Harrie Vredenburg is a professor and Suncor Chair in Strategy & Sustainability at the Haskayne School of Business, University of Calgary
At times during the recent election campaign, it seemed environmentally progressive Canadians were not so much concerned with addressing climate change as with virtuously signalling their opposition to oil, and specifically to Alberta. An engineering professor told me about an experience where he asked an audience: “If we could develop a technology to extract energy from oil reservoirs while leaving the carbon in the ground, who would be interested in that?” Not one hand went up. It is a sad commentary on our body politic.
While some like to portray Calgary as a city of oil industry climate retrogrades, the reality is far from that. In a city with a highly educated population of professionals – the headquarters of Canada’s energy industry and the home of three universities and an institute of technology – there are people working on radical climate mitigating innovations.
Climate change is ultimately about personal behaviour. Calgarians understand that. Over 300,000 commuters get to work daily on Calgary Transit’s wind-powered light rail transit (LRT). More than 40 per cent of downtown workers commute by LRT, making it the busiest light rail system in North America; an extension is expected to raise that to 60 per cent. Since the city built bicycle lanes, bicycle commuting has increased by 50 per cent.
In the headquarters city of Canada’s largest export industry, climate change mitigation means innovation in energy production and transport. I have studied how the industry is innovating for technological breakthroughs. These studies describe how the industry uses multi-firm open innovation and single firm initiatives to develop technologies for reducing emissions at competitive costs.
One radical innovation focuses on zero-carbon hydrogen production to power fuel-cell electric vehicles. While battery-electric vehicles will serve the light vehicle market going forward, they have limitations for long-distance truck, ship and airplane transport. The batteries required would be too heavy or require too frequent recharging where charging infrastructure is lacking.
A solution for truck, ship and air transport is the hydrogen fuel-cell electric motor, which has zero emissions. However, the conventional way of producing hydrogen from hydrocarbons emits carbon. It is possible to produce hydrogen from renewables and make it carbon-free but, so far, that has been expensive and has not gotten much traction. It is also possible to capture and sequester the carbon making the hydrogen production carbon free. More exciting, however, is a new technology developed by the University of Calgary that is being commercialized by Proton Technologies. It produces hydrogen from hydrocarbon reservoirs while leaving the carbon behind.
Another initiative, the Alberta Zero Emissions Truck Electrification Collaboration (AZETEC), will see carbon-free hydrogen electric trucks hauling freight. It is a collaboration between the University of Calgary and trucking companies Trimac and Bison, fuel-cell pioneer Ballard and power train manufacturer Dana.
Scientists have noted that we are not going to reduce emissions fast enough to avoid catastrophic climate change. We will need technology to extract CO2. An initiative founded at the University of Calgary called Carbon Engineering has developed a project in Squamish B.C., for removing CO2 from the air and turning it into fuel, a “negative emissions” technology. Bill Gates and oil-sands tycoon Murray Edwards initially financed the company, which recently raised US$68-million in equity financing in London.
Innovation also takes the form of radical business model innovation: Project Reconciliation, the Calgary-based Indigenous-led initiative to purchase 51 per cent of the Trans Mountain pipeline from the federal government for Western Canada’s Indigenous communities. As owners, Indigenous communities would not just be bystanders to be consulted but would have a real say in the operation of the pipeline and its impact on the environment and on First Nations. They would also have a real economic stake and would be the beneficiaries of the financial wealth generated from the natural wealth of their traditional territories.
The acquisition would be financed through a syndicated bond issue led by a Schedule 1 bank. Eighty per cent of the pipeline income would go to an Indigenous sovereign wealth fund invested in a diversified portfolio, which will generate income for communities in perpetuity. The fund will focus its investments on leaders in the low-carbon global energy transition and infrastructure projects adjacent to traditional territories of Indigenous peoples. The fund will effectively repurpose oil natural capital to low carbon energy ventures while helping Indigenous communities reach their goal of sovereignty.
What about oil? A recent study of oil producing countries in Science lists Canada as leading in climate rules. Emissions could be cut by 23 per cent worldwide if countries adopted Canada’s gas flaring practices. Oil sands companies have been addressing climate change by increasing energy efficiency. I have co-authored papers that provide peer-reviewed evidence that the oil sands industry has been achieving increased energy efficiency and reduced emissions intensity. The studies also show that the industry is approaching the average energy efficiency and emissions per barrel of all global oils and may even be lower than average soon.
Now that the divisive election is over, let us go beyond scapegoating Alberta to viewing Canada’s energy industry as a national asset in addressing climate change while creating jobs.
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