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Eddy Isaacs is chief executive officer of Alberta Innovates – Energy and Environment Solutions. He is a fellow of the Canadian Academy of Engineering and serves on the boards of the Petroleum Technology Alliance of Canada and the Alberta Chamber of Resources.

Societal demand to move beyond fossil fuels has become mainstream almost overnight. This leads us to the question: What comes after oil? As someone who hunts for novel energy technologies for a living, I have been in search of the answer.

To mark Earth Day in April, the Earth League, a network of institutions working to respond to the most pressing issues facing humanity , released a statement saying that 75 per cent of known global fossil fuel reserves must stay in the ground, to avoid the effects of climate change.

Climate scientists have been telling us that to avoid a rise in temperature of more than 2 C, we will need to cut emissions to nearly zero by about mid-century, even as the world's population grows to nearly 10 billion people.

If we consider this "unburnable carbon" scenario, what is the future for oil?

To answer this question, I think it is worthwhile to consider where we have come from with respect to oil. The choice for using oil in our transportation system was made at a time when climate change was not an issue, and that choice has revolutionized our way of life. We have been living in the golden age of oil and have seen global oil consumption more than triple in the past 50 years. Projections from sources such as the International Energy Agency, the U.S. Energy Information Administration and other sources indicate that global demand will continue to grow, albeit at a slower pace.

With the advent of new technologies in North America, such as hydraulic fracturing, or fracking, long horizontal wells, 3-D seismic surveys and steam-assisted gravity drainage, the world's reserves of oil have been extended by several decades. Russia, Saudi Arabia and the United States produce a third of all the oil in the world, the equivalent of more than 30 million barrels a day – and these three countries have shown that they are capable of increasing production even more.

Other key countries capable of significantly increasing production include Iran, Iraq, Brazil, Nigeria, Kazakhstan, Venezuela and Canada.

There are 43 countries that produce over 100,000 barrels of oil a day and these countries are dependent on the significant taxes and other revenue that oil production generates. The positive economic impact of oil makes it difficult for countries to simply walk away from its production. We face that same reality in Alberta and Canada.

Ten years ago, experts spoke about "peak oil" and the economic consequences when supply would no longer meet demand. Today, we are speaking about "peak demand" – we have reached a point when we have too much supply. There is considerable uncertainty about the future balance between supply and demand for oil use in our transportation systems.

There is no question that the world is transitioning away from fossil fuels. What is not clear, however, is how many more decades we will still be using oil.

To start with, there is no ready-made replacement for it. This is unlike the case of coal, for example, where cheap natural gas can serve as an immediate substitute in North America. Substitutes for oil in vehicles exist – biofuels, natural gas, plug-in-hybrids, battery electric and hybrid electric – but they are not as convenient as gasoline and diesel. It is difficult for alternatives to compete with the high energy content, portability and range provided by oil products and the existing infrastructure that has been designed around these fuels.

That said, there are possibilities for breakthroughs, such as wireless charging, which could allow electric car owners to charge their vehicles as they drive. But this type of technology is still a long way from general use because of the infrastructure required to support it, and we still need the electricity source to be a low- or zero-carbon emitter.

We are also seeing rapid advances in engine and vehicle design that may reduce oil demand. This will be a positive outcome, since about 75 per cent of the emissions attributed to vehicle use come from burning gasoline and diesel when we drive. The other 25 per cent is production-related.

In an ideal world, the energy transition already would be well advanced but, realistically, oil is likely to remain our chief transportation fuel for some time yet. This means we have to take accelerated action to make oil resources more sustainable. In other words, we have to find ways to use less energy and other resources in the production of crude.

Eric Newell, best known for his years spent as CEO of oil sands company Syncrude Canada Ltd. and the current chairman of Alberta Innovates - Energy and Environment Solutions, is fond of saying: "It is technology and innovation that has got us to where we are, and it is technology and innovation that we need to get us to the next stage."

Managing oil sands greenhouse gas (GHG) emissions will be challenging. Currently, GHG emissions of oil-sands-derived crudes, on a life-cycle basis, are similar to other heavy crude from California, Venezuela, Mexico and China.

The near-term target is to have GHG emissions of Alberta oil sands below that of conventional crude. It is possible. Innovation, especially in the short term, can bring about a reduction of some 20- to 30-per-cent in the production and conversion of bitumen to transportation fuels, including:

  • Energy efficiency to reduce costs and energy intensity at the same time,
  • Co-generation (producing combined steam and power), and
  • New recovery technologies, such as use of solvents and electromagnetic heating.

Combined, these advances can make up the gap with conventional crude.

In the medium term, having a greener electricity grid will be a major asset as the world moves to electrification. Some of the processes in oil sands can benefit from switching to non-fossil-fuel-based green electricity.

Alberta has made a strong commitment to energy storage, in order to allow more renewables to come onto the grid. Fuel switching, increased use of renewables (wind and solar) and biofuels are essential components of a renewable strategy. Also, smart metering and energy conservation can help us take action day to day in Alberta.

In the longer term, to reduce oil sands emissions further, industry will need to consider the use of small modular nuclear reactors and/or carbon capture and storage. Today, these technologies have significant cost barriers and societal concerns to overcome.

Alberta Innovates - Energy and Environment Solutions has a portfolio of a dozen CCS projects that are at different stages of development, and there are a couple that promise to cut costs by at least a third. We now need to advance these technologies to demonstrate this kind of performance in field operations.

At the same time, Albertans are advancing carbon utilization technologies that produce high-value goods from greenhouse gases, including production of chemicals. Conversion of carbon to valued products often requires power input. Such a power source has to be GHG-free – another reason to want a greener grid.

Lastly, we are starting to see academic work on uses for oil that go beyond burning it in vehicles. Can we find major new uses, such as using it to make carbon-fibre products that can be used as advanced materials to replace structural steel, or as carbon-reinforced wood?

There is a long way to go to fully understand the opportunities to turn oil and carbon into value-added products, but we need to quicken our pace.

Just as the Stone Age never ended because we learned to use stones for higher-valued products, the oil age may not have to end if we can find uses for carbon and oil that are of high value and non-emitting.

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