Innovation trends in oil and natural gas: Dan Wicklum

COSIA’s chief executive discusses how collaboration and open innovation of environmental technologies is transforming Canada’s oil sands.

As chief executive of Canada’s Oil Sands Innovation Alliance (COSIA), Dan Wicklum gets to work with some of the top engineers, scientists and business leaders in the oil patch. In the six years since COSIA was established, the former government executive and professional football player has turned the organization into an unparalleled hub of innovation, where the country’s major oil sands producers share ideas and intellectual property to accelerate industry’s environmental performance. To date, COSIA members have shared 981 environmental technologies that cost over $1.4 billion to develop. Context spoke to Wicklum to get his insights on innovation in the industry and where it’s headed.

Q: Do you think Canadians would be surprised about the extent of innovation in the industry?

A: They shouldn’t be. Oil sands has always been one of the most innovative sectors around. The reality is most sectors are judged against the Silicon Valley model of innovation, where the pace is incredibly quick—often weeks and months—and the price of projects relatively small. Contrast that with the oil sands. Developing a project takes years and requires billions of dollars. It also involves a global commodity where you are competing with other jurisdictions to be the low-cost producer. Under these dynamics smart people take a very deliberate approach to innovation. The sector is as innovative as any other out there. It just looks different than most, and it certainly looks different than the Silicon Valley model.

Q: What then should Canadians understand?

A: That innovation has always been important to the industry. It’s interesting when you look at companies in the country’s oil sector, it includes some of the oldest companies in Canadian business, in some cases 100 years. Think of the change these companies have gone through, and now they’re going through great change now. The bottom line is companies in the sector are very resilient. They have a remarkable ability to innovate.

Q: Environmental innovation and innovations to reduce costs seem to be two major themes in the way the industry approaches innovation. Can you comment on this?

A: They’re fundamentally linked in our industry. Let me give you an example. One of the biggest costs of producing oil sands is the energy input to heat water into steam that’s used to melt and recover the bitumen. The industry is relentlessly driving to find ways to use less steam. What this means is they are using less energy to make the steam. That in turn reduces costs and their greenhouse gas (GHG) emissions.

If you look at any of the more than 300 projects in COSIA’s current project portfolio, there is no one project that only benefits cost reduction or only benefits the environment. In each case, the goals of innovating for cost and for the environment are closely connected.

Q: Besides this linkage, what trends are shaping how innovation takes place in the industry?

Dan Wicklum is the chief executive of an alliance of oil sands producers who have made an unprecedented agreement to share intellectual property related to environmental innovation so that environmental performance can be improved more widely and quickly. Photo by Jason Dziver.

A: The change in the way they approach competition and collaboration is a big one. Leaders in the industry have been trained through many decades of operation to think of their companies in competition with each other for technology development. But today they increasingly understand that their biggest competition with other energy sources and with oil products from around the world. So, their view of where their competition is and how they react to it is changing. There’s an understanding that as an industry we’re stronger together when we develop technological solutions together, then compete with each other on implementation and execution.

That’s a major driver behind COSIA. Instead of each member company competing for their own projects, they’ve taken a sectoral approach to reduce costs and improve environmental performance together. And they’ve done that in a way that respects individual investments and intellectual property ownership.

Q: Are there other innovation trends you’re seeing in the industry?

A: Another is what I call “open innovation”. Today in the oil sands we’re taking new approaches to incent global innovators to come up with solutions to oil sands challenges. A great example is the NRG COSIA Carbon XPRIZE. This competition is challenging the best minds around the world to compete for innovations that can take carbon and turn it into a valuable resource.

In addition, I’m seeing a growing use of artificial intelligence and automation in the industry. These innovations are showing up in all kinds of practical ways. For example, cognitive computing is being applied in steam-assisted gravity drainage (SAGD) operations to enhance steam injection. We’re seeing companies start to introduce driverless trucks at mines. It’s all part of a constant quest to create efficiencies.

Q: Where is innovation in the oil patch headed?

A: Despite always being high, I think the level and pace of innovation is increasing. This is happening because of the trends I’ve just mentioned. At the same time, the industry’s culture is changing. We’re becoming more outward focused. We’re tapping into sources of ideas and technical capacity we haven’t engaged before.

We need to constantly get more efficient in how we solicit ideas and launch tech development and testing projects. As an industry, we’re getting better at this. The oil sands sector has fundamentally redefined how it innovates through COSIA in a very short number of years. The industry now has a very streamlined way of soliciting ideas and launching projects in priority areas. Now as always, the sector will be on a continual quest to get even better at innovation.

In this article, Context speaks with:
  • Dan Wicklum Chief Executive, Canada's Oil Sands Innovation Alliance