Rethinking energy, rethinking industry – who’d have thought pucks would take centre stage?

It is very easy to get bogged down in energy wars. Conversations, even macro-type ones, often degenerate into debates about trees and not the forest – is this/that pipeline needed, is there a market for bitumen, etc. Energy talk devolves into these bite size pieces, and fixates on them, because that’s how Canada’s energy industry is attacked, so we must deal with the disinformation.  There is a whole internet that needs convincing. But when that happens, it gets harder to think outside the box.

Sometimes something wonderful happens that, virtually speaking, slaps us right off our barstool (thanks for the visual Eminem – for whom the metaphor may be part of his daily routine). Lately, I’ve been fortunate to interact with people who are working outside the spotlight in ways that cause a complete mental reset.

One instance occurred recently in a conversation with Jeff Paquin, CEO of Wapahki Energy Ltd. Wapahki is a 100-percent-owned First Nation company, and has an attitude that is desperately welcome – they want to create jobs, build an industry, and solve problems in a way that is, unsurprisingly, beneficial to the environment. Wapahki is developing CanaPux, a new method of transporting bitumen by blending and encasing it in plastic. (Side note: this is a bit of a fanboy exercise, but not intended as some sort of weird product promotion (I am not a paid shill for anything, and will not receive a single bitumen puck as compensation). Also, I unfortunately can’t discuss all the other brilliant ideas going on to help solve energy problems (because there are too many of them), but I will get to them as I can. There is a point to the story beyond starry-eyed adulation (though there is an element of that for sure).

When I first heard of CanaPux in the news, my battle-weary brain simply interpreted it as a new way to transport bitumen, and I mentally filed it as a new subsection in the “crude-by-rail” category.

As it turns out, my initial reaction was sort of symptomatic of the problems with the whole energy dialogue. I lazily framed the new technology in a limited way – that lack of transportation is our biggest problem, because that’s what we’ve become fixated on.

CanaPux, as it turns out, is the tip of an iceberg, a multidimensional development that goes far beyond the issue of “moving oil.” I don’t know if that developed by design or accident, and it doesn’t matter; what does matter are the possibilities that unfold.

What’s so special here? Well, from one end to the other, fresh thinking is obvious. First, the project is primarily a development between a First Nation entity and a railway company, who in conjunction set out to create a better future for the community, in a greener way, by building a business that isn’t designed or defined singularly as “moving product.” Moving bitumen is one aspect of the business, but there are others, and each is a value-added component in one way or another.

The entire process doesn’t just get something to market, it in a way creates new markets. For starters, rather than focusing on getting bitumen to refineries, this system will take product to Asia – China and India as a considerable start – where huge demand exists for bitumen in the textile, roadbuilding/asphalt, and petrochemical industries. Both these massive countries require bitumen in locations not served by pipeline, so plasticized block transport is perfect.

Next, recycled plastic can be used to create the pucks, and, as you can imagine, the opportunities for plastic recycling are staggering. The world is begging for a productive use for waste plastic. At the other end of the chain, the plastic is separated from the bitumen and can be reused.

Further along the value chain, biomass material that would otherwise go to landfills can be sourced in Alberta or even backhauled on empty trains. This last part has value not to be underestimated; empty trains coming back from either coast could create a sub-industry whereby other First Nations (or anyone, for that matter) along the way can sign on to provide waste organic wood material that is of no value, or has negative value as forest fire fuel, but is valuable as biomass feedstock.

The benefits of this project are all over the place. First Nations ownership is a great thing from any perspective, and the project will create hundreds of local jobs. The bitumen pucks serve non-combustion markets in Asia that are not served by pipelines, and are huge – millions of barrels per day. The project has not just railway support, but participation. Greenhouse gases are reduced. The danger of transport spills is eliminated, since a spill would be cleaned up like Lego is cleaned up in the living room. The bitumen will command a higher value than as simple refinery feedstock. The plastic used the process can be reused in manufacturing. Sourcing plastic itself is an exciting aspect (as exciting as plastic recycling gets anyway), because, well, just look around. Waste plastic is, to put it mildly, plentiful. Who wouldn’t like to see all that crap find a home? The list of positives is so large it sounds crazy, but they are all real. What is worth remembering though as an overarching comment is that this is a First Nations initiative from people that are fed up with substandard living and want to do something constructive about it. That line of thinking is as noble as it gets.

If this whole idea had been initially screened by someone who was thinking like myself, as simply another way to move bitumen to refineries, maybe it would never have gone anywhere. There are always a million reasons why something won’t work, if one chooses to see things that way. Luckily, some people do not.

Wherever these people come from that dream up these new visions, we need more of them. Maybe there’s plenty of them under our noses, grinding away and muttering to themselves that no one will listen to fresh thinking. Rise up and be heard, you nerds. Not every long shot idea works, but some will, and the payoff can be revolutionary and huge.

Here’s another way to look at it, from the flip side. A few years ago, plus a bit, I had a summer university job at a small-town “dehy plant” as they were known in Saskatchewan. Dehy plants were an agricultural sub-industry in Saskatchewan whereby freshly-cut alfalfa was process into pellets by harvesting and quick-drying the alfalfa with natural gas heat, rather than baling it when bone-dry. Most of the pellets were shipped to Japan, which never ceased to amaze us, that alfalfa could be dried, processed, and shipped around the world to fetch many times the value that it would have in conventional hay bales. The industry was, however, largely wiped out when natural gas prices skyrocketed in the 1990s. So…we are now in a prolonged period of low natural gas prices. If the alfalfa processing business can’t/doesn’t make a comeback, what else is there that could be a proxy? Nothing? I find that hard to believe. The world as we know it was built on cheap energy, and you don’t get cheaper than near-free natural gas.

From one aspect, western Canada has a problem, the lack of access to energy markets. From another perspective, western Canada has profound opportunity – product that the world wants, needs, and has increasing demand for; a phenomenal workforce that is used to change and adaptive to technology; and square miles of untapped opportunity. We may not have supportive politicians, we may have to battle energy ignorance at every turn, and we may be the target of unfair attacks. But that doesn’t mean it is game over.


About the Author

Terry Etam is an independent senior consultant for small and midsize oil and gas companies. His website Public Energy Number One is dedicated to energy education and he is the author of The End of Fossil Fuel Insanity.