The world is changing rapidly and smart buildings, smart cities, electric vehicles, robotics, sensors and big data will determine our future. Underlying all of these changes is the demand for energy and other resources.
I am very pleased with the message of change from Prime Minister Justin Trudeau and the Liberal Party. I hope that this change will bring together Canada’s burgeoning cleantech industry with our resource-based industries to capture the enormous opportunity they have together.
Many think that economic growth in our resource-based industries and sustainability cannot coexist. And, of course, it is a fact that today Canada is still primarily a resource based economy: 20 per cent of our GDP and 50 per cent of our exports come from mining, oil and gas, forestry and other natural resources; while the TSX is still mainly a resource based stock market.
Contrary to popular opinion, I believe that resource-based growth and sustainable innovation can coexist. I would even say that they have to rely on each other for their future success. Why?
Sustainability is increasingly important, and not just among voters or politicians. It is frequently cited as a Top Three focus area for most Fortune 500 CEOs, and it also underlies three key challenges that resource industry leaders are seeking solutions for:
1. Short term pain points in their value chain, like water, air and ground pollution. Industry players need solutions to keep a social and environmental license to operate, and to avoid potentially costly liabilities.
2. In an environment of sustained low commodity prices where oil could stay at $40 to $65 per barrel for many years, the resource industry needs technologies that can dramatically improve their cost structure. For example, what if we had mini-upgraders for oilsand exploration that would also avoid the need for diluents, or what if we could do fracking without water?
3. We are in a transition to the new energy industry of the future. All OECD countries, including Canada under former prime minister Stephen Harper, have committed to work toward a carbon free society by 2100. For resource industries, this means building off positions in hydrocarbons while trying to avoid future stranded assets and adding new products to their core offerings.
We already see large international energy companies like Shell and Total working to increase their product offerings with a “third or fourth leg” in addition to oil and gas, in order to sustain their position as a Fortune 500 company for the longer term. In fact, through its acquisition of SunPower a few years ago, Total now has a relatively stronger position in solar than in natural gas.
Will hydrogen and fuel cells become a new “leg” for large energy companies as well? Japan is betting big on that and has decided to make the 2020 Tokyo Olympics a massive showcase for fuel cell and hydrogen vehicles.
In Canada, there are already a few thousand cleantech and sustainability start-ups developing breakthrough innovations that can help offer solutions for these enormous challenges. Working closely with our large resource-based companies would allow these young innovators to prove their technologies first in local market applications, and to scale and get ready for export to innovation hungry global markets like China.
There are already several promising solutions under development in Western Canada. A clear example of how productivity increase and improved sustainability can go hand-in hand is MineSense, a Vancouver technology company developing real-time, sensor-based bulk ore sorting solutions for the mining industry. If successful, MineSense will dramatically reduce the movement of waste rock as it promises to increase the accuracy of ore/waste classification by over 50 per cent, providing up to 20 per cent margin enhancement through reduced energy, water and chemical usage.
Inventys Thermal Technologies is developing the lowest cost CO2 capture technology for post-combustion flue gas, clearing the path to a CO2-free society. And when it comes to total game changers for a carbon free world, General Fusion is developing the fastest, most practical and lowest cost path to cheap commercial fusion energy with no pollution or greenhouse gas emissions: the Holy Grail of clean energy.
All these companies have the potential to help extract more value from our resource-based industries, while creating a new industry with in-demand sustainable innovations that can be exported and will create good jobs and wealth in Canada.
While a number of these developments are already going on, the new Liberal Government will hopefully help to accelerate their commercialization and deployment. It would be terrific if Trudeau would jump in front of the troops that have started their innovation march.
His strong connection capabilities will be a great catalyst to bring cleantech and resource-based industries together, and his leadership will surely increase momentum and help capture the enormous value of this opportunity. Canada’s future starts here.
Wal van Lierop is the President and CEO of Chrysalix Energy Venture Capital.
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