Twelve oilsands majors launch Canada’s Oil Sands Innovation Alliance, a joint program to accelerate improvements in environmental performance

It’s being called the most aggressive and largest collaboration of its type on the planet, bringing in a “new era” of oilsands development—twelve of the biggest players in the sector have announced a plan to pool their technology research and development (R&D) resources to accelerate improvements in environmental performance by the industry as a whole.

In early March, senior executives from BP Canada Energy Company, Canadian Natural Resources Limited, Cenovus Energy Inc., ConocoPhillips Canada Resources Corp., Devon Canada Corporation, Imperial Oil Limited, Nexen Inc., Shell Canada Energy, Statoil Canada Ltd., Suncor Energy Inc., Teck Resources Limited and Total E&P Canada Ltd. joined to publicly sign into creatingon of Canada’s Oil Sands Innovation Alliance (COSIA).

The new group is essentially the next step in the accelerated evolution of a number of collaborative organizations that have been working to improve the sector’s performance.

“We believe environmental stewardship is a shared responsibility whether on tailings, water, land or greenhouse gases. It’s this recognition and genuine desire to do better that has brought us [to the] formation of Canada’s Oil Sands Innovation Alliance,” said Steve Williams, president and incoming chief executive officer of Suncor, at the COSIA launch. “Our twelve companies have come together recognizing that none of us has a monopoly on ideas or wisdom when it comes to the environment. We know that the sum of what we do will be greater when we work together than when we work as individuals.

“COSIA is an entity that will provide the structure, the legal framework, to help companies collaborate on environmental innovation including setting goals, tracking progress and reporting progress to our stakeholders,” he said. “COSIA is a very public sign of our commitment to sharing ideas, best practices and solutions to improve our environmental performance.”

First steps in 2012

When COSIA is fully fired up later in 2012, it’ll be like having a department store devoted to four critical environmental areas rather than the current scattering of specialty boutiques.

Wherever they are located in actuality, all the water management technology R&D projects will be virtually lined up on one floor, the land reclamation projects on the next, tailings treatment on a third, and anything that ties into reducing greenhouse gas emissions on the fourth.

By the end of this transitional year, the entity is designed to be an interactive whole, just like the ecosystem the R&D is serving.

“The technology development out there is in a lot of different places,” says Joy Romero, vice-president of technology development with Canadian Natural Resources and chair of the Canadian Oil Sands Network for Research and Development (CONRAD), one of the COSIA predecessor organizations. “Two-thousand twelve2012 is all about COSIA working with CONRAD, OSLI [the Oil Sands Leadership Initiative] and others, to bring it all under COSIA.”

COSIA aims to reduce duplications in R&D, identify gaps and advance innovative solutions.

“It’s hard to get top focus and people in every one of the organizations. Once they’re all together you’ll have nothing but the best and the focus to do more, better, faster,” Romero says. “As companies, internally we’ll have a better opportunity to organize ourselves to have the right person in the right place at the right time.”

Why COSIA says it is different

One of the key features of COSIA is that it is intended to build on the strength of previous collaborations in the oilsands sector.

“We know that collaboration works. We’ve seen it through the success of other industry organizations,” says Suncor’s Williams. “Their achievements have given us confidence that an organization like COSIA is going to be successful in the future.”

Because its impetus comes from the executive suites of the participating companies, COSIA’s representatives say there is commitment at the highest level.

“The public has an increasing expectation of environmental performance in all sectors,” says biologist Dan Wicklum, COSIA’s chief executive. “Companies feel a sense of urgency, [in part because] the public includes thousands of oil company employees.”

“COSIA will set expectations and report progress [publicly],” says Wicklum. “Any time you make a commitment, especially a public commitment, there will be an expectation. People will be following that commitment.”

The thrust behind COSIA is to be open to new ideas. Whether an environmental technology requires an evolutionary development or a step-change, through its steering and technical committees COSIA will scan the horizon to identify the most promising new opportunities.

“We want to attract any organization that has a good idea that will allow us to attain our vision,” Wicklum says. “[We welcome] academia, governments, large companies and small companies, an elder in a First Nation who has an idea about how to reclaim land better or quicker. We really want to be an innovative organization.”

Romero explains that as a standalone company, COSIA will have mechanisms for welcoming non-oilsands companies as participants and for incorporating them into its membership.

In the past, inventors faced a lot of different doors to knock on to find a company willing to give them a hearing.

“I think approachability is very important in collaboration. We don’t want any barriers,” Wicklum says. “Inside of COSIA we expect to be much more efficient in understanding what ideas are out there, screening them and advancing the good ones. Companies can retain ownership of their [intellectual property] and the value, but sharing it will reduce redundancy and reduce gaps. A main motivation is to ensure the best ideas are advanced.”

Given COSIA’s emphasis on goal setting and reporting, it will presumably take some time to plan how to execute both. First it has to devise the mechanics of transplanting existing collaborative organizations such as the Oil Sands Tailings Consortium (OSTC) into the ribs of the COSIA umbrella. The transition has to be so smooth there’s no difference for employees between one day in the old organization and the next in COSIA, Romero says.

The main steering committee will be comprised of executives of the founding 12 shareholder companies. Through the technical committees this group oversees, COSIA will work to get a handle on a multitude of organizations and projects to decide where and how to plug in the resources members contribute.

Members pay according to their means.

“Good projects are not to stop,” Wicklum says. “We hope to fold them under COSIA and accelerate them with our added tools.”

That said, “COSIA is a hub, not a large organization,” Wicklum clarifies. “Innovation will take place in projects led by companies and others, so that’s where the money is spent.”

Rather than discuss the overall budget, Wicklum cites, as an example, that the OSTC spent $90 million on tailings innovation last year.

The realignment of organizations will force shareholder companies to rejig their budgets, particularly where only part of their participation in a given collaborative organization will shift to COSIA oversight.

All OSLI companies are COSIA companies, for example, but members contribute to some projects overseen by Petroleum Technology Alliance Canada (PTAC) that will move to COSIA and to other PTAC projects that won’t.

It’s complicated, and many questions still need to be answered, but there is a great sense of confidence in the success that the group will have in the future.

“COSIA isn’t an experiment and it isn’t about any single company, it’s about all of us. It’s about industry coming together to quickly implement the best environmental solutions and work to responsibly develop the oilsands,” says Williams. “Our 12 companies remain competitors and will continue to compete aggressively in the market with our products, but we know that when it comes to the environment, we all win when we start working more closely together.”