Sustainable development - which includes adopting the Kyoto Protocol - can mean more greenbacks for Canada's energy industry and not just a greening of the corporate image, says the president and CEO of Shell Canada.

Calling Kyoto an imperfect vehicle, Clive Mather said it's the best option there is, and that's why industry and government must find a way to "get on with it."

"If we can deliver (Kyoto) the way we currently see it, this will not harm industry," Mather told reporters following an address to the Calgary Chamber of Commerce last week.

"I ultimately believe it will add to our competitiveness both in terms of dealing with the environmental issues that do worry us, but also in terms of giving us a competitive edge that we can export to other countries."

Shell Canada CEO Clive Mather backs sustainable development.

The first step, Mather said, is getting Canada's energy industry to agree on a realistic framework. He credited the Canadian Association of Petroleum Producers (CAPP), which has criticized Kyoto objectives set out by the federal government, for working with Environment Canada to find a way to curb greenhouse gas emissions.

Released in April, Ottawa's plan proposes spending $10 billion to reduce Canada's 270-megatonnes (Mt) emissions gap within the 2008-2012 Kyoto timeframe. The plan also lowers the emissions-reduction target for about 700 large industrial emitters, including Alberta's oil and gas sector, to 36 Mt from a 55-Mt cut proposed in Ottawa's 2002 climate change plan.

"I think the industry here in Alberta has actually engaged in the Kyoto debate extremely well," said Mather, who for the past year has been at the helm of the oil and gas giant. "A lot of work has been done amongst working practitioners to turn the targets into practical steps that the industry can go and do.

"I wish it would go faster, I wish it were clearer, I wish that everyone was completely aligned, but we live in a real world."

Mather said Shell continues to invest in technologies that will offer "significant" environmental benefits, such as carbon sequestration and more efficient oilsands extraction.

He also told the chamber audience his company has realized real economic benefits by incorporating environmental measures into its daily business, saving millions of dollars each year.

He cited a $500,000 saving last year on three-dimensional seismic programs in B.C. by narrowing cut lines to less than a metre wide, which has meant both lower expenses and less impact on the forests. Creating an intranet website for Shell's retail network sites also saves $550,000 annually in printing and distribution of company correspondence.

At the company's Sarnia refinery, a new heat recovery system has meant savings of $1.5 million per year.

In addition, Mather said, "we envisage a steady transition to renewable energy sources like wind, solar and ethanol from waste straw," but added that tax incentives and federal policies would determine how quickly that happens.

By making genuine commitments to sustainable development - and not just "greenwash" (environmental projects that lack substance) - Shell also sees advantages in attracting and retaining the "top talent" it needs to run its business properly, he added.

"Sustainable development increasingly matters more to graduates."

Mather also stressed addressing stakeholder concerns on environmental issues, particularly with First Nations communities, as a vital part of pulling off a sustainable project. This is something Shell excelled at with its Athabasca Oil Sands Project, he added.

One area where dialogue with First Nations has bogged down, however, is the Mackenzie Gas Project, in which Shell has a stake.

The CEO told reporters Shell is committed to the project and that the current impasse - which has Aboriginal groups in the N.W.T. located along the pipeline route demanding compensation agreements be reached before the project goes ahead - can be overcome, but called on the federal government to step in.

"Mackenzie Delta for us is a very, very important project and we are committed to doing it," he said.

"But what we want to see is some unblocking of the regulatory processes so we can actually get this thing started again," he said, adding that Ottawa has assured the pipeline consortium - headed by Imperial Oil Ltd. - that it has "put additional resources on the case."

The group announced in late April it was shutting down its "project execution activities," because private and commercial negotiations between various groups and Aboriginal communities along the pipeline route were totalling into the hundreds of millions of dollars.

Meanwhile, responding to recent comments by Murray Smith, Alberta's representative to Washington, that the Mackenzie project could lose out to a spate of liquid natural gas (LNG) terminals planned to import natural gas from outside North America, Mather said he doesn't see a real threat.

"I don't see LNG as a direct competitor to those northern gas fields; they're very different forms of energy supply.

"They may be the same gas, but the infrastructure requirement is very different and it makes perfect sense from our point of view to have a pipeline which will evacuate (northern gas) through to the markets of southern Alberta and then on to the United States."

- With files from The Canadian Press (John Ludwick can be reached at ludwick@businessedge.ca)