Energy companies can be both socially and environmentally progressive, yet still oppose the Kyoto approach to reducing greenhouse gases, says the chief executive of oilsands giant Syncrude Canada.

Eric Newell, who described Syncrude as a model of environmental responsibility, lashed out at the federal government’s move towards ratifying the international climate change accord, calling it “absolute nuts.”

“We thought we were working very co-operatively with the government, until it became obvious that it was a one-way street,” Newell told the FGL Open Global Business Society forum held in Calgary.

Newell joined other speakers at the FGL forum, including the U.S. counsel general in Calgary, Roy Chavera, in examining issues related to corporate social responsibility (CSR) and recent scandals involving fraud and shady dealings in the business world.

But his Kyoto salvo was triggered by a question from the audience about the controversial climate change treaty, which Prime Minister Jean Chretien has vowed will be approved by Parliament later this fall.

A draft implementation plan for Kyoto was released for discussion last Thursday, and provincial and federal environment ministers were scheduled to meet earlier this week in Halifax to negotiate terms for the plan’s implementation.

“The Kyoto approach is a bad deal for Canada – and it’s not going to have any effect on the environment in the short run,” Newell said. “The big emitters aren’t even signed up to it, and we’re going to be at a competitive disadvantage against our major trading partner.”

The potential disadvantages of Kyoto to industry came into sharper focus last week with the release of the federal plan, a strategy that drew almost universal condemnation from energy representatives and the Alberta government, but kudos from environmental groups.

The proposed plan falls short of Canada’s original commitment under Kyoto to reduce greenhouse gas (GHG) emissions to six per cent below 1990 levels by 2012. And it was quickly dismissed as vague and flawed by both Alberta Environment Minister Lorne Taylor and Pierre Alvarez, president of the Canadian Association of Petroleum Producers. CAPP is now seeking clarification on specific points, including credit trading and final GHG targets for industry.

Eric Newell, chief executive of Syncrude

Highlights in the Kyoto strategy include:

* Cutting GHGs by 180 megatonnes annually – about 60 megatonnes short of the original Kyoto target.

* Improving fuel efficiency and promoting ethanol and biodiesel fuels by supporting a 10-per-cent ethanol blend in a quarter of all gasolines, and by 2010 blending a 10-per-cent ethanol mix into one-third of all gas sold.

* Encouraging consumers to cut their driving by 10 per cent each year and to use more public transportation, while making their homes more energy efficient with increased insulation, and turning down thermostats, water heaters and other appliances.

* Cutting 55 megatonnes in emissions from larger industries, partly through an emissions-trading system.

* Incentives for “green power,” including wind power.

“Instead of the consultation, negotiation and engagement we’ve been asking for, the federal government presents what looks more like a wish list,” said Nancy Hughes Anthony, president and CEO of the Canadian Chamber of Commerce, adding how to bridge the 60-megatonne gap between the federal plans and Kyoto targets is not explained.

Perrin Beatty, head of the Canadian Manufacturers and Exporters association, said the plan is based on a gross underestimation of costs. “The government is rushing Kyoto through without demonstrating that it understands the cost in terms of higher taxes and energy prices, lost jobs and disappearing investment,” he said.

Greenpeace environmentalists praised the government’s approach, calling it a “Made-In-Canada” plan which balances both consumer and industrial initiatives.

“Now the onus is on the provinces and industry to stop griping, roll up their sleeves and get to work,” said Greenpeace climate campaign spokesman Steven Guilbeault.

In Alberta, the pro-Kyoto group Albertans for Ratifying Kyoto applauded federal Environment Minister David Anderson for staying the course. “The federal government is echoing what many of the Kyoto supporters in this province and across Canada have been saying for the past few years,” said spokesman Jan Triska.

Meanwhile, Syncrude’s Newell says it’s a myth that those who oppose the treaty are somehow anti-environment. “That’s absolute nonsense. We’re all for reducing emissions,” he told the FGL conference.

“In my sector, the oilsands, we’ll reduce our energy intensity, our greenhouse gases per barrel, by 40 per cent between 1990 and 2010. That’s two per cent a year – the best of any economic sector in the country.”

But because of huge growth in oilsands production, Newell noted, “our absolute emissions are going to go back up.”

The Syncrude partnership, whose operations are based in Fort McMurray, is the world’s largest producer of synthetic crude oil, producing 81.4 million barrels of oil last year from deposits in northern Alberta. The plant is Canada’s single biggest source of crude oil.

Besides Kyoto, Newell and other speakers at the FGL forum tackled the continuing scandals in the business world.

“Regrettably, even the reputations of the best firms in Canada and the U.S. have been tarnished as a result of the recent financial debacles,” Chavera noted.

“It’s not fair to the model organizations, but everyone is being held accountable at the expense of a few.”

Newell said while some of the criticism being levelled at business leaders is deserved, he believes cases of corporate malfeasance are “isolated” and not reflective of what’s actually happening in Canada’s business community.

Similar to his stand on Kyoto, Newell said he favours voluntary actions, rather than regulatory restrictions, to encourage corporations to “do right.” “I think the approach Canada’s CEOs are taking is better, because it respects market forces, and therefore makes our buy-in voluntary rather than imposed,” he said.

“While market forces won’t prevent either bad judgment or criminal behaviour, they are increasingly effective in encouraging good corporate governance.”

The forum, sponsored in part by Business Edge, also featured John LeBoutillier, a member of the Canadian Democracy and Corporate Accountability Commission. The commission presented a report earlier this year to the federal government called The New Balance Sheet: Corporate Profits and Responsibility in the 21st Century.

LeBoutillier said it appears the federal government will take seriously the 24 recommendations in the report, which include requiring companies to publicly report their CSR standards and how they are being met, legislating protection for whistle-blowers in cases of criminal or fraudulent acts and halting corporate political donations.

“In a North American context, business needs to re-establish basic values such as integrity, honest and ethics, adopt better governance practices, and communicate more, be more transparent,” he said.

Business, government and other regulatory bodies all have a role to play in encouraging corporate responsibility, he added. “Our commission also feels that a company is unlikely to develop the corporate social responsibility culture if there is no commitment to it at the highest levels.”