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Oilsands needs more innovation to deal with environment, costs says GE exec

CALGARY – Costs and environmental pressures are making innovations in the oilsands more necessary than ever, says the CEO of GE Oil & Gas.

Lorenzo Simonelli, who leads the hydrocarbons division of the industrial giant, says the oil-and-gas industry should be moving faster on both fronts.

“If you look at different industries, you would say that the energy sector is one that is slower in adopting new technologies, and also tends to take longer to make decisions,” Simonelli said at a Calgary Chamber of Commerce event earlier this week.

He encouraged the industry to think big-picture when looking for ways to improve environmental and cost performance.

“This oil-and-gas industry is a very proud industry. It is also very siloed, and it tends to look at itself with respect to how it improves itself, and there are opportunities to look at other industries and new technologies, and actually adopt them at a faster rate.”

He said GE has already used health-care diagnostic tools to improve pipeline inspections and leak monitoring, jet engine technology in gas plants, and pumping technology from their water division in oil and gas fields.

But producers also need to become more technologically aware, he added, as improvements in sensors and data supplies provide new opportunities but also challenges.

“An industrial company needs to be a software company at the same time,” said Simonelli.

Oil-and-gas producers elsewhere in the world have managed to achieve two to five per cent increases in production from electric submersible pumps, he pointed out, which are used to help increase flow rates in wells, thanks simply to better use of information from sensors on the machines.

“That comes from data, and that’s a whole new world of opportunity.”

But at the same time, too much equipment is still providing too little information, said Simonelli, noting “there is a lot of dumb metal.”

Earlier this week, GE Oil & Gas also announced the results of the second round of its greenhouse gas innovation challenge, where the winners will have the opportunity to create a co-development plans with GE and other potential partners that will draw on a $475,000 directed development grant pool.

The competition focused on innovative ways to improve efficiencies in steam generation in the oilsands, and the winners were Sid Abma of Sidel Systems and Sumon K. Sinha of Sinhatech, both U.S. based, and Sylvain Lalot of University of Valenciennes and Hainaut-Cambresis in France.

Simonelli said while GE has made cuts amid the oil price slump, it hasn’t reduced its $1 billion in spending on new products and engineering, adding “taking a long-term view” is critical to the company’s success.

The oilsands industry has been making efforts in recent years to improve innovations, including with the creation of Canada’s Oil Sands Innovation Alliance in 2012. The alliance was formed to accelerate improvements in environmental performance in the industry through collaboration.

To date, the alliance says it’s shared 777 distinct technologies and innovations that cost over $950 million to develop.