States were also finding themselves unexpectedly without power. Stock exchanges and airports shut down. Transit systems and traffic lights ceased to function. Business and banking transactions stopped. And this was just the tip of the iceberg. Certain images of that day remain clear: the streets teeming with people making their way home on foot in the blistering August heat; a confusion of cars, as drivers tried to cross intersections without the aid of traffic lights; and the ghostly shadow of a silent streetcar stranded in the eerie darkness of a city without streetlights. I can only imagine what the situation would have been like had it been January.
Power outages, or blackouts, are hardly a new phenomenon. But in earlier times the consequences of them were considerably less severe, because we were less reliant on electrical energy. Today, computers play a key role in almost every aspect of life, and computers require electricity to run. The August power failure certainly brought home to all of us just how vital energy, in all its various forms, is to our lives today.
We depend on hydrocarbon energy (namely petroleum and natural gas) to fuel most vehicles and planes, heat buildings, power almost all industrial operations, and in some cases to produce electricity. Petroleum and natural gas are also the essential ingredients in a virtually limitless range of products from agricultural fertilizers and food storage equipment, through medical supplies, roofing and paving materials, to parts for cars, planes and ships. They give us toys, clothes, pens, recycling bins, children's car seats and myriad other articles essential to the modern home, classroom and workplace. We rely on petroleum-based products to insulate electrical wiring, lubricate engines, and provide components for televisions, household appliances and computers. And the list goes on.
FORECASTS INDICATE THAT BY 2020, global energy consumption will have increased by about 45 percent, with crude oil and natural gas remaining the dominant sources until at least that time (see "Looking at Our Energy Future"). While this may not be a particularly welcome message to some, it is a reality, and there are encouraging aspects to it.
The projected growth in energy consumption results from increases in the world's population, economic growth and improving standards of living in developing countries. Eighty-five percent of the world's people currently live in these developing countries, many of them with insufficient food in meagre shelters with no access to clean water or medical care. I believe people everywhere have the right to live decent lives, with the opportunity for ever-improving standards of living. And I believe that we in the developed world should help ensure that developing countries have the expertise, technology and resources to grow their economies in ways that benefit their citizens. This includes ensuring that they have access to the energy they need.
Increasing populations and growing economies can give rise to environmental concerns and challenges. As energy consumption rises with economic growth in the developing world, there will be a need to minimize the effects of this increased energy use on the environment. But these need not be conflicting objectives. For one thing, history shows that environmental performance actually improves with economic growth – the greater the overall prosperity, the more resources that can be devoted to addressing environmental matters.
I believe that the real key, however, lies in developing new, innovative and even revolutionary technologies that will enable us to produce and consume energy with much greater efficiency. We must continue to develop the means to make energy go further and to reduce its environmental footprint. Given that Imperial is in the hydrocarbon energy business, it stands to reason that we are focusing our expertise and research capabilities in this area. We are, for example, supporting the development of new fuels for hybrid cars and technology, such as fuel cells, that could result in unprecedented reductions in the amount of hydrocarbon energy required to power a vehicle.
As another example, we are also supporting research into technologies to capture and sequester emissions and many other potentially promising options. We encourage the development of any technologies that will lead to the safe, efficient and practical use of all available and competitive energy sources.
Like most responsible – and pragmatic – corporations, Imperial is strongly committed to the wise and efficient use of energy, which both minimizes costs to the company and to our customers and reduces emissions resulting from fuel consumption. And make no mistake, this focused effort is paying off. Today, for example, our refineries are 40 percent more energy efficient than they were 30 years ago – the amount of energy we save every year is equivalent to the amount needed to provide heat, light and power to about 400,000 Canadian homes for a year. And we have an on-going objective of a one-percent-a-year improvement in refinery energy efficiency – a challenge indeed, considering that the need to produce more environmentally friendly fuels such as low-sulphur gasoline and diesel fuel require refineries to conduct ever more energy-intensive processing. We have also virtually eliminated the flaring and venting to the air of natural gas that is produced from our oil wells.
Cogeneration is an example of an investment Imperial has made in technology that is helping us meet our energy needs more efficiently. At a cost of $250 million, we have built facilities at our oil sands operation in Cold Lake, Alta., and our refining and chemical manufacturing complex in Sarnia, Ont., that use natural gas to produce electricity and steam simultaneously, consuming much less energy in total than would be required to generate equivalent amounts of electricity and steam separately.
The solutions to the challenges that face us in meeting ever increasing energy needs while reducing environmental footprints will come from technological research and development. Some of the technology will emerge in the medium term; other new technologies will take more time to develop and result from concentrated research on both a massive and a global scale. The cost will be high, but it is incumbent on us to pursue this research with vigour. And until such time as these technologies develop, we must all make a contribution by using energy wisely and efficiently.
Tim Hearn is chairman, president and chief executive officer of Imperial Oil. |
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