Deep beneath the muskeg and forest of northern Alberta lies an untapped treasure. Call it the impossible oil sands, a vast pool of crude that lies beyond the reach of current technology.
Of the 1.7 trillion barrels of crude buried in the oil sands, the industry currently believes it can produce just 170 billion, or one out of 10 barrels.
But the Alberta government believes nearly double that number could some day be liberated if there are enough breakthroughs to figure out how to do it profitably.
Now, the battle to reach those impossible oil sands has opened a new front: the patent office.
As Canada's oil and gas companies pour billions into ever more challenging oil and gas reserves, they find themselves in a growing technological arms race that has produced a surge in patent applications from an industry that has historically paid little attention to protection of intellectual property.
Oil sands companies have long been criticized for an overly cautious approach to innovation that has left them dependent on decades-old methods to extract crude. Some critics have also suggested that the sector has failed to grasp an opportunity to make Canada a world leader in the development of new energy technology.
But change is beginning to take root. The past decade has brought seismic changes in the business of energy. Instead of succeeding based on their ability to find hidden pools of oil and gas, much of the oil patch now lives and dies according to its skill in drawing out greater volumes of energy from massive pools of known reserves, like the oil sands, which don't easily give up their riches.
The result: a substantial shift in the attitude of energy companies toward seeking patents for their discoveries. Rather than discard such measures as unnecessary or a waste of money, a broad cross-section of industry, from giants like Suncor Energy Inc. to small new junior companies, are working to shield their best research from competitors. The change has brought strong growth to legal firms that work in patents, produced a clash of titans -- Suncor is currently fighting a patent battle with Cenovus Energy Inc. - and created an expectation of new profits, as companies seek to develop new licensing revenue streams.
On some measures, such as the percentage of revenue devoted to research, the oil patch remains well behind the rest of Corporate Canada. Alberta also lags more innovative provinces like Ontario and Quebec in the number of patents its companies apply for and receive. What's more, only one of Canada's top 10 corporate filers is an oil and gas company. Schlumberger Canada Ltd. - the northern subsidiary of the U.S. company - is sixth on the list, behind companies like Research In Motion Ltd. and Procter & Gamble Co.
But the mounting interest in intellectual property points to a shift in the attention energy companies are paying to research - and hints at a future where Calgary could become, on a small scale, a sort of Silicon Valley North for the petroleum industry.
"There's a real focus on technology," said Doug Ramsay, chief executive officer of Calfrac Well Services Ltd., which has sought intellectual property protection for new liquid solutions it has created to help penetrate oil-bearing rock in high-tech new wells. "Are people going to the patent office more and doing more applications? You bet they are."
The past decade alone has seen a substantial shift. An analysis by The Globe and Mail examined patent filings by a basket of 10 energy companies - including Suncor, Imperial Oil, Nexen, Calfrac and Laricina Energy Ltd. - and found that those companies applied for 2.5 times more patents between 2005 and 2010 than between 2000 and 2004.
Companies have moved to protect advances in numerous areas, from new chemical cocktails that are used to make oil flow more quickly, to methods for speeding the cleanup of toxic effluents, to novel ways of squeezing thick crude from oil sands reservoirs.
The advances are big and small. Suncor, for example, has applied for patents related to advances in conveyor belts and hand railings. Imperial Oil has sought patents on steel wire rope lubricants. Both companies have also sought protection for much more significant developments, such as new solvents for extracting bitumen, methods to recover heat and water from oil sands waste streams, and ways to biologically detoxify oil sands effluent water.Report Typo/Error