Reinventing Innovation: The making of COSIA

The story of how Canada’s oil sands leaders created an IP-sharing alliance that’s now a world-leading hub of environmental innovation.

When Dan Wicklum talks about innovation in industry he likes to compare it to learning how to swim. “It’s like letting go of the edge of the pool and just start swimming. The idea is to stay flexible and learn as quickly as you can,” says the chief executive of Canada’s Oil Sands Innovation Alliance (COSIA).

It’s a telling comparison. It’s apparent what he’s really sharing is the experience of his own organization, an alliance of oil sands producers dedicated to speeding up environmental performance improvement in the oil sands.

Dan Wicklum, chief executive of Canada’s Oil Sands Innovation Alliance (COSIA), has led COSIA since its beginning in 2012. Photo by Jason Dziver.

“Innovation is never easy. It takes work. But as long as you can adjust and have smart people involved, you’re going to continuously improve,” says Wicklum, who’s headed up COSIA since its inception in 2012. Before that, Wicklum held senior federal government positions in science and technology.

This March, COSIA turned six years old. In a remarkably short time, the alliance has helped the industry let go of old ideas of competing for technology to become one of the most active collaborative innovation hubs in the country—and arguably, in the world.

While it’s a small operation of 20, the Calgary-based organization is funded by 10 of the largest oil sands companies, who represent 90 per cent of the country’s oil sands production. Each day, Wicklum and his team connect the network of hundreds of the industry’s top scientists, engineers and experts who are pursuing COSIA projects to solve the industry’s most pressing issues.

It’s an effort that’s brought together R&D activity in the industry, with 981 shared technologies to date that cost $1.4 billion. Under COSIA, researchers are working on potential solutions in many areas, whether it’s treating tailings with thickeners or building sustainable wetlands in boreal forests or harnessing algae to create biofuels while reducing GHG emissions.

And while COSIA works as a force for industry-led innovation, its model of deep collaboration and shared intellectual property among otherwise competing entities is remarkable. In many ways, the organization itself is an example of a telling yet underappreciated innovation.

The beginnings of collaboration: OSLI, OSTC and CONRAD

To understand COSIA’s origins, we need to go back a decade, when public perceptions of the oil sands had taken an unfavourable shift. Back then, aerial photographs of oil sands facilities and negative media coverage, combined with activism by non-governmental organizations, contributed to public concerns around the oil sands’ environmental impact. This shift in sentiment was being felt in boardrooms across the sector.

Gord Lambert was Suncor Energy’s vice president of sustainable development at the time COSIA was conceived as a way of accelerating innovations related to environmental performance.

“As company leaders, we realized our destinies were tied together because the oil sands has regional, cumulative environmental and social impacts,” says Gord Lambert, Suncor Energy’s vice president of sustainable development at the time. In an industry used to competing when it came to land purchases and project execution, this awareness stirred fresh thinking and new efforts to tackle environmental challenges together.

In April 2010, five oil sands companies—Suncor Energy, Statoil Canada, ConocoPhillips Canada, Nexen, and Total E&P Canada—founded a collaborative network called the Oil Sands Leadership Initiative, or OSLI. (Shell Canada would join a year later.) Each company agreed to work together in a number of areas including water management and land stewardship. Over the next two years, industry experts exchanged ideas and shared expertise on more than 50 projects, some aimed at managing waste, improving water treatment or taking a regional approach to land reclamation.

About the same time, oil sands mining operators were responding to Directive 074, new regulations from the province’s Energy Resources Conservation Board (now the Alberta Energy Regulator), requiring the sector more rapidly reduce tailings volumes. In December 2010, Suncor Energy, Syncrude Canada, Imperial Oil, Shell Canada, Teck Resources, Total E&P Canada and Canadian Natural Resources Limited (Canadian Natural) announced plans to form the Oil Sands Tailing Consortium (OSTC). Each company committed to share their prior work and new research on technologies and processes to deal with tailings, a mixture of fine clay, sands, water and residual bitumen produced from the oil sands extraction process.

The OSTC was possible to stand up quickly as it was able to use CONRAD (Canada’s Oilsands Network for Research & Development) as an umbrella structure to work under. CONRAD was established 25 years earlier by Syncrude and Suncor producing game changing technologies like Paraffinic Froth Treatment.

In all cases, industry players were taking action to work together to find faster, better environmental and sustainable solutions. Still, the scope of the effort and the number of participating companies was limited. There was an appetite for greater collaboration.

The sector’s top decision-makers were now meeting regularly to discuss how oil sands producers should respond to a changing business environment. Around the table, there was a growing realization the industry response to environmental issues had to be bigger and bolder.

“There was dissatisfaction with the status quo. The CEOs were starting to ask what would be required to develop the Canadian oil sands more sustainably,” Lambert says.

The COSIA blueprint and some tough negotiations

“Company executives realized the industry needed to accelerate the improvement of its overall environmental performance. This was not an area where we could afford to compete with each other,” says Joy Romero, Canadian Natural’s vice president of technology & innovation.

Joy Romero, Canadian Natural’s vice president of technology & innovation notes COSIA is one of the ways industry constantly challenges itself to improve. Photo by Jason Dziver

To explore this idea further, a number of the companies agreed in 2011 to send high-level representatives to an organizational design team for two months. Working with flipcharts and jotting down ideas on hundreds of yellow post-it notes, the team began to sketch out a vision of what a truly revolutionary collaborative might look like.

“We looked back at OSLI, OSTC, CONRAD and other successful collaborative initiatives around the world and asked what could we do differently to accelerate environmental performance improvements in the oil sands,” says Romero, one of the team members.

Gradually a new business model began to take shape: The new organization would take previous collaborative efforts to a much larger scale. It would create a more inclusive space to share best practices among both mining and in situ operators. It would also help the industry address environmental challenges by breaking down key barriers to working together, including intellectual property (IP) rights.

When the team reported back to the CEOs, discussion of the proposed model was intense, sometimes heated. Even so, the CEO group kept coming back to the principle that the industry could not afford to compete with each other on the environmental side.

“All the CEOs were fully engaged. They were asking questions. They were kicking the tires in a really rigorous way to think this through,” Lambert says.

Finally, on March 1, 2012, the CEOs of 12 of Canada’s oil sands producers at that time sat down in a Calgary boardroom to sign the new organization’s charter. The charter spelled out broad overarching commitments focused on “delivering accelerated improvement in environmental performance.” COSIA members would collaborate and innovate together to make measurable progress in four priority areas—tailings, water, land and GHG emissions.

Early days and some initial skepticism

At first, Wicklum says, there was initial skepticism among some media and observers. Some believed the new undertaking was a grand PR exercise.

“I remember one of the CEOs at the launch being asked how long they were going to give this ‘experiment’ a try. The executive didn’t blink, saying ‘This is not an experiment. We’re going to make this work,’” says Wicklum, who was hired as chief executive in January 2012 in the lead-up to COSIA’s launch.

To get the new alliance up and running, in the first year COSIA staff and member companies focused on developing a sound organizational structure. They folded existing OSTC, OSLI and CONRAD working groups on tailings, land and water into the new entity, and kept the work going. They also made plans to set up a new priority area and working group on GHGs over the next year.

Next, they agreed to define the scope of collaboration: Under COSIA rules, members would still own their technologies but provide other COSIA partners with access to research results and royalty-free patent use rights. Both prior work and new advances and IP achieved through project work would be available to all COSIA members, as long they used the technologies in the oil sands in Western Canada.

Finally, to sustain the overall effort, they created a series of legal agreements. The central tenet of these agreements was that each company—big and small—contribute equitably into the alliance and share in the development of technologies in any priority area. To keep everything on a level playing field, COSIA would track the dollars, work and IP contributed by each company and review these numbers each year with company CEOs.

“So long as they contribute equitably to the collaboration, they get equitable results back. This is the model that COSIA is using to advantage, so that project development risk can be shared across companies and across the sector,” Wicklum says.

COSIA may not be the very first IP-sharing initiative set up to promote environmental innovation. (According to a study by the Ontario-based Centre for International Governance Innovation, this distinction belongs to the Eco-Patent Commons, a technology-sharing initiative set up in 2008 with the help of multinational companies like IBM, Nokia and Sony.) But the made-in-Canada entity has pushed the boundaries for IP-sharing further than ever in the country, while attracting world-wide attention. Harvard Business School professor Michael Porter has cited COSIA as an outstanding example of creating shared value—finding ways to improve competitiveness while tackling environmental, economic and social issues.

So what’s the progress after six years?

Six years onward, those close to the industry say, the collaborative is having a profound impact.

While there have been changes in membership (today it’s made up of 10 members, reflecting some mergers and acquisitions), industry commitment to COSIA’s program remains solidly in place. Last year, representatives of COSIA’s member companies re-signed the COSIA charter, reaffirming their commitment to the alliance.

Stephen Kaufman, Suncor’s general manager of external innovation says the innovations coming from COSIA will help both industry’s environmental and competitive performance. Photo by Jason Dziver.

“The scale of the enterprise and the commitment of the firms have not wavered,” says Lambert, who since retiring from Suncor in 2015 continues to advise a number of organizations on sustainability issues. “COSIA has been able to keep up that level of commitment, because of the value creation that is occurring.”

Certainly, when it comes to environmental improvements, COSIA’s 10 member companies are planning and developing solutions more closely than ever. A case in point has been the sharing of centrifuge technology. For several years, Syncrude has pioneered centrifuge technology that squeezes water out from fine tailings for quicker reclamation. By sharing this technology and the lessons learned through COSIA, the company enabled other operators, such as Shell Canada and Canadian Natural, to adopt this technology more quickly and cost-effectively.

This drive to develop technology and share knowledge continues. Currently COSIA has 308 active projects, valued at $188 million, with 99 initiated in 2017. Member companies have identified new areas for collaboration such as sharing in situ best practices and non-aqueous (waterless) extraction techniques. They’ve launched a series of challenge competitions to engage innovators globally in the search for new ideas for reducing GHG emissions from oil sands production. And they’re funding, with government support, major projects such as the Alberta Carbon Conversion Technology Centre in Calgary that will enable researchers to test innovative carbon-use technologies at a commercial scale.

“We’re constantly challenging ourselves through COSIA to learn more as an industry and deliver faster, better results,” Romero says.

Collaboration Evolves: Meeting the challenges of today

Industry leaders like Stephen Kaufman, Suncor’s general manager of external innovation, are finding that as COSIA matures, its disciplined approach to investing in innovation—of avoiding duplicating work, focusing effort on key areas and sharing in technology investment—is one that is helping the industry stay competitive even as it faces lower commodity prices and greater environmental expectations.

Meera Nathwani-Crowe, Canadian Natural’s manager of technology & innovation, says the ability to pool resources through COSIA enhances early technology research opportunities. Photo by Jason Dziver

“The work we’re doing through COSIA will continue to be important to the sector’s vitality. By sharing technology development costs, we’re going be able to create future oil sands projects that are both environmentally better and more economically sustainable,” he says of the collaborative.

Others note that as the number of companies in the oil sands has become more concentrated and Canadianized with the sale of oil sands assets from global majors to Canadian companies, working together on innovation is even more critical.

“Many Canadian oil sands companies do not have the same capacity as multi-nationals to do early-stage technology research on their own. But they can do this research if they pool resources through COSIA,” says Meera Nathwani-Crowe, Canadian Natural’s manager of technology & innovation.

In addition to providing a cost-effective approach to innovation , Kaufman and Nathwani-Crowe say member companies have realized another benefit—better working relationships across the sector. As COSIA has evolved and member companies have become more comfortable with the sharing of knowledge and IP, a new attitude has emerged.

“Today if there’s a question about a technology that Suncor’s not familiar with, it’s now just a matter of picking up the phone and asking one of our COSIA peers,” Kaufman says.

“You can see the difference in our language as an industry,” adds Nathwani-Crowe. “We’re working together through COSIA to develop these technologies. We use the word ‘we’ more often these days.”

And so, on top of the many projects being worked on, it’s perhaps this willingness to openly share knowledge and ideas that may be COSIA’s greatest achievement so far, as people in the industry team up to keep the oil sands industry evolving in step with a changing world.


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