Feb. 5, 2020

Culture of innovation needed to meet ‘existential threat’ to oilsands

Expert says Alberta of next 50 years will go beyond practices of previous half century

Sparking new ideas from a vibrant culture of innovation is vital to ensuring oilsands and heavy oil production continues in Alberta, said a University of Calgary researcher.

“If we do not find a clean way, or a cleaner way, to produce bitumen, and then start to look at the end use of bitumen, if we don’t find this, there is an existential threat here with respect to the oilsands industry,” said Dr. Ian Gates, PhD, who is the director of the university’s $75-million Global Research Initiative (GRI) in Sustainable Low Carbon Unconventional Resources.

“I would argue that no matter what on this planet, we need heavy oil, we definitely do — but do we need Alberta’s heavy oil?”

As the featured speaker at the recent Enbridge Research in Action luncheon, which was hosted at the Westin Hotel in Calgary by the university’s Haskayne School of Business, Gates talked about how factors such as fear of change or taking risks can inhibit innovation.

About 140 people ranging from oil company executives to academics attended the event, which was moderated by Dr. Terry Ross, PhD, director of Strategic Centre Initiatives at Haskayne.

'No bitumen —  no oilsands'

Gates gave much credit to the industry’s ongoing efforts to lower carbon emissions from oil production, noting that levels had been cut by as much as 30 per cent for steam-assisted gravity drainage (SAGD) alone. The process enhances recovery from heavy oil deposits, as well as bitumen from oilsands.

However, a recent glance at daily news coverage about climate change shows that such progress is being drowned out by growing demands to speed the transition to low-carbon energy, and “for some folks, that essentially means no bitumen — no oilsands,” said Gates.

“This is not really the answer to what we need to do ... what we have here is an immense resource and we have to start thinking about how do we use it — how do we optimize it in a world where investment and other dollars are saying essentially: ‘We don’t want to be invested in those types of operations and businesses.' ”

Alberta’s oil industry has been the driver of much of the province’s wealth for many decades, said Gates. But when he asked the audience if they believed the practices of the past 50 years would continue into the next 50, no one put up their hand.

Professor co-founds companies

“We are not going to be the Alberta of the ’60s, ’70s, ’80s, ’90s and 2000s … or 2010s,” said Gates, who is also a professor in the department of chemical and petroleum engineering at the university’s Schulich School of Engineering. “We’re going to go beyond that, and that’s where I would put all the investment opportunities.”

Gates co-founded Proton Technologies, an Alberta company that is field testing the commercial production of hydrogen gas directly from heavy oil and oilsands deposits while leaving the carbon in the ground.

Hydrogen is seen as a green fuel for potentially everything from powering cars to heating homes because its emissions only consist of water vapour. Proton’s process is expected to produce about 18 gigajoules of energy per gigajoule invested, said Gates.

He also co-founded Solideum, an Alberta company that is field testing a way to better transport bitumen by turning it into dry pellets. The new method of railway shipment promises to substantially cut both carbon emissions and costs while improving safety.

Besides being turned into oil, the pellets could be a source of everything from carbon fibres to asphalt for roads, potentially creating new markets for Alberta’s oilsands industry, said Gates.

Trust seen as vital

It is vital that Alberta instead nourishes a collective culture of innovation that will carry it into the future, he said, adding that creating an environment that promotes creative and bold new ideas involves more than simply boosting the amount of research dollars.

Initial research at Solideum included combining a repurposed toaster oven that cost about $60 with a pizza oven to make the bitumen pellets, he said. “The thing is that money isn’t really the key here. It’s truly about the idea, the concept, and the testing of that as you go forward, and that we need to reinforce those activities and that thinking in our organization.”

Describing himself as fiercely loyal to Alberta, Gates wants investors that are about “building Alberta, and Alberta strong,” he said. “We need to build this collective from the individual/family/group/company/industry association, and our government, to essentially move things beyond — and there has to be positive action, there has to be open communication, and there has to be trust.”

Each group is responsible for carrying the message forward about the industry’s achievements, including the provincial government’s $30-million Canadian Energy Centre, which has its work cut out for it.

The next Enbridge Research in Action event on Feb. 26 will explore the topic of how companies can best communicate their sustainability initiatives and how that can affect the ability to attract and retain talent.