In a faceless industrial park south of downtown Calgary, our future economy can be found in a blender full of guck.
The lab device, at Imperial Oil’s new research facility, is testing how to pump carbon back into the tailings of an oil-extraction project. Mucky, yes. But if it works, the effort could sharply reduce Canada’s greenhouse gas emissions, and save Imperial $2 billion.
In all the uproar over pipelines, it’s easy to miss what is quietly flowing in Alberta’s oil patch: some of Canada’s biggest investments into research and development.
The oil giants are all investing heavily in projects — often in collaboration with one another — that have the potential to cut costs and cut emissions, as the drive to be globally competitive intensifies.
Suncor is leading the pack, increasing its R&D spending by 75% to $350 million last year. Canadian Natural is right behind it, at $345 million. This puts them high on the list of Canada’s Top 100 Corporate R&D spenders, just ahead of BlackBerry, and with nearly double the R&D spending of Shopify — companies with innovation built into their DNA.
Even by international standards, the top three Canadian oil and gas companies are spending more on R&D as a percentage of market cap than their top three American counterparts.
When you visit the oil patch today, it’s not just dozers and drills. A satellite named “Claire” orbits above measuring GHG emissions, and researchers in labs are experimenting with making biofuel out of algae.
Quest, based outside of Edmonton, is the world’s first commercial-scale carbon capture and storage project. It’s capturing greenhouse gases and sending them deep underground, instead of into the atmosphere. The aim is to capture 2.7 million tonnes every year — the equivalent of removing 570,000 passenger vehicles off the road annually.
In 2019, Suncor will open its long-awaited $150-million dedicated water testing facility northeast of Fort McMurray. Researchers at the Water Technology Development Centre will test technologies and new practices to reduce water use, improve energy efficiency, and create an overall smaller water footprint.
And if this cleantech zeal helps to improve the industry’s public image in Canada along the way — well that can’t hurt. Right now oil companies are facing a perfect storm of volatile pricing, political pressure and public scrutiny.
Betting on green could pay off in a big way, delivering a cleaner product at a competitive price. Alberta has already pledged $40 million for oil sands innovation this year, which will double to $80 million in 2020-21.
Now is the time to pull off this pivot. Global demand for energy is rising, and is expected to be 10 percent higher by 2030, driven mostly by growth in Asia. If Alberta can successfully position itself as a Silicon Valley for energy innovation, it can capitalize on its reputation and technological prowess and deliver cleaner energy, more efficiently, where it’s most needed.
John Stackhouse is a nationally bestselling author and one of Canada’s leading voices on innovation and economic disruption. He is senior vice-president in the Office of the CEO at Royal Bank of Canada, leading the organization’s research and thought leadership on economic, technological and social change. Previously, he was editor-in-chief of the Globe and Mail and editor of Report on Business. He is a senior fellow at the C.D. Howe Institute and the Munk School of Global Affairs and Public Policy and sits on the boards of Queen’s University, the Aga Khan Foundation of Canada and the Literary Review of Canada. His latest book, "Planet Canada: How Our Expats Are Shaping the Future", explores the untapped resource of the millions of Canadians who don’t live here but exert their influence from afar.
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