Page 71 - AIF - English

Environmental Regulation
Climate Change Regulation

Changes in environmental regulation could have a material Future laws and regulations may impose significant
adverse effect on our business, financial condition, results liabilities on a failure to comply with their requirements;

of operations and cash flow by impacting the demand, however, Suncor expects the cost of meeting new
formulation or quality of our products, or by requiring environmental and climate change regulations will not be

increased capital expenditures or distribution costs, which so high as to cause material disadvantage to the company
may or may not be recoverable in the marketplace. The or material damage to its competitive positioning. While it

complexity and breadth of changes in environmental currently appears that GHG regulations and targets will
regulation make it extremely difficult to predict the continue to become more stringent, and while Suncor will

potential impact to Suncor. Suncor positions itself to be continue efforts to reduce the intensity of its GHG
ahead of proposed changes or engages in the discussion emissions, the absolute GHG emissions of our company will

on proposed changes to ensure Suncor’s interests
continue to rise as we pursue a prudent and planned
are recognized.
growth strategy.

The company anticipates capital expenditures and As part of its ongoing business planning, Suncor assesses
operating expenses could increase in the future as a result potential costs associated with COemissions in its
2
of the implementation of new and increasingly stringent evaluation of future projects, based on the company’s
environmental regulations. Failure to comply with current understanding of pending and possible GHG

environmental regulation may result in the imposition of regulations. Both the U.S. and Canada have indicated that
significant fines and penalties, liability for cleanup costs climate change policies that may be implemented will

and damages, and the loss of important licences and attempt to balance economic, environmental and energy
permits, which may, in turn, have a material adverse effect security concerns. In the future, the company expects that

on our business, financial condition, results of operations regulation will evolve with a moderate carbon price signal,
and cash flow. Through industry associations, Suncor and that the price regime will progress cautiously. Suncor

participates, both directly and indirectly, in the consultation will continue to review the impact of future carbon
process for the design of proposed regulations and other constrained scenarios on its strategy, using a price range of

efforts to harmonize regulations across jurisdictions within $15 to $60/tonne of CO2e as a base case, applied against a
North America.
range of regulatory policy options and price sensitivities.

Some of the issues that are or may in the future be subject The Canadian federal government has indicated a

to environmental regulation include:
preference for a sector-specific approach to climate change
• The possible cumulative regional impacts of oil sands regulation; however, it is unclear what form any regulation

development;
will take for the oil and gas sector, and what type of
compliance mechanisms will be available to large emitters.
• The manufacture, import, storage, treatment and
disposal of hazardous or industrial waste
At this time, the company does not believe it is possible to
predict the nature of any requirements or the impact on
and substances;
Suncor’s business, financial condition, results of operations

• The need to reduce or stabilize various emissions to air;
and cash flow. The impact of developing regulations
cannot be quantified at this time in the absence of detail
• Withdrawals, use of, and discharges to water;
• The use of hydraulic fracturing to assist in the recovery on how systems will operate.

and production of oil and natural gas;
Although Suncor does not actively market into California,
the implications of other states or countries adopting
• Issues relating to land reclamation, restoration and
wildlife habitat protection;
similar LCFS legislation could pose a significant barrier to
Suncor’s exports of oil sands crude if the importing
• Issues related to offset requirements for various land
jurisdictions do not acknowledge efforts undertaken by the
disturbances;
oil sands industry to meet the emissions intensity
• Reformulated gasoline to support lower vehicle
reductions legislated by the Government of Alberta.
emissions;

• U.S. state or federal calculation and regulation of fuel Land Reclamation
life-cycle carbon content; and
There are risks associated specifically with the company’s

• Regulation or policy by foreign governments or other ability to reclaim tailings ponds containing mature fine
tailings, with TROor other methods and technologies.
organizations to limit purchases of oil produced from TM
unconventional sources, such as the oil sands.
Suncor expects that TROTM will help the company reclaim
existing tailings ponds by reducing the volumes of fluid fine

tailings. The success of TROTM or any other methods of
technology and the time to reclaim tailings ponds could

SUNCOR ENERGY INC. ANNUAL INFORMATION FORM 2014 69