The Cleantech Edge: Tackling Methane Emissions with Canadian Innovation

John Stackhouse: [00:00:00] Hi, it’s John here,

Sonia Sennik: and I’m Sonia Sennik, CEO of Creative Destruction Lab.

John Stackhouse: Welcome back to Disruptors x CDL: The Innovation Era.

Sonia, like a lot of Canadians, maybe most Canadians, you’re probably fretting about the future of our nation. This is a massive moment of insecurity for us, but also an incredible moment of national pride. It’s like the country’s going through this identity crisis again, and I was struck reading an article in the Financial Times on the weekend.

About Canada’s potential to be the world’s next superpower. There’s probably something a lot of humble Canadians don’t want to thump our chests with and declare to the world, but it made a pretty compelling case that certainly with resources, we’ve got everything that the world needs from oil and gas to water and hydro to critical minerals and heavy metals.

It’s all here right now, and the world’s gonna need a lot more of it.

Sonia Sennik: [00:01:00] Absolutely John. I was driving on the weekend and saw Canadian flags on the sides of cars without a World Cup and without any hockey championship around the corner. Just Canadians celebrating being part of this country, and I think we have an amazing opportunity to start with some Greenfield projects in the country, as well as innovating on some Brownfield projects in our existing incredible refinery, smelters and oil and gas facilities around the country.

John Stackhouse: I think one of the key points that we’ll be hearing a lot about in the months ahead is that Canada can produce a lot more. We consume a lot, maybe too much, but we can also produce a lot for ourselves and for the world. Uh, and that’s a great opportunity for the country. But of course with more production comes interesting challenges around sustainability.

How do we produce more and do it more sustainably, including. Perhaps with fewer emissions.

Sonia Sennik: We have the pen in our hand, John. We have the opportunity to draw out what we want these [00:02:00] technologies to look like, how they should be implemented, and how they can sustain us long term as a country. I think we should all really see this as an incredible moment for us to rethink who we wanna be for the decades to come, and how we want to contribute to the global economy.

John Stackhouse: Interestingly, I heard a lot of Pro Canada messages at a big oil and gas conference that I attended in Houston. It’s a big energy conference and it draws 10,000 people from around the world, Saudis and Japanese Australians and Brazilians. As well as a lot of Americans, and I expected maybe a skeptical eye of Canada just given all the rhetoric we’ve been hearing.

But on the contrary, there was a lot of bullishness about what Canada can do and a lot of interest in investing in Canada, especially for the kind of Greenfield as well as Brownfield projects that you’re describing, Sonia. So the opportunity is right before us. I thought the conference, which is sometimes nicknamed the Super Bowl [00:03:00] of Energy, was going to be a drill, baby drill convention, and there was certainly a lot of enthusiasm for that, but there was a lot of deep thought about how Canada and the United States, as well as other economic partners can create energy security.

And yes, some Americans want energy dominance, but it was really about energy security in a world that is going to be probably more fractured in the years ahead.

Sonia Sennik: John the door is wide open for innovation. We have incredible talent coast to coast, but especially in Alberta where we run our CDL Rockies Energy Stream.

It’s been one of our most compelling streams to watch with the types of innovators it attracts, and the rate at which these companies are able to scale with large corporate

John Stackhouse: customers. And you know what? Speaking of Alberta, much of the conversations at CERAWeek were about the AI opportunity data centers, which Alberta, as we’ve discussed on previous podcasts, has great ambitions for the data center.

Revolution is [00:04:00] underway, and it was a dominant theme. I learned that data centers right now are consuming about as much energy as the country of Japan, and it’s going to multiply in the years ahead. So while there were a lot of energy folks at CERAWeek, there was a huge number of tech folks as well. All the hyperscalers were there in force and not as visitors or tourists.

They’re working, in fact, they’re integrating their operations increasingly with gas companies because gas is what is going to power, at least in the near term. A lot of the data centers that we’re all going to need, that we’re all using already, even though we don’t know where that data crunching goes or all the power.

That’s needed to make it happen. So get ready for more demands for gas, but also an imperative for what you said, Sonia, for innovation in the ways that we extract gas, we produce it, we ship it, and we use it at scale with technologies that make it more sustainable.

Sonia Sennik: That statistic, [00:05:00] John, you used for energy consumption comparing it to the country of Japan.

I think at a micro level, a reminder for everybody that just two chat GPT prompts consume the same amount of power to charge your entire iPhone one time, which is, I think, interesting for folks to keep in mind when we think about how much our demand is growing around the world.

John Stackhouse: So bottom line, we’re gonna need a lot, lot more energy.

In fact, I wrote a blog post about this that you can find on my LinkedIn channel or at RBC thought leadership, and the title was from MAGA to MEGA, and MEGA being Make Energy Great Again. I kid you not, that was one of the slogans of CERAWeek and one of the challenges of making energy great again, especially if it’s more gas, is coming to grips with the methane that comes with the production of gas, as well as other activities including a lot in agriculture.

Fortunately, there’s a ton of new technology and more technology on the horizon [00:06:00] that is showing how we can produce more gas with less methane emission. We’ll hear later in the podcast from four Canadian innovators who I met at CERAWeek in Houston. They’re at the forefront of the methane challenge and have some incredible ideas already in the field.

But like me, a lot of listeners probably wouldn’t want to take a spot quiz on methane. It’s complex. It’s something most of us probably haven’t studied, and to help us understand it better, we turn to my colleague Vivan Sorab, who is our Clean Tech specialist at the RBC Climate Action Institute.

Vivan Sorab: Methane, first and foremost is the main constituent of natural gas methane is a greenhouse gas like carbon dioxide. When it’s emitted into the atmosphere, it captures heat over time. That accumulation of heat causes global warming. And it’s interesting to note that methane is significantly more powerful than carbon dioxide. As a greenhouse gas methane is 27 to 30 times more potent than carbon dioxide.

Now, why is it important [00:07:00] in Cleantech? One, because natural gas is critically important to the world. We use it to power our industries. We use it to produce petrochemicals. And managing methane emissions from the production of natural gas is critical, but methane emissions also come from other areas.

Agriculture is a significant source of methane. Think emissions from ruminant animals like cows, but also from rice farming. And this is a particularly large problem in Southeast Asia. It also comes from waste, organic waste when it decomposers produces methane emissions. And finally, it’s important to note that methane emissions do.

Occur naturally as well. So swamps, speed, bugs, and similar environments also produce methane emissions. So take an oil field, you drill a well, and you produce some kind of hydrocarbon fluid from subsurface. What you get out of the subsurface can be natural gas. It could be a mixture of oil and gas, or it could be pure oil underground, but when you relieve the pressure on it.

Stuff that’s dissolved in the gas escapes, and that’s very often methane. [00:08:00] When those hydrocarbons enter the gathering infrastructure on the surface, the people who are operating the oil fields need to release some of that methane into the atmosphere and the collective term to describe the release of methane.

Whether intentional or unintentional from this infrastructure is called venting. It’s one of the main major sources of methane emissions, and there are several technologies that are available to address venting. Knowing where the emissions come from is a harder question to answer than many appreciate, and entrepreneurs have come up with a truly remarkable range of technologies to answer that question, whether it’s satellites that circle the globe and provide insights into where the emissions are coming from at various spatial and timescales.

To Airon sensors. You can have a company that mounts a sensor on an aircraft, flies over an oil field, or flies over some kind of infrastructure and tells the operator, here it is where I think you should focus your search. And then there are startups that are developing ground-based sensors, think [00:09:00] infrared cameras or certain detection systems that are kept on site to measure where the emissions are coming from and providing very high precision to operators who want to control their emissions.

So I think that those are some of the key technologies, specifically on the oil and gas side. But I should also say that there are amazing entrepreneurs doing methane abatement in various sectors, including agriculture and waste. Canada has committed to reducing methane emissions by 75% relative to 2012 levels by 2030.

That is gonna take a lot of new technology to find where the methane leaks are coming from, as we already discussed, but then also going after the last stage of methane emissions that are a little more complicated or a little more challenging to drain in the, the simple ones. There’s a lot of political uncertainty right now, so it remains to be seen how some of these commitments move forward in time.

But the US, Canada, the European Union, a lot of governments around the world are taking initiative. And it’s also industry. I’ll just give you two examples. One is the Oil and gas climate Initiative. It’s a consortium of the world’s leading, as they’re called, super majors. The [00:10:00] large private integrated oil companies that have banded together and are aiming to reduce their methane footprint as close to zero as possible by 2030.

And then there’s the oil and gas methane partnership. Another consortium between the United Nations and various private sector players that provides a framework for these industries to measure their emissions and also report them allowing for transparency into the methane emissions ecosystem.

John Stackhouse: Sonia, that was a really helpful explanation of methane. In fact, I think I might be willing to take that spot quiz. But before we go there. Let’s hear from those clean tech entrepreneurs. I got to meet in Houston. We’ll start with Stephane Germaine. He’s the president of GHGSat, a Montreal Space Tech company that’s looking literally at the bigger picture.

Stephane Germaine: Hi, my name is Stephane Germaine from GHGSat. GHGSat uses its own satellites to monitor greenhouse gas emissions from industrial facilities around the world. So satellites [00:11:00] have a unique way of being able to do that. They can cover the whole world daily and help find those big leaks fast to help operators and governments really understand that true scope of the problems so they can better control and reduce those emissions.

Our customers are becoming more and more aware of the urgency of being able to reduce their majority of their emissions at in some cases. Very little cost and, and sometimes even at a profit, that whole business case has become much more prevalent, much more present in the last five or 10 years or so.

And that’s driven our focus first on methane instead of carbon dioxide, despite the fact we do both. And that has led to a lot more mitigation, which is great. Methane captures more heat than carbon dioxide does. So they’re both greenhouse gases. They both drive global warming, but methane does it faster.

So not only does it have a bigger impact for every unit or volume you reduce, it also has a much shorter term impact. We will go look at [00:12:00] places that our customers ask us to go look at, so their own operations so that they can better understand, control and reduce their emissions. After that, we always make sure we use a full capacity of our satellites, so we’re seeing stuff all over the world that even from places that aren’t necessarily our customers.

So there we work to reach out directly to the operators of those sites. So it could be, uh, an oil and gas facility internationally, or waste management facility internationally. And when that doesn’t work, then we work with international institutions. Like we work closely with the UN Environmental Program.

We work with industry associations like the Oil and Gas Climate Initiative, and we work with them to reach out to those operators to make them aware of what’s going on and then hopefully then also arrange for transfer of best practices and information to help them understand how they can reduce their emissions.

Canada’s a great place to do R & D, right? So it’s, it took a unique set of skills and experience that we as a country are fortunate to have. In our country, so around space and environment. But in addition to that, it’s a great [00:13:00] place for funding R & D. We were able to get some really important support from the Canadian government in various forms from the Quebec government, the Alberta government, and that helped drive us to a point where the technology was mature and was ready to be commercialized.

So Canada’s a great place for that.

Sonia Sennik: Hey John, remember when I said every company is a space company? GHGSat is leveraging space technology to inform clean tech decisions on the ground here on planet Earth. So what can be done with the data they get from their satellites? Companies can look internally at their own operations, make modifications, but better yet, they can observe the impact of their decisions over time.

And as Stephane said, our world’s methane challenge is urgent, important and fixable. And technology in lower Earth orbit, like their satellite named Hugo can really help.

John Stackhouse: And here’s another interesting point that we heard from our friend Chris Hadfield on a previous episode. Looking at Earth from outer space, you actually cannot see political borders, but you can see the [00:14:00] consequences of human and perhaps political activity, including emissions.

Now, it’s one thing to see the methane as Stephane’s satellites are clearly showing it’s quite another to then do something about it. That’s where our next guest is actually bringing the challenge down to earth. I met Liz O’Connell, co-founder and CEO of Arolytics. It’s a software startup that not only helps the oil and gas sector track their emissions data, it also identifies strategies to efficiently reduce methane.

Liz O’Connell: Hi, I am Liz O’Connell. I am one of the co-founders and the CEO of a company called Arolytics. Alytic is an emissions software company, so we help the oil and gas sector track all of their emissions data, integrate it from various sensors, but also help manage and then forecast that information to identify best opportunities to abate their methane.

One thing that makes us unique is we do not have any hardware. We are sensor agnostic, and so we can really take a very consultative [00:15:00] approach when we work with the oil and gas sector, really sitting down, helping evaluate all the different sensors and technologies out there, helping them build that strategy.

And we leverage an in-house modeling tool where we can actually virtually evaluate what combination of technologies is best for their measurement strategy. And so one concrete example of that is, you know, how do we look at integrating the operational data side that you’re already collecting? And then.

Correlating that with the emissions data and helping from an operations, a field level, but also the, you know, environment teams. How can we start to marry those two teams and provide visibility in that single platform to connect workflows around that? There’s something called oil and gas methane partnership.

It’s a global initiative. I think there’s about 50% of the global oil and gas production is signed on to a voluntary commitment to start measuring and be more transparent around their methane reduction. And their measurements. And so we see a lot of traction on initiatives like that, and our platform can help collect the data to really provide support for those global initiatives like that and start to marrying that operational [00:16:00] piece to just improve operational efficiency and start to collect the data that’s already being used for operations.

Sonia Sennik: Vivan mentioned earlier that methane abatement solutions will require hardware. But in the case of Arolytics, Liz and her team reinforce that they are sensor agnostic, meaning they can seamlessly integrate into any system. So in a world where companies are under immense pressure to cut emissions, having easy access to the right data at the right time is essential to making thoughtful and efficient decisions.

This is where innovative software can play an important role as companies work towards meeting their global methane reduction targets.

John Stackhouse: Sonia. I think another point worth stressing is that Arolytics is based in Calgary, as are the next two companies that we’ll hear from, and that’s an important point, geographic location that we’ll come back to in our wrap up.

After chatting with Liz, I spoke with Jacqueline Peterson, she’s the Chief Climate Officer at Kathairos Solutions, and if you’re wondering what Kathairos means, it’s [00:17:00] Greek for clean air. Jacqueline told me how the company completely eliminates methane venting at remote oil and gas well sites by using liquid nitrogen.

Jacqueline Peterson: Hi, my name’s Jacqueline Peterson. I’m with Kathairos Solutions. So Kathairos addresses this challenge of. Pneumatic venting and pneumatic venting is responsible for about 40% of the methane emissions that come from the oil and gas sector. Pneumatics, routinely vent methane just in order to essentially operate the site to separate the liquids from the gas to move it along.

But every time these devices are actuated, they release methane into the atmosphere purposely, which is very bad. So we. End this process or eliminate it by essentially replacing the gas that’s used to drive and power and pressure these pneumatics. So we use nitrogen instead. We’ll put a specialized tank on [00:18:00] site, tie it into all the existing pneumatic control loops, and we fill these tanks with liquid nitrogen.

The liquid nitrogen is then. Released as a gas at the pressures and quantities needed to power the various pneumatic devices at the well site. But instead of venting methane, at the end of it, we vent nitrogen instead. So it’s a very simple solution that then allows us to scale quickly across hundreds of sites, thousands of sites, and hopefully tens of thousands of sites in the near future.

The biggest challenge we have right now is truthfully some political uncertainty and regulatory uncertainty, and everybody wants to address this problem, but there’s other priorities going on too, right, that they’re competing with for their dollars. And so once companies know, have that political clarity about what’s expected to them, then they just [00:19:00] address the issue head on and create a plan and execute, like the industry has always done.

We have currently close to a million well sites in North America currently venting methane. That’s very difficult to solve, but that also means that there is so much to be done and seeing all of these great technologies coming out that show us where the methane is, and then ultimately how we can eliminate that from being vented.

There’s so much that we can do from that climate perspective to drive down methane reduction. And significantly clean up oil and gas to make it a much more sustainable fuel as we move forward as an economy.

Sonia Sennik: Jacqueline gave us a clear look at how regulatory uncertainty is a major roadblock to methane reduction, and how corporate leadership can push for real change her perspective on the sheer scale of the opportunity.

With over a million sites still venting methane because of their legacy pneumatic [00:20:00] systems, it really drives home how much work there is to be done. And the scale of this opportunity and her company’s solution to replace gas and instead use nitrogen is simple and flexible to tie into any pneumatic control loop.

John Stackhouse: I think we’re starting to get the picture, Sonia, that solving the methane challenge involves multiple technologies. At multiple levels. We’ve started in space and came down to earth with some good old analytics, and we’ve just heard about some of the chemistry as well as physics that can be applied to methane.

But of course, as Jacqueline said, all of this has to be approached with a business lens. Companies are not going to take this on if it’s not part of a broader company’s strategy. And that’s where our final guest comes in, helping to piece this together for companies to think through not just the methane challenge, but the business opportunity.

I spoke with Jessica Shumlich, co-founder and CEO of Highwood Emissions Management. We’ll now hear from Jessica about her startup, which is also from Calgary, [00:21:00] leverages data analytics and sophisticated simulation tools to optimize emissions management.

Jessica Shumlich: Hello, my name is Jessica Shumlich. I’m the co-founder and CEO of High Emissions Management.

Our mission is to deliver the oil and gas’ premier solution for the development of measurement informed inventories that deliver accurate, transparent, and scalable emissions reductions. Customers are based all over, so a lot of them are based in the US but we’re increasingly seeing interest in Europe as well as the Middle East.

And so we’re looking to be the world’s go-to solution for measurement informed inventory, which means that hopefully we’ll be adopted in every single country that has oil and gas development. We’re seeing a lot of investor pressure, stakeholder pressure, and we’re seeing oil and gas companies say, Hey, I’ve made these commitments.

And actually the whiplash to go back on their commitments and then just to potentially in four years have to reinstate all of them, is gonna cause them more problems than otherwise. We fundraised on being a billion dollar company, which means about a hundred million dollars in revenue. We think [00:22:00] between methane as well as other services that are adjacent to methane, broader greenhouse gases, we can really take and transform this whole market.

So we have two customers officially in our platform, which is terribly exciting considering the fact that we’ve only launched in January of this year. We’re seeing a lot of progress, but these are enterprise sales and they take a very long time. I’m from Canada, Canada’s my home and I love it there. We have access to some of the best available talent, and so the majority of our staff, with the exception of a few business development staff, are actually based in our headquarter in Alberta.

So proud to be in Albertan, proud to be an Alberta company.

Sonia Sennik: Jessica’s insights into finding product market fit in the emissions management space were very on point. It’s one thing to have a great idea. A compelling technology, but it’s quite another to get real traction in an industry that’s still figuring out how to prioritize methane reduction.

Her perspective on companies still moving forward with emissions commitments despite the political uncertainty, was also a good reminder that [00:23:00] investors and consumers are shaping this market too, not just the regulatory environments.

John Stackhouse: Sonia, you’re an engineer. What in your mind was most interesting of all those challenges that you’d love to take on?

Sonia Sennik: I love the idea of interdisciplinary approaches. For example, this selection of four companies. Could figure out ways to collaborate to make an even stronger set of tools, measurements, and management opportunities. I think the more that we can figure out ways in which these technologies can intersect and support each other to move more quickly and make a better impact, a greater impact faster.

That’s what gets me really excited. It’s all about the system, John.

John Stackhouse: It’s all about the system and there’s some great systems in many places in Canada, but especially when it comes to clean tech in Calgary. I was really impressed by Jessica’s sign offline that she’s very proud to be Albertan, proud to be Canadian.

And one of the groups we didn’t hear from, but that was very present at CERAWeek, is the Clean Resource Innovation [00:24:00] Network. Or CRIN, it’s one of those quiet success stories of Canada that brings together entrepreneurs as well as investors and policy makers and tries to advance exactly what you pointed out, Sonia, a systems approach.

We’ve got that in ag and critical minerals. But thanks to CRIN, we also have a lot of progress underway in methane management. I was also struck in my conversations with the entrepreneurs how concerned they and their investors are about regulatory uncertainty. I thought going to Houston, there’d be almost a celebration of the end of climate action policy and quite the contrary.

Pretty much every energy company and oil and gas company I spoke to is fully committed to emissions reduction. And they’re excited about these technologies, not just because of what it does for the planet, but what it does for profitability. These technologies make companies more efficient and yes, therefore more profitable.

And when they’re more profitable, that attracts more capital and that feeds that ecosystem that you are [00:25:00] speaking of.

Sonia Sennik: So how can we meet the moment and make the most of our innovations and our resources here in Canada? We just scratched the surface today, and there’s definitely more to unpack in our upcoming episodes.

John Stackhouse: And that’s a great note to end on.

Sonia, there seems to be so much despair in the world right now, and almost a sense of helplessness and hopelessness, but listening to these entrepreneurs, it’s hard not to have hope, that innovation, that imagination, and yes, human ingenuity. He’s going to overcome all the challenges that we’re talking about. For now, I’m John Stackhouse.

Sonia Sennik: And I’m Sonia Sennik.

Thanks for listening.

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