Great. Thank you.
To begin, I'd like to provide a brief overview of SDTC. I'm not sure how many folks are familiar with us as a foundation. I'd also like to talk about some of the drivers we see in the sector, in the oil and gas sector specifically, for innovation. Finally, I'd like to give you an overview of some of the investments SDTC has made over the past 15 years in the sector, to get at some of the issues raised by some of my peers here.
SDTC was created in 2001 with the mandate of being a policy instrument of the government to deliver environmental and economic benefits to Canadians. We're to do that by fostering the development and demonstration of technological solutions that address climate change, clean air, clean water, and clean land or clean soil. We're also to forge innovative partnerships and build a sustainable development technology infrastructure within Canada, which is more than just the hardware, it's also the ecosystem. We're also to ensure timely diffusion—that is, increase the number and rate of uptake of technologies into the marketplace across Canada to provide national benefits. That's national economic and environmental benefits.
As our primary instrument in delivering on our mandate, we use the SD Tech Fund, which is essentially a granting instrument that has received allocations of $955 million from the federal government to date since 2001. That has been largely deployed to date or allocated to projects. We are sitting at roughly $850 million of investments across Canada's economic sectors.
We're registered as a not-for profit and we operate at arm's length but we are accountable to Parliament, formerly through the Minister of National Resources but now accountable through the Minister of Innovation, Science and Economic Development. We are governed by a board of 15 directors, seven of whom, including our chairman Jim Balsillie, are nominated by the Government of Canada.
Essentially the role of SDTC is to financially de-risk the development and demonstration of technologies. It has been studied for a long time and identified that a lack of capital flows into high-capex development and demonstration of technologies. SDTC's role within that is to buy down some of the financial risk and draw in some of the other financial parties so that these technologies can mature, become market-ready solutions and drive benefits to Canadians.
To date that $850 million from SDTC has been invested in 304 projects. That $850 million has leveraged $2.3 billion from partners. That's government and industry, but about 85% of that is industry. So it's primarily industry.
In terms of the sectoral spread of our funding, a significant portion has been deployed to the oil and gas sector. I would say an estimated 15% has been deployed to what we refer to as cleaner fossil fuel technologies. These are advanced extraction technologies, but also technologies that address some of the waste streams from production. We've also invested in some of the support infrastructure, significant investments in pipeline leak detection technologies, other safety measures associated with production and the pipelines, as well as technologies that are used in the service industry that support the oil and gas sector.
What do we see as the trends or the challenges for the sector and some of the issues we should have top of mind when we look at innovation going forward in that sector?
First I would refer to the OECD green growth indicators study from 2014, which ranks Canada's competitiveness on multi-units on a GDP basis. They looked at GDP productivity per unit of CO2, GDP productivity per unit of energy used, per unit of water withdrawal, and per unit of material consumption in production. Canada ranked not so well, not so favourably, according to the study, when compared with peers such as the United States, the U.K., France, Germany, Ireland, etc. We ranked 14 out of 15 on CO2 productivity, 15 out of 15 on energy productivity, nine out of 11 in water withdrawal productivity, and 11 out of 15 in terms of material consumption productivity on a GDP unit basis.
Furthermore, the world is getting increasingly competitive, as we all know, and there are some megatrends out there that will impact the competitiveness of the sector going forward. The IPCC estimates that we need to reduce emissions by 40% to 70% to avoid the significant impacts of climate change. There's an expectation of 90 trillion dollars' worth of infrastructure investment to achieve significant reductions in carbon emissions over the next 15 years.
China is launching a carbon market in 2017 addressing eight of its sectors. That's just around the corner and they are working closely with the EU to align their policy framework for their market with that of the EU's. It is expected to create a consolidated market in the five- to 10-year time frame.
Finally, a recent McKinsey study estimates that 25% to 40% of the world will be facing shortages in water, energy, and food. Obviously I'd like to highlight energy in that we sit on a lot of energy resources. We need to deploy them effectively.
What does that mean for the oil and gas industry, particularly in Canada?
Many of the speakers before me have indicated the estimates from NRCan are in the range of 8% of our GDP. It's therefore critical to adopt innovative and sustainable solutions to stay competitive. We need to continually improve and drive performance margins to maintain our position in the global competitive landscape, but resilience in the sector to ride through these big macroeconomic blips that we're seeing, particularly on the price of oil, will be tied to a triple bottom line. It's more than just cost-competitiveness. It's environmental and social competitiveness.
You can see globally that externalities are playing an increasing role in determining the viability of business opportunities. Whether it's the perceived carbon liability or social licence issues delaying the rollout of projects, which all adds to the capex and the deployment cost of new business opportunities, these are all coming to bear. For economic prosperity to be maintained in this fast-changing world, we'll need to address those three pillars: economic, environmental, and societal.
We've all seen just how dramatic the highs and lows of oil prices have been over the past 10 years. There's a lot of volatility. It's very difficult for any industry to navigate that kind of volatility. In terms of a different breakout of Canada's position within that volatility, we're looking at how we can hold on to market share within that volatility. What price point do we require to have significant margins and to retain Canadian economic benefits?
This chart illustrates the cost bands for different producers of oil across the world from different resource stocks, as well as the GHG emissions per barrel for the different production pathways. The grey blocks are the cost band. Horizontally, you have the volume of production attributed to each production source and then the I-shaped bars give you the spread of the GHG emissions for the respective sources of production routes of oil.
I would like to highlight the oil sands block, which clearly shows it has the highest range of cost of production, but also the highest range of GHG emissions per barrel of oil. This is obviously not an ideal position to be in when you deal with volatility and drastic price drops. The red line across the horizontal is roughly the current price point, the green line being the average production cost across those various grey blocks. We're well above both the average and the current price point.
SDTC's investment thesis in this space is all about driving that cost range down. The next chart essentially illustrates where we're targeting, both from a cost of production point of view but also from a GHG intensity point of view per barrel. We've made quite a few investments in this space since our inception to achieve those objectives, and we're open for business to invest in more.
In terms of an overview of SDTC's investments across the value chain, they go from exploration all the way to marketing and distribution. As I said, this represents roughly 15% of our funds, so about 150 million dollars' worth of investments in this space. When I say investments, I mean grants. We're are a non-dilutive instrument. We do not take an equity position in the companies that we fund.
A significant portion of our investments in the value chain has been in production, obviously. We've looked extensively at solvent-based extraction. We've looked at enhanced steam operations. We've looked at downhole steam production, which also drives significant efficiency advantages, but we've also looked at tailings management, reducing the net yield of tailings but also remediating them completely, as well as extracting more value out of those tailings, minerals, and other co-products.
Finally we've look at addressing the balance of plant, driving efficiency throughout the operations of production. We refer to upgrading and refining. SDTC also sees this as a very important space to play, all with the objective of retaining value for Canadians but also driving up efficiency. The more refined the product is before it gets in the pipeline, the more efficient its transport. The investments we've made in companies like MEG Energy, Fractal Systems, and Field Upgrading, are all targeted at partial upgrading to enhance the amount of margin retained by Canadian entities at the end of the day.
Also we've made significant investments in pipeline, pipeline integrity, pipeline leak detection, and even pipeline repairs in sensitive ecosystems as well as investments in downstream refining in companies such as Quantiam, lmtex, and Paradigm Shift Technologies, which are drastically reducing the energy intensity of creating chemical building blocks for industry.