Ask a Canadian about cleantech and he or she will probably describe a company building wind and solar power generation or building electric vehicles, something like that.
In fact, most cleantech companies, at least those headquartered in Alberta and British Columbia, serve the natural resources industry, particularly oil and gas production.
According to Alberta Innovates, cleantech is any process, product, or service that lowers environmental impacts or energy-intensity below the industry standard. Stewart Muir, executive director of British Columbia-based Resource Works, said the term cleantech has been twisted by anti-fossil fuel activists.
“This idea that oil and gas is a dead end and not innovative, whereas solar and wind and other clean energy technologies are the future of innovation, is actually the opposite of what we see in the real world,” Muir said. “The greatest capital, the greatest blood, sweat and tears going into innovation in Canada is actually going into oil and gas.”
Joy Romero is the vice president of technology and innovation for Canadian Natural Resources Ltd. (NYSE: CNQ), one of Canada’s largest oil and gas producers and a big player in the Alberta oil sands. Romero is an experienced engineer who sits on a variety of boards and advisory committees of organizations set up to foster innovation, including cleantech, in the energy industry.
When Romero talks about innovation, people sit up and take notice. “People are innovation machines. The job of my department is [to] facilitate them [to bring] forward ideas on through to adoption [by the company],” Romero said. “If my CEO [Steve Laut] was here he would tell you that technology and innovation are the drivers for our company’s success.”
How does Romero define success in the cleantech space? She said that the principal yardstick is reducing CNQ’s carbon footprint. But lowering greenhouse gas (GHG) emissions has to make economic sense, too.
“If we can use fewer materials, use less energy or capture that energy and reuse it or capture waste and turn it into a valuable product, then we succeed,” she said.
As an example, she pointed to CNQ’s efforts to capture carbon from production at an oil-sands mine, and then pump it into tailings ponds where it bonds with the particles and helps separate oil from sand.
“When you put CO2 in water, it actually becomes an acid, changes the PH of the water that we use in our process. It works kind of like shampoo on your hair, becomes a little bit basic, removes the dirt,” she said. “Same thing but now the fines are removed and able to settle in a tailings pond.”
Romero is describing cleantech on a large corporate scale, but the real action is with startups, as well as established small and medium-sized companies that are pushing the cleantech technology boundaries. Some of them are officed in the Foresight Cleantech Accelerator Centre in British Columbia that is run by Neil Huff, a chemical engineer with over 30 years’ experience that ranges from General Electric (NYSE: GE) to five years as CEO of Ballard Power Systems Inc.’s (NASDAQ: BLDP) lithium battery division.
Huff said innovation is now a more structured process. Instead of an inventor coming up with a new widget, then trying to find applications—and buyers—for the product, industry now identifies a real world problem and works with an ecosystem of organizations—industry associations, universities, and specialized support groups like his accelerator—to find technology solutions.
“The whole idea of this program is to connect resource industry problems with innovators so that we're providing real solutions to real problems. And generating commercialization as a result of that,” Huff said.
For example, Foresight and Canada’s Oil Sands Innovation Alliance recently launched a $1 million competition to find technologies that remove carbon from natural gas because the Alberta oil sands uses over 700 million gigajoules of natural gas a year and operators are aggressively adopting new technologies to lower emissions.
“Supplying oil sands operators with a carbon-lean fuel source will significantly reduce GHG and ensure they are operating more efficiently and sustainably,” Huff said.
As provinces and the Canadian government bring in new standards to lower emissions, policy is certainly a key driver of cleantech innovation, he added, but industry is on board with the strategy. Oil and gas producers understand that lowering GHG emissions also lowers costs.
CNQ, for instance, removes carbon from its boilers, which it provides to a third party that creates sodium bicarbonate, an ingredient in soap, glass, and pharmaceuticals.
“That is really cool because taking something that’s waste and turning it into a valuable product, into everyday things that can fit into your home or my home or into a business. That's important for us,” she said.
Muir is on a mission to change how the Canadian public perceives cleantech. He argued that industry efforts to lower GHG emissions and improve environmental performance using cleantech solutions aren’t well understood outside the energy industry, but it should be.
His organization recently held a one-day symposium to get the word out about the importance of cleantech—or “restech” as he likes to call it—and Resource Works will be organizing more events in the coming year.
“It’s a phenomenon through all of human history that innovation affects all of things we do, and that includes oil and gas,” he said.
Devon Energy had been actively shopping the Permian Basin assets, and others in the Rockies, the past several months.
Oil major Exxon Mobil said Jan. 31 it would create three new separate E&P companies, effective April 1, in an effort to double its profit by 2025.
A big crowd turned out for an afternoon honoring industry leaders representing all facets of the energy sector.