Energy Innovation Network urging collaboration to tackle technological challenges of oil, coal and gas industries

A new energy innovation network is aiming to pump R&D into the oil & gas and coal sectors while lessening environmental impact. Initiated by the Alberta Energy Research Institute (AERI) and two years in development, the Energy Innovation Network (Energy INet) could marshall more than $3 billion for energy research over the next 20 years if its long-term strategy is fully implemented.

The cost of supporting R&D projects through Energy INet would be shared equally by industry, the federal government and the participating provinces.

The integrated approach could also help to put Canada in the international forefront of energy-related technologies, leveraging existing expertise and Canada’s diversity of plentiful energy sources. The not-for-profit corporation has already signed up 20 members and obtained $8 million in start-up funding over two years from AERI and Western Economic Diversification. Support has been provided from the outset by the federal government and several provinces and Energy INet officials hope to convert that to official endorsements and funding in the coming months. Organizations from the US, Europe and Asia are also being encouraged to participate.

Energy INet has identified six areas that it hopes to advance through collaborative research projects (see chart on page 2). More than 200 people were involved in formulating the strategy and proposal through a process that included a so-called ‘challenge dialogue’ using the Internet.

Nearly 50 partners have come on board including Alberta’s four universities, technical institutes, provincial and federal research institutes and oil, coal and gas companies. Foreign partners include the China National Petroleum Corp and China State Key Laboratory for Heavy Oil Processing.

“We need to go down this road to find breakthrough technologies. Current technologies are too limiting and will cause the industry to decline. Canada can become a source of clean energy technologies and this is a huge economic and social opportunity,” says Len Bolger, a veteran of the Alberta energy industry, co-chair of the AERI board of directors and a key driver of Energy INet. “This is bigger than Alberta. The western provinces have bought in and the federal government has been involved from the start.”

JOINT OTTAWA-CALGARY LAUNCH

Energy INet received a simultaneous launch March 16 in Ottawa and Calgary with a who’s who from the energy sector in attendance. The launch occurred one week after the inaugural meeting of its backers where a proposal to incorporate was tabled. The organization has 20 founding members, each of whom pay $25,000 in fees. The first official meeting of the new corporation is slated for early May.

At the Ottawa launch, Victor Doerksen, minister of Alberta Innovation and Science, characterized the initiative as an unprecedented collaboration between industry, researchers and government to ensure that Canada develops a long-term supply of environmentally responsible energy.

“Energy research and development expenditures have stagnated. The money invested in energy R&D is project-driven and largely uncoordinated between industry players. It is often focused on short term needs rather than a long-term strategic vision,” says Doerksen. “We can no longer afford to stay this course. There is an urgent need for investment in energy and related environmental innovation and new ways of operating.”

A case in point is Energy INet’s bitumen upgrading program. The objective is to use research and technology to increase the yield from oil sands deposits from 10% to 30-40%. It also will explore ways to reduce the amounts of natural gas and water in the extraction process.

The clean coal carbon program seeks to accelerate R&D to reduce emissions from coal through the introduction of technologies such as integrated gasification combined cycle, converting coal into a synthetic gas consisting if CO2 and hydrogen. The program would also explore the use of CO2 to increase the yield of convention oil resources and ways to store the CO2 underground (CO2 sequestration).

“We plan to identify technology gaps and look globally for solutions, “ says Bolger. “What’s left, we will do in Canada by establishing a business case and defining the cost.”

Bolger says it’s difficult to say how much funding will be dedicated to each area of research and where it will come from until a solid business case has been established for each program. Once a business case has been established, Energy INet officials will present it to governments and industry seeking input and funding. Intellectual property rights will be established on a case-by-case basis, but in general Bolger says it will reside with Energy INet and be made available to all participants. Others can access the technologies on a royalty basis.

Energy INet has established an interim board consisting of four industry champions, three members of the AERI board and representatives of the federal government and governments of Alberta, British Columbia, Saskatchewan and Ontario. The interim CEO is DR Eddy Isaacs, who is also AERI’s managing director.

Programs for CO2 and enhanced oil recovery and CO2 management have already been launched and two research managers from SaskPower and Syncrude Research have been seconded as program directors for the Oil Sands Upgrading Innovation program and the Clean Carbon/Coal Innovation Program.

FEDS SET TO LAUNCH ENERGY R&D REVIEW

When the federal government will be ready to consider becoming an active participant and funder in Energy INet may depend on the outcome a review of its energy-related S&T spending, which currently amounts to about $200 million annually. The review is part of the Sustainable Energy Science and Technology Strategy (SES&TS), which was announced in the recent federal Budget (R$, March 9/05). It commits $200 million over four years starting in FY06-07 for the development and implementation of a strategy to lever financial resources and ideas from other players, establish medium-term goals for conventional and renewable energy sources and an action plan for achieving the strategy’s goals.

“We’ve been working on this for some time. The idea is to pause and reflect and look at our priorities,” says Graham Campbell, DG of energy R&D at Natural Resources Canada. “The $200 million is predicated on the strategy and review of programs and will be advised by an expert panel which will complete its work by the fall.”

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