Rapidly Reducing emissions from Canada’s

fossil fuel use-an innovation crisis!

Steve Larter and Bruce Carson

Ian Gates and Richard Adamson

CMC, ISEEE, University of Calgary, CSEE,

Canada.

The dogmas of the quiet past are inadequate to the stormy

present. The occasion is piled high with difficulty, and we must

rise with the occasion. As our case is new, so we must think

anew and act anew.

Abraham Lincoln 1862

Bruce Carson

―Our inability to move scientific research to commercialization and utilization by industry threatens our international competitiveness and our standard of living going forward – carbon reduction technology is the one area, given our resources where we should lead the world and be competitive in the world.‖

Outline• Context-Economy, CO2 and Climate,

• The rise of gas. Lessons from history.

• Technology assessment and techie bit

• Innovation Crisis in the Energy Sector(Industry+Gov+Universities)

• Role of Universities in R&D

• A mid life health check for Canada’s innovation systems

• Beyond CMC-Innovation Routes Forward for A Clean Energy Superpower

• Optimistic Ending

Economic Drivers

Petroleum, incl. bitumen

Natural gas

Coal

Hydroelectricity

Nuclear

Wind

Other

• Energy accounts for over $80 billion (7% of GDP), direct

employment for 363,000 people and 28% of exports.

Source: National Energy Board Canadian Energy Overview 2008

5

Summary

• To be among the leaders in this changing world, Canada has to develop a strategy based on, and playing to her strengths

• Strong fiscal situation

• Stable financial sector

• Bountiful resources

• Agricultural capacity

• A strong (but dispersed) R&D capability

• And that 2 edged sword – proximity to what is still the world’s largest economy

What drives Innovation?

• Skilled workers

• Capable managers – promote high performers

• Scientific and engineering talent

• Competitive pressure

• Skills in addition to science – problem solving, managing, communicating business solutions

• Encourage international trade – stimulus

• Confront and outmaneuver aggressive competition

• Market opportunities

• A fully functional integrated academic to industry R&D system

Canada’s Energy Flow:

0

3

6

9

12

Nuclear

Hydro

Biomass+

Coal

Petroleum

Natural

Gas

Primary

Energy

SourceAdapted from Canada’s Energy Flow Chart, NRCan 2006

Exa

-jo

ule

s (

EJ)

of E

ne

rgy p

er

ye

ar

GHG

Emissions

(kg CO2/GJ)

56

74-87

100

10

Transition technologies needed

Energy

Used

Residential

&

Commercial(heat & power)

Industrial

(heat &

power)

Trans-

portation(liquid fuels)

Power

Gen. losses

Other

50% of

emissions

dispersed

http://royalsociety.org/2007-The-science-of-climate-change/

Uncertainty is a need for more action-not less!

N. Stern

“The need for urgent action to address climate change is

now indisputable. For example, limiting global warming to

2 C would require a very rapid worldwide implementation

of all currently available low carbon technologies.

The G8+5 should lead the transition to

an energy efficient and low carbon world economy,

and foster innovation and research and development

for both mitigation and adaptation technologies.”

Risks associated with rapid climate change

• Engineering Risk = probability X magnitude of consequence

• Risks associated with climate change are currently perceived by many as a distant, uncertain risk rather than dread risk(cf the rapidly negotiated and deployed Montreal protocol-ozone destruction which had shorter term health risks linked to it )

• Probability very high of direct and indirect sociopolitical and economic impacts from climate change but consequence largely falls on later generations

Canada’s(and worlds) Climate Change Challenge:

0

400

800

1200

1600

2000

1990 2005 2020 2035 2050Year

GH

G E

mis

sio

ns M

t C

O2e

/yr

Kyoto

Target

Actual

Emissions

Kyoto

Commitment

Period

(2008-12)

How?Cdn

Target:20%

reduction by 2020

-80% (US Target) ~450 ppm CO2

-65% (Cdn Target) ~550 ppm CO2

Need GHG

Reductions

(Mt CO2e/yr):

918 to 1344

Transformative Energy

Systems are Needed

• $100/t CO2 in 2020; $200/t 2025; $300/t in 2030

Cost to Achieve Cdn

Target?

0

400

800

1200

1600

2000

1990 2005 2020 2035 2050

Year

GH

G E

mis

sio

ns M

t C

O2e

/yr

Kyoto

Target

Actual Emissions (~80% from

energy)

Kyoto Commitment

Period

(2008-12)

-20% (Cdn)

-80% (USA)

-65% (Cdn)

Effic. &

Conservation

Renewable

& Alt. Energy

Carbon

Storage

12

Achieving 2050: A carbon pricing policy for Canada (2009), NRTEE

Carbon Management

Increase of scale X100’s to 1000s

Most emissions dispersed

Alberta CCS Pilots

Bergerson and Keith 2010(oil sands)

• But external perception is tailings ponds:

• and emissions must =0!

•

Strategies• Mitigation(efficiency,

CCS, renewables)

and adaptation

• Mitigation, adaptation and geoengineering (change of social processes)

• Moral hazard occurs when a party insulated from risk behaves differently than it

would behave if it were fully exposed to the risk• Moral hazard arises because an individual or institution does not take the full consequences and responsibilities

of its actions, and therefore has a tendency to act less carefully than it otherwise would, leaving another party to hold some responsibility for the consequences of those actions. For example, a person with insurance against automobile theft may be less cautious about locking his or her car, because the negative consequences of vehicle theft are (partially) the responsibility of the insurance company(Wikipedia).

• In the case of anthropogenic acceleration of climate change short term personal or institutional costs are

weighed against long term communal hazard.

• Oil sands in danger of becoming the flagship of the moral hazard argument

Technology

Needed for

Mitigation

And Adaptation

Technology needed to reverse perceptions

“…Current global trends in energy

supply and consumption are

patently unsustainable –

environmentally, economically,

socially.”“…What is needed is nothing short of

an energy revolution.”

If our technologies do not look

revolutionary and transformative they are

probably the wrong ones!

WEO, Nov 12, 2008

Engineering sustainable oil sands development-routes to revolution.

A Clear Daunting Challenge• Massive scale of carbon emissions reduction required

• Fossil energy production and utilization accounts for over 80% of GHG emissions

• Most emissions from usage not recovery-dispersed responsibility

• 50% of emissions not point source

• Timescales for complete substitution to renewable and alternate energy using markets are long(30-50 years)-massive social, political and economic inertia!

• But the fossil energy value chain must be decarbonized now!

• Canada’s huge oil sands resource is politically very vulnerable and will always have difficulty competing with conventional oil suggesting alternate routes are needed. It needs a makeover.

HOW?

• Transition technologies-more efficient recovery (near current market but slow deployment)

• CCS, efficiency gains, renewables.

• Move to gas for electricity and non-air transportation(CH4)

• New technology directions and lower carbon fuels (e.g. import biological revolution to the fossil fuel sector)

• Electrify the process-power generation+CCS!

• Air capture or accelerated rock weathering for remaining non point source emissions

• Massive social and economic system changes— rapid innovation needed.

1616

Technology Evolution in Oil Sands: What’s Happened and What’s New?

Ian D. Gates, Steve Larter, …Depts. of Chemical & Petroleum Engineering/ Geosciences

University of Calgary

Two Requirements:

1. Mobilize the Bitumen

2. Move the Mobilized

Bitumen to a

Production Well

Viscosities ~100,000 to

1,000,000+ cP so Key

to Success is First

Measured by Recovery

Process’ Ability to

Reduce Viscosity

Oil Sands Recovery Process Design

Operator Goals: Max Economics = Max Production Rates, Min Steam-Oil Ratio,

Max Recovery, Min Water, Min Emissions

STEAM

SOLVENT

NON-COND. GAS

AIRCATALYST

SURFACTANTS / ADDITIVES

CURRENT

ULTRASONICS

MICROWAVES

BIOLOGICAL

SAGD/CSS + AI

SAGP

PHASR

ES-SAGD

TSS-SAGD

SAP

LASER

SAVEX

SAVES

VAPEX II

CSP

CAPRI

IMM. GAS DISP.

CASPER

SCUM I

BRUTUS I

SAGD+CAT

SAGD/CSS/SF

IID

EM

AI, THAI II

LEMUR I

Process Octagon

Well Configuration Technology EvolutionFeature % Feature Earliest Year

Combinations of HWs & VWs

Cyclic VW Injection/Production

HW Injection & Production & VW Injection

5

3

1960s

1986

HW Under row of VWs 2 1976

HW Between row of VWs 2 1983

HW Between two VWs 2 1983

HW Injection & VW Production 3 1976

HW Production & VW Injection 3 1983

HW/VW Production & Injection 2 1984

HW Injection & VW Production w/ Solvent Injection 2 1989

HW substituting for VW in regular patterns 12 1984

Dual HW SAGD and VAPEX-like methods 11 1982

Single HW Injection/Production

Steam Injection – LEPs 3 1992

Single HW SAGD 1 1992

Single HW Annular Steam Drive (Pressure-driven) 2 1984

Single HW Low Pres. Steam (No steam to reservoir; heat only) 2 1994

Single HW Injection & Production w/ Solvent Injection 5 1992

Cyclic HW Injection/Production 6 1978

Three or more HWs

HW Injection & HW Production (Single) 4 1981

HW Injection & HW Production w/ Solvent Injection 6 1985

Horizontal Arrays of HWs 14 1981

Multidirectional Horizontal Arrays of HWs 8 1986

1. Cyclic Steam

Stimulation (CSS)

2. Steam-Assisted

Gravity Drainage

Commercial Technology Now: Evolution Has Led to Two Major Commercial Processes

Solvent-Assisted Versions Are in Use and PID process control

coming

CSS LASER

SAGD ES-SAGD, SAP

Exxon

Roger Butler

Exxon

Steam+ Clever Technology Has Enabled Insitu

Commercial Oil Sands Production but it is ~20+ Years

Old

Technology has Evolved, but Revolutionary Technologies

that Lead to Major Downward Shifts of the Invested

Energy (e.g. Steam) and Emissions Versus Oil Produced

have Not Yet Appeared

E.g. No Technology Exists Yet than Delivers SOR

Equivalents Under 0.5 m3/m3

We are Hooked on Old

Technologies and

Incremental Improvements

to Them

Final Remarks

Beyond CSS and SAGD, Most New In Situ Technologies Are

Incremental

We Have Not Been Revolutionary – Steam-Oil Ratios have Tended

to Get Worse with Time as more difficult reservoirs are developed

Oil and Gas Industry Awash with Talent, Energy, Experience and

Expertise but High Costs, Variable Resource Quality and Oil Price

Volatility plus a Conservative business model Curb Risk-taking and

Innovation

Universities have contributed

staff but only small amounts

of technology

Challenges: Funding, Risk,

Cultural impediments!

Have We Been Revolutionary?

Purpose of the Network

Help Canada meet its GHG reduction targets.

• Focus Canada’s university research expertise, raising ambition and level of delivery together with industry and other stakeholders.

• Create the technologies, insights and enablement mechanisms that can be used to decarbonize the fossil energy sector.

• Train highly qualified people to innovate, implement and guide the transformation.

• Facilitate the rapid exchange of information and technologies among researchers, industry and government stakeholders.

• Change the way we innovate!

25

1. Integrate Canada’s fossil fuel energy research community and collaborate with industry to enable a practical response to national GHG reduction targets.

2. Create transformative technologies and societal changes to enable the reduction of GHG emissions from the production of fossil fuel energy

3. Produce a trained cadre of technical and social scientists, engineers and technologists for the development and deployment of solution technologies

CMC Research in a Nutshell

Round I Research Projects"The best way to have a good idea is to have a lot of ideas." - Linus Pauling

• Theme A - Recovery, Processing and Capture• Fluidized bed gasification of low-grade coals and petcoke

• Integrated gasification and looping CO2 capture

• Rapid routes to carbon-efficient recovery of bitumen and heavy oil

• Development of direct air capture technology

• Hydrogen production and waste processing

• Theme B - Enabling and Emerging Technologies• Enabling the microbial capture of CO2 under anaerobic (subsurface) conditions

• A pore scale microlab to perform fundamental laboratory-based studies of CO2 transport and reactivity in reservoirs

• Theme C - Secure Carbon Storage• Storage geochemistry

• Adapting Probabilistic Seismic Hazard Assessment methods to site evaluation for carbon capture and storage

• Storage geophysics and monitoring

• Seismic behaviour of CO2 saturated sandstones: laboratory measurements and modelling

• Carbon mineralization in mine waste

• CO2 for CCS from fuel cells

• Theme D - Accelerating Appropriate Deployment of Low Carbon Emission Technologies

• Assessing the potential of low carbon fossil-fuel/derived technologies: A life cycle environmental and techno-economic evaluation of the oil sands

• Distributional implications of the transition to a low carbon Canada: managing political tensions

• Institutional innovation: early lessons of international experience with climate change governance

• National and international legal and regulatory framework for carbon management

Geoengineering – Becoming MainstreamNot a substitute for mitigation!

CDR-a prudent area for pilot research

Shepherd et al(2009) Royal society report on geoengineering.

CMC

Increased

Diversity

Good

Not so

Good!

The structure of inventionW. Brian Arthur

Schumpeter famously divided technological

change into three phases

1. invention (the creation of new technologies)

―The easy bit but are we doing it?‖

2.innovation

(the commercial introduction of new technologies)

―dragout not spinout!‖

3. diffusion(the spreading of new technologies).

―Need advection not diffusion‖

Diversity and variation of process is crucial at stage 1.

More focus is needed at stage 2 and stage 3.

Universities excel at stage 1. Industry excels at stage 3.

Meta-Innovation: Some assertionsThere are many barriers to innovation including

structural and institutional ones. Most of these we cannot easily deal with in the timescale we need to.

Key ones we can influence at CMC are:-

Increasing effective idea generation-Invention

Trying new models of work

Enabling effective industry/academic collaborations

Helping to link the multitude of oils sands organisations

Enabling IP unimpeded collaborations

Enabling ambitious large scale multi institution research at Canadian Universities

Engaging internet techologies

innovation cafe

Involving areas of current scientific and cultural revolutions(biology, nanotechnology) in our research program

Participating in the innovation revolution about to start.

• PARTNERS

• PTAC

• OSLI

• ConocoPhillips

• Cenovus

• Enbridge

• Suncor

• CCEMC

• CMC partners et al

• NCE Executive

• Genome Canada

• Pembina

• IPAC

• New out of sector groups!

Complementary or chaotic?

OSLI

OSRIN

AITF

CCEMC

CMCPTAC

PTRCAICISE

AICOSI

Aenergy

Aenvironment

O&G companies

UoC

UoA

NSERCNRCan

ERCB

APEGGA

And

Many More!

Alberta:

Half the population of Manchester

10 X the politics of the UK !!!!!!!!!!!!

Many positively focussed and

complementary organisations

involved in energy R&D and

Innovation but are they coordinated?

Many accelerating technology areasBiology, nanotechnology, AI, internet science

32

Key:rapid protoyping

High idea volume

Modified after Jurvetson SU 2010

Acceleration of DNA Synthesis, sequencing and Moores law

Eg Unc Oil Recovery processes don’t fit the ideal model

SAGD

CSS

ESSAGD

THAI

Mmmm!

Energy and carbon management

Currently fails the VC volume criterion!

To have a good idea-you have to have lots of good ideas!

Modified after Jurvetson SU 2010

http://whatmatters.mckinseydigital.com/flash/innovation_clusters/

Calgary

Toronto

Victoria

Edmonton

Halifax

Saskatoon

Kitchener

Ottawa/Gatineau

Vancouver Montreal

Silicon ValleyLondon ON

Quebec/Hamilton/Windsor

Energy sector punching way below its weight!

Key Learnings from Silicon Valley

• High idea volume needed

• Disruptive approaches

• Rapid prototyping(piloting) and iteration(key to biology and IT)

• Risk taking

• Expectation and acceptance of failure in many projects

• Openness about success of existing technology!

35

The structure of inventionW. Brian ArthurSanta Fe Institute

Schumpeter famously divided technological

change into three phases

1. invention (the creation of new technologies)

2. innovation (the commercial introduction of new technologies)

3. diffusion(the spreading of new technologies).

Field testing vs simulation-rapid prototyping

Rapid energy technology prototyping(easily fixed)

• Field and lab facilities-PTAC, OSLI et al-ala AOSTRA

(B$$$$)

Pilotting finance

• Numerical simulation-used widely but not always believed by petroleum engineering community yet used exclusively in other high precision industries for design and testing(see below). Needs improved physics, chemistry and computing(10-100M$$$):-

• Nuclear weapons testing

• Aircraft design

• Drug design

Alberta CCS Demo’s

One possible wild card innovation route driver?

Impact of consumer choice in USA

Sequence of increasing desire:

Coal;Bitumen; Oil; Methane; Hydrogen

While gas and oil prices are disconnected carbon prices would resolve that quickly

Modified after Kulcinski 2005

H/C=0.8

H/C=4.0

H2

Emissions_Ratio 0.8 4( ) 2.077

Emissions_Ratio 1.5 4( ) 1.841

CO2 emitted on a

natural gas basis

Coal and Bitumen

Ratioed to methane

Bitumen 1.4-1.5

US Natural Gas Consumption

Vented/flared in 2009 X5 transport

Gas price probably set by shalegas price

2010 US Health Spend 376B$

Walmart 10% US federal Budget

Healthcare. 10% US Federal Budget 10% US Federal Budget

After Yatsko

After Yatsko

After Yatsko

Possible future: Consumer driven demand

drives transportation towards lower carbon gas,

Reducing oil requirements in USA.

Can Canada provide some of the gas from

Insitu biological or thermal coal and bitumen

gasification, shalegas or hydrates

Modified after LLNL

Key Elements of Hydrocarbon to Methane Biodegradation

Just a simple reaction limited by mass transport

The reaction only can move forward given enough reactants and removal of waste products

1) Catalyst: Active microorganisms– Suitable reservoir conditions (temperature, salinity)

– Sufficient nutrients (mineral and water systems)

2) Reactants: Adequate substrate

3) Products: biodegradation generated gases (CO2 + CH4)

422224

13

4

1

2

1CH

nCO

nOH

nHC nn

Food

Oil: Coal

WasteNutrients

Bugs

Alberta a leader in this area-(UoC, UoA, AITF), Genome Alberta Genome Canada……

Jones et al(2008)

• Increase energy recovery while reducing CO2 emissions

• Reduce costs and carbon emissions at source(CH4 not CH1.4-or CH0.8 much less

CO2 per KJ- burning methane)

• Utilizes natural processes to recover cleaner energy from low hydrogen fuels(eg

coal; bitumen)

• Can we replace coal mining/ oil recovery with methane production?

• Technoeconomic finesse. Switch fuels while maintaining infrastructure.

We want energy and plastic with ZERO emissions! An alternative oil industry

Convert Oil(or Coal) to Methane(hydrogen)?

Jones et al(2008)

Nature

UoCalgary:UoNewcastle-UK

oil

Status of technology• Methane from oil or coal

• Mechanisms understood for oil but not coal

• Key organisms identified for oil

• Rate controlling nutrients defined

• Processes incorporated into reservoir simulators

• Significant gas rates achieved in lab but not yet in the field for oil

• Field operations and engineering constraints crucial

• Process monitoring and adjustment crucial

• Commercial onshore gas rates from coal can be locally obtained(Luca technologies) but are too low to be gamechanging at the level needed to eliminate coal mining currently

• Hydrogen recovery possible but very difficult

• Potential major gamechanger-as yet little interest shown(<150M$ invested to date)!

• The industry has not grasped the amazon of the microbial world!

Another alternativeBiG PoG CCS

• Bitumen gasification with polygeneration and CCS mostly at metropolitan centers to generate mostly electricity, some heat and maybe some gas and liquids for transport.

• Electricity exported for industrial and domestic use including high speed ground transportation which replaces short haul air travel.

• Waste heat used to thermally recover bitumen using geotolerant processes.

• Very low emissions, Canada becomes an electricity, technology and gas exporter.

• Large cultural shifts needed.

Three reasons for an expanded, integrated Canadian energy technology research, development and deployment (RDD)program

• Climate Change Mitigation

Technology is vital to mitigate the hazards and uncertainties of human accelerated climate change and ocean acidification for current and future generations.

• Canada’s image in the world

A substantial display of clearly advanced clean technology in the energy and carbon management areas is necessary if Canada is to overcome its current, externally perceived, image as not being a leader in sustainable energy technology

• The bottom line and product vulnerability

Energy mix futures are unpredictable, especially in the USA. Major retailers going green(eg Walmart) and the rise in gas inventories and new sources of gas could result in a rapid expansion of gas usage in Canada’s biggest customer for energy. Enhanced gas supply capabilities from Canada’s fossil fuels(shalegas, bitumen, coal, hydrates) would offer substantial economic protection from a large scale move away from liquid fuels in the USA but requires major RDD. A realstic price on carbon and real climate change action will further dramatically accelerate such changes.

Independent of the Route, we have to Fix the Plumbing!

Structural Issues

•Funding

•Institutional barriers and traditions

•Diversity versus Fragmentation

AEIC 2010

Insitu

Bitumen

Industry

technologies

developed

AEIC 2010

AEIC 2010

Canada: An innovation deficit?

Globally:

• Public energy R&D funding has fallen by up to 50% in real terms in major developed countries over the last 25 years.

• Energy R&D as a share of total R&D in OECD countries declined from 11% in 1985 to 3% in 2005.

• CNPC/Shell >1B$ R&D 2010

Nationally:

• Canadian business R&D declined by 20% between 2001 and 2007 (consistently below the OECD average).

By Sector in Cda (2007):

• 0.2%-0.7% for Canadian Energy Companies

• 0.5%-2.4% for other resource companies

• 0.9% to 23% for Canadian techno-centric companies

Matt McCulloch Pembina

Canadian Business R&D Ranking

What is wrong with this picture?

Despite a large public investment in University

research, industry does not see universities as a

major source of innovation!

Role of Universities???????????• Education, training staff, students

• Research

1. Basic investigation and information gathering (Journals of record)

2. Discovery (Discovery journals-Nature;Science etc)

3. Invention-technological nuggets(patents).

• Innovation and commercialisation(licencedpatents, spinouts, knowhow)

• Service and outreach

• Source of trusted information

• Other

Premier league(King 2004)

Canada major player in world

research with relatively

high spend rate

After King 2004

Dispersed Canadian academic activity?• Small grant levels usually-individual researchers!

• Single Professors- small groups!

• Masters students commonly dominate research groups in many Canadian Universities!

• (M.Sc R:PhD:PDF) Canada 10:1:<0.1;

UK 0:1:0.2

• Emphasis on training and diversity-not innovation in many cases!

• Great success in discovery and staffing industry but not in technical solutions

• Evidence of low risk taking driven by low funding levels

• Discovery grant success also drives other University income streams(eg CRC Chairs) and thus encourages universities to have a very large fraction of staff involved in research. While positive in intent, this also drives a culture where all staff become involved in all other activities including teaching and service. Does this result in an overly multitasked workforce with dispersed focii and does this partly contribute to a low level of engagement with innovation and commercialisation in Canadian universities???

60

• NSERC’s Discovery Grants (DG)program has 3 stated objectives:

1) promoting and maintaining a diversified base of high-quality research capability in the natural sciences and engineering in Canadian universities, 2) fostering research excellence, and 3) training HQP.

Success rates very high:

• 2001 79%; 2004 75%; 2008 71%; 2010 59%

• UK/USA NERC; EPSRC; NSF success rates <<<30%

• Many positive features to program which is the funding stream that supports most Canadian academics BUT:

• Average grant levels are 30-40K$ per annum per researcher-Very Low!

• Does this funding limit in any way the research targets attempted?

Canada’s universities produce some commercialised products

but is the system effective?

Canadian Universities have been very successful at training staff for industry but are Canada’s Universities optimally configured for research and teaching???????

Info on a Canadian University and Stanford.Stanford

Bachelors 1600

Masters 2000

Doctoral 1000

If the numbers are to

believed, Canadian

research universities have

very high undergraduate

teaching numbers

compared to PhD student

numbers and Canada as a

whole has a PhD graduate

level researcher deficit.

This, if true would severely

impact technological R&D

capacity, innovation and

commercialisation of

technologies.

Canadian Universities Mid Life Health Check and Grade

• Education, training staff, students A+

• Research

1. Basic investigation and information gathering (Journals of record) A+

2. Discovery (Discovery journals) A-

3. Invention-technological nuggets(patents). C

• Innovation and commercialisation(patents, spinouts, knowhow) D-F

• Service and outreach A

• Source of trusted information A

• Other ?

Canadian universities are major players on the world stage in research but have

a spotty track record in innovation. Does the heavy teaching focus and highly

multitasked academic model impact the underperformance in the innovation area ?????

Summary• We have quite a few problems but we tend not to talk about them!

• We may not even be aware of them in many cases!

• Lack of innovation in both business and academia

• Weak collaboration-many small groups!

• Large numbers of well intentioned but poorly coordinated enabling organisations at provincial and national level

• Business perceives academia largely a source of staff-not of innovation

• Low industry R&D funding levels

• Significant but defocussed and handicapped public academic research funding levels

• Ineffective cultural systems in both business and academia!

• Both business and academia do not see fully functional technological R&D as a primary role but focus instead on short term customer services(shareholders, students)!

64

Summary• Industry driven by short term shareholder interests

• Academia organised to train students short term, not to deliver on its other objectives which are poorly defined.

• Major R&D programs not well funded, focussed or resourced-many collateral disadvantages

• Many $$$ in many small pots. Linked funding often ineffective.

• Much ineffective local competition and repetition masquerading as ―diversity‖.

• No real evidence of a successful competition based technology drive in energy R&D!

• Lack of a focussed and integrated execution strategy!

“Insanity: doing the same thing over and over again

and expecting different results.!”

Albert Einstein

RecommendationsWe build too many walls and not enough bridges. - Isaac Newton

• Coordinate activity and focus resources and staff across Canada(CMC can help play a role but major national initiatives driven by government are needed)

• Beyond CMC• Increase energy RDD funding massively(via taxation)

• Create centers of excellence(national labs with dedicated staff-not a worthy but fragmented enterprise of poorly integrated companies, government labs, universities and faculties)

• Link Industry and National Labs directly

• Reorganisation of academic and research institutions to deliver sustainable energy technologies not just train students is mandatory-major restructuring is needed. Structures need to be Structured for purpose: Need to be Staffed for purpose: Need to be reconfigured routinely if they do no deliver as expected. Currently objectives are not clear and structures have evolved rather than having been designed.

• Develop a technology pilotting finance system and facilities

• There is no shortage of talent, lets cut the politics, raise ambition and goforit!

The Bottom Line

R&D Budget for a clean energy superpower

Stern report-key input in G8 and

Canadian Government policyIts main conclusion is that the benefits of strong, early action on climate change

considerably outweigh the costs. It proposes that one(2-3) percent of global gross

domestic product (GDP) per annum is required to be invested in order to avoid the

worst effects of climate change, and that failure to do so could risk global GDP being

up to twenty percent lower than it otherwise might be.

Canada= 30B$ PA to mitigate climate change

Alcohol, tabacco, narcotics 3% of GDP in Canada

Christmas =1XU=2% GDP=30B$

Reference Numbers

An example of crisis driven rapid invention; innovation and deployment

Nuclear fission discovered Frisch Meitner

1938

Plutonium discovered Seaborg 1941

Manhattan project 1942-1946 Groves and

Oppenheimer

"We must keep this whole thing quiet."

(Groves)

"Sir, I think they heard it in five states."

(Unknown)

1946 US publishes Smyth report on

Manhattan project which USSR uses to

construct its own bomb

USSR tests fission bomb 1949 Beriya

and Khariton

Atlas A ICBM deployed 1957

Discovery, invention, innovation,

deployment

Widespread deployment of technology within 10 years

From US Congressional report 2008

Manhattan and Apollo

Clearly perceived risk-Single customer-regulated solutions

Great Invention, Innovation and Dispersion

Crisis, NOT market driven!

1XU=Christmas=30B$=2% GDP

Capital investments of 218B$

2010-2035(7 XU)

Spend of .3XU per year

0.2 XU

Proposal • Develop an integrated Canadian national sustainable energy RDD

execution strategy and implementation plan linking industry and the best of the Canadian research community in all its forms-A Canadian Manhattan project

• Increase and maintain sustained funding in a coordinated manner(increase energy R&D funding by at least 1% GDP immediately=0.5XU)

• Create centers of excellence, restructuring where necessary-most of our traditional structures are ineffective for energy RDD! Start in Alberta!

• Focus resources and coordinate activity across Canada- diversity is not a strength if it is not coordinated! Divert energy from ineffective traditional competition to effective invention and innovation

• Develop a technology pilotting finance and facility system

• Finance a technology deployment fund

• Restructuring the RDD enterprise will involve upsetting many apple carts and offending sacred cows. It will require great leadership but can and must be done-quickly!

• Goforit

"The greatest danger for most of us is not that our aim is too high and we miss it, but

that it is too low and we reach it." –Michelangelo

The most important of decisions are always made under great uncertainty!

The key is to make those decisions now!

Acknowledgements

CMG(for STARSTM)