Suncor Energy Inc. (TSX:SU)

AGM 2016

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Apr 28, 2016

I'm going to call the meeting to order. My name is Jim Simpson. I'm chair of the board, and I'll be chairing this meeting today. I'd like to introduce people on the podium with me. My far right, Steve Williams, CEO Alastair Cowan, CFO Janice Odegaard, who is Senior Vice President, General Counsel and Corporate Secretary. Welcome all. On behalf of the directors and management of Suncor, I'm delighted to welcome you today to the twenty sixteen AGM for Suncor Energy Inc. I can see this is going to be a noisy page turning event. Before we start the formal agenda, I want to just have a safety moment and remind everyone what the deal is if there's an alarm. There's an announcement system, so we'll wait for that. If there is an evacuation announcement, we'll be direct out onto Eighth Avenue. And there's a muster point, immediately east of us, which is where we should, as you can, stick around till you hear an all clear signal to come back. And so make sure you don't come back until you're certain that it's, all clear. Let's see. There's several matters this morning, as you might imagine, on the formal agenda, and we've allowed for a question period after the formal meeting. So unless there's something specifically related to one of the motions or other items of business, formal business, save your questions. We'll have ample time, as I say, after the formal part to discuss the various issues you have. I understand, in fact, I know there are a couple of representatives from shareholders who have submitted shareholder resolutions set forth in the proxy, and they will be making their proposals today, which we welcome. We've opened a meeting to media, but they're not here to vote. Only registered shareholders and proxy holders are allowed to vote. If there are any questions relating to the formal business, I'd appreciate it if you would state your name and whether you're a shareowner or a proxy holder. And then a final sort of note of process here. There are a lot of people that I understand have things to say, so I'm going to limit conversations and and points being made on formal items to three minutes. And I also want to make sure that the points that are being made are relevant. So if things are not relevant or if they're running on inhibiting other people from having the ability to speak, I'll ask you to stop and conclude or make your motion, whatever the case may be. And once again, we're going to have a question and answer at the end of this period. So let's begin with the business of the meeting, starting with the appointment of scrutineers. Computer Shared Trust Company is the transfer agent register. Today, have Conan Doyle and Dean Nagler, who are our scrutineers for today. They will record the votes cast on any poll, and at the end of the meeting, we'll get their final report. You've all received copies of the meeting notice. Obviously, you wouldn't be here if you hadn't seen that. And I'm going to now call on Janice Odegaard to report on the meeting notice. Thank you. The notice calling this meeting of shareholders was mailed on March 1736 to all shareholders of record as of the close of business on 03/02/2016, and has been provided to each director and to the auditors of the company. Thank you, Janice. This notice will be filed with the minutes of this meeting. I'm advised by the scrutineers that that there is a quorum present, and so we are able to carry on with the meeting. I ask that the corporate secretary, Janice, would you kindly read the scrutineers report? Yes. Thanks, Jim. The scrutineers report shows 32 shareholders present in person, eight ninety five shareholders present by proxy for a total of nine twenty seven shareholders. That represents 1,110,708,309 shares, and that is 71.18% of the issued and outstanding shares of Suncor present today. Excellent. That's a good percentage turnout. I now declare the meeting regularly called and properly constituted for the transaction of business. I propose to take votes by ballot for election of directors, for the resolution on our approach to executive compensation and the two shareholder proposals that I just mentioned a moment ago. I propose to take votes by a show of hands for appointment of auditors. Based on proxies received to date, we would have over 99% in favor of the auditor. So I think a show of hands is appropriate for that particular vote. I now ask that the 2015 annual report, which includes the financial statements for the year ended 12/31/2015, and the auditor's report be tabled. And I have a copy. Copies were available as we came in this morning, and they've also been mailed to shareholders requesting the report. I'll be happy to answer any questions concerning the annual report during the Q and A period following the formal part of the meeting. We're ready for an election of directors, which is the next item of business. Suncor's bylaws state that the number of directors to be elected at any meeting of shareowners should be the number of directors then in office or such other number as been determined by the Board. There are currently 13 directors, and Doug Ford will be retiring effective today, bringing us to 12. I want to just mention very briefly Doug Ford has had twelve years of service as a director. For those of you who know him and particularly my fellow board members, we have immense respect for what Doug has done and appreciate his service. We wish him well in the future. So we've determined that there will be 12 directors elected to this meeting. Of the 12 directors nominated, 11 are independent, and one is Steve Williams, of course, a member of management. Backgrounds for the directors and experience, including principal occupations, are described in the proxy circular for this meeting. May I now have a motion, to nominate for election the board of directors, whose candidates are named in the proxy circular. Good morning. My name is Dave Kennedy. I am a Suncor shareholder. I move to nominate the following candidates for election as directors. Patricia M. Bediant, Mel E. Benson, Jacinth Couthe, Dominic D'Alessandro, John D. Gass, John R. Huff, Maureen McCaw, Michael W. O'Brien, James W. Simpson, Ira M. Thomas, Stephen W. Williams, Michael M. Wilson. Thank you, Mr. Kennedy. May we now have a seconder? My name is, Debbie Dexter, and I am a Suncor shareholder. I second the motion. All directors are to be elected at this meeting, and 12 persons have been nominated. I propose that we vote on this matter by ballot. As I mentioned earlier, the corporate secretary will give voting instructions. Thanks, Jim. On this ballot vote, all shares for which proxies in favor of management have been received will be voted in accordance with the instructions of the shareholders giving the proxy. Only proxy holders and shareholders who have not already returned a proxy or who wish to change their previous instructions have to complete a ballot if they wish to vote. The blue ballot handed out during registration at the beginning of the meeting is the ballot to be used for this vote. If you wish to complete a ballot but did not receive one when you registered, please raise your hand now. The ballot lists the 12 nominees named in the management proxy circular. To vote or withhold from voting for each director, please complete the ballot by placing an x in the appropriate spot beside the name of each nominee. When you've completed and signed the ballot, please raise your hand and it will be given to an attendant for counting by the scrutineers. Thank you, Janice. Does anyone require a little more time, to complete their balance? Okay. We'll wait for a minute. Yes. But, I'm asking now if anybody has, needs more time. I'm seeing none. I'm gonna we'll have we'll have questions, on these at at the time we vote. Would you please come to the microphone? Thank you. My name is Morika Kniveshir. I am a proxy holder for my own company that holds the shares. And yes, we are allowed to speak on motions. We are now voting on directors. I'd like to make comments on the people that we're voting on because we do have to make consideration to those people. I'm quite dismayed to see that we are shoveling out almost $4,000,000 paying directors who also have other positions, which tells me that we are not getting full time work out of any of our directors. Some of you may or may not have read everything in the prospectus. For those of you who have not, and even for those of you who have, I think it's behooven upon us to realize that there are a number of directors, particularly one that is coming new on the board, Madame Bident. I'm sorry if I'm mangling your name. I see that she has four other positions, plus I believe she's working full time. Now I ask you all, what kind of effort are we going to get out of a director of that nature? I'd also like to address some comments to our director, Mr. Simpson. Mr. Simpson, I noticed that you are getting a fee which is 275% to 300% more than other directors, and that is per what was sent out. I don't believe that you are worth three times what other people are getting. And that may well be that you are the one who's the chair. However, I don't see three of you up there. Okay? So therefore, I think our money, and I'm saying our, mostly for the minority shareholders because I realize that most of the shares here are being voted by large blocks. But the minority shareholders were getting raked over the coals with what we're paying, almost $4,000,000 of fees, awards, etcetera, per year. And this is not exactly the best economy that we've got. Furthermore, I'd like to make mention that we have, I believe it is Madame Cote, who came on board February 3. Yet I see one way or the other, she was shoveled $427,000 worth of awards in that year. That is what it says here. If it's not true, then this thing is lying. Somehow, I don't think that one individual who's been on board for barely a year now is worth that. There's something wrong and amiss here, and I am not about to let it slide under the rug. Thank you. Thank you. Appreciate your remarks. And we have opportunity in the Q and A to discuss this further, but I'll make a couple of very brief comments. The first is with respect to the amount of time and energy that various directors have to devote to Suncor. I can assure you that there's a very robust process internally, peer reviews and discussion among directors on contributions. And it's very strong process to make sure that directors are carrying their weight. And secondly, with regard to my compensation, I think it's perfectly justified by peer comparisons. And I know you disagree, but that's competitive study that's done every year on director compensation and chairman compensation. But as I said, we can discuss that a little bit more in the future. The next item of business is appointment of directors or auditors, I'm sorry. Management has proposed PricewaterhouseCoopers be appointed as this company's auditors. And since you, shareholders, appoint the auditors, I ask for a motion to appoint PwC. Good morning. My name is Carrie Vilecki, and I am a Suncor shareholder. I move that PricewaterhouseCoopers, LLP, be appointed auditors of Suncor Energy, Inc. To hold office until the next Annual Meeting of Shareholders or until a successor is appointed. Thank you. May we now have a seconder? Name is Rick Cusimano, and I'm a Suncor shareholder, and I second the motion. Thank you very much. Any discussion? You've heard the motion. It's been seconded. Those in favor, please indicate by show of hands. Opposed? I see none. The motion is carried. Next item of business is the advisory vote on our approach to executive compensation. These types of advisory votes, sometimes called say on pay, are getting to be more common. These votes are considered nonbinding, but they are a very useful vehicle for the board to consider when we adjudicate compensation for executives. As noted in the proxy circular, in considering our approach to compensation, we'll take into account the results of this vote together with any feedback that we receive during the year from our engagement activities with shareholders. The form of motion set out in the management proxy circular follows the recommended best practice of the Canadian Coalition for Good Governments. So may I now ask for a motion to that effect? Good morning. My name is Jason Legere, and I am a Suncor shareholder. I move on an advisory basis and not to diminish the role and responsibilities of the Board of Directors that the shareholders accept the approach to executive compensation disclosed in the management proxy circular of Suncor Energy Inc. Delivered in advance of its twenty sixteen annual meeting of shareholders. Thank you very much. May we now have a seconder for the motion? My name is Darren McAdew, and I'm a Suncor shareholder. I second the motion. Thank you, sir. You've heard the motion, which has now been seconded. Are there any questions or comments? Yes, ma'am. Again, I'll ask you to state your name. I'll give it to you the fold away. This time, it is Baroness Mareika Annette Kniepshir. And I am the proxy holder for my own company, Rice and Consultants. Could you stand back from the microphone a little bit and make it more clear? I'll stand back. Is that better for you, That's better. Thank you. Okay. We are voting on or giving you direction or advice and or the above on executive compensation. I take a look again at the circular. And if I were to say I'm having a heart attack, I would say that that's correct. And you might have to get the paramedics. I am absolutely flabbergasted. I think the better word is disgusted. I look to see that in Mr. Williams, dollars 12,000,000. Do any of you understand even that type of a number? $12,000,000 with salary, awards, God knows what else is shoveled his way. I know the answer that we're going to get is that, oh, it is competitive. Sir, I don't give a rat's behind. And I don't think the rest of us do either because I go to a lot of these meetings and 12,000,000 is not competitive. Maybe 4,000,000 but not 12,000,000 okay? Especially when I take a look and I see that the shares in the last year have dropped 8.822%. And yet this is what we're paying Monsieur William, dollars 12.2. That, to me, is excessive. Our annual dividend is 3.129%. And yet we also are giving increases to some people, such as Mr. Reinisch in the last three two years, pardon me. In the last two years, he's gotten a 17.556% increase. It's all in here if you do the numbers. Yes, we have others who have received increases as well. In fact, we took a look at Mr. McSween. In the last two years, he has received a 7.155 increase. The rest of Calgary is laboring under layoffs, cutbacks, no increases or no jobs. And you up there have the audacity to give increases and or pay people $12,000,000 or $5,000,000 or $4,000,700 per year. It is absolutely, as they say in my language, which is disgusting. And I don't care, and I don't think any of the minority shareholders care either whether that's supposed to be the norm. It cannot be the norm. And we're tired of it because we're not getting our money's worth when we're only getting 3% in return. Thank you. Thank you. Well, you did accurately predict a response. I'll put it in a nutshell that we do rigorous work on competitive pay. We require superior people to work in this company because we believe we're a superior company. And I respect your opinion. You're in the minority. Last year, over 90% of shareholders voted in favor of this resolution on our say on pay approach. And this year, the ISS proxy advisor firm, which very rigorously looks at compensation in respect to pay for performance, has given us extraordinarily high marks. So thank you for your comments. Appreciate that. We've received proxies for over 91% of votes cast on this motion, which directed they'd be voted in favor of our approach to executive compensation. That's a fact. We will now proceed with a ballot procedure described by corporate secretary. This was now going to be a pink ballot handed out during registration. Please mark it with an x, either for or against in the box. When you've completed and signed the ballots, please raise your hands. And I didn't notice, would you do do so now if you're still working on the ballots? Need any more time? While these ballots are being collected and counted, I'm going to proceed to the next item on the agenda, which is consideration of shareholder proposal number one on climate change reporting. I'm sure you've seen that. It's regarding the ongoing corporate initiatives respecting climate change as more particularly described in the circular. I understand a representative from NEI Investments, the shareholder that submitted the proposal, is in attendance to speak to it. So may I now ask you to share your remarks and make the motion? And it would help if you stated your name, please. Absolutely. Here we go. Thank you, Mr. Simpson. My name is Jamie Bonham. I'm with NEI Investments. We did file a resolution. I have some very brief comments that I'll provide on the resolution. And I just want to start off with talking about the fact that Suncor is a very material holding for us. So it's in our top 10 holdings. We are an investment firm. And so we have a very vested interest in seeing the company do well. I'm not here to hester the company. I have hester you in the past probably and we appreciate your patience with me. But within this context, I'd like to speak to our resolution on the company's strategic resilience in a low carbon future. We've had over ten years of dialogue and engagement with the company and have built a deep respect for staff and management and so it's not overly surprising that the company is taking the groundbreaking step of supporting this resolution. Nevertheless, I wanna take this opportunity to commend the company for its ongoing leadership and vision. And I use the word vision as I believe the company more so than most, if not all of its peers, has an eye on the future. And I use the word leadership as I think the industry is closely watching Suncor and will ultimately be following its path, some kicking and screaming, I don't doubt, but following nonetheless. The resolution itself succinctly lays out the challenges facing the company as well as the strengths the company can leverage to address those challenges. I won't get into detail on that now. I would note, however, that in this last year of great change, both positive and negative, the company's vocal support for climate policy and a price on carbon has been instrumental to development of a robust framework for Alberta and the impacts of this leadership will be felt outside of the province and indeed beyond the country. This should rightly be a point of pride for Suncor and its employees. We believe that NEI, the energy transition is underway. It's already there and it will bring both opportunities and risks. As a long term investor in the company, we do have genuine questions about how the company will prosper in the transition to a low carbon economy and thus our motivation for filing. This has to be a material question for anyone in this sector and we look forward to ongoing discussions with the company on this issue. But I want to take what's left of my time to speak directly to the company's shareholders. So I have spoken to many of Suncor's major shareholders about our resolution and have been encouraged by their keen interest and support for the proposal. I would encourage all shareholders to engage with the company on its strategy for the energy transition and deepen your understanding of why the company believes this to be a material issue. Ultimately, if Suncor is to continue to be a leading energy company in the years and decades to come, it will need to be bold and it cannot go there without the support of its shareholders. So I encourage you to read the company's strategy for resilience in a low carbon future and ask some tough questions, pester them if need be. And I do hope this marks the start of a deeper dialogue on this issue for Suncor and its shareholders. And I believe I have some text to end with. I am a proxy holder representing NEI Investments. I move that the proposed resolution set forth on page a one of the management proxy circular of Suncor Energy Inc. In respect of its twenty sixteen annual meeting of shareholders be approved. Thank you. Thank you, Mr. Bonham. Well put. May I have a seconder for the motion? Good morning. My name is Peter McConaughey. I'm a Suncor shareholder, and I second that motion. Thanks, Mr. McConaughey. I'll now ask Arlene Strom to speak to the company's position on this motion. Thank you, Mr. Simpson. Suncor's Board and management recommend that shareholders vote for this motion. We believe that we have a responsibility to address the environmental impacts of our operations, and we strive to not only continuously raise the bar on environmental performance but also on transparency. As Canada's largest integrated company, we recognize that we have a responsibility to think about our role in the energy system transition to a low carbon future. We have a long, well established track record of being a leader on climate change issues and appreciate that shareholders and other stakeholders benefit from understanding how the company is addressing these challenges. We believe the additional disclosures referred to in this proposal will provide the company with the opportunity to continue to engage with shareholders and other stakeholders in a way that is both meaningful and informative. Thank you. Thank you, Arlene. You've heard the motion, and it's been duly seconded. Are there any questions or comments? No further questions or comments. I propose we vote on this by ballot. We'll follow the same procedure that we have before. This time it's a yellow ballot, handed out during the beginning of the meeting, and the ballot will be used for this vote. So please mark your ballot with an x, for or against. When you've completed the signed ballot, please raise your hand, and, it'll be collected. Are we needing more time? Anyone need a little more time to complete the ballots? Okay. While they're being collected and counted, I'm going to proceed to the next item, which is, proposal number two, of a shareholder proposal, regarding lobbying disclosure. The next item of business has been described completely in the management proxy circular. I understand that a representative of the shareholders who submitted this proposal is or are in attendance to speak to it, and may I ask you now to share your remarks and propose the motion. Thank you very much. Fellow shareholders and members of the Board, my name is Emma Pullman, and I am here representing someofus.org and over 600,000 of our members in Canada, most of whom are direct or indirect shareholders in Suncor. I'm a proxy holder for Bruno Vernier, a Suncor shareholder. I move that shareholder proposal two set forth on Page B1 of the 2016 proxy circular be approved. Our proposal asks Suncor to provide a report on its spending at the local, provincial and national levels to influence public policy, including indirect funding of lobbying through trade associations, the policies and procedures governing lobbying and the board oversight for these payments. We believe this proposal makes strong business sense because without a clear system of disclosure, corporate assets can be used to promote public policy objectives, which may pose risks to Suncor and its shareholders. And a key part of an investor's job is to know and understand risk. In Canada, there are no regulations requiring companies publicly detail direct payments to trade associations, special interest groups, or lobbyists. Encore is a member of an industry association that funds one of the entities currently under investigation by attorneys general in 17 US states for fraud charges. These fraud charges pertain to misleading statements that ExxonMobil made to its own shareholders. In addition, London based InfluenceMap and Canada's Shareholder Association for Research and Education have pointed out that Suncor is a direct or indirect member in two of the leading proxy groups currently trying to derail the climate change commitments that US president Barack Obama made at the Paris Climate Meetings. In both of these cases, greater disclosure would allow Suncor shareholders to adequately assess shareholder risks. And I believe this is particularly so in light of the proposal that my colleague in front of me just made about climate change. Already two leading proxy advisory firms, ISS, which you mentioned a few minutes ago, and Glass Lewis have both recommended that shareholders vote in favor of this proposal. And a quote from ISS, Poorly thought out efforts can heighten reputational risks such as corruption or other scandals. Companies using agents, advisers, consultant lobbyists or other third parties to act on their behalf as potential for wrongdoing. We believe that publicly available data does not provide a complete picture of Suncor's lobbying expenditures. Suncor's board and its shareholders need complete disclosure to be able to evaluate the use of corporate assets for lobbying and assess any risks the spending can pose. There's a simple saying that what gets disclosed gets managed. Knowing Suncor's lobbying spending will be disclosed will ensure our board and management are both overseeing our company's lobbying to make sure it is done in the best interest of shareholders. Ultimately, disclosure is a safety mechanism for our company and its shareholders. We urge shareholders vote for this proposal. Thank you. Thank you, Ms. Poland. Very well put. Let's see. The motion has been made. We now ask for a seconder to the motion, please. Good morning. My name is Peter McConachie. I am a Suncor shareholder, and I second the motion. Thank you. I'd now ask Ginny Flood, Suncor's Senior Vice President for Government Relations, to speak to Suncor's position on this matter. Thank you. Suncor's board and management have recommended that the shareholders vote against this motion. Transparency is at the core of our corporate culture, and we agree with the spirit of this proposal. We disclose extensive information about our lobbying practices. We announced on April 1836 that we have committed to including in our annual report on sustainability enhanced disclosure largely as requested in the resolution, including details of our policy on lobbying and a list of the trade associations that lobby government in which we are a member. And we will continue to disclose our political donations as we already do in the report. Some of the information requested in the shareholder proposal, however, is information from third parties that we do not have have availability to. Thank you. Thank you. You've heard the motion, which has been seconded. Are there any questions and comments? No? Then I propose we, vote on this matter again by ballot. We'll have the same procedure as described earlier. This time it's a green ballot, so use an x to mark for or against. And we'll take a moment here to make sure they're collected. Any anyone need any more time? Cast their votes. Okay. Well, they're being collected and counted. I'm gonna proceed to the next item on the agenda, which are remarks from CEO and CFO. Steve, all yours. Okay. Thanks Jim and let me just add my good morning to everyone. Welcome to the twenty sixteen AGM. And I'm pleased to acknowledge right upfront that we're here located in the beautiful traditional territory of the Treaty Seven Peoples. I'd like to start by expressing my appreciation to Doug Ford. He's been a Board member for twelve years. From an executive point of view. He's been a tough boss to us. He's been a he's demonstrated a lot of personal commitment, great foresight, some very important strategic thinking to what the shape of the company is now and he's done that with a sense of fun and collaboration, which can be quite tough as you try to run corporations of this size. Thanks to Doug. He's been an active member. He's been much appreciated and good luck to him in his future endeavors. I'd also like to add my welcome to our newest Board member, Patricia Bediant. Patricia is an Executive Vice President and former CFO at the Weyerhaeuser Company, one of the world's largest integrated forest products companies. So she brings with her a tremendous wealth of financial experience and strategic planning, which will greatly help us through the next chapter at Suncor. A warm welcome to Patricia. If I cast my mind back to the Annual General Meeting last year, I spoke about our company in the context of a lower oil price environment. And I mentioned that resilience in responding to the drop in oil prices we've seen would be key to our performance. This past year has highlighted the importance of that resilience, especially since prices have remained lower for longer Suffice to say, I think for both us and other corporations, it's been a very challenging period. Add to that, the election of two new governments, one at provincial level, one at federal level. The increased focus that we've already heard particularly on climate change and the ongoing debate about pipeline infrastructure, then it's made for a dramatic external macro environment for us. So navigating all of that change hasn't been for the faint of heart. For many in the industry, the implications have been very significant. Some companies have to make some very difficult choices, in some cases, harvesting shareholder value just to survive. And in some cases, they haven't survived. At Suncor, knowing we had to reduce capital and operating budgets, we've had to make some very tough decisions, deferring projects, reducing costs and decreasing our staff levels. Be absolutely assured, none of those were made lightly. We were very conscious not to impact our focus on operational excellence, which is around safety, reliability and environmentally sound operations. In fact, our first quarter is probably the best quarter we've had in the company's history against those metrics. While the decisions we had to make were difficult, particularly on the staffing side, we knew we had to face up to the difficult circumstance and make those and position the company for a stronger future. You may have heard through our investor call this morning or previous ones, our goal is to use this period to build an even stronger organization, a competitively advantaged company that's poised to benefit significantly as oil prices start to recover as we think they eventually will as supply and demand starts to work. In 2015, we continued our laser like focus on cost management, a journey that was well underway before the oil price decline started and is guided by aggressive cost reduction targets. We've reduced or postponed discretionary and non essential spending across the company. We also collaborated closely with our suppliers and business partners. The sum of these efforts has allowed us to reduce our operating costs by almost $1,000,000,000 significantly more than the $600 to $800,000,000 that we targeted over two years when we were here last year. Those targets we set in 2015, we've done well against. We also took a hard look at our capital budgets, projects such as the Mackay River expansion and White Rose extension and both of those have been deferred. However, we did decide to advance growth projects which are in flight. A few examples of that would be the Fort Hills project and the Hebron project. That's knowing that these long life projects are expected to provide strong returns through their life cycles. You've often heard me say in Fort Hills case, that's a 52 life cycle, so we're taking the long view. Both of those projects are still expected to achieve first oil in 2017. Fort Hills construction is now over 55% complete and Hebron continues to move at pace in terms of its project milestones. Operational excellence still remains a very strong focus, helping us to drive out costs, increase production and ensure that safe and environmentally sound operation I described. The efforts are clearly paying off. Annual production in 2015 was 578,000 barrels per day, That's an 8% annual production increase, which put us in the upper range of our guidance for the year. You may have heard me talk on the analyst call this morning. Our actual production in March was just under 740,000 barrels a day. So growth is really starting to kick in. We've also seen very strong contributions from our in situ operations. Firebag averaged just under 200,000 barrels per day over the last six months. That's with a strong infill well performance that you've heard me describe before, the advanced reservoir management and the completion of some minor debottleneck projects that we've been doing there. We've been able to increase the nameplate capacity of that facility to 203,000 barrels a day. Those are very low cost increments, which are very important to our business model. So for us, I'll say it one more time, operational excellence is about safe, reliable and environmentally responsible operations. It's about strong, proactive, predictive maintenance programs and it's about well trained and fully engaged operators and employees. In 2012, we set a five year goal to achieve a 90% utilization at our upgraders in oil sands. I'm delighted to report we've already achieved that in 2015, two years ahead of our target. Our work in this area is helping us to drive down costs. In 2015, average annual costs at oil sands were just under $28 a reduction of almost 18% from 2014. In Q1 of this year, we've been able to drive that down even further to just above $24 The high utilization rates we achieved in oil sands in 2015 were mirrored in our Downstream where our refineries maintained an average rate above 94%. That performance was accomplished despite significant planned maintenance being carried out across all of our facilities. With today being the National Day of Mourning, we're reminded that safety has to remain an absolute top priority as we carry out those other pieces of work. It's an ongoing commitment that's as relevant today as it was yesterday and will be tomorrow. It almost sits above priority and it's a deeply held value within some core. In the current economic environment, some of you might find it difficult to look forward with any optimism and yet, it is important we do so. Because if there's anything, we've learned, in the commodities business, it's that both up and down cycles are a reality of this business. It's the companies that maintain a strategic approach at this stage of the cycle who really enhance their competitive position and returning value to shareholders in the process. That's what we're doing at this stage in the cycle. You've seen us take some big steps in 2015 including a transaction to exchange our Kent Breeze and our share of the Wintering Hills Wind Farm for the TransAlta Polar Creek cogeneration facilities. We also purchased an additional interest in Fort Hills project from Total AMP Canada, which moved us into a majority position at just under 51%. Later in the year, we initiated an all share offer to purchase Canadian oil sands. And as you've heard, we recently concluded that deal which will result in our stake in Syncrude increasing from 12% to 49%. Of course, yesterday, we announced the purchase of a further 5% working interest in Syncrude joint venture from Murphy Oil Corporation in Canada. Operating and growing our business safely, responsibly happens within a much broader societal context and that dynamic continues to evolve. The challenge of climate change and how to address it figured prominently in the public mindset in 2015. And I was pleased to see those conversations evolve and some concrete steps being taken this past year, putting us on the path to solutions rather than just problems. Late last year, Suncor and other oil sands producers and members of the environmental community came together to find a way to make joint recommendations on a very strong, globally leading climate change policy, for the Alberta government. And as a result of that collaborative work, together we were able to support, the government's climate change leadership plan. To remind you, that calls for a broad based carbon pricing regime coupled with an overall emissions limit for the oil sands. What it does for the companies, of course, is provide some predictability and certainty on pricings of emissions so we can start to factor that into our investment reviews. It helps us plan and innovate now as we start to look at different technologies which will help continue that reduction in our environmental footprint. That research and development will remain a priority for us both within Suncor and through other collaborative organizations. We're proud members of some of the globally leading organizations in this space. The Canadian, Oil Sands Innovation Alliance is a COSIER, is a standard setter for the world in how to collaborate on, environmental innovation and EVOQUE innovation itself is an incubator for how good ideas are commercialized and taken. We're very pleased to be a founder member of that as well. You can hear, we at Suncor share the global challenge to tackle climate change head on by reducing emissions and becoming what we call carbon competitive We're continuing to produce the energy that the world needs. The oil demand last year was the highest we've ever seen across the world. Through a new environmental performance goal, you'll see us harness technology innovation to set us on what we think will be a transformational pathway towards that lower carbon energy system. There's no question that more work needs to be done on the climate change file. But I think through the Alberta government's new and ambitious performance standard, we're starting to change the conversation about energy and infrastructure. We're starting to change it here, we're starting to change it nationally and we're starting to change it globally. And our vision is to deliver energy that creates prosperity, ensures a healthy environment and improves social well-being. The climate change leadership plan is also a reminder that best practices come from thoughtful solutions orientated dialogue right away across the spectrum. I'm encouraged to see those interactions are happening in a variety of places, including Canada's Eco Fiscal Commission where I serve as an advisory board member and the COP21 discussions in Paris last year where I attended as part of the federal government delegation. The constructive path forward is also reflected in discussions about carbon risk. As you heard, we are supporting NEI's shareholder resolution calling for much more transparency in this regard. And I think Arlene put it well, we deeply invested and believe in transparency. We think we set the standard not just for our own industry but for corporations and that's a position we're very proud to be in. We believe that shareholders and other shareholders can benefit from understanding how we're addressing the climate change issue and how we will remain resilient in a world that's transitioning to a lower carbon energy system. In fact, we think that's a world we can prosper in by advocating and implementing best standards. Think wise use of resources to provide that information is a smart move. Our engagement doesn't end with those concerned as we are about the environment. We recently launched a social goal which is focused on improving our relationship with the aboriginal peoples of Canada. We'll be doing that starting with Suncor through partnerships, through aboriginal youth and through mutually beneficial marketing arrangements and procurement. It's early days relative to the other file but we're quite excited about the opportunities we're seeing. As I look ahead, I remain confident in the strength of the company, its strategy and our future. That optimism rests heavily on what you've heard, a well defined plan focused on operational excellence, focused on capital discipline and focused on profitable growth, which allows us to deliver meaningful results for our shareholders. As always, that's backstopped by an outstanding team of leaders and employees. Suncor is the envy of the industry with its employee base and its leadership group. That enables us to effectively navigate the challenges and the opportunities of this world which is changing so fast. Those men and women of Suncor are a source of great strength for us the company. I want to take the opportunity to express my gratitude and appreciation to all of them for this very hard work and dedication they showed through a difficult year. It's their commitment to delivering results day in and day out which is helping us to create, which is our overriding goal in Suncor, to create energy for a better world. As I turn the floor over to Alastair Cowan, our Executive VP and Chief Financial Officer, I'd like to thank our shareholders and everybody who's come today for your continued support and confidence and conversation. We do appreciate the conversations. We do come here and listen. And I hope you see it reflected in the actions we take. Thank you. Thanks, Steve. Good morning, everyone. I'm pleased to be able to present Suncor's financial results for the past year. As Steve has already pointed out that 2015 was a dynamic year given the volatility of the oil price during the year and our expectation of a lower for longer crude oil price environment. We would say that despite the challenging environment, Suncor has demonstrated a resilience of health and stand out amongst its peer group. This was reflected in our results that were driven by our operational and financial strategy. Now that financial strategy was aimed at supporting increasing reliability and lowering costs, managing risk across the operations, delivering profitable growth and returns to our shareholders and providing financial flexibility. As Steve mentioned, 2015 was a very good year in terms of reliability and production with annual volumes coming in at 578,000 barrels of oil equivalent per day. That included 115,000 barrels per day in E and P and a record 463,000 barrels per day in oil sands. And their strong refining utilization remains consistently at the top end of peer performance, helping drive throughput of 432,000 barrels per day. As I turn to financial performance, cash flow was affected by lower oil prices, but did remain strong in relation to others in the industry at $6,800,000,000 That really reflected the underlying strength of our integrated strategy. We recorded operating earnings for the year of $1,500,000,000 or 1.1 per common share. Now the challenging business environment did mean that we lost under $2,000,000,000 on a net earnings basis, but that did include a $3,500,000,000 charge relating to a couple of specific non cash items. There was a $1,900,000,000 charge in terms of the impact of the weaker Canadian dollar on our U. S. Dollar denominated debt and $1,600,000,000 in asset impairments. I really want to emphasize that it's our operating earnings and operating cash flow, which are the true reflection of the strength of our integrated model, our ongoing focus on controlling costs and the rigorous capital allocation you've come to expect from us. The low price environment in 2015 reminded us of the importance of living within our means and being prudent in times of planting. The integrated business model, our strong balance sheet and our disciplined approach to capital allocation have certainly set up Suncor to emerge stronger from this downturn. The $6,800,000,000 in operating cash flow we achieved more than covered our sustaining capital of $2,600,000,000 and our dividend of $1,600,000,000 That left over $2,500,000,000 of cash flow to invest in growth. That, plus some cash on the balance sheet, allowed us to invest $3,600,000,000 in the growth projects in 2015, as Steve talked about, which will deliver long term sustainable shareholder value. Now for us, having cash available doesn't mean to say that we rush out to spend it. We remain steadfast in our commitment to exercise discipline and allocating capital. An example of that is we reduced our capital spending by over $1,000,000,000 versus the original 2015 plan without impeding our ability to execute critical maintenance or key growth projects. Discipline and prudence are the hallmarks of our financial strategy. We see the benefits of these today and they will continue to remain our key hallmarks in 2016 and beyond. So going forward, you can expect more of the same, living within our means, not wavering from our disciplined capital allocation priorities, maintaining the health and flexibility of our balance sheet and keeping a strong investment grade credit rating, one which is currently setting us apart from our peers. Suncor continues to be recognized for our long life low decline production and reserves, our industry expertise, our commitment to sustainable development, the integrated business model and of course our financial strength. We have demonstrated, as Steve talked about, strong per annum production growth over the past five years and will deliver substantial growth with in flight projects through to the end of the decade, which again sets us apart from our peers. We will reach 800,000 barrels per day of production by 2019. That will be 40% higher than the production in 2015. Our financial performance has allowed us to consistently return value to shareholders and 2015 marked the thirteenth consecutive year that Suncor has increased the dividend. So I want to emphasize that the Board has indicated it remains committed to ensuring that our dividends will be reliable, sustainable, meaningful and competitive. We believe that our dividend continues to provide an attractive return for our shareholders and is part of the company's compelling investor proposition, that's growth and returning cash to our shareholders. Both of those are underpinned by the strong balance sheet. Now investors don't have to look far to understand that the past year has been challenging for many of our peers. And thanks to that strong balance sheet, the same strategy and our disciplined execution, Suncor has definitely been able to successfully navigate the uncertainties of 2015 and improve our competitive position. And our team led by Steve will be singularly focused on continuing that progress. I too would like to thank our investors for your ongoing support. And with that, I'll now turn the microphone back to Jim Simpson. Thank Thank Very much, Steve and Alister. It's now time to complete the formal component of business. We've received the scrutineers report. The secretary will now give the results. Janice? Thanks, Jim. Firstly, for the election of directors, I will report on the votes in favor. Patricia Bediant, 99% Mel Benson, 97% Jassine Cote, 99% Dominic D'Alessandro 99%, John Gas 98%, John Huff 97%, Maureen McCaw 99%, Mike O'Brien 99%, Jim Simpson 99%, Ira Thomas 95%, Steve Williams 99% and Michael Wilson 99%. Secondly, with respect to the advisory resolution on executive compensation, for the motion, 1.59% against the motion, 8.41%. Thirdly, shareholder proposal number one, which was the proposal regarding carbon disclosure for the motion, 98.18% against the motion, 1.82%. Finally, with respect to shareholder proposal number two regarding lobbying disclosure for the motion, 40% against the motion, 60%. That concludes my report. Thank you, Janice. We will incorporate this report into the minutes of the meeting. And I accept the scrutineers' report and declare the Board of Directors will consist of 12 nominees named in the circular. I further declare that the shareholders have accepted our approach to executive compensation as described in the proxy circular. I further declare that the shareholders have approved the resolution proposed in shareholder proposal number one regarding the ongoing reporting with respect to climate change. And I further declare that the shareholders have not approved the resolution proposed in shareholder number two regarding annual disclosure of lobbying related matters. If there are no other matters to be brought before this meeting, I have a motion to formally close the meeting. And I'll remind you, we have the question and answer coming up right away. My name is Dale McMurray, and I'm a Suncor shareholder. I move that the meeting be terminated. Thank you, Mr. McMurray. May I have a seconder? My name is Kimberly Westman. I'm a Suncor shareholder. I second the motion. Thank you very much. Would you kindly raise your hands to approve this motion? Thank you very much. Any opposed? And the motion is carried. I now declare the formal portion of the meeting, is terminated. So, before we, go to question and answers from the floor, I'd like to take a moment and introduce Suncor's senior executive team who are here. They may be asked to comment on one of the questions, but I'd like to introduce them anyway. We've already introduced Steve. You know Steve and Alister and Corporate General Counsel, Janice. Let's go down the list. Eric Axford, Eric's Executive VP of Business Services. Mark Little, thank you, Mark, Vice President of Upstream, Executive Vice President of Upstream. Mike McSween, Mike is Executive Vice President of Major Projects with Fort Hills top of mind these days. Steve Rainesch, Executive Vice President of Strategy and Corporate Development. Chris Smith, Chris is Executive VP of Downstream Paul Gardner, Senior VP of Human Resources. Thank you very much. Now we'll proceed to questions from the floor. For those of you joining on the web, and there are a number I'm sure you'll see a box just below the slide display where you can submit your questions. And let me let me proceed. Any questions from the floor? Yes, sir. Could you please state your name again and go to Weinke? Thank you. My name is Emil Shribney. I'm a longtime shareholder. First of all, I'd like to thank all the Suncor staff because I have no doubt that they've had stressful times in this brutal economic situation. Since Suncor now has approximately 54% of Syncrude, I'd like to know what the current costs of production are at Syncrude and what the board and the staff feel that they can do to reduce the costs? And the second question I have, which is unrelated, is how much what is the percentage of Berkshire's holdings in Suncor? Very good questions. Thank you. Steve? I'll start with those. What I'm going to do is invite some of the ELT to speak directly to the issues in their business as well. I'll put Mark on notice. Mark is actually the Chairman of Syncrude now as well. So he's right in the mix of the work that's being done there. Just in terms of cost, I'll give you some broad numbers and I'll use the real ones from the first quarter and maybe the back end of last year because it sort of puts in context the real opportunity that's available there. So, Suncor's cash operating costs for and none of these are perfect comparisons. Suncor's cash operating costs for the first quarter were $24 just above $24 a barrel. If you look at Syncrude, they've had the best quarter they've had in five years, they were $31 a barrel. If you look at Syncrude over a longer period, they would have been up higher than that. In fact, the fourth quarter last year, they were up in the 40s. Because of the very high fixed cost structure in the oil sands business, it's really important you get the reliability and the throughput such that you can spread those fixed costs over it. And that's why we've concentrated so hard on reliability. Mark and myself have started work. In fact, we had meetings over the last few weeks with the most senior people in Imperial and in Syncrude. And we have some plans which are in place and we're very optimistic about what they'll achieve. Why don't you talk a little bit, Mark, about the focus we've got in that work? Great. Thanks, Steve. One of the opportunities we have is we have some tremendous depth in this business. Next year is our fiftieth anniversary in mining, oil sands and upgrading. And Syncrude started in 1976. They have a tremendous history. In fact, all the long standing families within the community often are on both sides of the fence. Some of the family works for Syncrude and some for Suncor. So there's a tremendous long standing relationship. We think as an organization with our journey, we bring some tremendous expertise and knowledge and understanding of this business. And Steve's talked about how that's been reflected in our results over the last five years. Obviously, Exxon and Imperial bring some tremendous expertise. In fact, Syncrude uses fluid coking technology, which was invented by Exxon. And so we think that between the incredibly capable people that work for Syncrude, the expertise that we bring as an organization and partnership with the Exxon organization that through that collaboration, we can make this the world class asset that it should be and create this and ensure that it delivers fabulous returns for our shareholders. Okay. Thank you, Mark. Let me just answer that last bit of your question on Berkshire Hathaway. These numbers are indicative because they have the ability to buy don't report immediately because they affect the market themselves. They often buy and we don't know until several weeks later. They have approximately 2% of Suncor, that's 30,000,000 shares and they've been adding a reasonable pace. Think they're probably now their biggest oil industry holding which gives you an insight into what their view of the long term opportunities in Suncor are. I'm actually going to be spending a couple of days with Warren Buffett in two weeks' time to talk to him about his views on our strategy and any input that he's got because he's a very engaged shareholder. Thank you. I have a question from the web. If you'll just wait for one moment, please. Mr. Williams, how can Suncor proclaim itself to be a climate leader growing oil sands production by over 40% versus 2015 this year and with the forecast to exceed 800,000 barrels per day by 2019? Yes. It's a great question. It gets back to the essence of what the issues are. Our business, and we're really proud to be in the business, is primarily oil and gas. And for as long as we can see, the world needs oil and gas. So the challenge for us becomes how can you be the best at doing that so that people choose to come and work with you. And that's the position we've aspired to get into. As I said, the demand for oil last year, which is not a function of oil companies, it's a function of consumption and public demand was the highest it's been. We see that continuing and it's driven by masses of the world's population coming out of poverty into the middle or consuming classes, driven primarily by China, India and developing countries. Our job and our purpose as a corporation is to provide in an environmentally safe way that energy to fuel the world. What we're doing is championing the best ways of doing that. We've got in Canada, strongly supported by Suncor, the best climate change practices in the world now. When we go to COP21, when we go to The US, we challenge them to meet Canada's standards. That's something we're really proud of. We expect, and you maybe heard the saying I've used is, we expect by popular demand to be the last oil company standing. That's a part of our business for as long as we can see. It's completely consistent. Our carbon footprint for each barrel we produce has decreased maybe 35% over the last ten years. That's something we want to continue to improve on. The plants which are being put in now are comparable with the carbon footprint of other sources of crude in the world when delivered to this continent. We're very proud of that. You're to see us out there continuing to drive forward with better standards for the world, developing new technologies and implementing them. And we think we can make real progress. I find it completely consistent. Thank you, Steve. Sir, you had a question? My name is Richard. Basically, the reason why I chose actually to become a shareholder, I looked at the balance sheet. It was a solid balance sheet back then. Key strategic acquisition was Metro Canada. And then after that, it was the Fortiel acquisition, and then and the Wastat takeover of of Canadian oil, and they try to block its distribution order. Right? And then somehow, you you got the business because they're in a very tough because of commodity price. My my my my my question is basically, what we have here is the the the lady here was talking about executive compensation being a problem. Is the company I I suggested last time with the corporate secretary, a change in the bylaw, basically, putting together this body and sorry, with the board board of director into one single what what they have there they have the the same set of example in Germany, which there's just board of director running. That that that that exempt works in Germany and in Europe also. But is willing to actually pursue that option? That's one question. The other option is the other question was, since there was a recovery in the price of oil, is Sankore at the end of the year will increase again dividend just like in 2015 to 02/09. Okay. Thank you. There are a couple of questions in there. I think one related, Steve, to sorry? Okay. I think Janice is prepared to answer the first of those questions. Yes. Thanks. And thanks very much for that question, which was would Suncor be prepared to change its bylaw to adopt a structure or some structures that have been adopted overseas in Europe? And I do recognize the gentleman from last year and our conversation last year. Actually, last year, we did amend our bylaw to put some advanced notice provisions in for the nomination of directors, which is becoming more of a standard provision here in Canada. But unfortunately, our corporate law doesn't actually permit for dual board structures of the nature that I think that gentleman was discussing. So there are no plans to do that. But I would be happy to have a further conversation about that with you after the meeting. Thanks very much for your question. Steve, would you comment on the second question? I'll just make the broadest of comments because it's always difficult because at some stage, shareholders and Board and looking after the company's interest crossover. What I would say is we have leading edge best practice in terms of, say, on pay. We've got a and we really appreciate the opportunity to discuss it. It's a very current conversation that's going on both within the company and in other companies. But 91% of our shareholders have voted and have the opportunity to contribute to that debate. It's a fairly clear position they're taking. So there are broad societal issues and we have to recognize those and we do. And we have to recognize what we're trying to achieve as a company. We hear it's a very healthy process that we're having the conversation shareholders have voted very clearly. Thanks, Steve. The second part, Chairman, I would just pick up is on the allocation of capital that was there. And you make a really good point. So one of the things we've established a great track record for is once we've generated cash, what do we do with it? And we're very disciplined in how we allocate that cash. You've seen us and of course, it's a Board decision, not an executive decision. You've seen us increase dividends over time. In fact, the last thirteen years, we've increased dividends to shareholders. You saw we bought 10% of the company back. So in a sense, we prefunded some of the acquisitions when oil prices were higher. And we look at both the opportunities within the company that we have like Fort Hills and Growth and we compare those to the opportunities outside. Right now, the mix that's right for us is finishing the projects off that we've got. We've been buying other projects or corporations at what we think are very attractive and potentially accretive prices for us. You'll see us keep balancing those four things. That mix will change as time goes on. What you have seen is a commitment to shareholders to return funds and that been very successful over the last four or five years. Thanks, Steve. Good. We're developing a bit of a queue here. I think we'll go over here. I just wanted to get some clarification on something which I've heard you say a number of times. In replying to the results, you seem to tote very loudly the percentage. And I think we need to look at where those percentages come from. Those percentages come from largely large blocks of voting. Many of the votes come from board members who have large number of shares, so they're voting for themselves. So therefore, I would have to say when you start toting that 91% of the people voted for this compensation nonsense that you people are shuffling into your pockets, I have to say that it is self serving because you're voting for yourself. And other of the large blocks, which are perhaps mutual funds and such which hold your shares. In other words, other people who are also making large sums of money, but certainly not the minority shareholder. And I would like to stand up for the minority shareholder because those of us who have worked all our lives put money into a company to get a very small return, I know you keep saying, oh, 315% over the number of years. However, we don't have a lot of other choice and we're almost forced into putting our monies into companies such as yours to get a paltry 3%. And I say paltry because our CEO up there, if we do the math, earns $1,000,000 a month, which is $50,000 I believe, a day. So during this meeting, he's earned $6,000 How many of you earn $100,000 every two years? So what I'm saying, when you're voting for yourself for these huge amounts, it is not really accuracy that you're giving us. It's giving us feel good platitudes to make yourself feel good. Thank you. I think we've responded to that in substance based on your prior remarks. Thank you for your comments. Over to Ms. Pullman. Thank you very much. So we're very encouraged that four in 10 shareholders have voted in favor of our proposal for greater transparency. I just wanted to ask you the question, are they going to get it and how do you plan on delivering on that? As you know, because of our prior conversations, Suncor is committed to transparency. We set the standard in the industry. We set the standard on this continent in terms. We've won the prizes for the last five consecutive years on disclosure. We absolutely agree with the principle of transparency. Transparency. The problem and the reason we recommended to shareholders to vote against it was because of a technical difficulty. But it's a pure technical issue. We don't have access to some of the issues, some of the information that's requested. In terms of political lobbying, in terms of institutions or associations, absolute transparency. So we largely agree with the proposal. Thanks, Steve. Yes, sir. There's been a lot of discussion Sorry, in the name is Prit Kotisha, and I'm a There Suncor has been a lot of discussion in the media around pipeline and market access and getting oil to Tidewater. Could you just comment on how important it is for our industry to grow? Do you want me to pick that one up? Yes, am earning some of my money today. I'll give you I'll start at the very high level and then work down to Suncor because it does become different as you cascade through there. So really important for Canada that we get the full price. We have been giving I think the number that most analysts would calculate is Canada gives away just under $30,000,000,000 a year because we don't get reasonable pipeline access. We get complete market access for all our products. We just end up paying a very high number in terms of what that costs us. So really important for Canada to get that in terms of royalties and taxation. Really important for the companies to get that in a competitive sense. So you will see us as an industry supporter and as a company supporting all of the main pipelines. We have an interest in Gateway. We have an interest in Trans Mountain. We have an interest in Line three and we have an interest in Keystone. And we will continue to advocate as a pipeline is the safest and most environmentally sound way of getting product to market. There is broad support starting to come for that. Part of the negotiation discussion that we've been having with the NGOs is about a recognition that a pipeline is the best way to do that. It was a very successful tactic that was used but it was never really about pipelines. Now having said all of that, Suncor is in a very strong position. We have pretty much all the market access we need for the rest of this decade. And as we've been buying up some of these assets, we've been buying market access with those projects. So it hasn't changed our position. So the simple version is the country industry needs it. We're at the lower end of that are supporting and you'll continue to see us doing that. And I'm greatly encouraged by what's going on. I think the provincial government has spoken very clearly about their advocacy for pipelines and I'm hearing much more reassuring words now from the federal government. So a lot of the work we've been doing about making sure we're at the forefront in terms of best environmental practice is starting to cause a different conversation. Given the cycle and given the lack of growth in the industry that happens generally over the next four or five years, I can start to see a period where this market access issue gets solved. Yes, you are, sir. I'm having difficulty with this carbon footprint. You produce a barrel of oil for me and you're audited as producing so much carbon. And yet, I think that one should have to adjust for the fact that I burned that barrel of oil. So some of that designation of the carbon footprint should be assigned to me, should it not? I really like your point. What we've actually advocated is what we call a broad based carbon tax. Climate change is about CO2 in the atmosphere. And CO2 is produced broadly in two areas in our business. One is at the point of production, the things we do. We have trucks, we have shovels, we put steam, we extract the oil and then we get it into a usable product for our customers. That only takes 20% of the footprint. 80% of the carbon footprint of a barrel crude comes from the consumer, the point at which we turn our car on, the point at which we put our central heating on, the point at which we put the air conditioning on. So you're absolutely right. Economists are pretty much in complete alignment that the best way to manage the carbon footprint is to put a broad based carbon tax so people feel the consequences of their consumption. Because if you're not careful, you can just tax oil companies but individuals feel completely detached from it. In the end, what will affect the demand for oil are our personal habits. It's not what an oil company does, it's what we decide to do in terms of where we want our food to come from, where we want our water to come from, do we want to travel to work, do we want to go on vacation, do we want to heat our houses. So what we're advocating is the broad based carbon tax so that we all start to take that conversation and realize the exact point you've made. It actually, this is mainly a consumption issue and we need to get to all of those people who are consuming so they can start to change their behaviors. I like that question too, Steve. Yes, sir. Hi. I'm Ross Gurley. I'm a shareholder of Suncor as well. My question is on the other component of the province's climate change policy, and that's with respect to methane reduction. Just wondering if the company has assessed our current position and how we're going to achieve the required 45% reduction in the next several years. Yes. And of course, we were strong supporters of including the methane regulation. Just broadly speaking, Canada is in a much better position than The US. We ourselves, if you look at our operating facilities, have closed facilities, so we have flares in them. So we don't and recovery systems on those flares. So we're not huge producers of methane, much more dominant in the way you're drilling conventional wells and conventional gas wells in particular. So with support, it's all the advocates of it. It doesn't have the biggest impact on Suncor in that 99% of our production is oil, not gas, and most of that is from oil sands. So a different issue largely for us. I noticed that you on your production graph, so you had a component for tight oil, which would imply some form of conventional oil production. Therefore, there would be presumably methane emissions at those locations as well. Your point is right but it's a very small part. The actual consequence to our overall operations is relatively minor compared to other oil companies that have a different ratio. But yes, there is a small amount and Canada's practices are actually amongst the best in the world now. Part of the conversation is about leveling the playing field to get The U. To catch up these things. I don't know if you want to add anything to it, Eric. Eric was actually with the representatives from the EPA who came up a few weeks ago to talk about the whole of the Canadian strategy, but partly about methane as well. I don't know if there's anything you'd add or whether that's enough. I think I'd just build on something you said. I think the graph you might be referring to was a comparison between Fort Hills and Tide Oil. It wasn't really flagging our own operation in a big way. As Steve said, we really have an immaterial production component from the conventional part of our business, which is why the methane reduction part of that climate plan is less significant. It is a huge issue for the general oil industry in Alberta and Canada, though, and in The U. S, and it is one of the real areas of harmonization between U. S. And Canadian trend on this. And we have been super engaged with governments both in Alberta and at the federal level to try and actually drive to kind of stronger, more positive, beneficial, harmonized rules and regulations across the continent, and that's a great example of one step. I'm also part of the Canadian Association of Petroleum Producers. I represent Suncor on their board, and I can tell you that the industry here has actually largely adopted and embraced the desire to try and move in that direction as well. It's actually a positive development, I think, for the industry and for Canada. It's perhaps just worth adding, Eric, for those who don't know, that if you take a molecule of CO2 and look at the impact it has on climate change and then you take a molecule of methane, methane has 20 times the impact per molecule. It's really important that we get to methane as part of that climate change agenda. Absolutely. Good question. Thank you. Any other questions? Right here. Sorry. I've been waiting on pins and needles to speak here. I've been blessed as little over ninety years on this earth. And one thing I have discovered is in some forty years I've invested that Canadian oil sands is a very favorable stock to own. I was disappointed when Suncor would selfishly give so little in this trade over because high loss, a considerable amount of money on it. Now I don't mind that now. I'm not at my age. But anyway, I'm wondering if you're doing so well and it's it's a very democratic meeting. I I it's great to hear all these expressions here. But if you have done so well and promised so much, maybe you can promise a little more in dividends as well. Thank you. You're to make a promise, Steve? I'll just say thank you for being so loyal and coming. And hang in there. I think a lot of the things we've done, including the acquisition of Canadian Oil Sands is going to start to bear fruit. But you talk in a real case about how difficult the market has been and a number of properties have a number of assets have come down considerably in price. In the worst cases, they haven't survived. I think the good news for Canadian Oil Sands shareholders now is that they've come into the Suncor family and the future does look quite bright. Yes, sir. My name is Franz Porton Reed. I'm a shareholder. I'd like to ask now why is it that I worked in nineteen fifty three, fifty four, up way north near the Alabaster River where now the oil sands are in that area, and in the springtime, when I went to bed my hands would pass on the side of the river below a little bit there before the water comes. And there, my hand so dirty with oil, and then oil went into the river. Now why why the environmental should pay you now. Why do you take out the oil out of this hull instead of you cleaned it all up. I love your point. I love your point. Talking about yeah. I think that was at that time all the way into the Alabasca River. That's what I think strongly. I've been living with all my mind. And after that, I said to myself, that is a kind of dirty oil that gets through the sandy in there because I could not wash my hands clean. You know, I have such a hard time to get my hands clean. That's all I have to say. Thank you. That's all. If we go back far enough in the original discovery of the oil sands, was exactly that. Our aboriginal neighbors discovered it and used it on their kayaks and canoes because it helped them. That was the exact discovery. And sometimes, in lighter moments, we often do too much in public, but we say exactly the same. We're the biggest cleanup operation in the world. We're taking millions of barrels of oil saturated sand, cleaning it up and putting it back. But I hear your point. I'm not allowed to say those things. Enough. I think the gentleman asking the question made our point quite well. Yes, sir. My name is Wallace King. My father and I have been shareholders since GC West days, so we go back to the late '60s. And we've bought furs all the way up to Mackenzie to Fort Chef. And one thing always bothered my father staying on the same issue was cleaning up of the water, the effluents, the tailings ponds. In the last five years, we've had a couple of releases there of a couple 100,000 barrels into the Athabasca River from Pond C. So where are we with cleaning up these tailings ponds? That's the first question. I have a second one. Okay. I mean, let me do you want to do it, Mark? Sure. No, it's a great question because tailings is a key focus area And I think people know that several years ago, we reclaimed the first tailings pond within the industry. Wapusu Lookout is what we call it today. It used to be called Pond 1. So the focus of that has been huge and to separate the water and the fines, we used to continue to make more and more ponds. So technology was invented called tailings reduction operation. And it's really about accelerating the pace at which we can recycle the water. The huge advantage of that is we can shrink our footprint and not have nearly as many tailings ponds. So we stopped building tailings ponds. And now we've started putting the sand right back into the pit and managing the water and recycling such on a faster basis. So this is all about reducing the footprint of technology. There's just been a new tailings management framework that's been released by the Alberta government. We've been working through that process. It's a follow on to the previous Directive 74 in tailings. So we've been working now on recrafting our plans. We've just submitted our updated tailings plan and it's all about reducing the risk, reducing the exposure, driving down the amount of water that we're using, increasing our recycle and that sort of thing. So there's been enormous progress in tailings but now we still have to reclaim our ponds that we've had historically. So we do have a number of ponds that we're working on and we're in various degrees capping those off and getting them ready for reclamation. I just have one broader comment. When I came to Suncor fourteen years ago, we used to talk about four problems. We used to talk about tailings and the challenge that was there. We used to talk about water, water withdrawal from the river and how much we were consuming. We used talk about land disturbance and then the CO2 and the climate changing gases. Three of the four are on their way to resolution. We still got lots more work to do but we can see the end of the challenges on tailings. We can see water consumption is a fraction of what we used to use. Now we've used different technologies and recovery techniques. And the footprint now, we're able to reduce it because of the way we design a mine and how fast we clean up those tailings and put clean sand back. Real substantial progress on three of the four and I'm very optimistic we're going to solve the last one as well. Do you have a second question? Well done on the tailings ponds cleaning up. The second question is your view on the price of oil. I was reading a book called Twilight in the Desert. And from your actions, you must believe some of that hypothesis, and that is Saudi's production is reaching an end of its life. So can you, without divulging any corporate secrets, give kind of your view on where you see the world price of oil going in towards the turn of the century, I guess? Firstly, I would say, we don't bet the company on guessing a price of crude. So for this year, we are balancing our budget, assuming the price of crude is $36 a barrel, which may prove to be conservative, but we think that, that is prudent. In the long run, our simple belief is that supply and demand works. And every indication is that's happening. It takes some time because the equation is a complicated one with lots of producers and lots of consumers. But we can see the market starting to come back into balance now much as we expected. Whether that's this year or next year is very difficult to call. That's one important piece of information. The underlying demand continues to go up, which is the consumption discussion that as the world's economy start to work as more and more individuals and countries aspire to come out of poverty into a consuming class, then they need energy to help them with that. The carbon transition we've also talked about is starting and making progress. But the ability to decarbonize the world instantaneously doesn't exist. Everything that we do is based on is largely based on an energy supply system which has oil and gas. Our belief is, so supply and demand works, we will see a transition to a lower carbon world and we will position ourselves to be one of the very best performers in that so that we can work through that. We also are significant investors in alternative energy as well. So we've built a number of wind farms. We've built an ethanol plant. We are investing in some solar technology and we've got some innovation hubs who are looking to invest in new technologies as they start to evolve. So we think best performance we can have in the world we're in now as it starts to transition and having a foot in alternative sources is the right strategy and you'll see us pursuing that for the foreseeable future. Thanks very much, Steve. I've been advised there are no questions on the Internet, but one more here. Thank you for everything today. My name is Sagar and I'm a shareholder. I have a very quick question for you, which is in terms of your operation cost and production. So my question is, so in terms so right now, I just saw that slide you have for the CSOR which is the industry wide. Your CSOR is around 2.6. So my question to you is, have you is Suncor considering any other kinds of technology like microwave technology for heating the reservoir and moving away from steam? If so, if you've seen any, if you're doing any or if there are any ongoing pilots which use microwave technology, does it actually reduce production cost or operation cost? Does it actually reduce your 20% GEG to even lesser? Yes. If you look at our main processes today, we're actively piloting reasonable scale both solvent technology, which removes the need or largely removes the need for steam and microwave technology. We have commercial pilots running as we speak now. Both are encouraging. It's too early to draw a conclusion on that. We haven't got a bad fit with our timing for our next in situ investments. We believe we'll be able to answer the questions on the viability of those technologies and put the flexibility into our new facilities. Yes, real opportunities there in both of those cases and the industry is, and us in particular, are quite excited about the possibility. That will be a fundamental part of reducing our carbon footprint and other technologies like that which we believe will work, very much so. Very good. Thank you. Any further questions? Well, I think we'll call it a day then. I would like to thank everyone for joining us. I particularly appreciate your comments and interventions. And we look forward to connecting with you again same time next year. So have a great day, and thanks for coming.