Thank you, Mr. Vice-Chair.
I'm delighted to be able to meet with the committee this morning. I'm in perfect position to follow your tour of the oil sands yesterday, as well as your meeting with the community in Fort Chipewyan.
I'm a professor of chemical engineering at the University of Alberta, and I'm director of the Centre for Oil Sands Innovation—and I've provided you with some written material on the latter. I'd like to briefly address two questions this morning that are at the top of my mind as a researcher working in the oil sands. The first question is whether the oil sands industry can adopt new technologies to improve its environmental performance. Second, what research is required to develop what we call transformative technologies that can be applied to the oil sands?
On the first question, for an industry that involves enormous capital investments in the range of tens of billions of dollars, the history has been that this industry has been enormously innovative and willing to embrace change. The plants that you flew over yesterday are nothing like what Suncor looked like in 1967 or what Syncrude looked like in 1978. The operations have been completely transformed through the mining and extraction operations, and those transformations are based on research and development, pilot testing, and industry innovation here in Canada. The oil sands industry has demonstrated a capacity for technical innovation that I think is unparalleled in the Canadian resource extraction industries.
Now, the major driver for this change has been cost. The industry has been striving through the last two decades to reduce its expenses to make itself more profitable. It may seem strange, but in 1990 Suncor Energy was seriously contemplating shutting down its oil sands division. This is the company that has at times been one of the darlings of the Canadian stock exchange and is currently in the process of taking over Petro-Canada. In 1990 it was looking at getting rid of its oil sands operation altogether because it was so marginal. Instead, they embraced technological change, revamped their mining and extraction operations, and turned the oil sands into a major profit centre.
The other driver for these companies, as we move into the future, is public pressure on the environmental front. I think you have to be realistic as to what the incentives are for companies to embrace innovation and technology change. Cost is always a factor, and environmental regulation and public expectation is, of course, the other.
I'm a researcher at the university. My particular focus is on research into long-term innovation. I'm not so much focused on what technology is available today as on what we need to do now to develop technologies that will be available five, ten, and fifteen years out. The oil sands of Alberta are an enormous strategic resource, and it would be a mistake to focus only on the near term; it's important to position ourselves not only for next year, but decades into the future.
I'd like to tell you a little bit about a unique centre at the University of Alberta that I direct, the Centre for Oil Sands Innovation. In 2003, five years ago, the international interest in the oil sands was really just ramping up. The industry was starting to expand, and at that time the president of Imperial Oil, Mr. Tim Hearn, came to the president of the University of Alberta with a unique proposition. He said, “We need help. We have major resources in northern Alberta but we do not believe that the current technology is sustainable for the long term, so we want to work with you on long-term research and development to try to come up with transformative technologies for the oil sands.”
What I'm talking about in transformative technologies is mining that has much less impact on the landscape, extraction technologies that do not use large amounts of fresh water from the Athabasca River and do not create tailings ponds, and upgrading processes that minimize energy consumption and greenhouse gas emissions.
Imagine a university president being confronted with a leader from industry saying, we want you to do long-term basic research. Of course the answer was an immediate yes, and we worked to establish a centre that has now grown into one that is national in scope.
Why did Hearn come to the University of Alberta? It wasn't just because Edmonton is the closest major centre to the oil sands. Through support from the Government of Canada through the Natural Sciences and Engineering Research Council, in partnership with companies such as Syncrude and Suncor, the University of Alberta had built up a group of professors who were unparallelled in their ability to conduct research and innovation related to oil sands. So it was a long-term investment by the Government of Canada that created the intellectual capacity—the people who were able to undertake this challenge. In particular, the industrial chairs program and the partnerships programs of NSERC were keys in developing that capability at the university.
From an official launch in 2005, I am proud to report that the Centre for Oil Sands Innovation has grown to encompass 20 different projects spanning basic chemistry, biology, physics, and engineering. The successful collaboration with Imperial Oil has led them to renew their commitment. They're providing us with another five years of funding, at $10 million total, because they've been so pleased with the success over the initial five years. In partnership with the Province of Alberta and the Government of Canada, we're moving forward on another five years of research on oil sands innovation.
While I'm immensely proud of the University of Alberta and our intellectual capacity, when it comes to such major research challenges we don't have quite enough intellectual capacity ourselves. So we've been building a research network on oil sands that now includes the University of British Columbia, the University of Victoria, Queen's University, and we'll soon be starting projects in collaboration with Natural Resources Canada, the National Research Council, and the University of Ottawa.
As director of the Centre for Oil Sands Innovation, I have a fascinating challenge. I'm in the job of teaching professors about the oil sands and some of the challenges they present and trying to enlist and engage their interest and attention.
In the oil sands of western Canada, which span Alberta and Saskatchewan, we have a world-scale resource. We have, in the oil sands industry, an amazing receptor capacity for new technologies and new ideas, and we have a strong foundation in science and engineering to conduct research and development for new technologies that can develop this resource in an environmentally sustainable way.
I'd like to thank you for your invitation to speak this morning, and I look forward to questions and discussion on the topic of innovation in the oil sands.
Thank you very much.