The National Post is Canada’s second largest national paper.
Does Rick George aim to keep his enemies close, or to be eaten last?
Rick George, the former head of Suncor, is one of the most talented and successful businessmen in Canadian history. On the basis of a single brilliant insight, he transformed the economics of the Alberta oil sands, setting Canada on the path to energy superpower status. He repatriated and reprivatized Suncor. He absorbed Petro-Canada in the biggest merger in the country’s history.
And yet Mr. George was also slow to see, and perhaps naive in dealing with, the environmental whirlwind that would be unleashed by his success, as appears evident in his newly published autobiography, Sun Rise: Suncor, the Oil Sands and the Future of Energy, written with John Lawrence Reynolds.
Mr. George’s tale of business success is often inspiring, if somewhat guarded, but that part of the book contrasts markedly with the account of his well-intended but often muddled and contradictory approach to dealing with the environmental movement’s massive international campaign of misinformation about the oil sands.
The fact that President Barack Obama nixed the Keystone XL pipeline, which was designed to take diluted bitumen to the refineries of the U.S Gulf Coast, while the other main oil sands export routes to the West Coast are being resolutely opposed by environmental NGOs, aboriginal groups and B.C. citizens, suggests that Mr. George’s fervent belief in “dialogue” failed to produce the required results. Indeed, it is never quite clear if his policy was to keep his enemies close, or be eaten last.
First the inspiring bit. Rick George was born in a small town in Colorado, became an engineer, joined Texaco, expanded his perspective by qualifying as a lawyer, then went to Philadelphia-based Sun Oil, where he starred in the company’s North Sea operations.
In 1991 he moved as heir apparent to the company’s Canadian subsidiary, whose perpetual corporate headache had been its oil sands operations. Mr. George’s light-bulb moment was to spot that the company was using a flawed production process. The open-pit operation depended on massive bucket wheels to dig out the unyielding oil sand, which was then loaded onto conveyor belts to be taken to a processing plant.
This method had been developed to produce soft coal. Frozen oil sand was a whole different bucket load, and led to endless shutdowns. Mr. George’s deceptively simple answer was to replace the bucket wheels with shovels and the conveyor belts with trucks. The result was a $5-per-barrel reduction in production costs, a proverbial “game-changer.”
Fortunately for Mr. George, and for Canada, his parent in Philadelphia saw profitability as an opportunity to sell, as did the government of Ontario, which had decided in the early 1980s, after seeing the “success” (i.e. public popularity) of state-owned Petro-Canada, to buy 25% of its own “window on the industry.” Somewhat ironically, the stake was purchased by the Conservative government of Bill Davis and sold by the NDP government of Bob Rae.
Apart from inspiring many other companies to move into the oil sands, Mr. George also greatly expanded Suncor’s operations. This success attracted the attention of the environmental movement, for whom the oil sands were an easy target.
For the rest of this column, please go to the National Post website: http://opinion.financialpost.com/2012/10/15/peter-foster-oil-sands-%C2%ADdialogues-of-the-deaf/