Industry View

• Develop a strategy with compelling business case
• Build a technology roadmap
• Change the way research, development and deployment (RD&D) is done by integrating and focusing research efforts. In addition, industry stakeholders should develop a one-channel funding mechanism to save time, focus resources and ensure accountability
• Improve market incentives to include earnable, awardable royalty credits and revamp the current system of income tax credits.

The Alberta Department of Energy (ADoE) has subsequently

developed and launched the Innovative Energy Technologies Program (IETP) in 2004. Citing the Spudding Innovation assertions, the ADoE says that Alberta's recoverable reserves of conventional oil could be increased as much as 14% of OOIP or some 8.7 billion barrels.

IETP offers royalty adjustments of up to $200 million over five years to specific pilot and demonstration projects that use new or innovative technologies to increase environmentally sound recoveries for existing reserves and encourage responsible development of new oil, natural gas and in situ bitumen reserves. The program is also designed to assist industry to find commercial technical solutions to the gas over bitumen issue that will allow efficient and orderly production of both resources. By sharing the financial risks, IETP will encourage innovation and quicker commercialization of new technologies.

Producers and service providers can both apply for funding. Evaluation criteria are based on a demonstration of compliance with Alberta Energy's objectives of developing innovation, encouraging dissemination of technology and providing positive economic benefits to the people of Alberta without causing harm to the environment. The first round of funding was allocated in spring 2004, and applications will be accepted for the second round of funding until October 31, 2005.

A second study released in March 2005 by PTAC through its Technology for Emission Reduction and Eco-Efficiency (TEREE) steering committee examined social, regulatory and other non-technical barriers to the deployment of emissions reduction and related technologies in natural gas and conventional oil with a primary focus on the Western Canada Sedimentary Basin. PTAC's Barriers to Deployment of Environmental Technologies report (www.ptac.org/eet/
dl/eetreport0401.pdf) proposes ways and means to overcome barriers preventing upstream O&G companies from investing in emission-reducing and other environmental technologies. PTAC President Eric Lloyd

encourages industry to begin viewing environmental technologies not as a cost, but as an economic opportunity.

The Barriers report suggests greater government tax incentives are needed to promote environmental innovation and direct funding support, particularly during the demonstration phase of technology commercialization, to move innovative technologies toward deployment. Furthermore, the report recommends the formation of a one-window approach to access funding, and the creation of a database for best practice environmental technology. Producers have expressed the need to better discern the best practice technologies from all of the environmental technologies marketed to them. Finally, the report recommends regulatory alignment with deployment of best practice technologies and improved communication of progress being made.

Currently, PTAC is working on another recommendation from the Spudding Innovation report, an Unconventional Gas Technology Roadmap for industry, government and other stakeholders in the Western Canadian Sedimentary Basin. This project's goal is to help focus attention on the long term potential for unconventional gas reserves, and to galvanize a coordinated and cooperative approach to technology development by building a technology roadmap. The roadmap will outline the business and societal challenges to development, the state of the current recovery technology, and the best avenues for improved or new technology. The target completion date is March 2006.

Denis Gaudet graduated from the University of Alberta with a Mechanical Engineering Degree in 1973. Denis's oil and gas industry career began in Fort St. John, B.C. and continued in northern Alberta, B.C., The Netherlands, Scotland, Norway and England. While at Nowsco Well Service's head office in England, Denis worked throughout Europe and North Africa in sales, marketing and operations.

Denis returned to Calgary with Nowsco in 1986 to work in sales, operations, and international marketing, then moved to Canadian Fracmaster as Vice President of Technical Services.

Denis joined PTAC as a Board Member and represented oil and gas industry service sector companies for seven years. In his current position as Director, Technology Transfer, Denis is responsible for the Technology for Emission Reduction and Eco-Efficiency project and several technical areas within PTAC.