Thank you very much. It's my pleasure to be here. I'm delighted to be with you here to share some of the thoughts from the R and D and the research perspectives.
First of all, I belong to the Faculty of Energy Systems and Nuclear Science, in which we study energy from the perspective of economic and social impacts as benefits to society. So we study oil and gas as part of the energy supply chain. Accordingly, when we deal with oil and gas, really as one resource—a natural resource, an important resource in Canada—we always compare and try to find its position versus other resources.
My first image is where we started talking about the map—we call it an energy map—to find out if we would like to capitalize and to strengthen our oil and gas industries and what the motivations for and limitations of doing that might be.
First we said, okay, let's try to map what we have as energy, including oil and gas. We started building the generation side. From the generation side, we built energy bio-power, nuclear power, thermal, hydrogen generation, solar, wind, geothermal, and other.
I just took you one step further up, where we found that we can build a reliable infrastructure for a gas network, for a thermal network, and for an electricity network. The idea here is to say that if we would like to say we have water finally in a certain region, how can we improve it? Do we need to upgrade it, maintain it, extend the lifetime? In order to answer these questions, it is primarily two factors, and these factors are related to the fact that it is supporting a regional area as transportation lines.
So I think the first image I would like to emphasize is that if we would like to really evaluate and make a proper plan for the oil and gas industry for the coming period, one thing we need to do is to see the needs and do a comparison with other energy sources in the region and internationally.
The second thing to look at is refined versus crude oil, which is a very important question, and one that I think everybody is trying to resolve. I would say at this point the question, when we have natural gas and crude oil, is whether we should proceed and extend the refinery. Doing so is very important for the Canadian market as well as the international market if we want to actually export the crude oil.
In order to answer this, again from a research perspective, we started our analysis by saying that we would build a model in which we would define the inputs and outputs for each entity such as a refinery or pipeline, upstream or downstream. And we tried to build in the parameters, which are the performance indicators, and see these parameters—economic parameters, environmental parameters, even HQP. In our terminology, HQP is high-quality personnel, including new-generation engineers and persons working in industry. Based on this model, we try to optimize and maximize the benefit from oil and gas.
This is a generic overview just positioning oil and gas. If we would really like to promote the oil and gas industry further, there will be a parameterized mathematical formulation that will determine that this approach is definitely the way to go based on optimization.
Looking at the oil and gas industry in more detail, in terms of generation, of course, gas represents 16% of the energy distribution. Nuclear is 33% and hydro is 23%. That means gas is actually a major contributor to energy in Canada. In terms of how to map this, we found, from the statistics I provided to you, for example, that Newfoundland generates around 18,000 cubic metres, and Nova Scotia and New Brunswick are around 48,000.
I have provided some information about the statistics we collected so far from the oil and gas industry, in terms of actual generation or production. We have tried to map these values to the actual geographical map and to say, for each region, what the local requirements are and what the sustainable factors are for each region.
Based on that, what we try to actually emphasize is whether we can sustain locally to minimize the transportation: can we balance the need for transportation versus local sustainability? That was one of the factors we tried to analyze. We found that it is primarily related to each region's requirements and needs as generation is available in that region. So from the map, from the projected figures we got from the actual oil and gas production, such as what I've provided, we found that it is very important to optimize the energy locally in each region based on the input-output parameters for each particular region.
I would like to go further into this, and in particular into the picture of where the crude oil chain goes. We have the wells. Crude oil and natural gas go to gathering pipelines that go to oil and gas processing facilities. This is a very simplified picture. That goes to feeder pipelines and then to transmission lines, which are bigger. That goes to a smaller size, which is the distribution—the LDCs—and then to homes and industry. That means we have a network. This infrastructure is not only a refinery but actually a network: from the generation, from the wells up to the processing upgraders, and then up to the end user. This means that if we would like to focus only on the refinery, that's only one element in the supply chain.
So in regard to that refinery's characteristics, from the top view, if we would like to optimize it in such a way as to maintain its maximum function or its maximum key performance indicators, we have to look at this upstream and downstream. Transmission lines are quite large, over long distances. If we'd like to see where to go in terms of maintaining existing refineries, increasing or expanding, developing a new refinery, or transporting the crude oil into the U.S. or internationally—primarily the U.S.—that means we need to model this network. Modelling the network actually includes the characteristics of the material, of the oil, the cost of maintaining the infrastructure, and then costs or the benefits or the value of the oil and gas products.
With this picture, I always feel that it is very important that we build the model dynamic with existing current production. Putting in our requirements and strategy will enable us to actually refine the policy around this supply chain.
If you would like to go to the end of the supply chain, which is actually the products, what we have as products, I have a picture of where we have the whole fractionation, or the situation or the refinery process, if we can say that—a simplified one. We have the crude oil and the generic products. So in the end, each product actually has its own supply chain. We have the fuel that goes to vehicles or transportation. We also have some products that go to jet fuel and also to diesel fuel for trains, and some for lubrication, fuel oil, grease, and asphalt, etc. We have quite a spectrum of products.
The question is.... A refinery is quite a dynamic process, where we can actually tune it in a way that can generate what we like to generate. This means that in a dynamic manner, with adaptive systems or adaptive refineries—I would say smart refineries—we can actually focus more on a product that we are interested in producing.
Let's take a vehicle as an example. As we know, there is the PHEV or plug-in hybrid electric vehicle, so if there is a rule or a policy or a direction to go into electric vehicles, it means that while we are talking about the refinery production or tuning or maintaining its operations, we need to have a look at what's exactly running into that electric vehicle, because it's a factor.
In Ontario, I am actually a member of something called the PHEV—plug-in hybrid electric vehicle—initiative, where we are thinking about how if we want to do electrification for a vehicle, what is the best way to do it? That definitely would affect the supply chain of oil, gas, and fuel. Accordingly, what I want to say here is this: each of these elements actually has a supply chain.
If I would like to maintain the refinery as one element, I need to be 100% sure that the supply chain is maintained properly, upstream and downstream. In addition to analysis on a case-by-case basis, what I strongly recommend in terms of actually evaluating that supply chain is having a real-time simulation for that supply chain that can show us parameters and what-if scenarios: if we contribute 80% of the electric vehicle, what will happen upstream? What if we implement 90% of the electric vehicle? What will we get? That was one of the pictures I tried to emphasize here.
Finally, in terms of the refinery itself, the last thing, as I mentioned, is the dynamic and adaptive aspect. The refinery involves a lot of processes. One of them is physical, thermal, and catalytic, which is chemical. That means we can actually adapt and attune and improve the refinery process.
My last comment in terms of improvement is about integrity. A lot of integrity requirements need to be maintained in terms of physical and mechanical integrity. Second, modifications can be made in terms of energy savings. We can actually improve the refinery's energy saving by maybe 20%. That is a good factor and a big factor. In terms of research, we have achieved something similar to 20% improvement in energy, and environmental and safety aspects as well.
That's primarily a quick review of my discussion.
Thanks a lot, and I'll be pleased to answer any questions.