NET ZERO AMBITIONS

from CHOA 35th Anniversary Journal-Edition 1

THE LAST BARREL STANDING

BY BRYAN HELFENBAUM, ALBERTA INNOVATES

The Net Zero emissions movement continues to gather momentum. Pledges to achieve Net Zero have surpassed 70% of all global emissions, despite fossil fuels still supplying 84% of energy demand. The Canadian government has committed to achieving Net Zero by 2050, and five oil sands producers who represent 90% of total bitumen production have committed to the same. THREAT OR OPPORTUNITY FOR THE HEAVY OIL AND OIL SANDS INDUSTRY?

The Overall Trajectory is Clear … While it is fair to be skeptical of the speed and likelihood of achieving global or even national Net Zero, the overall trajectory is clear. The diminishing demand forecast for hydrocarbon-based transportation fuels, the global investments in hydrogen, the growing movement in circular plastics, and other global trends lead to a flattening and eventual decrease in global oil demand. Supply cost, carbon pricing, consumer behavior, and diversification will determine the suppliers who will prevail. Achieving Net Zero, in any timeframe, will require significant outcomes in technology development and deployment. But the ramifications extend far beyond just technology – there are political, behavioral, market, and other influences and impacts to consider. Also, while the extraction and combustion of fossil fuels has garnered overwhelming attention, there are significant challenges relating to industrial, manufacturing, and building emissions that need to be addressed in parallel. However, this article will focus on challenges and opportunities in Canadian oil and gas.

CCUS: A Potential Advantage for Alberta The most significant opportunity lies in carbon capture and storage (CCS); there is no credible Net Zero scenario that doesn’t include CCS. Alberta and Canada are fortunately very well positioned to deploy largescale CCS due to subsurface pore space, existing infrastructure, and local expertise. Key assets are already operational and can form the backbone of the opportunity – large-scale capture facilities at Quest and Boundary, transportation in the Alberta Carbon Trunk Line, CO2 injection at Clive and Weyburn, and R&D facilities at the Alberta Carbon Conversion Technology Centre and the Carbon Capture & Conversion Institute. These assets and operational expertise enable further expansion and position Canada as a global leader in CCS. Conversion and utilization will play a role, and could foster significant business opportunities, but large-scale storage will be crucial to achieving Net Zero.

“... there is no credible Net Zero scenario that doesn’t include CCS.”

Solvents and Hydrogen Upstream oilsands emissions can be significantly reduced through solvents to replace aqueous extraction, both for In Situ and Mining. Piloting has been completed or is underway across a wide range of solvent types/concentrations/timing, as well as the addition or replacement by electromagnetic radiation. These technologies have other environmental benefits, including minimizing water usage and reducing land footprint. Steam additives represent a different mechanism but have potential to reduce steam/oil ratios by 5-20%. The potential for a hydrogen economy seems to be fashionable every 20 years, but this time there is sufficient capital, technology, and global government support that it appears likely to succeed at a material scale. Blue Hydrogen (Steam Methane Reforming plus CCS) represents a tremendous production opportunity for domestic use and exports; a node is in full development in the Greater Edmonton region, with many inter-related projects. Burning hydrogen in oil sands facilities, as a full or partial replacement to natural gas, could represent a significant opportunity to reduce emissions.

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Bitumen Beyond Combustion Can Address Scope 3 Emissions Bitumen Beyond Combustion (BBC) products, like carbon fibre and asphalt binder, represent an opportunity to reduce “Scope 3” (end use) emissions by diverting 20-50% of hydrocarbon products to non-fuels within which carbon is sequestered. Moreover, the downstream impacts of BBC could further enable the shift to a Net Zero world, as these lowcost materials could enable fuel-efficient transport and longer-lasting infrastructure. Other BBC products include materials for energy storage (activated carbon, vanadium) as well as advanced carbon materials (graphene, nanotubes, carbides).

And More … There are a multitude of other technology opportunities that could play a role in achieving Net Zero – biofuels, geothermal, Small Modular Nuclear Reactors, Direct Air Capture, and a myriad of digital applications. Some are niche while others have broader potential, and some are close to commercial while others remain a “wildcard”. Converting Threat to Opportunity To invoke an overused cliché, the threat of Net Zero is actually an opportunity. With the right approach, Canada can leverage its existing assets and expertise to become a leader in enduring industries. Converting Net Zero ambitions from a potential threat to a real opportunity for the heavy oil and oil sands industry will require a level of innovation and collaboration not seen since AOSTRA, including parallel development of both technology and policy. How can we each do our part?

Bryan Helfenbaum, Executive Director of Advanced Hydrocarbons, Clean Resources division, Alberta Innovates

Bryan Helfenbaum is the Executive Director of Advanced Hydrocarbons at Alberta Innovates, responsible for programs such as Recovery Technologies, Methane Emissions Reduction, Partial Upgrading, Digital Oilfield, and Bitumen Beyond Combustion. In addition, Bryan is a Theme Lead for the Clean Resource Innovation Network and a Fellow in the Energy Futures Lab. Prior to joining AI, he spent 20 years in a variety of technical, business, and innovation roles in industry. Bryan has a Bachelor’s degree in Environmental Engineering from Waterloo and an MBA from Calgary.