techlife magazine

The Sustainability Issue

Words: Scott Messenger
Images: Blaise van Malsen

This Web Exclusive was featured in Volume 5, Issue 2 of techlife magazine.

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How Wade Bozak and Alberta's small business community could redefine oil sands sustainability

Wade Bozak, Vice President, RJ Oil Sands Inc.

In a workshop the size of a small-town hockey rink, just west of Edmonton, Wade Bozak grabs a small beaker from a lab bench and turns it upside down. Half full of what appears to be pure oil, it defies gravity and stays put. Bitumen, Bozak explains. He rights the glass and inserts a long metal spatula, teasing out a tentacle, dark and sticky as molasses.

"This is what all the fuss is about," he says with a smile.

That's a statement thick with meaning. In the oil sands alone, there are nearly 170 billion barrels of recoverable oil, making this reserve third only to Venezuela and Saudi Arabia, a kingdom built upon more than 260 billion barrels. In 2010, Alberta's reserves generated $3.7 billion in royalties and made possible the export of 1.4 million barrels a day to the United States.

Overall, they're a load-bearing pillar for an oil, gas and mining industry that accounts for almost a quarter of the province's gross domestic product and directly employs 140,000 people.

Hence the type of fuss most Albertans make over them - including the provincial and federal governments who recognize them as a major long-term provider of jobs and revenue.

That plays out differently elsewhere.

The European Union, for example, has been developing a system to rank energy sources by environmental impact. Though it has yet to come to a final decision, it is threatening the oil sands with an economically damaging rating because of the high amounts of energy it takes to extract a barrel of oil from the sands.

Some businesses are reacting as well, shunning the sands to position their brands as eco-friendly, including Lush cosmetics and Liz Claiborne. Then there's been all the attention focused on the nearby Athabasca River, and on the impact the oil sands is having on water quality.

Alberta's oil producers are countering with action. Real progress in the areas of land, air, water and biodiversity, after all, is essential if Alberta's industry or government is to tell a story about the oil sands compelling enough to satisfy its critics.

For Bozak, and a host of entrepreneurs like him, that necessity means opportunity. The bitumen in that beaker is a product of his ingenuity, separated by his own technology from tailings, the oil sands' major waste stream. There's clean sand and water to go with it, not far from being reintroduced into the environment, along with a claim that, given the chance, he could eliminate the tailings ponds in less than two decades.

In other words, Bozak, a NAIT Civil Engineering Technology grad (class of '93) and vice president of RJ Oil Sands Inc. - an eight-person operation - may have a way for big companies to address the oil sands' challenge.

"We're offering solutions to help them do that," he says.

He's not alone. Others are recognizing this as a niche industry: identifying and addressing environmental issues some big oil companies can't get to quickly enough becasue of the distance between idea and execution that comes with the complexities of corporate structures. As Bozak demonstrates, it's perfect territory for small business, nimble by nature, quick, focused and tenacious.

Any one of them could probably argue they represent a novel solution capable of turning the tide of global opinion.

"All these little solutions," says Bozak, "well, it's going to be a big solution someday."

But first, entrepreneurs need to overcome a common obstacle: getting to market. In the oil sands, rapid development has left a legacy of challenges. Is Alberta positioned to support those who might help to fix it?

RJ Oil Sands phase separator, demonstration unitBozak's solution is elegant, relatively simple technology. It uses no chemicals, no heat and no power other than electricity to pump oily wastewater into and out of the unit, basically a collection of holding tanks and pipes.

The key component is his phase separator. On his shop-floor test unit, this is a blue pipe, a couple metres long and about 7.5 centimetres wide.

Waste enters, is aerated with a non-reactive gas that, in the heightened pressure of the separator, breaks into bubbles small enough to cling to individual oil droplets, causing them to float up and away from virtually clean water.

"This was fully invented here," says Bozak.

There are patents and blueprints, but designs for early prototypes go from his head to quick sketches for his resident welders, a few NAIT grads busily hammering, cutting and welding at one end of his shop. "I've got a talented group of guys here. If I can dream it up, they can make it."

As a startup entrepreneur, Bozak is an anomaly, and he knows it.

"The work that I've done here, a financial institution wouldn't have touched it with a 10-foot pole." Although he's now bringing his technology to market, and quoting multimillion-dollar orders that will mean profit by next year, it has taken more years of research and development than most funders will abide.

But, then, Jack Seguin isn't like most funders. The former NAIT welding instructor went on to found, among other ventures, English Bay Batter Inc., a continent-wide food manufacturer. Now president of RJ Oil Sands, he and his bank account put the company in unusually advantageous financial standing.

The more common challenge of finding funding may be slowing the flow of solutions to the oil sands - even if, as Troy Lupul says, "there's a huge pool of opportunity out there right now."

Co-founder and former president of FilterBoxx Water and Environmental Corp. and president of Allied Water, Lupul (Water and Wastewater Technician '90) has moved into venture capital with Walsingham Growth Partners, an investment group focused on energy, environmental and IT infrastructure.

Still actively starting companies, he knows how difficult commercialization can be in Alberta, and how much it depends on conveniently and efficiently meeting the needs of big players focused on extraction.

"You could have the Holy Grail and it wouldn't matter," says Lupul. Startups need to approach major oil sands producers with comprehensive technologies, he adds: packages that neatly address an issue from start to finish.

Bozak's custom separator units fit in trailers that can be moved by flat-bed to production sites and connected upstream to the waste source. Oil is removed to the production stream, while the water, depending on the application, is either reused or reinjected into the formation. The entire process is fully automated.

New technology also has to satisfy the corporate "bean counters" says Lupul. That is, price - and fiscal responsibility - remains a factor. Of Alberta's brightest ideas, the big question, as he sees it, is going to be about which is most cost effective.

"It's definitely not going to be some big mechanical system, I'll tell you that. It's going to be something that's crude and rudimentary, but it works."

Bitumen. "This is what all the fuss is about," says Wade Bozak, vice president of RJ Oil Sands Inc.First, that rudimentary technology has to actually get to market, which Bozak has. In Alberta, that's no small feat.

Like most places around the world, the province suffers from a commercialization gap.

Alberta Innovates - Technology Futures was created by the provincial government in 2010 to bridge that by helping small to medium-sized enterprises, or SMEs, take great ideas to market.

"SMEs have been determined to be the key economic engines in a country or region that [provide] the big corporations with all the supplies and services they need, including technologies," says Rick Tofani, the organization's acting vice president of new ventures.

The oil sands giants may be setting goals in terms of sustainability, but when it comes down to the technology to achieve them, quite often "they expect their suppliers to come up with those wins for them," he adds.

It's like the big electronics producers: "Nobody knows the names of the little guys, but everybody knows that the big guys don't make the parts."

To help the "little guys" - which, according to Tofani, make up more than 90 per cent of Alberta's business community - Tech Futures acts as facilitator and funder to startups and post-secondary educators like NAIT, which work with SMEs on everything from applied research to connecting them with major producers.

"My argument has always been collaboration is the key to innovation," says Dr. Haneef Mian, NAIT's Ledcor Group Applied Research Chair in Oil Sands Environmental Sustainability.

As head of a group that is fostering relationships between SMEs with innovative technologies and the oil sands' biggest players, he knows that neither can do it alone. SMEs don't have access to the bitumen and the majors aren't in the business of designing or developing technologies.

"They are business organizations that are in the process of providing something to their shareholders," he says. "That's their primary objective."

In addition to its capacity to validate and test new technologies through applied research, he sees the value of his program in its role as one of Alberta's main hubs of information, ideas and resources that lead to solutions. And as Tofani sees it, programs like this are a fundamental part of Alberta's approach to improved commercialization overall.

"It can't be left to SMEs knocking their heads together and competing with one another," he says. "They've got to be part of a well-oiled ecosystem."

Bozak's team includes welders and fabricators, making RJ Oil Sands versatile and nimble."I'm an innovator and an inventor, but at the end of the day I'm an entrepreneur," says Bozak.

And because of his success so far, he's also a poster-boy for what might come of Tofani's "ecosystem," a fine balance of regulators, funders, facilitators, and companies big and small.

To top it off, Bozak has the attitude that could help change perceptions of those critical of today's oil sands industry.

"I'd love to see the big problems go away, and I'd like to have a part in that," he says. "A made-in-Alberta solution, by an Albertan."

Over the last 10 to 15 years, the market has changed considerably - especially in the way it has fallen under the scrutiny of the western world.

"In days gone by, technologies that increased the bottom line were of utmost importance," says Tofani. That's still true, but nowadays, there's a much greater emphasis on sustainability. "It's become a major factor in a large multinational's operations."

Recently, Corporate Knights Inc. provided proof of that. As part of its annual "Global 100" program, the Toronto-based company devoted to "clean capitalism" ranks companies for sustainability. Suncor Energy Inc., the oil sands' biggest player, was this year's highest-placing Canadian company at 47. And being the company's third appearance on the list, it may indicate a trend upon which SMEs might capitalize.

"Environmental sustainability is critically important to our entire industry," says Shelley Powell, Suncor's vice president of oil sands transformation, "so we're certainly looking to collaborate with others who have similar priorities and values."

To Troy Lupul, that's a call to action. "There's so much opportunity in that space. I think somebody with the right ideas can have huge rewards," he says, careful to add the winning ideas are those that meet needs quickly and efficiently, and with virtually no disruption in operations.

Bozak knows this, and, as he attempts to convince more of the industry of the value of his separation device, he understands the challenge ahead.

Ultimately, the market will drive innovation, and will be the sole decider of Bozak's success, no matter how much funding he gets. Though he's beginning to make a name for RJ Oil Sands, he's yet to become an essential cog in the oil sands industry - or a leading character in a new story Alberta can tell about its fossil-fuel economy.

Bozak might better serve in a supporting role anyway. The stage may finally be set, with regulators and industry champions calling direction, for a chorus to emerge. The plot has certainly thickened. In the best ending, Bozak is just one of many voices that lead Alberta to a resolution that satisfies itself as much as critics.

"I truly believe we could eliminate the tailings ponds," he says. "And do it at a profit."