Oil Sands Resolution

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					                                  ExxonMobil Shareholder Proposal:

                                        Oil Sands Resolution
         ExxonMobil Corporation      Symbol: XOM      Lead filer: Green Century Capital Management

Northern Alberta harbors more than 175 billion barrels of oil in underground deposits known as the “tar
sands” or the “oil sands,” one of the largest oil reserves in the world.1 Currently, and for the foreseeable
future, infrastructure limitations mean that the United States is the only viable export market for oil
sands output.

Tar sands oil extraction was deemed “the most destructive project on Earth” in a February 2008 report
of the same name.2 Mining, upgrading and refining bitumen from oil sands is “one of the most
environmentally costly sources of transport fuel in the world”3 -- highly resource intensive and
environmentally damaging, requiring the draining of wetlands, diversion of rivers, creation of massive
toxic tailing ponds, and the removal of trees and vegetation.4 On top of the impacts on air quality, water
quality, wildlife, and ecosystems, oil sands are also incredibly energy intensive5, and their development
and expansion will mean a significant increase in GHG emissions.6

Despite a brief slow-down in 2008 and 2009, development of the oil sands continues to grow. Public
opposition and awareness of environmental and other risks associated with the oil sands also continue
to increase, as significant reports published in the last year highlight the oil sands’ environmental
damages and economic weaknesses. Oil sands development was held up as a key obstacle to progress in
the high-profile Copenhagen (COP15) negotiations, leading to a tarnished reputation for Canada and
growing global opposition to the oil sands.

ExxonMobil has dramatically increased investments in the oil sands over recent years through its stake
in Imperial Oil and through ExxonMobil Canada. At the end of 2009, ExxonMobil’s total proved reserves
in the oil sands were over 2.7 billion barrels- nearly 12% of the company’s total proved reserves. Despite
the company’s significant presence in the oil sands, ExxonMobil has little to no disclosure on the risks
associated with the environmental, social and economic challenges that accompany oil sands

Shareholders are being asked to vote FOR a report discussing possible long term risks to the
company’s finances and operations posed by the environmental, social and economic
challenges associated with the oil sands.

    1. ExxonMobil’s considerable investments in the oil sands expose the company to significant
       financial and regulatory risks. There is significant potential for future carbon regulation, oil price
       volatility, water scarcity, reclamation costs, as well as the legal and reputational risks arising
       from local environmental damage and impairment of traditional livelihoods to impact the long-
       term economics of these projects and the value of our company.

    2. ExxonMobil’s shareholders may bear significant financial risk from legal challenges to oil sands
       development. A favorable ruling for the Beaver Lake Cree against the Canadian government

        could lead to a shut-down or delay of oil sands projects. Over 1,500 of ExxonMobil’s oil sands
        project permits are listed in the Beaver Lake Cree case and could be directly impacted by a

    3. ExxonMobil is exposed to significant risk from economic challenges associated with oil sands
       development. Oil price volatility and other market forces could render the company’s capital-
       intensive oil sands projects uneconomic, as happened to many projects in 2008. Increased labor
       and material costs due to rapid development could lead to decreased economic viability of oil
       sands projects.

    4. ExxonMobil’s disclosure on this issue is insufficient. The company fails to demonstrate that it
       recognizes oil sands-related risks and is taking action to mitigate potential harm.

ExxonMobil has significant investments in the oil sands

ExxonMobil is heavily involved in the oil sands, both through its ownership of Imperial Oil and through
its own investments in oil sands projects. ExxonMobil has significant stakes in both mining and “in-situ”
projects, which require deep drilling and steam injection to extract bitumen from the oil sands.

ExxonMobil owns 69.6% of Imperial Oil with an investment value of $21.6BN. Imperial is one of Canada’s
largest oil companies and a major presence in the Alberta oil sands. Imperial owns and operates the
Cold Lake project, an “in-situ” development that produces an average of 123,800 bbl/d. Imperial is also
the 70% owner of the new Kearl oil sands mining project.

Imperial owns 25% and is the de facto operator of Syncrude, which currently has the capacity to
produce 375,000 barrels of synthetic crude oil per day from the tar sands. Imperial’s stake in Syncrude
represents 734 million barrels of crude per year. Syncrude recently announced plans to expand synthetic
crude production capacity to 425,000 bbl/d and raw bitumen production capacity to 600,000 bbl/d by
2020.7 ExxonMobil will supervise the expansion from the project management side. ExxonMobil includes
reserves from both Cold Lake and Syncrude on its balance sheet in its FY2009 10-K.

ExxonMobil has its own investments in the oil sands through ExxonMobil Canada. ExxonMobil Canada
owns a 30% stake in the Kearl oil sands project, the aforementioned mining project that is 70% owned
by Imperial Oil. ExxonMobil estimates that Kearl will produce 110,000 bbl/d by 2012. ExxonMobil
Canada also purchased significant oil sands leases in 2009 from UTS Energy.

The company has made significant investments in the development of the oil sands and clearly intends
to further expand its operations. As a result, ExxonMobil is exposed to substantial risks associated with
its current and future operations, particularly in relation to the environmental impacts of these projects,
but has failed to demonstrate it is adequately addressing its existing or future liabilities.


According to a recent Goldman Sachs report, “Oil sands projects face significant environmental
challenges… *which+ present material risks to project viability and returns potential.”8 Following is a

detailed analysis of several key risks faced by ExxonMobil in relation to the environmental impact of its
expanding oil sands operations, including regulatory, litigation, physical and reputational threats.

Water: Oil sands mining, such as will be done at ExxonMobil’s planned Kearl project and is done at
Syncrude’s operations, is water-intensive: taking into account recycling, up to four barrels of water are
used to extract and upgrade one barrel of synthetic crude oil.9 Water scarcity, particularly in the
Athabasca River Basin where most projects are located, and water pollution are significant concerns for
oil sands operators, and can present regulatory and physical risks for companies.

Risks related to water and oil sands development include:

        REGULATORY: In February 2010, the Cumulative Environmental Management Association
        (CEMA), a coalition of government, non-profit organizations, industry, First Nations, and others
        dealing with oil sands issues, released a Phase 2 Water Management framework for the oil
        sands.10 The new framework includes recommendations to manage oil sands mining water
        withdrawals; and highlights the need to limit industrial water withdrawals from the Athabasca
        during winter low flow conditions. The framework recommends enforcement of a reduction in
        mine operators’ allowable water withdrawals from the Athabasca River from the currently
        allowed 8 m(3)/s to a proposed 4.4 m(3)/s during low flow conditions, along with additional
        monitoring and research. The Phase 2 Water Management framework is not a final or
        enforceable document at the time of this memo drafting, but after public consultations during
        2010, regulators will incorporate input and modify the framework into a set of rules to be
        implemented in 2011.11 Depending on the final water management rules, this new guidance
        could have significant implications for oil sands companies that heavily rely on water
        withdrawals to operate.

        REGULATORY: In situ net water use averages around one barrel of water per barrel of bitumen,
        less than mining projects, but in-situ projects such as Imperial’s Cold Lake face new regulations
        on water use. In February 2009, Alberta’s Energy Resource Conservation Board released draft
        regulations containing tougher restrictions on water usage for operators of in-situ oil sands
        operators, which also require improved measurements and formal reporting. The agency’s
        manager told the Edmonton Journal that companies will have to compete for water and disposal
        space in the future. Also in February, the Pembina Institute, an environmental think tank with
        extensive expertise on the oil sands, recommended charging for water used by the energy
        sector. 12

        PHYSICAL: Between 1970 and 2005, the Athabasca saw its average summer flow decline by 29
        percent, and climate scientists predict that average flow could decline by 24-68 percent by the
        end of this century.13 According to documentation from Petroleum Technology Alliance of
        Canada referring specifically to the oil sands, “Water, quantity and quality, will likely be the
        environmental issue of the century. Even climate change concerns are motivated more by issues
        of fresh water quality and distribution than other factors. Rapidly growing demands for water,
        where data is limited due to reduced government supported data gathering in the last 20-40
        years, will drive and limit development in increased recovery…”14

Land: Oil sands mining is an environmentally-damaging practice, requiring clear-cutting, strip-mining
and the generation of massive toxic lakes that are visible from space. In-situ projects, while not as visibly
destructive, also cause significant land disruption to allow for the maze of pipelines and wells required

to extract the bitumen. All oil sands operators are required by law to provide a closure plan that will
ensure a restoration of project land area to “equivalent land capability.”15

Reclamation, however, is very difficult for oil sands projects. Only 0.2% of land disturbed for oil sands
development, or 1.04 kilometers, has been certified as reclaimed by the government.16 One reason for
this difficulty is that much of the original land upon which oil sands were developed consisted of
wetlands, which are nearly impossible to recreate. As of the writing of this memo, no technologies or
methods have been developed to accurately reclaim wetlands after oil sands development.17 While
exact reclamation costs are not known due to lack of disclosure by industry, it is widely understood that
it is a very expensive process.

Risks related to land and oil sands development include:

        REGULATORY: In February 2009, the Alberta Energy and Resources Conservation Board (ERCB)
        released new rules to regulate the reclamation of tailings, Directive 074: Tailings Performance
        Criteria and Requirements for Oil Sands Mining Schemes, which forces companies to reduce
        tailings by 50% by June 13, 2013 and requires tailings to achieve a certain level of trafficability
        before reclamation.18 Oil sands operators are required to submit their first compliance reports
        for Directive 074 by September 30, 2011, and then annually thereafter. Failure to comply with
        the Directive could lead to a variety of enforced penalties, including a possible suspension of
        company projects.

        EXXONMOBIL-SPECIFIC: The Pembina Institute reports that of the nine projects that submitted
        tailings management plans in accordance with the Directive, only two will actually achieve
        compliance.19 ExxonMobil and Imperial submitted a tailings management plan for Kearl that
        does not comply with Directive 074 in either fine particle capture requirements or in
        trafficability (weight-bearing) requirements. While it is still unclear how ERCB will enforce
        Directive 074, the agency has the right to enforce suspension of the project under Directive 019:
        ERCB Compliance Assurance—Enforcement.

        FINANCIAL: A recent RiskMetrics report on tailings costs notes that reclamation costs could
        range from CAD$15 to CAD$50/ton for existing solid tailings, especially if reclamation processes
        such as bioremediation are deemed necessary for full reclamation.20 According to RiskMetrics,
        operating costs could increase CAD$1.25 to CAD$4.17-per-cubic-meter (or CAD$1.46 to
        CAD$4.86-per-ton) if progressive reclamation and/or recycling is required. The operating cost
        increase could range from CAD$1.21 to CAD$4.05 per barrel of production.

        EXXONMOBIL-SPECIFIC: According to the Riskmetrics report, Imperial Oil could see an increase
        of 6 percent to 17 percent in its balance-sheet leverage due to higher remediation costs for
        existing tailings at Syncrude operations.21 The report also specifically points out ExxonMobil as
        70% owner of Imperial and notes estimated figures for cost increases for that company as a
        result of its ownership of Imperial.

        LITIGATION: In April 2008, the toxicity of the tailing ponds drew worldwide attention when 500
        migrating ducks became fatally mired in a Syncrude tailing pond. The provincial and federal
        governments have served Syncrude joint charges under the Migratory Birds Convention Act and
        the Alberta Environmental Protection and Enhancement Act. The company has pleaded not
        guilty to federal and provincial charges and is scheduled to go to trial in March 2010. If
        convicted, executives may be sent to jail for a maximum of six months and the company may

        face fines up to $800,000.22 The high media profile of this case also presents potential
        reputational damage. ExxonMobil has particular exposure to this risk due to Imperial’s
        ownership and operation of Syncrude.

Air: While the significant greenhouse gas (GHG) emission profiles of oil sands projects present serious
risks, the oil sands are also more polluting than conventional oil in non-GHG emissions. Producing one
barrel of bitumen creates more than twice as much nitrogen oxides (NOx) and sulphur dioxide (SOx)
emissions as producing one barrel of conventional oil.23 Furthermore, a recent report from the
University of Alberta discovered that oil sands projects have led to toxic concentrations of Polycyclic
Aromatic Compounds (PACs), a group of organic contaminants containing several known carcinogens,
mutagens, and teratogens.24 It is expected that air pollution will grow as oil sands expansion occurs –
NOx emissions intensity from the oil sands could increase to 31% of Alberta’s total emissions, and SOx
emissions could grow to 92% of Alberta’s total emissions.25

Risks related to air and oil sands development include:

        REGULATORY: Canada has recently announced a new national strategic plan to reduce air
        pollution by up to 55% by 2012.26 The plan sets national caps for industrial emissions of four air
        pollutants commonly associated with smog and acid rain and emitted by oil sands projects,
        including NOx, SOx, volatile organic compounds, and particulate matter. Companies operating in
        the oil sands that exceed the caps on pollutants under the new regulations will need to expend
        capital to either improve the operations of their projects, purchase new technology to control
        emissions, or purchase credits for the NOx or SOx targets that they have not yet met.

        REGULATORY: The oil sands are more GHG-intensive to extract than conventional oil. Average
        greenhouse gas emissions for oil sands extraction and upgrading are estimated to be 3.2 to 4.5
        times as intensive per barrel as for conventional crude oil produced in Canada or the United
        States.27 Governments in both Canada and the United States are moving towards enacting
        legislation or regulations that would limit GHG emissions and could have a material financial
        impact on oil sands producers. Canada has pledged to reduce GHG 17% by 2020 below the 2005
        baseline.28 The Canadian regulatory framework includes GHG intensity-based (emissions per unit
        of output) targets for the oil & gas industry, which must reduce carbon intensity by 18% on 2006
        levels by 2010, and by a subsequent 2% per year.29 At the federal level in the United States,
        climate legislation has passed through the House and is currently in the Senate. The U.S.
        Environmental Protection Agency (EPA) will begin to regulate GHG emissions, beginning with the
        largest polluters such as power plants and refineries. Given the significant GHG emissions
        resulting from refine tar sands oil refining, both EPA regulation and pending climate legislation
        could have an impact on tar sands imports into the U.S. Furthermore, states and regions in the
        U.S. are beginning to develop Low Carbon Fuel Standards (LCFS) that could effectively ban tar
        sands oil from entering certain regions of the country.30

        REPUTATIONAL: According to the Canada West Foundation, in the six-month period from June
        through December 2009, Canadian articles focusing on the negative environmental impacts of
        the oil sands outnumbered positive stories by at least 4:1 and web media stories with a similar
        focus dwarfed positive environmental stories by at least 8:1. The ratio was even more lopsided
        during a wave of oil sands activism that occurred at the time of the COP15 talks in Copenhagen
        in December.31

        REPUTATIONAL: According to oil sands activist Michael Marx, at least 50 groups in the US and
        Canada are organized to fight the expansion of the oil sands and advocate for greener
        operations. A campaign by Forest Ethics to organize a corporate consumer backlash began to
        bear fruit in February, when Whole Foods Markets and Bed Bath & Beyond announced that they
        would seek alternatives to oil sands transportation fuels.32


The First Nations, the Aboriginal peoples of Canada, hold rights based in the Canadian Constitution that
are at least equal to, and may exceed, those of ordinary Canadian citizens.33 The First Nations occupy
lands in and around the oil sands development regions of northern Alberta. They are given preferential
treatment and the authority to self-govern, which means they are key players in development projects
that affect them. Beyond the very straightforward issues brought to the foreground when projects,
pipelines or roads cross their land, other issues pertaining to the externalities associated primarily with
effects on wildlife and public health can serve as obstacles to oil sands development.

First Nations are starting to speak out collectively with the message that development is occurring too
fast. They are calling for new development to be halted in order to grant them time to figure out how to
deal with existing impacts, and to plan for any future developments.

In March 2008, the Beaver Lake Cree Nation filed suit against Alberta, calling for an injunction to block
more than 16,000 permits related to oil sands development. The Cree say that the development is
destroying their hunting and fishing lands. In February 2009, the Co-operative Bank (UK) announced that
it would provide CAD $90,000 to fund evidence-gathering for the case, and has since provided at least
another CAD $100,000 to support the lawsuit.34

        EXXONMOBIL-SPECIFIC: The Beaver Lake Cree lawsuit is particularly relevant for ExxonMobil
        because over 1,500 of the company’s project sites (including Imperial Oil projects) are listed in
        the case as in Beaver Lake Cree territory that would be directly impacted by a decision.35

        REGULATORY: According to the Canadian Boreal Initiative (CBI), the resolution of this case will
        have tremendous impacts in shaping how the government discharges its obligations to consult
        and accommodate First Nations under the constitution.36 The level of engagement required is
        linked to the level of the impacts. There is always a duty to consult at a minimum, but there is
        also a requirement to accommodate affected First Nations. This duty, which increase with
        increasing impacts, falls on a spectrum, ranging from ‘consulting to inform’ at the low end, to
        outright consent at the high end. Because of the significant impacts they create, major oil sands
        projects are likely to trend towards the high end of this spectrum.

        FINANCIAL: Many legal opinions hold that the Government of Alberta has not been meeting the
        standards to consult and accommodate First Nations as required by legal precedent, according
        to the CBI. If these opinions are confirmed by the courts in present and future litigation,
        companies with permits granted by the Alberta province may find them nullified by this lack of
        consultation. If the courts place an absolute limit on infringement of First Nations rights (the
        remedy sought in the Beaver Lake case), then the province’s decision-making processes will take
        considerably more time.

        OPERATIONAL: Enbridge Gateway Pipelines Inc.’s proposed pipeline from Alberta’s oil sands to a
        deep sea port on the coast of British Columbia has been delayed in part by challenges from
        indigenous groups related to their title to the land and environmental assessments.37 Pipelines
        such as this one are key to bringing oil sands product to market, but their development faces
        serious challenges, including legal risk from the many First Nations who live in territory crossed
        by the pipeline.

    ExxonMobil provides no information on its ability to withstand the significant changes that could be
    imposed by a favorable ruling for the Beaver Lake Cree or potential financial impacts the decision
    could have on the company or its operations.


Due to its carbon-intensive products and long capital horizons, the oil sands sector is uniquely exposed
to economic, competitive, and regulatory risks resulting from oil price volatility and other related market
forces. A typical oil sands project in Alberta involves billions of dollars of capital investment, has an
operations workforce of over a thousand people and a lifespan of over 50 years.38

        FINANCIAL: Before the price of oil plunged in 2008, the oil sands were the world’s largest
        industrial project. Companies had planned to spend as much as $125 billion to expand
        operations toward the goal of tripling oil production over the next 10 to 15 years.39 However,
        the oil sands are the most expensive source of oil in the world, and as a result are uniquely
        vulnerable to low oil prices. Between oil’s price drop in July 2008 and June 2009, 85% of
        deferred or cancelled non-OPEC production capacity was located in the oil sands.40 Overall
        spending was cut in half during this period, which Canada’s federal Environment Minister Jim
        Prentice dubbed a “de facto moratorium.”41

        FINANCIAL: There is only a small price window at which oil sands projects are recognized to be
        economically viable. Financial analysts and industry players including Goldman Sachs and Total
        have said that oil sands projects require long-term prices in excess of $80/barrel to break even.42
        Given the long capital horizons involved in the oil sands, oil prices need to remain consistently
        high for decades in order for projects to earn a return. Deutsche Bank and BP, among others,
        have raised doubts recently about the long-term oil demand and have predicted that global
        demand will peak in the next 10-20 years.43 ExxonMobil shareholders could see significant
        capital assets stranded if long-term prices and price volatility render its projects uneconomic.

        FINANCIAL: Due to the oil sands’ remote location, labor and material costs can skyrocket when
        rapid development of the oil sands demands more than supply allows. According to a report
        published by Wood MacKenzie in March 2008, during the oil sands development boon in 2006
        costs skyrocketed for mining producers an average of 32% and for in-situ producers an average
        of 26%.44 The combination of oil price volatility, high up-front capital expenditure, and increased
        labor and material costs in the Alberta oil sands presents significant economic and financial risk.

ExxonMobil does not disclose any information about risks specific to its increased investments in “heavy
oil” (oil sands, also shale oil) projects. Shareholders believe it is critical for ExxonMobil to disclose
possible economic risks associated with its significant investments in the oil sands.


ExxonMobil is a clear laggard in disclosing risks related to its oil sands investments and operations. The
company has not provided investors with sufficient information to enable them to determine whether
the company recognizes and is properly managing the risks associated with oil sands development.

ExxonMobil’s website contains brief information devoted to the oil sands that deals only with specific
initiatives the company is taking to lower its environmental footprint. This information can be found in
the “Environmental Performance” section of the company’s Corporate Citizenship Report.45 ExxonMobil
does not disclose any information about risks associated with the oil sands in its SEC filings or in any
other public documents.

In comparison, other companies disclose significantly more information about risks and risk mitigation
activities in the oil sands. Imperial’s 2008 Annual Report mentions one regulatory risk related to the
2007 US Energy Independence and Security Act and potential impacts on the company’s ability to
market oil sands product in the United States.46 Shareholders believe Exxon should incorporate at
minimum this risk into its own public documents, and should join industry leaders in disclosing critical
risks associated with oil sands development.

Suncor and Nexen are two leaders in disclosure of oil sands risks.
           o Disclosure on regulatory risks associated with oil sands
                   “Some of the issues that are, or may in the future be, subject to environmental
                      regulation include: the possible cumulative regional impacts of oil sands
                      development; …. Withdrawals, use of, and discharges to, water; issues relating
                      to land reclamation, restoration and wildlife habitat protection; … U.S.
                      implementation of regulation or policy to limit its purchases of oil to oil
                      produced from conventional sources, or U.S. state or federal calculation and
                      regulation of fuel lifecycle carbon content.” (Suncor 2008 Annual Report, p 20)
                   Risk Factors section entitled: “Regulatory Requirements at Oil Sands” (Suncor
                      2008 Annual Report, p 21)
           o Risk Factors section entitled: “Tailings Management” (Suncor 2008 Annual Report, p 21)
           o The level of detail provided under “Asset Retirement Obligations,” paragraph 4 (Suncor
              Annual Report, p 22)
           o Risk Factors section regarding oil sands expansion (Suncor 2008 Annual Report, p 32)

          o     Disclosure on water quality and scarcity risks in the oil sands
                     “Additional costs may be incurred if allocation limits are placed on our water
                        usage, if our water needs exceed allocated amounts or if existing water
                        allocations are reduced.” (Nexen 2009 10-K, p 35)
            o   Discusses risks associated with First Nations lawsuit
                     “Aboriginal peoples have claimed aboriginal title and rights to a substantial
                        portion of western Canada. Certain aboriginal peoples have filed a claim against
                        the Government of Canada, the Province of Alberta, certain governmental
                        entities and the regional municipality of Wood Buffalo (which includes the city
                        of Fort McMurray, Alberta) claiming, among other things, aboriginal title to
                        large areas of lands surrounding Fort McMurray, including the lands on which

                        the project and most of the other oil sands operations in Alberta are located.
                        Such claims, if successful, could have a significant adverse effect on the Long
                        Lake Project and on us.” (Nexen 2009 10-K, p 33)
            o   Risk Factors section entitled “Our heavy oil production is more expensive and yields
                lower prices than light oil and gas” (Nexen 2009 10-K, p 30)
                     “Heavy oil is characterized by high specific gravity or weight and high viscosity
                        or resistance to flow. Because of these features, heavy oil is more difficult and
                        expensive to extract, transport and refine than other types of oil. Heavy oil also
                        yields a lower price relative to light oil and gas, as a smaller percentage of high-
                        value petroleum products can be refined from heavy oil. As a result, our heavy
                        oil operations are exposed to the following risks:
                                 additional costs may be incurred to purchase diluent to transport heavy
                                 there could be a shortfall in the supply of diluent which may cause its
                                 price to increase; and
                                 the market for heavy oil is more limited than for light oil making it more
                                 susceptible to supply and demand fundamentals which may cause the
                                 price to decline.
                        Any one or a combination of these factors could cause some of our heavy oil
                        properties to become uneconomic to produce and/or result in negative reserve
            o   Risk Factors section entitled “The Long Lake Project faces additional risks compared to
                conventional oil and gas production” (Nexen 2009 10-K, pp 31-33)

ExxonMobil’s public documents provide no information on the risks associated with the environmental,
social and economic challenges associated with the oil sands as described in this memo and how the
company is prepared or preparing to address them.


Oil sands development clearly carries significant environmental, social and economic challenges.
According to a recent report from Innovest, “When additional costs are considered, such as the
inevitable remediation costs, carbon costs and the potential inflationary costs for materials and labor
that would be imposed by the very oil prices required for profitability, it does not appear that these
projects are economically viable.”48 Furthermore, legal challenges pose significant risks to ExxonMobil
and to the entire oil sands industry.

However, ExxonMobil’s current disclosures do not provide investors with evidence that the company is
aware of these risks and is taking action to mitigate them.

This lack of information in ExxonMobil’s SEC filings, website or other public documents leads
shareholders to request a report discussing possible long term risks to the company’s finances and
operations posed by the environmental, social and economic challenges associated with the oil sands.

  “Oil Sands Facts,” Alberta Energy at
  Environmental Defence, Canada’s Toxic Tar Sands: The Most Destructive Project on Earth, 02/08, available at
  The Oil Sands Report Card, Pembina Institute and World Wildlife Canada, 2007, p. vii.
  James Hansen, director of NASA's Goddard Institute for Space Studies, has written about the impact of oil sands
development on the earth’s natural carbon storage capacities:
          “The tar sands of Canada constitute one of our planet's greatest threats. They are a double-barreled
          threat. First, producing oil from tar sands emits two-to-three times the global warming pollution of
          conventional oil. But the process also diminishes one of the best carbon-reduction tools on the planet:
          Canada's boreal forest. This forest plays a key role in the global carbon equation by serving as a major
          storehouse for terrestrial carbon - indeed, it is believed to store more carbon per hectare than any other
          ecosystem on Earth. When this pristine forest is strip-mined for tar sands development, much of its stored
          carbon is lost.”
The Guardian, February 19, 2009.
  The tar sands use 0.6 billion cubic feet per day of natural gas. In November 2007, Canada’s National Energy Board
released a report warning that "increasing demand [for natural gas] and gradually declining production reduces the
net exports to zero by 2028 [after which] Canada becomes a net gas importer, reliant on LNG (liquified natural gas)
imports." The report goes on to predict that "Canadian natural gas production is expected to decline by almost 40
per cent by the end of 2030." The energy return on investment (EROI) of developing oil from the tar sands is
between 2 to 5:1. Middle Eastern oil has an EROI of roughly 20:1. (“Five steps to success: An analysis of Obama's
energy plan,” University Wire, 2/24/09).
  Presently, tar sands oil extraction pumps 29.5 million tons of GHG into the atmosphere every year, or 12 per cent
of Alberta’s total greenhouse emissions and five percent of Canada’s emissions. (
  “Syncrude to Expand Production Capacity 60% by 2020,” Wall Street Journal, 2/24/10.
  “Canadian oil sands fieldtrip 2009: Key takeaways,” Goldman Sachs GS Sustain, 11/19/2009.
  Lines in the Sands: Oil Sands Sector Benchmarking, Northwest and Ethical Investments, November 2009.
   “No Consensus on Water Withdrawal Recommendations for the Lower Athabasca,” World Wildlife Fund (WWF-
Canada) press release, 2/5/2010.
   “Oilpatch to see new rules on water use -- Proposal calls for lower consumption,” The Edmonton Journal,
February 18, 2009.
   University of Alberta, “Running Out of Steam: Oil Sands Development and Water Use in the Athabasca-
Watershed: Science and Market Based Solutions,” Environmental Research & Studies Center, May 2007.
   Petroleum Technology Alliance of Canada, “2006 09 26 (DRAFT) PTAC/EnergyINet Viscous Oil Recovery Steering
committee (VORSC),”
   Government of Alberta, “Alberta’s Oil Sands: Facts and Stats,”
17                                                                                                  nd
   Alberta Environment, “Guideline for Wetland Establishment on Reclaimed Oil Sands Leases” (2 edition),
prepared by M. L. Harris of Lorax Environmental for the Wetlands and Aquatics Subgroup of the Reclamation
Working Group of the Cumulative Environmental Management Association (Fort McMurray, AB: December 2007),
   ERCB, "Directive 074: Tailings Performance Criteria and Requirements for Oil Sands Mining Schemes," (2009),
   Sustainability Solutions and CFRA – Joint Report: OIL AND GAS, Tailings Pond Remediation Costs Understated,
RiskMetrics Group, 12/21/09.
   Sustainability Solutions and CFRA – Joint Report: OIL AND GAS, Tailings Pond Remediation Costs Understated,
RiskMetrics Group, 12/21/09.

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   “Oilsands firm charged over duck deaths,” The Calgary Herald, 2/9/2009.
   J. Bergerson and D. Keith, “Lifecycle Assessments of Oil Sands Technologies,” Proceedings of the Alberta Energy
Futures Project Workshop, 2006,
   “Untold levels of oil sands pollution on Athabasca River confirmed,” Science Daily, 12/8/09.
   Environment Canada. CAC Emissions Summaries. Criteria Air Contaminants Emission Summaries.
   “Action on climate change and air pollution,” Environment Canada.
   National Energy Technology Laboratory, Development of Baseline Data and Analysis of Life Cycle Greenhouse Gas
Emissions of Petroleum-Based Fuels, DOE/NETL-2009/1346 (November 2008), 12, table 2-4.
   “Canada files emission target with U.N.,” CBC News, 1/30/10.
   “Oil sands project exposure to carbon and energy costs,” Trucost Research Note, July 2008.
   “U.S. carbon rules pose oil sands hurdles,” Globe and Mail, 1/11/10,
   Oil Sands Media Monitoring Project Report, Canada West Foundation, January 20, 2010. The report says:
          “The various groups protesting the oil sands included Greenpeace, satirists the Yes Men,
          members of Canada’s First Nations who were protesting what they saw as health risks
          caused by the oil sands, and the Climate Action Network, a coalition of environmental
          groups that handed out Fossil Awards to countries seen as blocking progress on climate
          change. Canada received several of these awards. Also, 11 members of the European
          Parliament, from countries including France, Finland and the Netherlands, called for
          European businesses to cease their investments in the oil sands.
          But not all criticism of the oil sands came from environmental groups and foreign officials.
          The most widely covered criticism of the oil sands in Copenhagen came from Ontario and
          Quebec. Quebec premier Jean Charest, Ontario Environment Minister John Gerretsen and
          Toronto Mayor David Miller travelled to Copenhagen to speak out against the oil sands,
          claiming to be “embarrassed” by them and speaking out against any Canadian carbon plan
          that would cause their provinces to shoulder extra carbon burden to allow the oil sands to be
          further developed.”
   “Whole Foods, Bed Bath and Beyond Reject Suppliers That Use Oil from Canadian Tar Sands,” FastCompany,
   Section Thirty-Five of the Constitution Act, 1982.
   “U.K. Bank backs oil sands lawsuit,” Edmonton Journal, 7/5/09.
35, pp 21, 110-118, 451-457, 518-
   Presentation by Larry Innes, Executive Director, Canadian Boreal Initiative, 9/11/08.
   “PetroChina walks away from Gateway,” Globe and Mail, 7/12/07.
   The Oil Sands Report Card, Pembina Institute and World Wildlife Canada, 2007, p. 3.
  The figure of $110 billion appears in “Oil sands Mega-Project Scrapes Bottom of Oil Barrel,” Inter Press Service,
7/28/06; $125 billion (Canadian) is cited in Driving It Home: Choosing the Right Path for Fueling North America's
Transportation Future, Natural Resources Defense Council, p. 19.
   International Energy Agency, June 2009. Medium-Term Oil Market Report – 2009 Edition. p.48.
   “Boom and Bust in Alberta,” Globe and Mail, 01/31/09.
   Goldman Sachs, "Canadian oil sands fieldtrip 2009: Key takeaways." November 2009. See also: “The Viability of
Non-Conventional Oil Development,” Innovest Stategic Value Advisors Research Note, March 2009.

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   Deutsche Bank, "The Peak Oil Market: Price Dynamics at the End of the Oil Age," October 2009. See also: “World
oil use to peak at as low as 95 mln bpd-BP,” Reuters, 2/4/10,
   “The Cost of Playing in the Oil Sands,” Wood Mackenzie, March 2008.
   ExxonMobil Corporate Citizenship Report contains the company’s only disclosure on oil sands impacts, without
any mention of risks. (
Pg. 28: “Up close: Developing oil sands responsibly.
          Globally, about 13 percent of the world’s known oil reserves are buried in oil sands—bitumen
          embedded in sand and clay. To help meet the world’s growing energy demand, we are
          developing oil sands reserves in Canada. Where deposits are found near the surface, oil
          extraction operations use open-pit mining, which has a visible impact on the land while in
          operation. We are working to minimize these impacts through concurrent reclamation efforts.
          Our Canadian affiliate, Imperial Oil Limited, is one of several companies funding leading-edge
          reclamation research conducted by the Canadian Oil Sands Network for Research and
          Development. We invest millions of dollars annually to research revegetation, watershed
          management, and improved reclamation materials. Imperial Oil Limited has a 25 percent interest
          in Syncrude, which operates an oil sands project in northern Alberta. Our improved reclamation
          activities make better use of the first few inches of top soil— home to the seeds, roots, and
          nutrients vital to forest health. So far, the project has permanently reclaimed 22 percent of its
          original mining area lease—the largest share in the oil sands industry. In 2008, Syncrude received
          the industry’s first provincial land reclamation certificate for a 104-hectare parcel known as
          Gateway Hill. We have planted 5 million seedlings and are in the process of reclaiming 4500
          hectares. Reclaimed land is being put to productive reuse, including a 4.5-kilometer hiking trail
          and grazing grounds for a herd of 300 bison. Producing and upgrading oil sands consumes more
          energy and water than conventional oil production. According to the Canadian Association of
          Petroleum Producers, full life cycle GHG emissions could be up to 15-percent higher for fuel
          derived from oil sands than for fuel derived from onshore light crude oil. We are focused on
          finding and developing ways to improve both energy and water use efficiency. Imperial Oil is a
          founding sponsor of the Imperial Oil-Alberta Ingenuity Centre for Oil Sands Innovation at the
          University of Alberta, which seeks breakthrough technologies for more energy-efficient
          extraction processes. Imperial Oil has also helped to pioneer state-of-the art water recycling
          techniques through 40 years of technical innovation at our Cold Lake operation.”
   “The U.S. Energy Independence and Security Act of 2007 precludes agencies of the U.S. federal government
from procuring motive fuels from non-conventional petroleum sources that have lifecycle greenhouse gas
emissions greater than equivalent conventional fuel. This may have implications for the company’s marketing in
the United States of some heavy oil and oil sands production, but the impact cannot be determined at this time.”
Imperial Annual Report 2008, pg 33.
   Nexen 10-K, 2008., pp 28-33
   “The Viability of Non-Conventional Oil Development,” Innovest Stategic Value Advisors Research Note, March

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