Imperial CEO says oilsands needs to burnish its image
Claudia Cattaneo, Financial Post Published: Wednesday, March 12, 2008
When Tim Hearn started working at Imperial Oil Ltd. 41 years ago, oil was worth US$1.80 a barrel and natural gas 16¢ per thousand cubic feet.
With oil prices nearing US$110 and gas prices US$10,Mr. Hearn, 64, is retiring on March 31 as CEO and chairman of Imperial, leaving behind a company with no debt and pushing forward some of Canada's largest oil and gas projects. Mr. Hearn will be replaced by Bruce March, 51, an Exxon Mobil Corp. refining executive.
In an exclusive interview with the Financial Post's Calgary bureau chief, Claudia Cattaneo, Mr. Hearn said one of the biggest challenges facing Canada's oil-and-gas industry is communicating its importance to the country and challenging growing negative perceptions that the oilsands produce "dirty oil." He also expressed confidence that the $16.2-billion Mackenzie Gas Project will move ahead soon under a new proposal made by Imperial and its partners and now being evaluated by the federal government.
Q What is the biggest challenge facing the oilsands industry today?
A We need to do a much better job of communicating the value of the oil-and-gas industry in general to the country and to the world, and the oilsands in particular. If I start with the oil-and-gas industry [in general], 25% to 30% of all private investment is being done by the oil-and-gas industry, 30% of the value of the Toronto Stock Exchange is in our industry, 97% of the trade surplus is driven by the industry, so it's huge, and particularly at a time when Ontario is in such difficulty. A lot of people don't understand that for every two jobs created in Alberta, there is one created elsewhere in the country. We fully recognize that we all need to do a better job on the environmental side of that equation. And I think, unfortunately, the public debate doesn't keep the two Es in balance-- the economy and the environment.
Q Are you concerned about how the oilsands' image has deteriorated in the past little while, with everyone now referring to the oilsands as dirty oil?
A Of course, and I think it's a well-conceived plan by a number of people who can range from anti-development to whatever. But they have done a bit of a job on the oilsands, because it suits their agenda, and I think as an industry we are going to have to rise up and get our side of the story out much better, and so that's our fault. But at the end of the day ... I think where our governments are going to play an important role, is: Are they going to let other countries' special interest groups set the public policy agenda for our country? Both at a federal and provincial level. I would think we would be highly remiss if we let that happen.
Q Will you delay the Kearl oilsands project as a result of the recent federal court ruling?
A All the judge asked was to please clarify what you meant on that section. The judge didn't say, we need to stop the project, we need to reopen the whole case, we have to redo the hearings. She didn't say any of those things. She said you need to be more clear. From a project point of view, we are continuing on as is.
Q What is the status of the Mackenzie pipeline?
A We have made some proposals to the federal government. They are reviewing them now. I think they are really good proposals. We don't have any more brilliant ideas at this point in time. For sure, the aboriginal group will be still involved, we'll be involved, TransCanada Corp., the producers, but how it's ultimately owned and operated, I think there is lots of different ways it could go. We are not asking for big handouts, that's for sure.
Q Why did you decide to retire now?
A I thought this was the right time from the company's point of view. We are moving into implementation of a lot of things. I feel that my company is in excellent shape. Except maybe for one little pipeline project. I would have liked it a little bit forward. I have a lot of other interests. I am going to do two for-profit boards -- I am on the Royal Bank board and I am in negotiations with a number of other companies. I have agreed to chair the Calgary Homeless Foundation. I am going to work with a couple of faculties at the University of Calgary. And I am still chairing the C.D. Howe Institute.
ccattaneo@nationalpost.com
http://www.financialpost.com/analysis/columnists/story.html?id=16ecf8e0-...
