After Oil & Gas: What Else Can Alberta Do?

price of gasoline in Calgary and Houston April 4 2020 historic lowsAfter 50 years of serious oil and gas expansion it is time to rethink the options for Alberta’s economy.  In every downturn, large or small, there is talk of “Western diversification” but nothing much seens to change.  This time, it needs to be different.

Is Calgary or even Edmonton as dependent on oil and gas as it was in the 1980’s and 1990’s?  Definitely not, but if oil and gas jobs were cut in half those economies would collapse and that is the situation we find ourselves in.  Like so many others (Devon, Shell, …) the company I work for just announced it is permanently laying off 60% of its Calgary work force and consolidating operations in Houston Texas.

Alberta (and to a lesser degree Saskatchewan and British Columbia) can say it wants to focus on “tech” or other sexy rabbit holes just like every other jurisdiction on the globe or “The West” can play to our strengths, which are:

  1. a highly educated work force
  2. a young and mobile work force
  3. a focus on earth sciences like geophysics
  4. mechanical skill sets like engineering, drilling and welding

After discussing the options with dozens of Alberta leaders here is a surprising list of industries Alberta can enter / expand that use our unique strengths:

1 – Hydrogen Generation

The joke about hydrogen is that it has been “next years technology” for the last 30 years.  Remember the hype around BC based Ballard Power in the late 1990’s.  So it is fair to ask, ‘why is it different this time?’  After all, hydrogen production is incredibly bad for the environment and insanely expense?  Right… not any more.  There are two important changes that have come to hydrogen in the last few years, which position Alberta and western Saskatchewan to develop this miracle energy:

  1. A Calgary startup named Proton Technologies has invented a very simple method of producing increadibly cheap hydrogen completely in the ground (aka in-situ):
    1. extracting only pure hydrogen
    2. leaving all the negative CO2 and other green house gases stuck in the ground where they are now
    3. ready to pipe to large scale industrial users (like electricity and other large factories in California and BC)
      .
  2. So called “Green Hydrogen” created using the spare electricity from solar and wind farms during downtimes.  As we explained in our summer 2018 article Should The Alberta Government Promote Solar & Wind Power? Alberta already has substantial solar and wind farms which have only expanded since then.  During peak demand times, the solar and wind are used by consumers, offices and factories but surprisingly it is not uncommon for these facilities to “blow off” the electricity during off peak hours and weekends.  That free electricity can be used to produce 100% clean hydrogen like it is in some parts of Asia and Europe today.

2 – Lithium

Yes, the lithium in your lithium ion batteries (think rechargeable AA cells, power tool batteries and hybrid car batteries) comes from somewhere.  Today it comes from some pretty ugly parts of the world, but did you know that Alberta has vast amounts of easily obtainable lithium?

Here are some segments from a recent “Daily Oil Bulletin” report:

“…Alberta has lithium — a lot of lithium. We actually have as Alberta a real competitive advantage when it comes to developing that lithium, because we have a head start in terms of our understanding of geology, and the skills and knowledge that we have in this province. We understand wells and pipelines and many of the things that we use to develop oil and gas. There is a real parallel there.”

…E3 Metals Corp. is leading the charge to usher in the new era leveraging technology developed at the University of Alberta combined with oil sector expertise to extract lithium from subsurface brine. The company would essentially replicate conventional oil production; only rather than separating oil out of the subsurface fluids it would extract lithium. Many of Alberta’s increasingly depleted wells already produce up to 95 per cent brine that is pumped back underground after the oil is separated — E3 would simply target lithium instead of crude…

…E3 has amassed mineral rights in the lithium-rich Leduc formation of central Alberta and hopes to be producing 20,000 tonnes a year of lithium carbonate equivalent by 2023 — coinciding with an expected crunch in the supply of lithium worldwide. The plant could scale up to 50,000 tonnes a year and the model could be replicated across E3 leases in future years.

“Demand for lithium is soaring,” Liz Lappin, E3 VP corporate affairs and exploration, and president of the recently formed Canadian Lithium Association, told a recent lithium workshop at the University of Calgary. Annual lithium demand of around 300,000 tonnes is set to jump to a million by 2025 and two million by 2030, representing “unprecedented demand for lithium really tied to electric vehicle growth,” she said.
SOURCE

3 – Helium

Take a close look at this picture and tell me what is wrong with it?  That is NOT an oil rig.  Look at the flag.  This company is drilling for helium… in SASKATCHEWAN… with a GEOLOGIST!

na helium Saskatchewan

Yes, the lighter than air stuff in balloons.  A few years ago you would have been right to think of Helium as a very low cost product with an endless supply.  That is because the United States military has been draining its massive “strategic supply” of helium for the last 30 years, but now they are out.  That means the world is scrambling to find new sources of helium for critical manufacturing.

Did you know that helium is an absolutely critical component in everything from computer hard drives, to MRI machines, to fiber optics (think the internet!).

There is more than just a passing interest in tapping and producing helium in Alberta:

“…Jan 06, 2020  Calgary, AB – A veteran of Canada’s ailing oil-patch is hoping a new product drawn from deep under Prairie grain fields will provide a natural resource boom for Western Canada.

…After 35 years in the oil and gas industry, he had grown frustrated by its multiplying headaches, including environmental criticism, pipeline constraints, regulatory burdens and the need to adopt expensive new technologies as easy-to-produce pools of oil and gas are depleted.

But New York-based financial manager Nick Snyder, 36, founder and chairman of privately held North American Helium, assured him none of those problems exist with helium, the lighter-than-air product he plans to produce and export…
SOURCE

4 – Non-Oil & Gas Pipelines

Lithium and Helium would both take advantage of Alberta’s existing pipeline infrastructure, but just like the oil industry, they need more pipes and that means high paying jobs engineering and construction jobs.

Proton Technologies CEO, Grant Strem, recently told us:

“…My goal is to build a large tunnel for hydrogen from Alberta out beyond Vancouver Island (where there are not a bunch of whales) and build subsea risers to floating liquification terminals. With our huge resources Canada can supply 20% of the world’s energy needs by 2040 via low cost hydrogen exports, at a production cost of less than 50 cents per GJ (cheaper than natural gas).  Floating liquification is important because Canada has a long history of changing the royalty rate after the infrastructure is built. If they monkey with the contract, pull up anchor.

This scale will need many very large air separation units (oxygen plants) to be constructed and will revitalize our economy based on clean energy…

5 – Orphaned Well Cleanup

Because Alberta has paid billions of dollars into the Canadian equalization payment system and received little in return, it is logical that at this time of transition from oil, the Canadian FEDERAL Government step up with some funds to pay for the 2800 orphaned wells that need to be cleaned up.  This work will require some engineering expertise but mostly manual labour.

6 – Negative Emission Power Plants

When I hear “carbon capture” I roll my eyes and think of how non-economic and complex it is.  Historically, Carbon Capture and Storage has been something between a science fair project and a public relations play for governments.

What we are talking about is something that is well known in science but has not been talked about much in the news.  Intentionally growing crops that absorb vast amounts of carbon, harvesting those crops, extracting the carbon and injecting in into what used to be oil reservoirs is ‘the new thing’.

“…Through photosynthesis, a type of carbon fixing, they pull in more than 860 gigatons of carbon dioxide each year from the atmosphere, storing it in their leaves, shoots, and roots. Unfortunately, much of the carbon dioxide is re-released back into the atmosphere when the plants—annual crops such as rice, wheat, and maize—are harvested or degraded by bacteria, fungi, or animals.
SOURCE

How to Build a Carbon Negative Power Plant
SOURCE
negative carbon power plant ccs

Alberta Saskatchewan Saline AquifersThis is a huge market.  Both Saskatchewan and Alberta are ideally positioned for early stage adoption of BioEnergy with Carbon Capture and Storage (BECCS).  Negative emission production of electricity using biomass feedstock with permanent isolation of captured carbon in deep saline aquifers is a real business.  We have the experts, the engineers, the climate, the surface area, the pipelines and most importantly the subsurface saline reservoirs that other places just don’t have.

Also, what are now emissions-intensive liabilities (coal/gas-fired power plants) can become important assets that function to withdraw CO2 from the atmosphere in the new energy economy.  Canada can become a world leader in negative emissions production of electricity.

Similarly there are companies IN CANADA TODAY, that are pulling CO2 right out of the air and storing it in the ground:

This is not pie in the sky, sometime in the foggy future stuff; this real and this is now.  In three of the four Intergovernmental Panel on Climate Change (IPCC) scenarios for arriving at 1.5 C in surface warming, BECCS is an absolute requirement.

Contrary to the opinion of many, Alberta and Saskatchewan are rich in potential resources for BECCS, renewables, and renewables to hydrogen. Western Canada should prosper in the new energy economy of the near future, if we just try.

7 – Wind & Solar

Many Western Canadians think Wind and Solar are a green energy hoax but that is ‘fake news’.  Manufacturing of Wind and Solar devices are not near as bad for the environment as you have been lead to believe.   On the other side of the Wind and Solar arguments are large numbers of people that self identify as “green” and do not want to deal with energy realities.  The facts do not change because of peoples opinions; it is unequivocally true that energy equals prosperity and the world needs more energy if we want to lift people out of poverty and sickness.

While we are sure that Alberta, Saskatchewan and BC have the skills to handle the design and manufacturing of many wind and solar components, we think there is a bigger immediate market in the application of that tech.

Southern Alberta has the third most clear sky and sunny days of any geography in North America.

“…Alberta has the second highest potential to produce solar energy in all of Canada, receiving more solar irradiation than any other province or territory other than Saskatchewan!

Based on the visible sunlight during daytime hours, Alberta and Saskatchewan share the highest percentage of sunny days 50% of days are sunny in Alberta. On average, other Canadian provinces see about 45% of sunny daytime hours.

That’s about 320 days of sunlight, compared to other provinces average of 300 days.

Calgary tops the list for most sunshine hours with 2,396 hours of sunlight per year. Following Calgary is Winnipeg, then Edmonton with 2,345 hours of sunlight. Even though solar panels work even when it is overcast and raining or when covered in snow, this much sunshine provides a great amount of energy for solar panels to convert to electricity.
SOURCE

transalta renewables - wind farmsIf you have ever made the mistake of driving an empty truck through the Lethbridge / Fort Macleod area, you know southern Alberta has some of the most consistent wind days anywhere too.

Beyond new farms, old wind and solar farms need retrofitting.  There is serious talk about TransAlta updating the giant Cowley Ridge wind farm near Pincher Creek that was shut down in 2016.

“…TransAlta’s wind project team will continue to engage with landowners, stakeholders, and First Nations communities as we advance the Cowley Ridge Repower Project through Alberta’s REP competitive bid process and through the AUC application and approval process.
SOURCE

You might ask yourself, where all that electricity would go.  Well, when I worked at TransAlta in the 1990’s we were sending vast amounts of power to California.

Most Canadian’s don’t realize just how big and powerful (pun intended) California is.  If California were its own country, it would be the 6th largest economy in the world… they will take every electron of green energy we can send them and fortunately, much of the required infrastructure already exists to get us started.  The rest of it can be built… by us!

Alberta Has Choices

At first glance the Western prairies and mountains do not look like they offer much beyond cattle grazing on the land and oil and gas in the land, so it is understandable that many think we can produce little else.  To be sure, the oil and gas industry will not soon leave Alberta, BC or Saskatchewan but the price we get for it and difficulty in transporting it in trains and in pipelines have made our governments finally think seriously about diversification.

We have choices.  There are voids in the both todays and tomorrow markets but nature abhors a void and someone somewhere will fill those needs if Alberta and the rest of Western Canada do not.  We need to move quickly and with purpose if we are going to be real players in the Hydrogen / Helium / Carbon Storage / Wind and Solar markets of the mid-2020’s.

We can do it with the right leadership so lets get it done!

 

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