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Felicity Bradstock

Felicity Bradstock

Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK.

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Canada’s Oil And Gas Industry Must Innovate To Survive

As the Canadian government, like many others, aims for net-zero carbon emissions by 2050, the nation’s energy industry is investing heavily in innovation and digital technology to enhance the oil and gas sector while achieving clean energy objectives.  

In 2020, the government announced an ambitious climate plan, aiming to reduce emissions and invest in clean technologies, sending the energy industry into a tailspin. However, oil and gas companies have responded by investing more heavily in digitalization, carbon capture technologies, and artificial intelligence (AI).  

Following the release of the Canadian climate strategy, Pollution Probe and QUEST released a report suggesting that despite years of innovation, Canadian energy companies were still failing to make a meaningful contribution to reduce carbon emissions or encourage clean energy solutions. 

The two companies have announced a multi-year partnership to explore how “innovation sandboxes” might encourage the energy sector to adopt low-carbon technologies. The report highlights the unwillingness of regulators and policymakers to adopt innovative services and technologies in energy and explores how greater innovation may be achieved across the sector.

However, Canada is no stranger to digital innovation. In 2020, as much as CA$28 billion (US$22.4) was expected to be invested in digital transformation, around a 7 percent increase from previous years, according to information from the International Data Corporation (IDC).

The sectors attracting the greatest level of investment were robotic manufacturing, intelligent and predictive grid management, electricity, and 360-degree customer and client management.

Emissions Reduction Alberta (ERA) announced in 2020 a CA$58.4 million (US$46.7m) investment in natural gas innovations. The ERA will use AI and machine learning technologies to measure and locate methane emissions, as well as prototyping new approaches to convert natural gas to hydrogen, as well as pursuing several other goals. 

Steve MacDonald, CEO of ERA, explained, “Some projects will have an immediate impact by improving the performance of the natural gas sector’s existing operations and others are accelerating transformative opportunities, like hydrogen production, that can change the face of the industry.”.

Recent data also shows that the introduction of robotics could lead to the replacement of 20,000 jobs in Canada over the next decade. New innovations in robotics in the industry include subsea IMR - perpetually underwater robotics solutions with lower costs and a greater reach than traditional conventional remotely operated vehicle (ROV).

These types of robotics can cover long distances, regardless of weather conditions, to carry out visual inspections, cleaning, and other vital tasks, which were much more difficult to achieve previously. However, much of the new technology still requires human involvement, making the oil and gas industry more efficient while maintaining jobs.  

Related: Why Iran’s Return To Oil Markets Isn’t A Major Threat

In addition, Canada is ahead of the curve on carbon capture and storage technologies (CCS), opening the Boundary Dam coal plant in 2014, at a cost of CA$1.3 billion (US$1bn), the world’s first commercial-scale carbon capture and storage operation. To date, the facility has captured around 4 million tonnes of carbon in total, well below the original one million tonne annual target.

President Trudeau is betting big on CCS as Canada’s 2021 Federal Budget, announced this month, introduces tax credits for carbon-capture initiatives. The budget proposes a tax credit for investments in carbon-capture projects that will cut emissions by a minimum of 15 megatonnes annually, expected to come into effect in 2022. An additional CA$319 million is proposed by the budget over seven years in support of the research and development of carbon-capture technology, aiming to improve its commercial viability.

Canada’s oil and gas sector is responding to growing pressure from the government with rapid innovation and greater digitalization across the industry. It is these moves that will help the nation’s hydrocarbon industry maintain its major international status.

By Felicity Bradstock for Oilpirce.com 

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