Share more toys in the (oil) sand box, companies urged

Thursday, November 11, 2010


CALGARY -- Consider the plight of the oil sands CEO, who must somehow make bitumen without destroying the earth, grow without triggering another inflation nightmare and build without sucking dry a dangerously shallow labour pool.

Deloitte, the biggest consulting firm in the world, has a suggestion on how to do it all: join hands and sing Kumbaya.

Or, as they put it in a new report entitled "Gaining ground in the sands 2011: A look at 10 of the top issues facing the oil sands sector," collaboration is key.

"One of the ways to deal with these trends is through greater collaboration," said Chris Lee, Deloitte's Calgary-based national industry leader in energy and resources.

Companies have already made some strides toward working together. The most recent example is the formation of the Oil Sands Leadership Initiative, which has seen companies agree "to work together to meet the challenges of responsible development."

But real-world evidence of working together has so far been few. All of the top oil sands companies, for example, are independently developing almost identical technology to clean up tailings, despite offers from Suncor to license its version and Shell to give away its own research.

Still, the fact that sharing has been offered speaks to the changes afoot. Deloitte is advocating for companies to "continue to do this and even accentuate it."

In the meantime, those CEOs can cross their fingers and hope the U.S. rebound is a slow one. "In terms of costs, steel and labour at this point in time are fairly under control," Mr. Lee said. "The bogey is what happens to the U.S. economy. If the U.S. economy's growth rate expands at a far greater pace than anticipated over the next few years, you could have the possibility of cost inflation. That's where, again, greater collaboration hopefully works toward finding ways to come up with more efficiencies."