President and CEO Message

President and CEO's Message
Innovation Matters: Innovation is a mantra within Canada’s oil and natural gas industry. The word itself may be overused at times, but what it means to our industry, Canada and the world, cannot be overstated.
We are leaders in innovation: we are confident that it can help solve many of the environmental challenges we face today and those in the future—and we have good reason for thinking so.

The fact is, our entire Canadian oil and gas industry is founded on innovation. Before the 1960s, the idea that you could extract economically viable amounts of oil trapped in the vast oil sand deposits of northern Alberta was met with skepticism and more than a few failed early attempts. But in 1967, Great Canadian Oil Sands Limited, with support from the Alberta government, having pioneered new technologies for bitumen extraction and upgrading, launched the world’s first large-scale commercial oil sands operation. The endeavour required incredibly creative, out-of-the-box thinking and cutting-edge science and engineering techniques. It turned the oil sands from a curious geological phenomenon into a valued resource: one that today generates billions of dollars of revenue while creating hundreds of thousands of jobs for workers all across Canada.

The same spirit of innovation enabled pioneers to find ways of safely and reliably extracting previously inaccessible deposits of natural gas and oil from shale rock, as well as from remote deposits under the ocean floor.

Our industry attracts some of the brightest scientists, researchers and engineers in the world. We continually invest in research and development that leads to both breakthroughs and continuous improvement. This is why, although we face significant environmental challenges, I am confident our industry can do its part in meeting those challenges.

Doing so will enable the growth of our industry and the long-term prosperity of Canadians. It will help establish us as a supplier of choice to a world that will continue to rely on oil and natural gas for decades to come. The International Energy Agency forecasts global energy demand to increase by nearly one third between 2013 and 2040, with fossil fuels continuing to be a key fuel source that moves people, keeps them warm and provides energy security. At the same time, recent commitments by governments around the world to transition to a lower-carbon economy mean that consumers will increasingly look for energy that is produced the Canadian way: in an environmentally responsible, transparent and stringently regulated manner.

Canada showed its commitment to be a leader in reducing GHG emissions at the 2015 Paris Climate Conference. While we as an industry are just one part of a collective effort that includes government, regulators and energy consumers, we do not shy away from the prospect of being a leader. We thrive upon it.

For Canada’s oil and natural gas industry, innovation is in our DNA. It comes out strongest when we are faced with a compelling challenge: such as the need to improve environmental performance, meet stringent environmental regulations, and remain competitive in the global market. Since 2000, we’ve seen a quadrupling in oil-related patent applications by Canadian inventors as a share of total patent applications at Canada’s Intellectual Property Office (CD Howe, 2016). A report by the Science, Technology and Innovation Council found that research and development investment in the Canadian oil and gas industry has increased almost 14-fold from 1999 to 2015. Canada’s Oil Sands Innovation Alliance (COSIA) has developed and shared 819 distinct technologies valued at $1.3 billion.

This massive investment in innovation is already producing environmental dividends. When it comes to oil sands
in situ and mining extraction processes, technology and energy efficiency improvements have allowed us to reduce the amount of greenhouse gas emissions generated per barrel of oil produced. Freshwater use intensity by oil sands operators has also fallen—by more than 30 per cent. We’re among the leaders globally in methane reduction, land reclamation, carbon capture and storage, and the reduction of air contaminants like sulphur dioxide and nitrogen oxide. We are currently developing a wave of technologies that will help accelerate the land reclamation of tailings ponds.

Not only are these technologies driving improvements in our own industry; Canada’s oil and gas industry innovations are finding applications in other industries such as mining, forestry and water treatment. As well, we are setting the standard for sustainable development, with countries around the world coming to Canada seeking our expertise on how to extract resources in a manner that is sustainable, responsible and cost-effective. Canada is seen as a world leader on environmental performance, scoring ahead of the USA, Russia and Venezuela in Yale’s latest Environmental Performance Index report.

Through collaboration engines like COSIA, funding agencies, and the significant investment in dollars, people and time that individual companies contribute to environmental research and innovation, we are going to see these trends continue. The spirit of innovation that extracted oil from sand, natural gas from shale rock and both from our offshore waters, is the same spirit that is driving environmental innovation for Canada into the 21st century.

Tim McMillan
President and CEO
Canadian Association of Petroleum Producers