Todd Parker
CEO - Blue Spark Energy
Part of the Spotlight on Energy Tech

Canada Must Capitalize on its Strong Reputation in Natural Resource Industries

Takeaways

  1. The government should not be picking technology winners and losers, it should be creating the framework enabling markets, entrepreneurs and the educational system to jointly deliver technological solutions.
  2. The Middle East and the Pacific Rim countries are huge potential markets for Canada’s energy technology sector in the short and long run. Canada’s excellent reputation, and experience in developing solutions in difficult operating conditions and complex infrastructure and logistics are a clear competitive advantage.
  3. Canada’s oil and gas industry can be a leader in the world’s energy transition by showing other countries how to use hydrocarbons responsibly from a technology and best practices perspective.

Action

The Canadian government should provide more support for exporting services and engineering solutions not just through funding, but also through the organization of specialized tech and cleantech forums.


How competitive is Canada in the global cleantech or energy tech marketplace? How can we grow, accelerate, scale and export more innovative Canadian technologies?

Even though we talk about Canada’s small market size as perhaps being a barrier, Canada has many advantages. First off, we have a diversity of industry in terms of a low population density and large geographic span. We have a broad range of industries across Canada, which allows specialties or niche markets to start growing. Since Canada is so interconnected, there seems to be a lot of cross over amongst these diverse industries to look for common best practices or common technological trends. This diversity of industry coupled with Canada’s high education levels and its smaller market size necessitates innovation, which makes us incredibly entrepreneurial as a culture.

With regard to accelerating cleantech development, we need to focus on generating awareness of what cleantech is much earlier, specifically within the education system. Canada does a great job of having kids in school and educating them about the environment and carbon. Similarly, we need to specifically teach kids what cleantech is and how it impacts lives, not from a government funding perspective but from a boots-on-the-ground perspective. We also need to make our institutions of higher learning much more cleantech focused both education-wise and in terms of awareness.

“Diversity of industry coupled with Canada’s high education levels and its smaller market size necessitates innovation, which makes us incredibly entrepreneurial as a culture.”

I do not support the government picking specific winners or losers around technology. The government’s role is to create the framework that allows the entrepreneurial piece, educational piece and the niche markets to all come together to deliver a technological solution. The Canadian Government does tend to pick winners in terms of its funding; it has tunnel vision around specific sectors or specific solutions that it funds generously and if you fall outside the range of that focus, you seem to fall by the wayside despite being cleantech. This creates an environment in which people try to anticipate what the government wants to achieve in the near term and then rush out to do that. But government is fickle, so when a company brings investors onboard to invest in projects that it portrays as heavily supported by the government of today, that can all go away after the next election. It is a concern from a brand perspective because at the end of the day, we are fighting internationally for investment dollars. If investors do not feel that this is a secure place to invest in, it does not matter how much you want the sector to grow; it does not go anywhere. Trump certainly magnifies that change because he is so pro-business. But, even within the US, there did not seem to be as large policy swings around the environment or business as there seem to have been in Canada.

In my mind, the role of the government is to generate awareness and create demand so that entrepreneurs, companies, students etc. see some kind of perceived return from entering the cleantech space. Those returns could be environmental, financial, reputational, or take other forms. While the government is doing an okay job on the awareness front, it needs to focus on creating a framework to strategize around the milestones and goals of cleantech development. It needs to show people what a low carbon future will look like and what their alternatives could be.


Where do you see the best opportunities for Canada’s energy expertise and technology to be exported internationally and why?

In the immediate near term, the Middle East is a promising market. The region seems to be such a hotbed of opportunity since its oil and gas industry is under some extreme cost constraints and is looking for world class, low cost innovative solutions. Suddenly that “Made in Canada” stamp seems to jump right out at them because our oil and gas industry operates in some of the hardest working conditions and yet, we have been economic for years.

A company with the Canadian label is generally seen to be practically minded, honest, legally compliant, environmentally responsible and safety conscious. So you are meeting that immediate cost driver with those other aspects of being Canadian; that really seems to be pulling through. This aspect of Canadian competitiveness will mostly affect our mid-term market.

“Even as we transition to a lower carbon global economy, the need for hydrocarbons will still exist at quite a high rate for the next 50 to 100 years.”

In the longer-term, the Far East and Pacific Rim countries such as Malaysia, Indonesia and the Philippines countries will experience huge growth in energy demand. They have increasing energy demand and struggle for resources to meet that demand. At the end of day, a lot of these places are logistically challenged just like many parts of Canada are. So, while they are perhaps trying to deliver energy infrastructure or energy solutions on a far larger scale per set-up than in Canada, they are still facing logistical constraints that we have solved here in Canada.

In terms of competition in energy tech export, our direct competitors are Australia and Europe, and to some extent the US, though not from a technology perspective. Although Australian and European competitors have developed technologies under difficult geographic conditions, Canada’s ability to overcome extreme logistical challenges for infrastructure projects does give us an edge.


How important is international trade for Canada’s cleantech and energy technology industry, and how should we be maximizing Canadian tech companies’ ability to seize international opportunities?

Trade is becoming extremely important to Canadian businesses. We are in a constrained marketplace and finding places to take our services and products is becoming ever more crucial, especially as the North American Free Trade Agreement (NAFTA) becomes more difficult. Even though the US is our primary market right now, the Pacific Rim region, India and China show huge potential for growth.  Even culturally, there seem to be robust relationships between Far East countries and Canada, which could be developed to be quite healthy trading partnerships.

“Trade is becoming extremely important to Canadian businesses. We are in a constrained marketplace and finding places to take our services and products is becoming ever more crucial.”

The government does offer some support through its Trade Commissioner Service and Export Development Canada (EDC). But government has more of a manufacturing focus. The cleantech sector does not do overseas manufacturing per se and does not specifically sell a product. Ours is more of a solution or a service-oriented sale, which seems to make it more difficult to get support from government organizations. There seem to be lots of insurance and financial aid programs for putting products on the shelf, but putting services and engineered solutions to work in foreign markets gets less support from government.

One thing Canada could do to grow its reputation and help trade partnerships is to organize more tech forums in general, and cleantech forums in particular. The Global Petroleum Show in Calgary and the Canadian Mining Expo see a large representation of people coming to explore Canadian technologies. In contrast, I cannot think of a large tech forum specifically in Western Canada. To grow trade partnerships and our reputation as a cleantech innovation hub, we have to create something in our backyard to show people our industry is impactful and meaningful.


What role do you see the oil and gas industry playing in Canada’s future economy?

Let us call a spade a spade; big government is picking winners and losers at this point. The government wants an anti-carbon environment, so it is putting the squeeze on producers of hydrocarbon. Yet, statistically, the highest emitters of greenhouse gases are vehicles, but we are okay making hydrocarbon-burning vehicles, whether they are airplanes or cars, and all the associated industries. At the end of the day, we need government to understand the milestones and goals that it is trying to drive across the broad economy. Even as we transition to a lower carbon global economy, the need for hydrocarbons will still exist at quite a high rate for the next 50 to 100 years. 95% of Blue Spark’s efforts are still focused on taking our technology into global marketplaces where we see the demand for oil and gas being long standing.

“Canada already has a strong reputation in natural resource industries; we can continue to move it along the right course instead of killing it off entirely.”

Canadians do not like being offside; we are pretty creative, highly educated and good problem solvers. Take the cleantech space, we are innovating and producing things today in ways that were not imaginable maybe even 10 years ago. This moves us much closer towards environmental stewardship or environmental leadership on a global scale. If we can align our priorities a little bit better, the Canadian oil and gas industry can be a leader from a technology and best practices perspective. It can showcase how to produce hydrocarbons and use them responsibly. Canada already has a strong reputation in natural resource industries; we can continue to move it along the right course instead of killing it off entirely.


How do you view the talent pool the Canadian oil and gas industry represents for the future economy?

The Canadian oil and gas industry represents a pretty broad group of people who are both professional and experienced. Secondly, Canada has already exported a lot of that talent, so we have a really great expertise built up not only specific to the Canadian market but also the international side of things.

“We have not done a great job of creating opportunities for the highly skilled talent in the oil and gas sector to easily transition to other emerging sectors.”

However, this talent pool has been melting away incredibly quickly since the economic downturn and fall of oil prices. To some extent, there is a transfer of talent from oil and gas to other industries. But in a lot of cases, people are just leaving Canada; the Canadian oil and gas industry is still in a net brain drain. So we have not done a great job of creating opportunities for the highly skilled talent in the oil and gas sector to easily transition to other emerging sectors.