That was one of the takeaways from a panel Wednesday that was part of a series on the Corporate Knights Earth Index. The initiative tracks Canada’s progress on decarbonizing its economy in a variety of carbon-intensive sectors, from buildings and transportation to agriculture and power. Heavy industry – the manufacturing of cement, steel, chemicals, pulp and paper, and non-ferrous metal smelting and refining – has seen only a slight reduction in its greenhouse gas emissions since 2005, according to Corporate Knights analysis, something that will need to change for the country to reach its climate ambition.

Heavy industry’s contribution to Canada’s GDP is 2%, but it is responsible for 9% of the country’s emissions. And to meet Canada’s commitment to cut emissions from 2005 levels by 45% by 2030, these industries would have to decline at an average rate of just over 4% a year. Lowering these emissions will not be easy without a complete rethink of these industries’ processes, said Ralph Torrie, head of research at Corporate Knights. “Incrementalism is not going to be an effective strategy in this case,” he told the panel. 

This is because roughly half of these industries’ greenhouse gas emissions come from the chemical processes they use to manufacture products. So it isn’t simply a matter of electrifying their energy consumption. A larger, more complex transformation has to happen. Recycling and disruptive technologies will be key in that transition, said Torrie, but most important will be speed.

By taking bitumen and converting it to carbon fibre alone, it will add so much value to our economy. And it will transform our economy, not transition it.

—Laura Kilcrease, CEO of Alberta Innovates

When it comes to cement, Chris Bataille, an energy economist with the Paris-based think tank Institute for Sustainable Development and International Relations and a professor at Simon Fraser University, said a big chunk of emissions can be eliminated through better design that minimizes the amount of cement used in buildings. But carbon capture technology will also be necessary to reduce emissions, he said.

In Edmonton, a pilot project is under development at a Lehigh Cement plant that hopes to capture more than 90% of the carbon dioxide that comes from the facility’s flue gas. The project is a first for the North American cement industry and follows a Norwegian carbon-capture cement project being built in Brevik, Norway, by HeidelbergCement.

Panellists also exalted the potential of research exploring “bitumen beyond combustion,” which entails tapping Canada’s bitumen deposits to make useful materials beyond oil and gas, such as carbon fibre (a strong, lightweight material used in some electric cars). Laura Kilcrease, the CEO of Alberta Innovates (which funded a $15-million competition to further develop this technology), says that this is not only an alternative way to use an abundant Canadian resource, but an important avenue for increasing its value. “By taking bitumen and converting it to carbon fibre alone, it will add so much value to our economy. And it will transform our economy, not transition it,” she said. 

Panellists agreed we’ll need a national conversation about how these critical industries make the necessary changes to arrive in a net-zero future. And a large part of that conversation will need to involve Indigenous communities, said Jean Paul Gladu, a founder and principal at Mokwateh Group who serves on Suncor’s board of directors. Gladu said that we won’t be able to achieve our goals without Indigenous consent.

And just as there is little time for incrementalism when it comes to the climate crisis, Gladu said that the same applies to Canada’s relationships with its Indigenous Peoples. “We’ve got to start thinking bigger in this country,” he said. 

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“A crisis is a horrible thing to waste,” says Paul Pede, the co-founder and CEO of Carbonix, an Ontario-based Indigenous technology company that works with oil sands companies. “If your eyes are open to it, the opportunities are there – and other opportunities are emerging.” Pede’s company has been developing products like activated carbon that help industrial operators remove and remediate waste from their sites for more than a decade and has worked in the past with Alberta Innovates to develop applications for – and from – oil sands byproducts.

In Canada, he says, that’s “easily” a $100-million opportunity. “But now, what we recognize is that if you take a lot of the same processes that we developed, there are applications in other areas.” That includes everything from grey areas like the petrochemical industry to unabashedly green ones like renewable-energy-based hydrogen production and energy storage, and they substantially increase the size of the prize his company is chasing. “With the processes that we’ve developed, we’re now becoming an advanced materials cleantech company – and probably the only Indigenous advanced materials cleantech company in the country.”

Pede isn’t alone here. Jim Boucher, the former chief of the Fort McKay First Nation, launched the Saa Dene Group of companies in 2020. In addition to investments in a new construction firm, an education publishing company and a virtual healthcare portal, one of its earliest forays was a partnership with Calgary’s Acceleware, a cleantech company that says it can produce oil and gas with near-zero upstream GHG emissions. The Acceleware|Kisâstwêw partnership will see the two partner on a pilot project in the Cold Lake oil sands region, one that they hope will demonstrate the technology’s potential to larger oil and gas companies. “I think it’s a game-changer with respect to how we produce oil in Alberta,” Boucher says. “And I think that will address a lot of the issues and concerns that environmental groups have, as well as people in Canada and around the world, with respect to how development occurs.”

Acceleware’s RF (for “radio frequency”) XL technology performs the same basic function as conventional techniques, which use steam to move stubborn bitumen reserves to the surface. But unlike those conventional techniques, which use natural gas to generate the heat, Acceleware’s proprietary technology converts electricity into electromagnetic energy and turns the water already present in the formation into steam. The company says their solvent-free method can reduce operating and capital costs by 40%, virtually eliminates water use, and significantly reduces upstream emissions, depending on the kind of electricity that’s used. That’s increasingly going to come from lower-carbon sources, given Alberta’s enviable renewable-energy potential and the fact that its remaining coal-fired electricity plants are scheduled to switch over to natural gas by 2023.

So why hasn’t technology been more widely embraced? In part, Acceleware CEO Geoff Clark says, it’s a function of the way the business used to operate. “They’re all about de-risking rather than game-changing, monumental solutions.” Before, the people who might have championed these sorts of ideas didn’t have the social or corporate capital they needed to step out on a ledge – and those who did often found themselves getting pushed off the ledge.

But the disruptions that defined 2020, from the COVID-19 pandemic to collapsing oil prices and the rise of ESG investing, gave those potential champions new life. And while Keystone XL’s failure is bad news for Albertan jobs and profitability in the medium-term, it may encourage more people to start swinging for the fences on climate-friendly technologies rather than settling for bunt single after bunt single. “I think it’s kind of a rebirth that I’m witnessing within the companies that we’re talking to,” Clark says. “The people that were touting ESG and sustainability within organizations before were not getting the airtime that they get now. Now we’re seeing people really interested in what we’re trying to do,” he says.

As it turns out, those people included Jim Boucher and the Saa Dene Group. And while he describes their coming together as “a happy coincidence,” Clark thinks the relationship can serve as a role model for the industry as a whole. “We think that in order to get consent – and not just consent, but enthusiasm – among Indigenous groups, you have to show the benefit. And that benefit has to go beyond just dollars. It has to address poverty, it has to address skill development – basically everything that Indigenous groups have been asking this industry for.”

For their part, Albertans are increasingly asking for decisive action on climate change. According to a December poll conducted by Janet Brown Opinion Research for the Pembina Institute, 68% of Albertans support the goal of achieving net-zero emissions by 2050. And while 65% said the province’s oil and gas industry is a “global leader in emissions reduction,” 81% think the province is “too dependent on oil and gas.” The furious public uprising against the province’s plan to open the eastern slopes of the Rocky Mountains to open-pit coal mining, an uprising that included country musicians like Paul Brandt and Corb Lund as well as southern Alberta ranchers and Indigenous communities, speaks to the province’s rapidly changing attitudes.

And it’s not just voters in Alberta who want to see the industry move faster when it comes to climate change. In his 2021 letter to CEOs, BlackRock’s Larry Fink pointed out that between January and November of 2020, investors poured US$288 billion into sustainable assets, a 96% increase over the whole of 2019. “I believe this is the beginning of a long but rapidly accelerating transition – one that will unfold over many years and reshape asset prices of every type. We know that climate risk is investment risk. But we also believe the climate transition presents a historic investment opportunity.”

That’s an opportunity that Bryan Helfenbaum is particularly excited about. As the executive director of advanced hydrocarbons with Alberta Innovates, he’s been tasked with spearheading the government’s Bitumen Beyond Combustion program. And right now, he likes what he sees. After all, while the growing adoption of electric vehicles will reduce the demand for gasoline and diesel, he says there are still plenty of ways that carbon-based resources can contribute to the low-carbon economy: “The ‘low-carbon economy’ isn’t actually low carbon – it’s low carbon in the atmosphere. A lot of the stuff around you right now is made out of carbon. So it’s just about keeping carbon in solid form and using it, as opposed to combusting it.”

Alberta Innovates has a whole portfolio of investment areas that align with Canada’s net-zero goals, from digital health and smart agriculture to biotechnology and artificial intelligence. But it’s the alternative applications for bitumen where the dotted line between Alberta’s past and its possible future is most clearly visible. Take carbon fibre, a high-strength, low-weight material that can be spun out of bitumen. Over the last decade, the global demand for it has doubled, with much of that coming from the enormous growth of the wind industry and its ever-expanding appetite for more, bigger and lighter turbine blades. But its future, and Alberta’s role in it, depends on drawing the right lessons from the province’s past. “What we don’t want to do is find ourselves shipping dilbit to the U.S., just like we do today, and it’s there where they convert it into advanced carbon materials,” Helfenbaum says.

That’s one of the things that Carbonix’s Paul Pede is trying to avoid. Pending the resolution of certain COVID-related concerns, his company plans to start a demonstration project in Fort McMurray – and use it to develop new applications for its existing processes and technology. And while it will continue to focus on developing remediation-related products for industrial projects, he says the Government of Alberta’s Natural Gas Vision and Strategy – one that revolves around expanding into areas like hydrogen, petrochemicals and recycled plastics – also has plenty of upside. “The opportunities were already starting to emerge, and there was a focus by the province already on becoming a supplier of higher-value added products based on the same resources that are available now. They’re just being processed and presented in a different manner.”

On this issue, at least, the federal and provincial governments seem mostly aligned. Despite some predictably partisan bluster from Jason Kenney, Alberta’s natural gas strategy and the federal government’s commitment to reach zero plastic waste by 2030 should work in harmony. And the associated economic upside is considerable: in January, a group of 40 companies that includes Canadian Tire, Coca-Cola Canada and Maple Leaf Foods signed on to the Canada Plastics Pact, which is aiming for a so-called circular economy for plastics by 2025. If it acts decisively, Alberta could become Canada’s go-to plastics recycling hub.

But for all this light at the end of the tunnel, there’s still some actual tunnel to get through first. “People in Calgary and Alberta are going to have to work through their grieving process,” Clark says, “and get past their feeling of persecution and realize that this industry has to go on – that life has to go on.” In order for that to happen, governments will need to do more to help the workers who used to build major pipelines adjust to this new reality. Iron & Earth, a worker-led non-profit based in the province, has called for a “prosperous transition,” one that would help create “one million new climate careers” and launch a new cycle of prosperity in the prairies.

At a proposed cost of $110 billion over 10 years, it wouldn’t be cheap. But the cost of not funding this sort of just transition, in terms of missed economic and environmental opportunities, could be far higher. If it works, people may look back on Keystone XL and the decision to cancel it – again – as an unwitting midwife for the long overdue birth of a new economy in Alberta. “I’m not going to say it’s going to be easy,” Pede says. “But in the last year, there’s been a great shift towards investing in this sector.” That shift, in time, could be far more important to Alberta’s economy and its future than any pipeline project.

Max Fawcett is a freelance writer and the former editor of Alberta Oil magazine.

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