Inside an office overlooking a stand of trees waiting for spring, there is a speckling of Jim Carter’s legacy. Display models of oil sands equipment he helped design, framed magazine conversations he contributed to, medals of our country’s highest honours, and the immaculate pin-striped suit he wears all tell the story of a resolute man.
The oil sands industry has not had it easy. Brandished “dirty” from the beginning by media and visiting Hollywood fame, in more recent years it's also been battered by low oil prices. But Carter’s story of oil sector ingenuity and innovation weave a different tale - one that we rarely hear about.
Raised on a dairy farm on Prince Edward Island with his four siblings, Jim Carter had a love of outdoor life and machinery. He figured at an early age that he would be an engineer, and by 16, left home during the summers to work in Southern Ontario, eventually finding his way to the rugged terrain of Northern Ontario at Noranda’s Geco mine. He began his mining engineering career at Iron Ore Company of Canada (IOC) in Labrador before being appointed mine manager at mine No.9 in Grand Cache, Alberta, at the age of 27.
When Carter first arrived on the scene at Syncrude in 1979, draglines and bucket-wheel reclaimers transported oil sands to the extraction plant via conveyors. They were also moving overburden at the time and putting it into the mined out pit. This mining method was not sustainable over the long term and mobile equipment was considered to be the best alternative for overburdened equipment going forward. The truck and shovel method that had been tested in the oil sands had mixed reviews and faced some controversy, but with Syncrude’s $50-$100 million R&D budget, Carter saw nothing but opportunity.
“My challenge was to find a truck and shovel that wouldn’t get stuck in the sands, and could carry enough volume,” says Carter, explaining the design process that began on his two-week visit to the General Motors Diesel factory in London, Ontario, in the early 1980s. The 170-ton truck with its modified locomotive drive system would be the first of its kind, and would turn out to be a great success. Carter and his team set the target to move 6 million tons of material in the first year. “We blew through that and moved 10,” he says.
Break-through innovations followed, the kind that would change the industry. There was the double-roll crusher technology, the 240- and 400-ton trucks and shovels with their Syncrude-designed undercarriage. Hydro transport was also a huge success, allowing Syncrude to lower the temperature of extraction and separate bitumen from sand while in transit. It also reduced the CO2 emissions produced per barrel, and made mines that were a long distance from the upgrader, such as the Aurora mine, possible.
When Carter took over the position of VP of operations in 1989, however, the cost to make a barrel of oil was around CAD$18. It went to market for anywhere between $17 and $20. “Needless to say, the owners were not charmed,” he recalls, chuckling. “Our executive committe set a target: $12 per barrel operating cost and 12% return by 2000.” Once again, Syncrude blew through the target, producing 74 million barrels of oil a year by 1995, up from 54 million in 1989, all using already existing assets and at a cost that was very close to $12 per barrel and returns that were higher than 12%.
Carter saw the oil sands as something that could change Canada’s economic profile; however, Syncrude needed more than innovation and technology to get ahead. Employees, he believed, were the company’s greatest asset. The executive leadership of the company talked to all the teams about the business, shared the cost of making a barrel of oil and the company strategy. In the early '90s, they developed a vision together that, even after 10 years in retirement, Carter can cite like a preacher does a Sunday morning revelation. “We wanted to engage their hearts and minds, not just their bodies and brawn,” he explains.
Engaging the stakeholders in and around Syncrude’s footprint was also non-negotiable. “[They] were going to be strangers in their own backyard if we didn’t engage them in the process. And by that I mean, enabling the First Nations communities to reap the economic benefits that were going to come out of this major project.”
Syncrude hired people from surrounding communities, but also helped them build their own legacy by giving them the tools to start their own businesses. “It was hard because we ended up growing our own competition,” he explains. “But it was the right thing to do. At the end of the day, the high tide did lift all the boats.” Today, Syncrude is one of the largest employers of aboriginal people in the private sector, doing around $250 million/year in business with them. “Combined with other oil sands players, it’s probably close to a billion,” he says. “It is a tremendous success story - and an untold one, quite frankly.”
Such foresight also trickled into his “extracurricular activities,” which, over the course of his 28 years at Syncrude, could account for a career or two on their own. In the early '90s, he founded the Mining Industry Advisory Committee to save the School of Mining and Petroleum Engineering at the University of Alberta from being shut down for lack of funding. The program is now one of the most successful post-secondary mining programs in the world.
In the past, Carter has described the oil sands as an economic locomotive for Canada. And he would know. Because of the oil sands, oil is one of our country’s largest exports. Even so, Carter is concerned for Canada. “As the third largest crude oil reserve in the world, behind Saudi Arabia and Venezuela, we don’t have the available capital to produce it ourselves. We have to be careful not to send the signal to capital markets that we are not a good place to invest, and right now, that is happening.”
“As the third largest crude oil reserve in the world, behind Saudi Arabia and Venezuela, we don’t have the available capital to produce it ourselves. We have to be careful not to send the signal to capital markets that we are not a good place to invest, and right now, that is happening.”
No question, building a career in the oil sector is not for the thinned-skinned. Carter recalls the many times in the space of his career that oil dipped to $10 a barrel. “We were always figuring out ways to make cuts and still run our business successfully. My advice has always been to never stop re-calibrating your spending. You’ll be surprised what you come up with.”
"My advice has always been to never stop re-calibrating your spending. You’ll be surprised what you come up with."
He also advises executives to win the hearts and minds of employees. “If you treat them properly and give them the knowledge, it goes a long way.” Extensive operations experience was also key to his success. By the time he became Syncrude’s president and COO in 1997, a position he shared with his good friend, then chair and CEO, Eric Newell, he had experienced everything that could happen in the business in some shape or form. “I really like working with machinery and people, and combined, that is what the oil sands are all about.”
Today, Syncrude moves approximately 1.5 million tons of material every 24 hours, processes 350,000 barrels of oil a day and generates enough power to keep the lights on in Edmonton. Although he is “retired”, Carter keeps the schedule of a spry careerist in his prime, sitting on five corporate boards, including for Finning International, ATB and Irving Oil. “In the 28 years I was at Syncrude, we never shut down or missed an hour of production as a total facility, and I am very proud of that fact,” he said. “It’s been a tremendous career for me, helping to turn an R&D curiosity into a Canadian success story.”