1

Clean Resource Innovation Network (CRIN)

• Canada has a long history as a global leader in resource development and innovation• Solutions to today’s energy challenges require an understanding of the entire innovation system and

how the pieces fit together

• Many players contribute to oil and gas innovation system

2

Clean Resource Innovation Network (CRIN)

Federal Contribution

Granting Councils Research Support

Provincial Contribution

Universities/Colleges

Private Sector Structure

Global Markets and Opportunities

CRIN (Clean Resource Innovation Network) Linking Organizations

Outcom

esInpu

ts

Public Funding and Effort

• Steering Committee Representatives• Industry: Canadian Natural Resources, Cenovus Energy, Imperial, MEG Energy, Husky, Nexen,

Shell, Suncor Energy, COSIA, PRNL, PTAC, CAPP • Government: Calgary Economic Development, Alberta Economic Development and Trade,

Alberta Innovates, Innovation Science and Economic Development Canada, Government of Canada

• Academia: University of Calgary, University of Alberta• SMEs: Innovate Calgary, PSAC, Tundra Process, CAODC, ACTIA, Hatch• Finance & Entrepreneurs: BDC, Evok Innovations 3

CRIN’s Governance Structure is Simple and Inclusive

Senior Leaders Forum (SLF)

Steering Committee

Sub-committeeMembership Engagement

& Outreach

Sub-committeeTechnology Enablement

Sub-committeeInnovation Ecosystem

Development

BoardCRIN(NFP)

Advisory Council

SLF is comprised of the CEOs of Oil and Gas companies, SMEs, Innovators, Accelerators, Associations and Deans of Universities.

• Many players contribute to the oil and natural gas innovation system

• Solutions to today’s energy challenges require an understanding of entire innovation system and how pieces fit together

• CRIN aims to enhance innovation effectiveness by:

• Better priority setting and alignment on key game changing technologies to pursue

• Broader source of ideas and more entrepreneurs engaged from across Canada and the world

• Focus on deployment phase (field pilots to commercial roll out) where current system falters

• Better connectivity between all participants (academics, entrepreneurs, funders, customers, governments)

• Expand “path to deployment” and customer centered objectives for the technology work across sectors

4

Canada is the Global Leader in Producing Clean Hydrocarbon Energy from Source to End Use

• World Business Council on Sustainable Development frames the 2050 challenge as “nine billion people not just living on the planet, but living well and within the limits of the planet”

• Canada has a role to play in helping those countries meet the growing energy needs, while reducing emissions and growing the economy

• Innovation will position Canada to contribute responsibly

5

Innovation Key to Meeting Increasing Global Energy Demands

Global supplier of technology to reduce

carbon emissions

• We agree that “clean growth is good for our planet and our pocketbooks.” (Action on Clean Growth).

• We believe we are part of the solution to address the challenges posed by climate change.

• We innovate to become carbon and cost competitive.

• We seek to leverage resources (skills, expertise and funding) to advance and accelerate results.

• We recognize that societal benefits are far greater when sectors works together for effective, rapid and responsible deployment.

6

CRIN Members are Committed to Making a Difference

• 75% of energy private investments in clean tech come from the oil & gas sector.

• Petroleum Technology Alliance of Canada (PTAC) has positive results:

• captured of over 820K tonnes of CO2e offset credits per year – equivalent to removing 164K cars off road annually.

• valued of offsets are between $76M -$104M per year. Potential cost savings estimated at between $531M-$552M.

• Innovation in oil sands technology has potential to reduce GHG emissions by 79%.

Our Beliefs Our Results

Canada will continue to benefit from an innovation system that is financially sound, technically leading edge, diverse, and socially and environmentally responsible.

Upstream

Midstream

Downstream

End-Use

• Syngas production• Bitumen partial upgrading• Natural gas purification• ZDD additive removal

• Digital pipeline leak sensors• Pipeline structural “Tap-Test”• Shrimp/arctic microbial remediation• Microbial land-spill remediation

• LNGs• Syngas and hydrogen fuel• Biodegradable products• IOT and automation efficiencies

Oil & Gas Clean Tech Innovation(currently in devevelopment, pilot, and early adoption by the industry)

• Methane leak detection/measurement• Advanced materials/genome corrosion for pipelines/ships• Carbon storage in reservoirs, tanks, and volcanic rock

• Carbon capture, storage, and use• CO2 + saline waste water, and CO2 + algae processing

into water and value-added (bio)products or bio-oil • Water treatment using oil sand petroleum coke

• Advanced materials & equipment• Efficient insulation materials and recycling of heating waste• Efficient combustion and capture technologies

• Zero CO2 emissions extraction• Hydrogen extraction in non-carbon

vehicle (leaves CO2 in reservoir)• 100% well site restoration

• Zero-emission combustion technology

• Blockchain transportation tracking system

• 100% efficient refining systems that re-use, treat, and add-value to all by-products

• Zero-emission fuels• Biodegradable petroleum products• Zero-emission combustion

technology

Future Oil and Gas Clean Tech Innovation

• Carbon capture• Solvent use in EOR• In-situ combustion• Oil sands EVs

• Tailings Innovation• BTEX degrading bioaugmentation remediation well restoring• Bio/genomic/microbial water and soil remediation

GHGs: 161 Mt CO2 Equivalent

GHGs: 10 Mt CO2 Equivalent

GHGs: 22 Mt CO2 Equivalent

GHGs: 235 Mt CO2 Equivalent

Transportation: 172 Mt CO2 EquivalentChemicals/fertilizers: 24 Mt CO2 Equivalent

On-farm fuel use: 22 Mt CO2 EquivalentElectricity Generation (oil and gas): 17 Mt CO2 Equivalent

End-Use

7

Clean Technology Innovation in Oil and Gas Positions the Sector to be Carbon and Cost Competitive

Oil & Gas subsectors with greatest need to innovate:

• Upstream Oil/Gas Production (22%)

• Transportation (23%)

• Other End Use (9%) electricity, chemicals, fertilizers, farm-fuels

• Refining (3%)

*Other also contain GHGs that are the result of oil and gas end-use

End-Use

Light Manufacturing, Construction, and Forest Resources

GHGs from Oil and Gas

GH

Gs

(Mt

CO

2 Eq

uiv

alen

t)

Canada’s Total GHGs in 2014: 732 Mt CO2 Equivalent

26% Oil & Gas193 Mt CO2 eq

23% Transportation 172 Mt CO2 eq

11% Electricity Generation 79 Mt CO2 eq

10% Heavy Industry76 Mt CO2 eq

10% Agriculture73 Mt CO2 eq

8% Waste & Others55 Mt CO2 eq Waste

1717

57

30

2018

21

95

68

87

62

12

24

52

51

22

29

22

12% Buildings87 Mt CO2 eq

523 12

GHGs from the use of Oil and Gas Products

Upstream

Bitumen In Situ

Light Oil ProductionHeavy Oil Production

Frontier Oil ProductionNatural Gas Production & Processing

Bitumen MiningBitumen Upgrading

MidstreamOil & Gas Transmission Downstream

Natural Gas Distribution

Freight TransportCommercial, Recreational, Residential Transport

Passenger Transport

Refined Petroleum ProductsNatural Gas

Chemicals & Fertilizers

On-Farm Fuel Use

Innovation Needs to be Across the Full Value-Chain

9

Current Technologies in Oil Sands Have Potentialto Significantly Reduce Emissions

• Direct contribution to Canada’s GDP is $130B

• Over 8,800 firms in the oil and gas sector (upstream to downstream)

• Direct jobs across the country are over 190K (in every province)

• Oil and Gas exports add $43B to Canada’s balance of trade

• An estimated 6,000 products are made from oil & gas

10

Canada’s Oil and Natural Gas Industry Provides Significant Economic Benefits Across the Country

• Significant opportunities for Canada to build on our success. However, the sector’s innovation can be much more effective with some new emphasis:

• Better priority setting and alignment on key game changers to be pursued• Broader source of ideas and more entrepreneurs engaged from across Canada and the world• Focus on the deployment phase (field pilots to commercial roll out) where the current system falters• Better connectivity between all participants (academics, entrepreneurs, funders, customers)• The prioritization approach used now is a successful model that can improve the innovation process more

broadly• CRIN can expand the “path to deployment” and customer centered objectives for the technology work across

the sector

11

Leveraging Innovation Experience and Capacity

12

Clean Resource Innovation Network (CRIN)

Conversion of hydrocarbons to electricity. Integration of solutions from primary energy producers to energy converters, retailers, regulators

Future State: Canada is the global leader in producing clean hydrocarbon energy from source to end use

Building on carbon capture technology development efforts and catalyzing transformative carbon utilization technologies

Bitumen Beyond Combustion: Developing non-combustion products and production processes from Alberta’s bitumen

The production of hydrogen and alternative fuels with zero emissions, advanced decarbonization of hydrocarbons

H2 BBCP CO2

Low to Zero EmissionHydrocarbon Production to End Use

Production End Use

14

Clean Resource Innovation Network (CRIN)

Production: Bitumen Beyond Combustion (BBC)

15

The Clean Resource Innovation Network (CRIN) Webinar Calgary, AB February 11, 2019

Axel Meisen, C.M., Ph.D., P.Eng., FCAE, FCIC

Senior Advisor, Alberta Innovates

16

1. Importance of BBC products2. Promising BBC products: asphalts, carbon fibres, polymers3. Production processes4. Alberta Innovates’ BBC initiatives5. Insights and conclusions

Outline

17

Canada’s Oil Sands

Combustion Products (∼90%)

Non-combustion Products (∼10%)

Reserves 180 Billion bblProduction 2.7 Million bpd

Bitumen:

: A Rich Source of Energy and Materials

18

Major Uses of Oil

19

Essential Characteristics of BBC Products and Processes

Functional and price competitive

Large-scale production potential

Global market access

Safety; environmental & social acceptance

Low GHG generation over

full life cycle

20

Promising BBC Products

• Carbon Fibres (CF)• Carbon Fibre Combination Products (CF-concrete, - wood, -polymers)• Polymers• Vanadium for redox batteries (electricity storage)

• High-quality and Transportable Asphalt Binders• Asphaltenes

21

Asphalt Binders from Oil Sands Bitumen

Atmosphericdistillation

Vacuumdistillation

Air blowing

Bitumen Lighter cuts

Lighter cuts

Off gases

LongResidue

ShortResidue

Asphalt Binder(Molten, >150oC)

22

Transportable Asphalt Binders• Molten (current): Tanker trucks, Railroad tank cars, Specialty ships

• Solid (desired): Railroad cars, Bulk carrier ships

Schematics - not to scale

Pellets

Asphalt binder

Polymer shell

http://www.nitechcorp.com/PelletizedAsphalt.html

CanaPuxs

http://www.theglobeandmail.com/news/national/cn-develops-technology-that-could-make-bitumen-transportation-safer/article34082304/

23

Asphaltenes from Oil Sands Bitumen

C5 / C7Extraction

Purification

Bitumen Maltenes

Impurities

Asphaltenes

Purified Asphaltenes(Solid)

24

Carbon Fibres from Asphaltenes

Pre-treatmentRaw

Spinning200oC

Surface Treatment

Asphal-tenes

ProductFibres

Carbonization800 – 1,500oC

Graphitization>1,800oC

OxidativeStabilization

300oC

Raw Fibres

Temperaturesare illustrative

25

Carbon Fibre Combination Products

26

PolymersPolymer Formula Production

Mt/yLD, LDPE Low density, low density

linear polyethylene(C2H4)n 64

HDPE High density polyethylene (C2H4)n 52PP Polypropylene (C3H6)n 68PS Polystyrene (C8H8)n 25PVC Poly vinyl chloride (C2H3Cl)n 38PET Poly ethylene terephthalate (C10H8O4)n 33PUR Poly urethane resins (C17H16N2O4)n 27PP&A Poly amide and acrylic fibres (C12H22N2O2)n 59

Other 16Additives 25

Total 407R. Geyer, J.R. Jambeck, K.L. Law, Production, use, and fate of all plastics ever made, Sci. Adv. 2017; 3:e1700782 (19 Jul 2017)

27

Polymers: Generic Industrial Production Processes

Other feedstocks

HC feedstockConversion/Separation

Bitumen

Polymer

React Separate/Combine

Form

High THigh P

CatalystsFast

Pure

28

Polymers: Generic Biological Production Processes(e.g., Spider Silk)

Other

FeedConversion/Separation

Bitumen

Polymer

React Separate/Combine

Form

Low TLow P

EnzymesSlow

Mixed

Biodegradable/ compostable

29

Summary: Generic Process for All BBC Products

Other

FeedstockPre-treatment

Bitumen

BBC Product

React Separate/Combine

Form

TP

CatalystsEnzymes

Biodegradable/ compostable?

Energy

Alberta Innovates BBC Projects ($2 million)

30https://albertainnovates.ca/bitumen-beyond-combustion-program-invests-2-million-in-research/

Project Researcher OrganizationValue-Added Opportunities for Conventional and Atypical Asphalt Cements and Asphaltenes Derived from Alberta Oil Sands in Road Construction.

Simon Hesp Queen’s University

Design and Performance Evaluation of Road Base Courses Comprised of Asphaltenes Derived from Alberta Oil Sands.

Leila Hashemian University of Alberta

Fabrication and application of short carbon fibers using asphaltene-based carbon precursors.

Weixing Chen University of Alberta

Multiphase Characterization of Bitumen-Based Carbon Fibers and Demonstrating their Use in Producing ‘Crack-Free’ Cement and Asphaltic Concrete.

Rishi Gupta University of Victoria

Producing High-Value Nanostructured Materials from Bitumen Coke.

Jinwen Chen CanmetENERGY

Low-cost Process of Converting Asphaltene into Valuable Graphene-like Materials.

Zhi Li University of Alberta

Vanadium Redox Flow Battery – Technology Comparison, Acquisition of Experience, Development of use Cases and Energy Management Strategies.

Petr Musilek University of Alberta

31

Insights and Conclusions1. BBC products: expanded and diversified markets for oil sands bitumen,

while meeting major human needs for materials2. Promising BBC products: asphalts, carbon fibres, polymers3. BBC production processes numerous, challenged by:

• Bitumen complexity• Current technology limitations• Energy requirements

4. Bio-polymer analogs needed5. Alberta Innovates’ BBC horizon: near- to long-term

32

References

Bryan Helfenbaum bryan.helfenbaum@albertainnovates.ca

Axel Meisenaxel@meisen.ca

https://albertainnovates.ca/wp-content/uploads/2018/04/BBC-Report-1.pdfhttps://albertainnovates.ca/wp-content/uploads/2018/04/BBC%20-%20Report%202.pdfhttps://albertainnovates.ca/bitumen-beyond-combustion-program-invests-2-million-in-research/

Contacts:

Paolo BombenPaolo.Bomben@albertainnovates.ca

StantecNathan AshcroftNathan.Ashcroft@Stantec.com

Alberta Innovates

Ken HardingKen.Harding@stantec.com

33

AcknowledgementSome images in this presentation were taken from publicly available websites, with their use being gratefully acknowledged and restricted to this presentation

The contents of this presentation resulted from the presenter’s professional work and should not be construed as representing the views or positions of organizations with which he is collaborating

Disclaimer

34

Clean Resource Innovation Network (CRIN)

Freight Transport:Anchor Tenant in a ‘Made in Alberta’ Hydrogen Economy?

Supported by:

Jarislowsky

Foundation

David B. Layzell, PhD, FRSC. Cofounder, Transition AcceleratorProfessor and Director, Canadian Energy Systems Analysis

Research (CESAR) Initiative,

University of Calgary, Calgary, AB. T2N 1N4

Email: dlayzell@ucalgary.ca Web: www.cesarnet.caTel: 403 220-5161

Dilbit

Synbit

SCO

HeavyLight/Med Other Feedstock

Other Fuel Input

Diesel

Gasoline

Aviation Fuel

Other RPP

Conversion Loss

0

3

6

9

Alberta Crude OilProduction

Refinery Input RPP from AlbertaOil

Chem

ical

Ene

rgy

(EJ/

year

)

Alberta

Other Jurisdictions

0

1

2

Diesel Demand

Chem

ical

Ene

rgy

(EJ/

year

)

HDV Freight

Other Road Freight

Other FreightPassenger

Other Uses

0

30

60

90

0

100

200

300

AB Diesel Use

Kine

tic

Ener

gy (P

J/ye

ar)

Chem

ical

Ene

rgy

(PJ/

year

)

2286 PJ/yr258 PJ/yr

From Alberta Oil to Diesel Use in 2016

NO

TE:

ü Transportation fuels: 77% of Alberta Oil

77%

ü AB oil produces 9X more diesel than is used in AB (2016)

ü Freight transport accounts for 69% of all diesel use

Alberta is in the

transport-ation fuel business.

Bans on Internal Combustion Engines

Coun

trie

sRe

gion

s

NetherlandsDenmarkIndiaIreland

KeyNew Vehicles onlyImported vehiclesAll Vehicles* Diesel only

ChinaFranceEnglandWalesN Ireland

Scotland

IsraelNorwaySweden

Costa Rica

CopenhagenCapetownAuklandBarcelonaBrussels*

MilanLos AngelesLondonSeattleVancouver

Athens*Madrid*Mexico City*

Rome*

British Columbia

2020 2030 2040 2050

Today

Alberta needs a ‘Plan B’, and the

Freight Transport sector can play an

important role!

GHG concerns – on their own – may not be sufficient to switch from diesel in the next 20-30 years, but there are other forces for change…

The Future of Freight & The Future of DieselEmissions from Cdnfreight movement:

Emissions from alldiesel fuel use in AB:

70 Mt CO2e/yr(10% all GHGs)

19 Mt CO2e/yr(8% all AB GHGs)

Empty kms

www.sunherald.com

CHALLENGES OTHER THAN GHG THAT NEED TO BE FIXED…

https://www.revelstokereview.com/

q Driver shortage

q Low marginsq Cost of diesel

maintenance q Too many

companies

• e-Commerce / e-Retail• New business models with

enhanced logistics (e.g. Physical Internet)

• Autonomous, connected trucks• Battle of the Electric Trucks

Nikola

Tesla

Battery Electric

Hydrogen Fuel Cell Electric

In an autonomous, connected, big-data world, what kind of electric truck is

better for Canada & Alberta?

EMERGING TECHNOLOGY, BUSINESS MODEL & SOCIAL INNOVATIONS

For Alberta, it’s Hydrogen

8

q Natural resources to make H2:ØNG & oilØBiomassØWind & Solar

q Carbon utilization & storage potential

q Large potential demand (inside & outside AB)

q Technical & corporate expertise

q Innovative spirit

Alberta’s Strengths A Hydrogen Fuel Cell Electric Hybrid (HFCE) Drivetrain

ALBERTA ZERO-EMISSION TRUCK ELECTRIFICATION COLLABORATION (AZETEC)Proposal submitted to the ERA-BEST competition

TransitionAccelerator

63.5 t (gross) B-Train X 700 km

Fossil Diesel –Int’l Combustion Engine (FD-ICE)

Natural Gas –H2 Fuel Cell Electric Hybrid (NG-HFCE)

ENERGY SYSTEMCOMPARISON

GHG BENEFITS ASSOCIATED WITH NG-HFCE ASSUMING NO CARBON MANAGEMENT

0

500

1000

1500

2000

FD-ICE NG-HFCE

gCO 2

e/km

t CO 2

e/Pr

ojec

t

Dire

ct E

miss

ions

1000

800

600

400

200

0

154 tCO2/project

Indirect

Upstream

257 tCO2/project

Tailpipe

The HFCE drivetrain eliminates tailpipe emissions, but increases upstream emissions where they can be dealt with more cost-effectively.

Natural Gas Wind and Solar Power

ElectrolysisH2 production& purification

Public Grid

Oxy-fuel Combined Cycle

Carbon Management

ExcessO2C or CO2

Distribution & Fueling Systems

AB Freight Transport

Other H2 Users & Export Markets

H2 H2

H2

Elect-ricity

Truck Manufacturer

Fuel Cells & other OEM components

Oil

CARBON-BASED FUELS WIND AND SOLAR POWER

Components being piloted in AZETEC proposal

KEY

Components for Future pilot studies

Bio

VISION FOR A ‘MADE IN ALBERTA’ HYDROGEN ECONOMY

H2 from C-based fuels can be produced at a ½ to ¼ the cost of H2from electricity, even with C mgmt.

H2 from wind & solar is the longer term solution and could make it possible for Alberta to have a low cost, low carbon public grid.

0

1000

2000

3000

4000

NG…NG…

1X 9X

PJHH

V/ yr

NG to H2production

NG demand (2016)

AB N

G pr

oduc

tion

(201

6)

Prod-uction

Dem-and

Natural gas

1X 9X

NG needs for 1X or 9X AB diesel demand

Alberta has the resource potential in the form of:q Natural gasq Oilq Wind and solar

WHAT IF THE CURRENT DIESEL MARKET THAT IS SUPPLIED BY ALBERTA OIL, WHERE REPLACED WITH AB HYDROGEN FROM NG?

…carbon emissions would need to be managed.

… If H2 is made from NG:~104 Mt CO2/yr for 9X AB

diesel demand

…AND ALBERTA COULD BE FINANCIALLY BETTER OFF ?

H2 is a value-added commodity.

Per GJ, H2 would sell for 3-10X the price of natural

gas and crude oil.

.

.

NA Market Potential:q AB crude for diesel

production: $18B/yrq H2 equivalent:

$56B/yr

CONCLUSIONS1. The Alberta economy relies on transportation fuel demand and there are

strong forces for electrification (BE or HFCE)

Ø In Freight, the ‘drivers’ for change include lower maintenance costs, lower emissions, and compatible with an autonomous vehicle future.

2. Alberta has a competitive advantage for the production of Hydrogen for

use by HFCE drivetrains

Ø Freight sector could be a willing partner for the build out of infrastructure and creation of market demand

3. The alternative is highway electrificationØ Alberta is competitively disadvantaged

https://www.theguardian.c

om/environment/2018/apr

/12/worlds-first-electrified-road-for-charging-vehicles-

opens-in-sweden

https://www.inverse.co

m/article/38301-siemens-ehighway-

electric-highway

34

Clean Resource Innovation Network (CRIN)

• Become a member• Sign the social contract and

become part of the community of people and organizations committed to becoming the global leader in producing clean hydrocarbon energy

• Visit cleanresourceinnovation.com

• Sign up to receive CRIN monthly e-newsletters

• You need to join CRIN as a member and then will automatically be added to the distribution list)

35

Join CRIN

• Follow our main CRIN page on LinkedIn to get the latest updates on current CRIN events, news and activities and discussions among network members

• Join our Member-only group pages for technology-focus areas with exclusive content and discussions, accessible only to CRIN members:

• Cleaner Fuels – Reducing Carbon Intensity

• Digital Oil and Gas Technology

• Methane Monitoring, Quantification and Abatement

• Low to Zero Carbon Hydrocarbon Production to End Use

• Novel Hydrocarbon Extraction

• Novel Land and Wellsite Remediation

• Water Technology Development

*Note: You must be logged into your LinkedIn account and request to join these groups.

36

Follow CRIN and Join Online Discussions

34

Clean Resource Innovation Network (CRIN)