Improvements Needed In Translating Technology Into Commercial Ventures, Says Shell Canada Head
If Canadian oil and gas companies are committed to the transition of energy towards a decarbonized economy, they need to give a hand to smaller service companies who have ideas on how to do that, the president of Shell Canada said Saturday.
“I think it’s about commitment and really just being deliberate about wanting to help out with these smaller outfits,” Michael Crothers, country chair for Royal Dutch Shell plc, said after participating in an energy event at Spruce Meadows.
“In Canada, we are very good at inventing technology but we are not very good at translating that to commercial ventures,” he said during a “NED Talks” discussion of the energy diet challenge.
The talks, which featured Dutch and Canadian speakers looking at the transition towards a decarbonized economy, were part of Holland Day at the show jumping facility. The event was organized by the Netherlands consulate-general in partnership with TheFutureEconomy.ca , a publishing house focused on the ongoing transformation of the Canadian economy.
As part of its effort to encourage new technologies that could help reduce greenhouse gas emissions, Shell is testing a methane detector in the Caroline gas field, Crothers told the DOB.
“Their detector is cool because it can look at a whole wellpad at once,” he said. The Quanta 3 technology can monitor continuously for leaks. “If that kind of technology is workable, then it could really help the whole industry with our methane reduction caps,” according to Crothers.
While it’s a little bit of extra work for Shell, he said he can ask his people in the field to spend some extra time, focusing on gathering the data because it’s for a larger goal.
“That’s an example of giving a small company a chance to test their technology and I think that if you are committed to that energy transition, you can find those opportunities.”
Crothers, whose company supports climate action, told the audience that a different approach is needed to manage the dual challenge of climate change and supply and demand. “The transition, in our view, will require unprecedented co-operation between business leaders, governments, ENGOs and society at large,” he said.
“Emerging technologies will need time-limited support until they can compete on their own,” according to the Shell Canada president. “A combination of regulations that incents the right behaviour and public innovation funding creates an appetite and incentive for companies to invest in commercializing technology.”
He also suggested that resource companies are going to need to work more collaboratively. For example, the Quest carbon capture and storage project developed by Shell also was funded by Shell, Chevron Corporation and Marathon Oil, with major support from the Alberta and federal governments. While the project has stored more than two million tonnes of CO2, cost has been a major barrier to CCS, the audience heard.
“If we were to build it again we could cut the capital and operating costs by 30 per cent,” Crothers said, noting that Shell has made that knowledge freely available to any country, including the Netherlands, that would like to use it. “We hope that can leapfrog the technology which has great potential to reduce emissions globally.”
Both renewables and hydrocarbons will be vital to meeting energy demands in the coming decades, he said. “We have to take advantage of the local opportunities in different parts of the world where they have opportunity for wind or hydro and use that and at the same time manage that surging demand by making the use of hydrocarbons more responsible and have less emissions.”
Companies also have to be able to experiment with different technologies, according to Crothers. “There is so much new technology out there right now that it’s hard to know which of those will be the right one,” he said. “You have to actually test them and prove them out and find entrepreneurs that can convert their ideas into field trials.”
Need for CRIN
Innovation has been the lifeblood of the industry, said Ginny Flood, another NED Talks speaker and vice-president, government relations for Suncor Energy Inc. “We are considered an extraction resource industry but in actual fact what we are is an innovation industry because our success has been in innovation.”
The Clean Resource Innovation Network was created in response to the industry’s unique challenges in the need to be both carbon cost competitive while continuing to improve its environmental footprint, said Flood who also is outreach chair for the network which has brought together organizations such as COSIA and PTAC, post-secondary institutions from across Canada, large and small players and government (DOB, July 10, 2017).
“What we realized is that there’s a lot of people working on many solutions but it’s not connected. We are all striving for the future and we are all looking for that kind of silver bullet,” she said.
“The network was established because we feel we are doing a great job but that we don’t have time for that luxury,” said Flood. “We have to prove and figure out how are we going to innovate in a way that we are going to be able to accelerate and amplify both the deployment and commercialization of our technologies.”
There also is such a large number of government programs that funding is not focused, she said. “Our goal is to actually start focusing this effort in a much more consistent manner so that we have government, we have small enterprises, university institutions all of the other people working in that space that we [are] all working to the same objectives,” said Flood. “This is really about creating and leveraging,” she added, noting that Alberta Innovates and Innovate Calgary are all part of the network.
And while fossil fuels may look different in the future, there is still a role for them, she said. “I think what we want to do at Clean Resources Innovation is to take that to the next step — what is the possibility that we can be both cost and carbon competitive well into the future and that we are a viable alternative to the energy mix well into the future.”
The event also heard from the CEO of a Vancouver-based venture capital firm who also emphasized the need for greater collaboration with companies working across industries and across countries in their response to an era of abundant cheap energy.
“We really think the key is to learn as much as possible from other industries together and to tap into the best and the brightest in universities worldwide who can lead you to new solutions and new markets,” said Wal van Lierop, chair and chief executive officer of Chrysalix Venture Capital.
“Bringing new innovation to our existing industry is very important,” he said in the panel discussion that followed. “We need government and industry to work together so that we can make choices in scaling up of the most successful companies.”
Shell is working with Chrysalix in an investment in GlassPoint Solar, the fastest-growing solar company in the world, whose solar powered steam generators are replacing more expensive natural gas in enhanced oil recovery projects in the Middle East and California, said van Lierop. “In Alberta … we can maybe make energy exploration less energy intensive — very important.”
Also participating in the NED Talks were Connie van der Byl, director of the Institute For Environmental Sustainability at Mount Royal University and Esmee van Veen, sustainability manager for KLM Dutch Airlines along with moderator Harrie Vredenburg, Suncor Chair in Sustainability at the University of Calgary.