General Electric Co. chairman and chief executive officer Jeff Immelt said Canada’s energy industry needs to make the crude wrung from the Alberta oil sands competitive with other sources around the world in terms of greenhouse gas emissions, and is positioning the industrial conglomerate to play a key role.
A big supporter of oil sands industry expansion, as well as export pipelines such as Keystone XL, Mr. Immelt said he wants to share his company’s environmental technology as a way to win over critics concerned about the climate impact of the oil sands.
GE, one of the largest multinational corporations with a market capitalization of $264-billion (U.S.), is working with the industry’s environmental technology sharing group, known as Canada’s Oil Sands Innovation Alliance (COSIA), on such projects as greenhouse gas and water reduction in steam-driven and mining operations.
The company and others need to drop their guards about intellectual property as they try to solve overarching and thorny problems that have served to stoke campaigns against development among environmental groups and many politicians throughout North America, Mr. Immelt said in an interview with The Globe and Mail in Calgary.
Another high-profile U.S. CEO, Tesla Motors Inc.’s Elon Musk, said last month he would not take legal action against others who employ the company’s technology to speed up development of electric cars.
“I think we live in an open-source world. I’m more aligned with Elon than I am with others to say: if you can really set a goal on [greenhouse gas emissions] and get everybody to put their chips on the table and go after it, I actually think everybody benefits in the end,” he said following the announcement of up to $18-million of investments by GE, Suncor Energy Inc. and others of the 13 COSIA corporate members for carbon and water reduction projects.
When it was formed as a technology-development group two years ago, COSIA had to study how to work around intellectual property and proprietary information restrictions as the long-time competitors began to look for joint solutions for such problems as the massive lakes of toxic tailings at mining sites.
GE is a major supplier to the COSIA companies and others in the country’s oil industry, offering such equipment as water evaporation technology for steam-assisted bitumen operations and products that boost energy efficiency. On Tuesday, it also announced global competition for ideas to cut carbon emissions from oil sands, offering $1-million in seed money for the winners. GE aims to apply technology developed in other sectors, including power generation and health care, to the oil sands sector.
“I’m always willing to fight it out in the marketplace. Particularly in a case like this, evolution of the industry benefits everybody, much more than trying to figure out how instead of having 30 per cent market share I can have 32, if only I kept everything right here,” he said. “Your market share of a bigger pie is ultimately how people are going to win in this battle.”
Much criticism of projects such as TransCanada Corp.’s Keystone XL pipeline, which would take oil sands crude to Texas refineries, and Enbridge Inc.’s Northern Gateway, aimed at moving the supplies to the Pacific Coast, is actually aimed at the carbon intensity of oil sands development as much as the pipelines themselves, Mr. Immelt said.
The federal and Alberta governments have repeatedly delayed tougher carbon rules for the industry, which some analysts have said has only made approving Keystone more politically risky for U.S. President Barack Obama.
“We, in terms of the oil sands, need to peg a greenhouse-gas target that would make us competitive with any other fuel source in the world. I think that more or less takes it off the table as an excuse,” Mr. Immelt said.
Suncor CEO Steve Williams told reporters Tuesday that the COSIA members are within “days and weeks” of establishing common greenhouse-gas emissions standards for new oil sands projects such as the $13.5-billion Fort Hills development, but he did not offer details.
With the combined market value of GE and the COSIA members, which also include ConocoPhillips, Devon Energy Corp., Total SA and others, in the hundreds of billions of dollars, a cash injection into technology such as that announced Tuesday looks paltry. However, it should be considered as seed money, he said.
More will be invested when they are integrated into oil sands developments.
Mr. Immelt says that he does not view surging production of shale oil in the United States as a threat to Canadian energy supplies. Instead, North America is more likely to become an exporting powerhouse, he said. “I think the trilogy of Canada, the U.S. and Mexico – if you’re sitting in Riyadh or Moscow or any other oil producing country in the world, you sit there every day and say, ‘Oh my gosh. North America could be a whole new scene,’” he said.
“The notion of our countries being net exporters of energy in our lifetime is a huge game-changer. I think that’s the way business people look at it. I hope it’s shared by governments,” he said.Report Typo/Error