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Part of Canadian Natural Resources Ltd.’s Horizon Oil Sands project near Fort McMurray, Alta. If the biorefinery pilot at CNRL’s Primrose South is successful, it will be extended to the Horizon project.Larry MacDougal/The Globe and Mail

One of Canada's largest oil-sands producers is building an algae-based processor at its Primrose South project in order to recycle greenhouse-gas emissions to produce biofuels and other products such as fertilizer for land reclamation.

Canadian Natural Resources Ltd. (CNRL) is working with the National Research Council and Toronto-based Pond Biofuels Inc. on a $19-million pilot project aimed at proving the commercial viability of using industrial flue gases from its processing plant to feed algae in a "biorefinery" unit. Pond has already built two small demonstration models in Ontario at St. Mary's Cement and a U.S. Steel Canada plant.

The federal government will contribute $9.5-million to the project, while CNRL will add $6.3-million and Pond will pony up $3.2-million.

CNRL said that the project is part of its ongoing effort to reduce greenhouse-gas emissions from its operations and that the technology could reduce emissions at the oil-sands site by as much as 30 per cent. If successful, CNRL will build a similar plant at its Horizon Oil Sands plant, which could reduce emissions there by 15 per cent.

"What you want is a suite of solutions and right now, with respect to greenhouse gases, we don't have a whole lot [of solutions]," Joy Romero, CNRL's vice-president of technology development, said in a telephone interview.

"This will be one of the solutions.… It suits basically anybody who has carbon dioxide in a flue gas, so this one has a really broad application."

As well as diverting carbon dioxide, CNRL will use waste water and waste heat to fuel the growth of the algae, which will then produce valuable products, she said.

Oil companies around the world have been investing in algae research, as a way to divert carbon dioxide from the smokestack to produce green fuels. The project announced Friday will be the world's largest, closed biorefinery attached to an industrial facility. It comes as Canadian oil-sands producers face aggressive opposition from environmental activists and increasing regulatory burden from some governments because of the GHG-intensive nature of their production.

The algae conversion project is an example of the kind of effort that the National Research Council will undertake under its new mandate to pursue research and development that will benefit industry and help boost Canada's productivity. The NRC has been doing work with algae for 50 years, but in the past five years has focused on its ability to absorb CO2 and reduce emissions from industrial sites.

"The goal for the pilot project is to prove the technical and economic components of this before full-scale commercialization is done," said Aleks Patrzykat, executive director of the NRC's algal carbon conversion program. "Once we prove the commerciality of it, the technology can be deployed to any emissions where you have CO2."

He said the algal technology could eventually capture 20 per cent of Canada's carbon-dioxide emissions from large industrial sources, although it will take several decades to reach that scale.

Exxon Mobil Corp. is spending $600-million to develop the capacity to make motor fuel from algae, but is working with a scientific firm to re-engineer the algae, while Pond Biofuels is using an "off the shelf" variety with input from NRC scientists on how to maximize its growth.

Sounding much like green-energy visionaries in other fields, Pond Biofuels CEO Steven Martin predicts big things for algae carbon recycling. "I think this technology is ready for an explosion outwards," he said.

Follow Shawn McCarthy on Twitter: @smccarthy55Opens in a new window

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