Daily Oil Bulletin: June 15, 2012
COSIA Open To New Ideas
Canada's Oil Sands Innovation Alliance (COSIA) is doing everything it possibly can to make sure that anyone with a good idea -- an organization or an individual -- has a way to access the alliance, a session at the Global Petroleum Show in Calgary heard.
"We don't yet have a very good way as a sector to essentially accept -- in a very co-ordinated way -- new ideas, new products, new processes," said Dan Wicklum, chief executive of the alliance.
So COSIA will set up a separate screening entity, a single point of contact for inventors, to assess the ideas it receives for improving oilsands projects' environmental impacts.
The people with those ideas will then be directed to the appropriate channels, said Wicklum.
The alliance was formed by a dozen oilsands companies last March to collaboratively accelerate their pace of improving environmental performance (DOB, March 1, 2012).
Many of the unsolicited ideas COSIA has been receiving are not that realistic -- they defy the laws of chemistry or physics -- and many have a kernel of viability that hasn't been well developed or verified while yet others are solid, he said.
And while oilsands producers are driving and funding COSIA, it will have associate memberships so that people and organizations can sit on steering committees.
"They might not have a technical vote but they would be completely involved in prioritizing and planning," said Wicklum.
Research providers such as universities or governments can simply be part of projects; they don't need to be an associate or a member at all, said Wicklum.
The 12 current and founding members are: 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.
COSIA is in discussion with two companies that are about to join the alliance although that hasn't been announced yet, said Wicklum.
The 12 companies account for 80 per cent of Canada's oilsands production and with the additional two companies close to 90 per cent of oilsands output will be represented, he said.
"As far as we know this model doesn't exist anywhere else in the world, certainly not at this scale, this level of importance," said Wicklum.
Member company CEOs have committed to setting environmental performance goals in each of four areas: land, water, tailings and greenhouse gas (GHG) emissions, and publicly reporting on their progress.
No date has been set for the announcement of goals, however a "goal development methodology" is to be completed by the end of August, he said.
COSIA will have a full-time director and technical staff in each of the priority areas as well as a steering committee.
The tailings segment is already operating via the Oil Sands Tailings Consortium (OSTC) formed in December 2010 by seven oilsands mining companies to collaborate on research and development related to tailings, which chose to embed itself within COSIA.
The OSTC has defined its scope, shared its innovation, signed joint venture agreements and is now setting goals and identifying new projects to fill innovation gaps, he said.
COSIA members who share their patented technologies can expect other member companies to do the same, he said. "We all allow each other to use our intellectual property, to use the patent without any licensing fee."
Only environmental knowledge will be shared; members will remain fiercely competitive in other areas, said Wicklum.
A council of CEOs meets about once every six weeks, whereupon Wicklum presents the organization's progress.
One of the first things COSIA has to do is define the technical boundaries of each of these areas in a "scoping process."
Outside the boundaries it's business as usual. "Companies might work together but they'll work together on traditional business terms."
Wicklum said each member company is expected to then "literally come to the table with a stack of paper and say, 'This is the innovation that we have, that we own. It [belongs to] our company right now but we would like to contribute to the alliance.'"
COSIA hopes to have technical boundaries set for water by the end of June, to have those boundaries for land completed by the end of July and for GHGs by the end of the September.
Because there is such a range in the size of member companies COSIA is not asking every company to contribute equally to the alliance but to contribute "equitably," he said.
Based on approved production capacities, large companies are expected to contribute more than small companies. A "functional methodology" will be followed to determine if each company is contributing equitably.
Once contributions are deemed to have been made equitably, companies will have "use rights" for all the innovations that have been contributed, which means they can't be sued for using another member's environmental technology.
The value of the contributions will be based on what they cost, regardless of whether they worked or not, he said.
If it's decided a company has not contributed equitably it will be expected to "over-contribute" to the alliance over the next five years.
That company can take a look at what's been contributed by others but because it is not considered vested it won't have immunity from being sued if it commercially employs what it has learned.
COSIA will assess member companies' contributions once a year.
A team of about 40 lawyers has been working on these agreements on and off for around six months, he said.