There's no question it's audacious, running an oil company designed to escape the drill-and-plunder model that's been standard for as long as the industry has existed.
Since she founded Imaginea Energy Corp. in 2013, Suzanne West has raised more than a few eyebrows in the oil patch with her quest to rethink the fossil-fuel equation. By employing renewable energy, obsessing about waste and sowing a creative culture in the workplace, she's making something that looks more like a tech company than an oil operator.
But now, times are tough. Can West's brand of post-oil oil company make a buck, or is it a luxury better suited to the days when the industry was flying high on $100-a-barrel crude?
So far the plan's working despite the downturn, CEO West says. In fact, she insists that innovating has never been more crucial. "As a culture, our industry has a very command-and-control organizational model, and it's not conducive to lots of collaboration, innovation and creativity," says West, 50, in an interview that's part TED Talk and part economics lesson.
"We're seeing the result of the suffering – people are sitting, waiting for things to go back. But I have no time for a pity party. I have to figure out how to get better. How do I reinvent myself? I'm not assuming [oil] is going back [to $100] at all. How are we going to, not just survive, but thrive at $30 oil? What do we have to do differently?"
West's conversion came in 2013. A chemical engineer by trade, she had already proven she could run traditional exploration and production companies successfully, having built and sold four of them. The most recent was Black Shire Energy, which Twin Butte Energy bought for $358-million. The question was, what to do next. Turned off by the traditional energy business, West considered retiring.
In February, 2013, she attended a Necker Meets Oxford conference on Virgin Group founder Sir Richard Branson's island in the British Virgin Islands. The big ideas being batted around by other entrepreneurs, academics and philanthropists helped shape her new venture and unique approach to energy production. "I came away from Necker realizing that energy is going to define our future – what it is, where we get it from, what we use it for – and that our industry has such an opportunity to be a force for good. And we're not," she says. "I decided I wasn't leaving the game with that as the narrative."
U.S. private equity fund Lime Rock Partners, which had backed Black Shire, invested $300-million in Imaginea in 2014, betting West would repeat her success, even with the new holistic philosophy.
Privately held Imaginea is a pipsqueak by Big Oil standards, producing about 6,000 barrels of oil equivalent a day, mostly in southeastern Alberta. It employs 27 people in Calgary and 32 in the field. West gauges success not by the traditional metric of increasing production, but by producing as cheaply and cleanly as possible.
After all, the bottom of the market is the best time to judge how lean a company operates. West says Imaginea was still making money at $30 a barrel, albeit thanks to having put favourable price hedges in place. In fact, lately she's not even drilling wells; eliminating waste and finding environmental solutions for existing output are the better bets. She figures this is where the industry has to head no matter what. "Ultimately, even if oil goes back up for some miraculous reason, it will not be competitive," she says. "There will be other choices, cleaner choices, cheaper choices. The world is moving toward affordable energy for all of the people – so people in Africa can have heat and light at a low cost. We've got to do it fast and we've got to do it disruptively," she says.
One example: Imaginea runs some of its wells on solar power. Electricity represents as much as 10 per cent of operating costs for oil and gas operations, and solar can cut the expense by up to $3 a barrel. When the reserves run out in a decade, Imaginea can then feed the Alberta grid with its 50-kilowatt generating station.
Solar's just the start. Another idea is employing drones in the field. Cutting down on crews driving trucks to wells, as the industry has done since John D. Rockefeller's time, would reduce emissions and harmful impact on roads and trails, while also allowing the company to gather much more data remotely.
The oil patch, it's fair to say, is not abuzz with concepts like the Internet of Things and Big Data. West is hopeful she can put such cutting-edge stuff to use on oil and gas gear. The resulting tide of data could help identify patterns that would light the way to greater efficiency and better accident prevention.
West isn't banging down doors to preach her gospel in downtown Calgary, home of Canada's ultimate "bro" culture. But as someone determined to "smash up" the concepts of energy and environment, she's willing to share her findings with whoever asks. "It's not helpful to live in the world of 'or,' where you're either a crazy tree-hugger or a greedy capitalist. That's just limiting our solution set. I'm hanging out in the middle with the permutations and combinations, the solutions and the opportunities," she says.