In a climate of low commodity prices, it is more critical than ever for the oil and gas industry to focus on innovative collaboration, Petroleum Technology Alliance Canada members heard Monday.

“Together, we can effectively minimize costs and increase production and reserves while reducing the environmental footprint,” said the PTAC board in its 2014 annual report.

In 2014, PTAC commissioned a study to look at each of the nearly 450 projects that had been completed over the previous 18 years, Soheil Asgarpour, president, told the organization’s 19th annual general meeting and awards luncheon.

The projects included topics such as reduction of costs and the environmental footprint and increasing production and reserves. “Evaluating more than 400 of PTAC’s completed projects validated the considerable financial and environmental benefits of the PTAC collaborative model,” said the board in its annual report.

A significant number of the projects evaluated were launched under the Alberta Upstream Petroleum Research Fund (AUPRF), which is managed by PTAC and led by the Canadian Association of Petroleum Producers (CAPP) and the Explorers and Producers Association of Canada (EPAC). The fund conducts practical science-based studies to address high-priority environmental and social issues related to oil and gas exploration and development in Alberta.

Since 2001, producers have provided $19.2 million with another $99 million secured from other sources such as NSERC and other beneficiary industries such as forestry for $119 million in total research dollars, said Asgarpour. “Industry estimates that the cost savings from this program alone has been in the range of $90 million to $350 million so far while value creation continues to snowball,” he said.

When compared to the industry cost, this rate of return clearly demonstrates the value created by reducing costs and improving environmental outcomes and enables industry to do even more work in managing the environment, said Asgarpour.

“This result flies in the face of the conventional wisdom that says there must be a trade-off between social and economic performance.”

Another example of the success of the PTAC model is the REMVue Slipstream technology projects, he said. The technology was developed and commercialized through a series of projects and pilot validations under PTAC’s Technology for Emission Reduction and Eco-Efficiency committee between 2004 and 2009. The Slipstream technology captures vented hydrocarbons from oil and condensate tanks, compressor packing and other instrumentation and uses it as fuel in the field process.

Hundreds of Slipstream units are in operation, generating $4.5 million a year from the engine fuel displaced. The carbon offset of the technology is equivalent to taking 40,000 cars off the road annually, said Asgarpour.

With low commodity prices expected to continue in 2015, PTAC will focus on developing cost-reduction projects to help industry become more competitive with other global hydrocarbon producers, members heard.

“Over 99 per cent of Canada’s hydrocarbon resources is unconventional, making our resources some of the most expensive to develop and produce in the world,” he said. “You really have two choices: sit back and wait for commodity prices to improve or work together to compete with low-cost global producers by bringing down costs through innovation and collaborative technologies.”

PTAC is planning two projects to reduce drilling and completion costs related to production from tight oil/shale gas and oilsands. It is seeking leveraged funds from both the federal and provincial governments.

Pipelines also will be a major focus area for PTAC this year. The Pipeline Abandonment Research Steering Committee will release its first two project reports in 2015 while continuing to develop new projects.

In a keynote speech, Heather von Hauff, executive director of the policy and integration branch of Alberta Environment and Sustainable Resource Development, paid tribute to PTAC for its co-operative approach to conducting important research, developing technologies and demonstrating the importance of technologies. “These actions truly demonstrate that your organization is walking the talk.”

PTAC also announced the following volunteer recognition awards for 2014:

  • Corporate leadership: Devon Canada;
  • President’s award for leadership in collaborative research and development: the Phoenix Network, which consists of four innovative organizations including Nexen Energy ULC, Statoil, Husky Energy Inc. and Devon Canada;
  • Collaborative spirit award: members of the Phoenix Network working group including Lars Hinrichs (Devon Canada), Larry Frederick (Husky), Serene Cheung and Aurelie Lagisquet (Statoil) and Dan Giesbrecht (Nexen);
  • Chairperson’s awards: Mike Ekelund from the Alberta Department of Energy and Kevin Stashin from NAL Resources;
  • Ecological leadership: Shane Patterson from Alberta Innovation and Advanced Education;
  • Soil and groundwater research leadership:  Tony Knafla of Equilibrium Environmental;
  • Water innovation leadership, Bill Berzins of K’nowbe;
  • Air quality R&D leadership: Koray Onder of ConocoPhillips;
  • Eco-efficiency leadership: Scott Hoiland of Devon Canada;
  • Commercializing of SME technology: Cap-Op Energy;
  • Outstanding service: Ole Mrklas of ConocoPhillips
  • Distinguished service: Chuck Szmurlo, previously with Enbridge Inc., Mike Scribner, ConocoPhillips, Jerry Keller, Devon Canada and Mark Sombach, Cenovus Energy Inc.

By Elsie Ross

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