HSBC reviewing oilsands retreat: Suncor chief
Williams says project financing is not a problem
CALGARY• Moves by European banks to withhold financing for oilsands projects has not had an impact on financing and borrowing costs, according to the CEO of Canada’s largest integrated oil producer.
“I have a very long list of bankers (willing to work with the company) so I can’t include them in all the business,” Suncor Energy Inc. president and CEO Steve Williams said Wednesday on the sidelines of a summit on carbon taxes in Canada.
“The world’s capital is coming to offer itself to Suncor and companies like us so, no, it’s not having an impact. It’s not driving up our costs,” Williams said.
In April, Europe’s largest bank HSBC Holdings PLC said it would no longer provide financial services to new, greenfield oilsands projects or new pipelines dedicated to the oilsands sector, but would continue to fund expansions of existing projects.
The move by HSBC follows similar announcements from European banks such as Paris-based BNP Paribas and Amsterdam-based ING Group last year, apart from divestments from a number of pension funds.
But Williams said that some banks — HSBC in particular — might be rethinking their approach to financing oilsands projects after he called the London-based bank’s CEO John Flint.
“I spoke to John Flint personally and told him that what he was actually proposing is taking the environmental conversation backwards and that right now, the new technologies we’re introducing are reducing the carbon footprint,” Williams said.
“If we want to introduce new technologies and reduce the carbon footprint then we need to be investing money,” Williams said he told Flint. “They’re reflecting on that and I think you’ll hear some things about HSBC’s policy.”
HSBC was not able to provide comment. The bank has a loan book of $6.1 billion in the Canadian energy sector.
“HSBC is a proud, long standing supporter of the energy sector both here in Canada and around the world — that is not changing,” HSBC Bank Canada president and CEO Sandra Stuart said in a release at the time its energy investment policy was announced.
Even if HSBC is reconsidering its energy investment policy approach, Suncor’s Williams doesn’t believe there’s a trend among banks to de-fund oilsands projects. The focus is on demanding more disclosure around carbon and investing risks from energy companies, he said.
“I think generally there is a trend to say we want more transparency and we want to understand what the financial risks are,” Williams said, adding that Suncor is “at the leading edge of disclosure.”
His remarks were echoed by institutional investors from G7 countries, including the Ontario Teachers’ Pension Plan and Caisse de dépôt ET placement du Québec, who announced initiatives in Toronto on Wednesday to boost investment in global development opportunities and integrate climate-related disclosures and sustainable development goals in their decisionmaking process.
Williams participated in a panel discussion alongside former Quebec Premier Jean Charest, former Pembina Institute executive director Ed Whittingham and University of Calgary economics professor Jennifer Winter on the benefits of carbon taxes on Wednesday.
The company has been a long-standing advocate for economywide carbon taxes, and Williams had prominently backed Alberta Premier Rachel Notley when she announced her government’s climate plan in 2015, which included a carbon tax and a cap on oilsands emissions.
However, Williams has also stressed that a combination of taxes, royalties and overly burdensome regulatory review processes has made Canada uncompetitive relative to other jurisdictions and that Suncor will not invest more money in the country until the competitiveness issue is fixed.
Asked whether or not Canada’s $4.5-billion purchase of the Trans Mountain pipeline system and expansion project last week from Houstonbased Kinder Morgan Inc. restored his confidence in the country’s ability to execute on major projects, Williams said it was an “encouraging” step in the right direction.
“On the one hand, it’s a clear unambiguous commitment that it is a piece of infrastructure that’s in the national interest and needs to be built. On the other hand, it’s also recognizing that the normal processes didn’t work very well,” he said.
The hard work of actually building the pipeline to B.C. still needs to be done, he said.
Ottawa agreed to buy Kinder Morgan’s Trans Mountain pipeline system and expansion project for $4.5 billion, which it hopes will facilitate the construction of the project to connect the oilpatch with international markets.