Alberta Venture Magazine - Alberta's Value Village

03-Oct-2016

Adding value to primary resources can be a long, expensive undertaking. Those who come out on top sometimes need help to get there.

Neil Camarta knows old habits die hard. Consider that he’s retired twice already, the first after 30 years of travelling the world with Shell, the second after a stint with Petro­ Canada during the whirlwind of the company’s merger with Suncor. But the president and CEO of Field Upgrading, who came out of his second retirement to found the Calgary­based technology development company with industry veteran Guy Turcotte, is tackling a different kind of habit. Camarta knows that Alberta’s oil and gas sector has expended considerable energy fighting the “dirty oil” label. Now, with Field Upgrading’s novel heavy­oil upgrading technology, Camarta wants that label gone for good.

“We take the ‘dirty’ out of ‘dirty oil,’” Camarta says as he explains his company’s desulphurization and upgrading process. It removes sulphur, heavy metals and acids out of bitumen – the thick, sticky oil extracted from the oil sands – with elemental molten sodium. While there are other approaches for removing toxic sulphur from heavy oil, “they tend to be big and complex and have a lot of emissions, too,” Camarta says. In contrast, Field Upgrading has developed a process that is cheaper to put in place and has no direct greenhouse gas emissions. “It’s an environmentally friendly process that produces an environmentally friendly product,” he adds.

Field Upgrading is targeting the shipping industry, which produces an outsize amount of sulphur dioxide and is under regulatory pressure to curb its pollution levels. The company already has an operational pilot plant in Fort Saskatchewan that opened in December 2015, and it’s working on scaling up production with a demonstration refinery. Camarta says it’s a risky play, but one with tremendous payoff – not just for Field Upgrading, but for anyone interested in reducing industry’s environmental footprint.

But how, exactly, does a company of Field Upgrading’s size fund the development of this kind of technology, with its massive costs and long payback period?

“You can’t get the [financial support] from banks, because they’re not going to help out with risky business like developing new technologies,” Camarta says. So as far back as 2011, he went to Alberta Innovates, where the potential windfall from adding this kind of value to bitumen was evident. A partnership with Alberta Innovates brought technical guidance, including analysis that supported the pilot plant operation in Fort Saskatchewan, and a financial vote of confidence.

“When small companies go looking for funding, they usually have to give something up to get something,” Camarta says. “We’ve avoided all that thanks to Alberta Innovates. We have a homegrown technology that really fits Alberta’s resource industry, and they gave us funding at the right time so we still have the freedom that we had in the beginning.”

That’s also what David Bressler, a researcher with the University of Alberta, credits for the recent successes of Forge Hydrocarbons. Since 2003, Bressler has been working with biofuels, including agricultural feedstocks and low­value oil, like animal fat, crop seed oil and brown and yellow grease, which can be converted into fuel without a catalyst or hydrogen – both of which are typically required in the production of biofuels. He licensed some patents to the company, who then brought in strategic investments from across the world. Today, Forge Hydrocarbons is reaping the rewards: the company just received $4.2 million from Sustainable Development Technology Canada for a new production plant that will produce almost 20 million litres of biofuel annually.

Bressler says grants from Alberta Innovates helped him take the research across the so­called “valley of death” – the early stage period of a company before it brings in meaningful revenue. That support allowed Forge Hydrocarbons – which is itself a spinoff company from the University of Alberta – to capitalize on a market­ready technology. “These grants are critical to help the technology get the proof of concept that allows you to generate business cases for investment in commercial plants,” he says. “Alberta Innovates understands how to support companies while they’re at their most vulnerable, in terms of their revenue streams.”

Adding value, then, can be an arduous and capital-­intensive undertaking, one that requires supports to see visionary projects through to completion without hurrying for quick returns. The businesses that find success – such as Forge Hydrocarbons and Field Upgrading – need the kind of support that only an organization like Alberta Innovates can offer. Alberta, after all, is in the business of innovation – and that’s one habit it won’t kick anytime soon.

For the entire article, visit Alberta Venture’s website: http://albertaventure.com/2016/10/alberta-innovates-positioning-alberta-global-competitiveness/