Important efforts are driving clean technological advancements even further in the natural gas industry, through unprecedented cooperation between downstream utilities and upstream natural gas producers in innovation.
The Natural Gas Innovation Fund (NGIF) announced recently that seven Canadian natural gas producers – Birchcliff Energy Ltd., Canadian Natural Resources Limited, Chevron Canada Limited, Perpetual Energy Inc., PETRONAS Energy Canada Ltd., Shell Canada Energy, and Tourmaline Oil Corp. – are now partners in a single united effort to advance the right emerging clean technologies to commercialization, improve environmental performance and reduce greenhouse gas (GHG) emissions in Canada’s natural gas energy sector.
They join the five original downstream natural gas utility investors – ATCO Gas Ltd., Enbridge Gas Inc., FortisBC Energy Inc., Pacific Northern Gas Ltd., and SaskEnergy – already investing in downstream distribution and consumer solutions.
“The development and innovative application of continually improving technology through the Natural Gas Innovation Fund will allow Canada to expand its role as a world leader in the natural gas industry” said Mike Rose, President, CEO and Chairman of Tourmaline Oil Corp. “Ever, cleaner burning natural gas represents a remarkable economic and environmental improvement opportunity for Tourmaline, Canada and the world.”
NGIF was created by the Canadian Gas Association in 2016 to fill what was a technology development gap in the sector and ensure the industry remained competitive with innovations happening elsewhere, for example in renewables and electrification.
“In an age where technology has become the catalyst for exponential advancements in our industry, we’re excited to be involved in an initiative which pursues diversity of thought and provides a platform for sharing solutions,” said Mark Fitzgerald, President & CEO of NGIF-investor PETRONAS Canada.
For John Adams, NGIF’s Managing Director, the collaborative model puts the fund in a class all by itself.
“It’s certainly a historic time on the innovation front,” says Adams. “At no time in Canada – nor to my knowledge across the globe – have natural gas upstream producers and natural gas utilities come together under one roof to collaborate and drive cleantech innovation solutions across the value chain.”
The results already speak for themselves. In just over two years, $9 million in industry grants has been approved for funding through our industry peer review process – comprised of all NGIF investors – to drive forward 44 cleantech projects with solutions for downstream natural gas.
Over 150 applications with cleantech solutions for natural gas were generated by competitive funding calls 1-3 and – coupled with some already existing legacy work from the Canadian Gas Association (CGA) – the demand has been “fantastic”, Adams says.
Now the fourth and latest funding call for applications – this time aimed at small to mid-sized enterprises and technology development start-ups with cleantech solutions for the natural gas production side – is now complete with evaluations for proposals underway.
This particular funding call and future initiatives now also has the support of federal and some provincial governments. Natural Resources Canada (NRCan), Emissions Reduction Alberta (ERA), Alberta Innovates (AI) and the Province of British Columbia Innovative Clean Energy Ice Fund will consider co-funding successful NGIF applicants whose projects promise to deliver significant GHG emission reductions in Canada.
“Our investment committee will look at late-stage cleantech projects that are nearing commercialization for this round 4,” Adams explains. “We support up to 25 per cent of funding for eligible projects, and that’s where our federal and provincial partnerships can help fill some of the funding gaps for really good applicants.”
The money for NGIF project investments comes from its industry investors themselves, whose representatives pool their resources, knowledge and expertise to select the best clean technologies in Canada for industry field-testing.
“All our investors are involved and everyone gets a voice at the table,” Adams says. “We decide as a group what our priorities are at the beginning of our process and then see near the end of our process in the project management phase which of the technologies are excelling and will give us the most return for our innovation dollar.“
The cleantech companies are closely scrutinized as well, considering factors like the strength of the management team, environmental benefits potential, their planned business model when the technology eventually becomes commercialized, and their financial capacity to drive the project forward.
The timing for NGIF couldn’t be better, with natural gas demand expected to increase 43 per cent by 2040, according to the International Energy Agency (IEA).
“It is a lower GHG emitting fuel compared to coal, and the IEA sees an opportunity for natural gas to replace coal for electricity generation, and so help reduce GHG emissions,” said the agency in a 2018 industry forecast.
At the same time, innovations such as horizontal drilling to capture cost-effective, unconventional gas has led to an upsurge in supplies.
“And that’s a great place to build from,” said Adams. “With coming federal and provincial government regulations to reduce methane emissions from upstream oil and gas production by 45 per cent by 2025, we’ll be able to look at a breadth of technologies that will carve a path to compliance capturing and reducing vented air contaminants economically.”
“Additionally, we have a cleantech bucket list – including potential emissions reduction in freight and long-haul transportation – that we are confident will bring environmental benefits to the industry”
Efforts so far offer a glimpse of NGIF’s potential.
“Cleantech initiatives are significant factors in driving the economy and creating jobs.”
Last year the fund contributed over $379,000 in funding to Ontario-based Pond Technologies for a system that captures industrial emissions from natural gas and converts them into valuable algae biomass.
Pond’s carbon capture and utilization (CCU) technology is intended to generate revenues, with Algae grown at the Markham plant sold as natural health supplements, high-end food colourings, or as a source of sustainable protein for human or animal consumption.
Another Ontario company, NextGrid Inc. received $375,000 in investments from NGIF to support the development of a residential combined heat and power system (CHP).
The system uses a natural gas connection with the potential to generate 100 per cent of a homeowner’s space heating, hot water and electricity requirements while dramatically reducing GHG emissions, replacing the hot water heater as well as the furnace in a typical Canadian residence.
Overall, besides the obvious environmental upsides, cleantech initiatives are significant factors in driving the economy and creating jobs.
“As we know, development and demonstration projects can sit on a shelf and never get mobilized due to unmet funding needs or market uptake,” Adams says. “Through NGIF, our cleantech companies can ‘de-risk’ their technologies, commercialize, build sales and grow as our investors are also conveniently the market uptake. And of course, growing companies generate more jobs and higher investments in them.”
Besides, investing in Canadian innovation is always a smart move, adds Michael Crothers, President and Country Chair, Shell Canada. “Canadian gas has the potential to displace more carbon intensive energy sources both here in Canada and around the world,” Crothers said. “NGIF is an open invitation for entrepreneurs to help us further enhance our sector’s leading environmental performance.”
For more details about NGIF and its portfolio companies visit www.ngif.ca
Dennis Lanthier is an award-winning writer and corporate communications specialist with almost two decades of experience in oil and gas. He earned an International Association of Business Communicator’s Gold Quill in 2011 for the creation of a magazine distributed to TransCanada Pipeline’s employees and retirees. Dennis is now a freelance writer working with several oil and gas associations in the energy sector.