Working Together for Sustainable Success

PTAC Members 191 members as at March 30, 2009

Producers – 24 Government – 5 Delacom Detection Systems, LLC National Silicates ARC Resources Ltd. Energy Research Institute (AERI) Deloitte - Research and - Drilling Fluids Group BP Canada Energy Company Alberta Finance & Enterprise development, Tax New Paradigm Engineering Ltd. Cadence Energy Inc. Canada Revenue Agency EBA Engineering Consultants Newalta - Environment and ChevronTexaco - CTSO SR&ED Section - Research Department Technology Group ConocoPhillips Canada Province of British Columbia Eco Roads Ltd. Noetic Engineering Inc. Devon Canada Corporation Saskatchewan Ministry of Emerson Process Management Norwest Corporation EnCana Corporation energy and Resources - Copeland Scroll Oilflow Solutions Inc. EnerMark Inc. ENEFEN Energy Efficiency Orion Projects inc. Husky Energy Inc. Individuals – 7 engineering Ltd. Oxand Technologies Inc. IFP Technologies (Canada) Inc. Hoopfer, Dwayne Energy Navigator Inc. Outland Technologies Inc Imperial Oil Limited Kearsey, John EnviroSafe Technologies Inc. P.K. Services International Laricina Energy Ltd. Kenny, James Envirosoft Products Inc. Paradox Access Solutions Inc. Nexen Inc. Lloyd, Eric Epcor Paragon Soil and Pengrowth Management Limited Putt, Ken Epic Consulting Services Ltd. environmental Consulting Inc. Penn West Ltd. Radke, Gerald Epicentre Consulting Ltd. Pason Systems Inc. Petro-Canada Resources Todd, Murray ETX Systems Inc. Pathcom Wireless Inc. Quicksilver Resources Canada Inc. Expro Group Canada Inc. Portfire Associates Inc. Shell Canada Ltd. Service and Supply Extreme Telematics Corp. Praxair Canada Inc. 2008 Annual Report Suncor Inc. – Resources Group Companies – 135 Fekete Associates Inc. PressSol Ltd. Talisman Energy Inc. 3 esi Ferus Gas Industries PricewaterhouseCoopers LLP Total Exploration & Production Ltd. 3M Canada - Oil and Gas Division Flextronics Technology (TICE) Practice Trident Exploration Corporation Abandonrite Enviro Services Corp. Gas Liquids Engineering Ltd. Process Ecology Inc Unconventional Gas Resources Canada Advanced Geotechnology GChem Ltd. ProTechnics Vermilion Gas Resources Canada Advanced Measurements Inc. geoLOGIC systems Ltd. Q’Max Solutions Inc. - Oil and Gas Division Gowling Lafleur Henderson LLP Quadrise Canada Fuel System Inc. Transporters AECOM Canada (Intellectual Property Development) Rainmaker Global / Midstream (formerly Gartner Lee) Ground Effects Environmental business Development Processors – 7 Afina Energy Inc. Services Inc. Reaper Pumps Inc. ATCO Pipelines AGAT Laboratories Ltd. GuildOne, Inc. REM Technology Inc. Enbridge Inc. - Hydrocarbon Division Gushor Inc. Remediation Consulting Group Inc. Inter Pipeline Fund Air Liquide Canada Inc. Hatch Energy Rigstar Communications Inc. Keyera Energy Ltd. Alberta-Pacific Forest Industries, Inc. HIFI Engineering Inc. RPS Energy Canada Nova Chemicals Corporation Woodlands Division Hyperion Technologies Inc. RWDI Air Inc. Pembina Pipeline Corporation Alfa Laval - Process Technology IHS Schlumberger of Canada TransCanada Pipelines Ltd. oilfield Marketing Unit Innicor Completion Systems - A division Scientific Drilling International ALS Environmental of Innicor Subsurface Technologies (Canada) Inc. Venture Capital – 2 AMEC Earth & Environmental IntelliView Technologies Inc. ShawCor Ltd. Octane Venture Partners ARCADIS Canada Katch Kan Limited Siemens Product Lifecycle Purple Mountain Ventures AXIA NetMedia Corporation KPMG High Technology Practice Group Management Software (CA) Ltd. Blue Source Canada ULC Little Guy Oilfield Rentals Inc. Sky Hunter Exploration Ltd. Research Boreal Laser Inc. LoadTrak SNC Lavalin - Studies and Providers – 8 Brine-Add Fluids Ltd. Lonkar Services Ltd. developmental Projects Alberta Research Council C5 Oilfield Enterprises Ltd. - Technology Department Sproule Associates Ltd. Alberta Sulphur Research Ltd. Camcor Capital Inc. LxData Inc. SQFive Intelligent Oilfield Solutions Ltd. EI DuPont Canada Company Canada Tech Corp Macleod Dixon (Technology Stantec Consulting Ltd. Natural Resources Canada (CANMET) Canadian Fertilizers Limited enterprise Group) Sumitom Electric Lightwave/ABF Division Petroleum Technology Research Centre Canadian HSE Registry Mactronic Enerflex Systemware Innovation Corporation Pure Elements Environmental Solutions Century Oilfield Services Inc. Maple Leaf Environmental Terra Water Systems LP Saskatchewan Research Council CH2M Hill Energy & Chemicals equipment Ltd. Terrapro Group TIPM Laboratory (Perm Inc.) Chinook Engineering Ltd. Matrix Solutions Inc. The Moorhead Group LLC CISCO Systems Canada Co. MEI Resources T.L. Watson & Associates Inc. Learning Clean Well Tools Ltd. Meridian Environmental Inc. Total Combustion Inc. Institutions – 3 Clearstone Engineering Ltd. Millenium EMS Solutions Ltd. Trican Well Service Ltd. SAIT Combo Energy Services MRCan Services Ltd. Triple D Technologies Inc. University of Alberta Computer Modelling Group Ltd. MSDS Binders Inc. Tundra Boiler & Instrumentation Ltd. University of Calgary Cybera Myotis Wireless UTI Limited Partnership Daily Oil Bulletin Naiad Company Ltd. WellDunn Consulting DALKIA Canada WorleyParsons Komex zed.i solutions

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PETROLEUM TECHNOLOGY ALLIANCE CANADA 2008 ANNUAL REPORT

MISSION Message from the Board of Directors PTAC Technology Areas

While depressed oil and gas prices are proving to be a hallmark of the current Enhanced Environmental Management economy, pressure to manage environmental impacts and reduce greenhouse • Emission Reduction / Eco-efficiency To facilitate innovation, collaborative research gas (GHG) emissions continues unabated amidst the challenge to reduce overall • Energy Efficiency recovery costs and improve the efficiency of operations. This dramatic economic • Resource Access and technology development, demonstration and political contrast has industry stakeholders throughout the world wrestling • Air with the same question: How can we continue sustainable and profitable • Ecological and deployment for a responsible Canadian hydrocarbon resource development in this depressed economic environment? • Soil and Groundwater hydrocarbon energy industry. The economic downturn, changes in consumer behaviour, the implementation • Water of measures to increase fuel efficiency, and the adoption of alternative energy • Alternative Energy Solutions sources have already resulted in reduced global market demand for oil and continued significant downward pressure on oil prices. At the same time, IMPROVED OIL AND GAS RECOVERY the environmental policy of the new administration in the US will likely put • Conventional Oil and Gas Recovery significant pressure on industry to reduce GHG emissions in particular and the • CO2 Enhanced Hydrocarbon Recovery VISION environmental footprint in general. • Coalbed Methane/Unconventional Gas • Surveying this shifting global landscape, it is imperative that we ask two • Heavy Oil To help Canada become a global hydrocarbon energy fundamental questions: 1) How can we develop and produce our conventional and unconventional Upgrading, Refining, Petrochemical technology leader through innovation, collaborative hydrocarbon resources in a sustainable and profitable manner? Technologies, and Transportation 2) How can we convert our resources to production in time and in an • Hydrocarbon Upgrading efficient and orderly manner to meet the future global demand? research and technology development, demonstration • Refining Globally, it is estimated that the world has over 11 trillion barrels (bbls) of light/ • Petrochemicals and deployment for a responsible Canadian heavy oil and bitumen resources in total reserves. One trillion bbls have been • Hydrogen consumed already, and 1.3 trillion bbls are recoverable with existing technology, • Gasification hydrocarbon energy industry. leaving approximately 9 trillion bbls of resources untapped. However, technology • Pipelines development offers the opportunity to increase the reserves accessible from • Integration these 9 trillion bbls of trapped oil, and to reduce the costs of producing existing • Transportation reserves. The need to develop new technologies to convert these vast resources into production and reduce the cost of recovery is becoming increasingly Contact Us evident. If we can develop new technologies and increase the recovery of PTAC Technical Areas For further information, please contact: PTAC Petroleum Technology Alliance Canada Canada’s bitumen resource to 30%, which is equal to the current rate of recovery • Drilling and Well Completion Suite 400, Chevron Plaza, 500 Fifth Avenue SW, Calgary, AB Canada T2P 3L5 from light oil resources, Canada’s oil reserves could exceed the current reserves • e-Business main: (403) 218-7700 fax: (403) 920-0054 email: [email protected] web site: www.ptac.org of the entire Middle East. In addition, tremendous unconventional gas resources remain untapped. Canada alone has 1500 trillion cubic feet (tcf) of tight gas, • Facility Design Personnel 500 tcf of shale gas, 500 tcf of coal bed methane and a massive 28000 tcf of • Geosciences gas hydrates resources. To put this in perspective, Canada’s unconventional gas • Health and Safety Soheil Asgarpour Bruce Peachey Brenda Belland Susie Dwyer Bobbi Singh resources are more than four times the global gas reserves that are currently • Instrumentation/Measurement President Technical Advisor, Manager, Knowledge Centre Innovation and Technology Accountant phone: 403-218-7701 Increased Recovery phone: (403) 218-7712 Development Coordinator phone: 403-218-7723 available using prevailing technologies. • Operations phone: 403-218-7720 phone: 403-218-7708 email: [email protected] email: [email protected] email: [email protected] • Production Engineering email: [email protected] email: [email protected] We have enough known conventional, unconventional, and undiscovered Arlene Merling Tannis Such Trudy High • Reservoir Engineering resources to meet the foreseeable demand for oil and natural gas. However, Director, Operations Chris Godwaldt Manager, Environmental Research Lorie Frei Administrative Assistant • Security /Membership Technical Advisor, Initiatives R&D Initiatives Assistant phone: 403-218-7711 converting most of these unconventional resources into economic reserves will • Telecommunications phone: 403-218-7702 Water Innovation phone: 403-218-7703 / Website Administrator email: [email protected] not be without challenges, particularly in this difficult time when costs are high, email: [email protected] phone: 403-397-3189 email: [email protected] phone: 403-218-7707 email: [email protected] email: [email protected] oil price is low, and the expectation to manage the environmental footprint is real. 3 4

PETROLEUM TECHNOLOGY ALLIANCE CANADA 2008 ANNUAL REPORT PETROLEUM TECHNOLOGY ALLIANCE CANADA 2008 ANNUAL REPORT

As new discoveries become smaller in size, and our conventional model for the development of technologies that will both lower reserves are depleted, we are going to be forced to reach beyond costs and minimize the environmental footprint and yet enable the low -hanging fruit. commercial production of challenging resources on a scale that is competitive with the lower-cost production of hydrocarbons Exploitation of our unconventional resources now demands from places like the Middle East. PTAC has developed this much- the development of sophisticated technology that significantly needed business model. impacts capital and operating costs. Given requirements for new infrastructure, more energy input, and increased water usage The PTAC collaborative model encourages the leveraging of to extract unconventional resources, environmental impact is financial and intellectual expertise across all stakeholder groups to also a significant consideration. Our challenge is to find suitable develop needed technologies and allow innovations to be pursued technologies to produce commercially from these resources while in a timely manner while minimizing the risk of costly duplication. minimizing the environmental footprint. Over the past twelve years, PTAC has established a proven track record demonstrating the value of using this collaborative The ups and downs of the commodity market have taught us a approach to develop and disseminate technologies. A recent valuable lesson. We cannot rely on high prices in order to achieve example is PTAC’s CO2-Enhanced Hydrocarbon Recovery project profitable sustainable development of our conventional or to reduce GHG emissions. Project funding was shared among the unconventional resources. Commodity prices are not within our federal and provincial governments and seventeen companies. control, and we can only manage what we can control. This approach has provided high leverage and economic returns on investment for the participants, much higher than they would Our Canadian experience proves that innovation and the have enjoyed by funding the research individually. In addition, the application of technology are the key to profitable and sustainable leveraging of intellectual expertise amongst the participants has development of both our conventional and unconventional been priceless. hydrocarbon resources, and oil sands resources in particular. From the late 1960s to the late 1990s, and then into the early No matter the economy, the fact remains that we have tremendous 2000s, innovation and the application of existing and emerging petroleum resources remaining to be recovered, and there is technologies led to a substantial reduction in the cost of oil sands absolutely no limit to our potential for innovation and creativity. development. Today more than ever, we need government and To harness the potential of these resources, we need to invest in industry support for ongoing and future technology development. research and development to find effective solutions, and there Strong leadership and commitment by both government and are significant benefits to pursuing these in a collaborative manner. industry have been and will continue to be instrumental in Working together, we can increase our production and reserves in developing these technologies. For example, the government of a sustainable manner that is sensitive to the need for both cost Alberta invested over 80 million dollars and worked closely with reduction and reduced environmental impact, while respecting industry in the development of SAGD technology, which led to the proprietary ownership of technologies. conversion of significant in-situ oil sands resources into reserves. Such collaboration between government and industry is integral From the very beginning, PTAC volunteers have formed the to the successful development of technology. Likewise, industry cornerstone of this organization, dedicating their time, energy, leadership is also crucial. For example, EnCana Corporation has and talent to pursue this collaborative approach. Many expert shown great leadership in the development of PTAC-facilitated volunteers have dedicated their valuable time to PTAC’s Board of eco-efficiency projects to reduce GHG emissions and costs. These Directors, Board Committees, and technical steering committees projects will benefit the entire industry. and subcommittees. We would like to take this opportunity to thank the two hundred and eighty volunteers who have carried on Bonnie-Jean McAllister Ealanta Photography The current economy is challenging, but to ensure the future of that legacy of service in 2008 by dedicating this Annual Report to our industry we need to commit both intellectual expertise and them; after all this is what PTAC is all about. financial resources to develop technologies that enable sustainable, profitable production of our conventional and unconventional GPC PHOTOS: hydrocarbon resources. Collaboration among all stakeholders Soheil Asgarpour, Ph.D., P. Eng Fred Hutchings is essential to the development of these non-competitive President Chairperson technologies. To achieve this, we require an appropriate business 5 6

PETROLEUM TECHNOLOGY ALLIANCE CANADA 2008 ANNUAL REPORT PETROLEUM TECHNOLOGY ALLIANCE CANADA 2008 ANNUAL REPORT

ACHIEVEMENTS 2008 Key Accomplishments

Success We Can Build On reducing greenhouse gas emissions at the very successful Towards Clean Energy Conference. In 2008, PTAC completed the reorganization and streamlining of the historical Technical Areas of Interest into three main PTAC In addition to events, PTAC excelled at project facilitation with Technology Areas and a small number of complementary Technical the launch of several new research projects in the area of Enhanced Areas. As a result, PTAC was able to focus more intently on project Environmental Management. The Alberta Upstream Petroleum management in the technology areas of Enhanced Environmental Research Fund (AUPRF), formerly known as Environmental Management, Improved Oil and Gas Recovery, and Upgrading, Refining, Research Advisory Council (ERAC), provides funding for peer- Petrochemical Technologies, and Transportation. PTAC accomplished reviewed environmental research studies. Consultants, and many diverse goals in each of these areas, from the coordination university and government scientists conduct these independent of successful events such as the Global Petroleum Conference, to research studies, ensuring thorough and objective identification the launch of multi-million dollar research projects under TEREE of necessary improvements and practical, cost-effective solutions. (Technology for Emission Reduction & Eco-Efficiency), AUPRF Public and private companies then apply these recommendations (Alberta Upstream Petroleum Research Fund), and ADOE (Alberta in the field to improve their environmental performance. In Department of Energy), to taking new steps with industry partners 2008, PTAC facilitated 17 projects receiving a combined total in collaborative research under the CO2 and Alternative Energy of $1.4 million in AUPRF funding. Industry funding leveraged Committees, and helping Small and Medium Enterprises (SMEs) government, institutional, and stakeholder support at a significant make new inroads in bringing their technologies to industry. rate, resulting in projects valued at over $3.1 million. At the same time, PTAC expanded their facilitation of the AUPRF by adding Building upon the new structure unveiled in 2007, PTAC continued a caribou research program to the existing program. AUPRF The Alberta Saline Aquifer Project (ASAP) and the Alternative those that are near commercialization but not yet in commercial to tailor their 2008 events calendar to ensure clear alignment with program funding was increased by approximately 50% over the Energy Solutions for Oil Sands Project (AESOS) exemplify the use. In second quarter 2008 PTAC launched Phase II of this study stakeholder demand. The resulting events were very well attended, 2007 program, demonstrating a renewed industry commitment major steps PTAC has taken with industry partners in 2008. focusing on the application of High Temperature Gas Reactors. and offered participants timely and relevant learning opportunities to improving environmental performance. Additional research ASAP, led by Enbridge and operating under the PTAC CO2 EHR to bring valuable information back to their organizations. In May, in Enhanced Environmental Management was conducted under Committee, will identify and prioritize three or more suitable PTAC, with the support of the National Research Council PTAC once again held the annual 2008 Spring Water Forum, a very the TEREE banner, as three exciting projects aimed at reducing deep saline aquifer locations for a pilot program to demonstrate of Canada – Industrial Research Assistance Program (NRC- successful one-day conference where eleven presenters discussed greenhouse gas emissions and increasing eco-efficiency were the feasibility of CO2 sequestration. PTAC has assisted with the IRAP), concentrated on providing increased support to SMEs existing and emerging technologies to reduce water consumption. launched or completed in 2008. preparation of a funding development plan, funding applications, in transforming ideas, technologies and “know-how” into a Then in June, the world took notice as PTAC hosted the Global information dissemination and administrative services to launch product or service to benefit the industry. Continuing the program Petroleum Conference, which included 104 technical and business In addition, in 2008 PTAC was awarded a $1.5 M grant from the this project. ASAP involves industry participants, government launched in 2007, PTAC staff and contracted subject experts presentations by nationally and internationally respected experts. Alberta Department of Energy. This grant will assist in achieving agencies, academic organizations and consultants working in the provided support to SMEs to help them make significant advances The conference focused on reducing overall costs and minimizing the Department’s mission to optimize sustained contributions PTAC collaborative model to design and demonstrate safe and in moving their technology forward in a value-added manner the environmental footprint using innovative technology solutions. from Alberta’s energy and mineral resources in the interest of reliable long term sequestration utilizing 1,000 to 3,000 tonnes of and adapting their technologies to better meet specific industry Over the course of three days the speakers brought the latest Albertans through support of a PTAC research program. This CO2 per day. In addition, this project will clarify and establish a needs. PTAC offered assistance by supporting innovation, updates on conventional and unconventional resources. However, PTAC program is focused on the development of industry- template for pore volume ownership and regulatory requirements technology transfer, and project initiation and execution. PTAC the highlight of the event was the 2008 Plenary Panel Session identified technologies with a clear path to commercialization. of injecting CO2 into a saline aquifer. A successful demonstration developed and launched SME-specific website pages to help moderated by Mr. Peter Mansbridge, chief correspondent for The objective of the research plan is to promote the application will enable saline aquifer sequestration to play a pivotal role in SMEs better understand how to efficiently get their new products CBC Television News. This session allowed for open and candid of existing and emerging technologies and the development and reducing CO2 emissions in Alberta. developed, demonstrated and supported through effective public discussion of the current issues facing the hydrocarbon adoption of new technologies to minimize the environmental technology demonstrations. Over 50 SMEs presented their energy industry. The distinguished panel included Honourable footprint, maximize hydrocarbon recovery, and reduce capital At the same time, PTAC’s Alternative Energy Committee research and technologies at PTAC conferences, forums and Ed Stelmach, Premier of Alberta; Mr. Gerri Protti, Executive and operating costs for the sustainable exploration, exploitation launched the second phase of the AESOS Project. In 2007, information sessions in 2008. At this critical time for the oil and Vice-President, Corporate Relations, and President, Offshore & and development of hydrocarbon resources. The research grant PTAC initiated a phased study to evaluate the potential for using gas industry, this initiative has helped bring SMEs, organizations International Division, Encana Corporation; Mr. Kevin Meyers, provided by Alberta Energy will provide the foundation and nuclear technology to produce CHP (combined heat and power) and stakeholders together to share how they can overcome President, ConocoPhillips Canada; HE Mohammed bin Dha’en structure to promote additional industry support and focus for and hydrogen. The first phase focused on evaluating nuclear challenges and achieve results within the hydrocarbon energy Al Hamili, Minister of Energy, United Arab Emirates; Mr. Sami projects, leveraging funding from industry and other organizations. technologies to determine their fit with typical requirements for industry. PTAC will help SMEs develop the right technologies Fahed Al-Rushaid, Chairman and Managing Director, Kuwait Oil Three projects valued at $1.48M were launched under this program both thermal in-situ and mining projects with an upgrader. In and encourage innovation through knowledge sharing, networking Company; and Dr. Soheil Asgarpour, PTAC President. October in 2008. addition to current commercial technologies, Phase 1 also included with industry and other stakeholders and partnership creation. saw over twenty speakers gather to share their knowledge in an assessment of next-generation nuclear technologies, that is, 7 8

PETROLEUM TECHNOLOGY ALLIANCE CANADA 2008 ANNUAL REPORT PETROLEUM TECHNOLOGY ALLIANCE CANADA 2008 ANNUAL REPORT

Outlook for 2009

Maintaining a Firm Foundation development of hydrocarbons in the face of low oil and gas prices, to meet industry needs. With the continued support of NRC- sessions will be more focused on specific sub-topics in these in Uncertain Times and the opportunities this creates for using existing and emerging IRAP, PTAC will respond by further expanding and enhancing three areas. In an effort to reach a greater number of SMEs, technologies to reduce costs and minimize environmental its services to assist Canadian SMEs in the hydrocarbon industry. PTAC will provide webinar access to the sessions. These steps footprint with a view to achieving competitive clean energy PTAC is developing a series of seminars/webinars to help educate will assist SMEs to rapidly commercialize their technologies for Over the past thirteen years PTAC has established a solid production. Other PTAC events anticipated for 2009 include an SMEs and improve their knowledge of industry. The Oil and Gas sustainable hydrocarbon development while minimizing cost and reputation as an organization that PTAC members and the Annual Spring Water Forum, the two-day Towards Clean Energy Fundamentals for Small & Medium-Sized Enterprises (SME) environmental footprint for the hydrocarbon energy industry. Canadian hydrocarbon energy industry can rely on. Through Conference in the Fall, and a series of environmental portfolio seminar/webinar series will be hosted in 2009. Topics include sound decision-making and prudent financial stewardship, PTAC 1 events focused on sharing the results of AUPRF research to be overviews of the environmental areas of water, air and land - areas Potential project value reported reflects estimated overall cost of ten projects. has ensured a firm foundation upon which to build research and held throughout the year. likely to have the most immediate impact on SMEs. Subsequent Two projects have not yet had their value estimated. technology development, demonstration, and deployment both now and into the future. Essential to this stability are the more Enhanced Environmental Management will continue to be a than two hundred PTAC volunteers who form the bedrock of the major area of concentration for project development in 2009 organization, dedicating their time, energy, and talent to PTAC’s under the auspices of TEREE, AUPRF, and the PTAC CO2 Projects and Committees Board of Directors, Board Committees, and technical steering EHR Committee. PTAC is expecting to facilitate 23 projects committees and subcommittees. Despite the uncertainty of the receiving over $1.7M in AUPRF funding for research in the areas Innovative R&D Technology Development Innovation current economy, PTAC has put in place strategies to maintain of air, soil, ecological, water and caribou issues. Meanwhile, a • NRC-IRAP SME Phase 2 PROJECTS OR NEW PROJECT PHASES LAUNCHED IN 2008 their firm foundation through 2009 and into the future. significant acceleration in TEREE projects is expected in 2009 • Devon Technology Strategic Plan PTAC facilitated 25 research and development projects or new project with twelve planned projects currently valued at over five million phases during the course of 2008. Alternative Energy Most importantly, PTAC will continue to develop their dollars . An exciting Joint Industry Project is also about to get • Alternative Energy Solutions Phase 2 membership and recognize the contributions of their volunteers. underway in 2009. This demonstration, to be led by Husky Environmental Heavy Oil In 2008 PTAC established a new tradition of volunteer recognition, Energy Inc. and facilitated by PTAC, will capture and purify CO2 • UV Application for Selective Destruction of • Flue Gas Steam Stimulation presenting awards to individuals who made an indelible impact from the Husky Upgrader in Saskatchewan, and inject it into a Emissions Consituents in the Oil and Gas Industry • Continued Development of Numerical Simulation of a Sour Gas Flare CO Enhanced Hydrocarbon Recovery on the organization and the industry. At the Annual General Lloydminster-area reservoir for enhanced recovery. This project • Development of Novel Method to Detect and Locate Fugitive Emissions 2 • PTAC Carbon Capture and Storage (CCS) study Phase1 Meeting in April, PTAC held a formal awards ceremony to will mark the first time a combination of hydrocarbon base and • PTAC Air Research Planning Project acknowledge and thank volunteers who had gone above and CO2 is used for increasing recovery from the heavy oil reservoirs. • Weathered PHC F2 and the Eco-Contact Pathway - Phase I - Quantifying the Effects of Weathering” beyond in their leadership and contributions to PTAC Technical Hydrocarbon energy industry stakeholders will benefit from the • Development of Risk-based Environmental Assessment and Remediation Steering Committees. In June, a luncheon presentation was held increased understanding of capture, purification, compression, Guidelines for Salt Releases to Muskeg and Other Wetlands Settings in conjunction with the Global Petroleum Conference to honour transportation and injection technologies. In addition, PTAC’s • Validation of Subsoil Hydrocarbon Criteria for Stratified Remediation at Upstream Oil and Gas Facilities in Alberta Technical Steering Committees individuals in the special categories of Lifetime Achievement, Alternate Energy Committee and CO2 EHR Committee are • Application of Different Measures of Bioavailability to Support the In 2008, PTAC facilitated eleven Technical Steering Committees, Distinguished Service, and Volunteer of the Year. In 2009, PTAC evaluating and reviewing the option of launching the next phases Derivation of Risk-based (Tiers 2 or 3) Remedial Benchmarks for and two subcommittees: will continue this tradition celebrating the achievements of their of the AESOS and ASAP projects respectively. PHC-contaminated Sites • Refining the Analytical Protocols for Methanol, Amines and Glycols Enhanced Environmental Management many volunteers, further strengthening the foundations of the • Boron Impacts in Soil a Produced Water Co-Contaminant • Technology for Emission Reduction and Eco-Efficiency organization. • Efficient Strategies for Remediating and Revegetating Sensitive In addition, a significant portion of 2009 research projects (TEREE) Steering Committee Landscapes: Oilsands, Saline Areas, Forested and Foothills Regions will focus on Increased Recovery. PTAC expects to allocate • Air Research Planning Committee • Putting Grizzly Bear Research Results into Today’s Land Management • Soil and Groundwater Research Committee PTAC is hosting the 2009 Petroleum Conference in conjunction approximately $700K of the Alberta Energy Research Grant to and Planning in Northwestern Alberta: Continue Map and Model - Boron Working Group with GO EXPO, a conference featuring three streams focusing Development for and Complete Interim Health launch collaborative R&D and demonstration projects to find - Salinity Working Group Results for Grizzly Bear Populations in Alberta respectively on Oil Sands, Operations, and Increased Recovery. technological solutions to maximize recovery from our world class • Ecological Research Planning Committee • Evaluating the Ecological Risk of Energy Sector Development on • Water Innovation Planning Committee The conference will aim to feature 60 speakers over the course resources while minimizing the environmental foot print and cost. Burrowing Owls in Native Prairie Habitat • Alternative Energy Solutions Committee of three days to bring the latest updates on conventional The research grant provided by Alberta Energy will provide the • Development of Ecologically-based Criteria to Assess the Impact and unconventional resources. The conference will focus on foundation and structure to promote additional industry support and Recovery of Seismic Lines Improved Oil and Gas Recovery • Removing the Wellsite Footprint • CO2 Enhanced Hydrocarbon Recovery Steering Committee reducing overall costs and minimizing the environmental and focus for projects. Industry and other organizations are invited • Linear features, forestry and wolf predation of caribou and • Increased Recovery Steering Committee footprint using innovative technology solutions. Once again, a other prey in west central Alberta to participate in these projects, which will provide tremendous • Unconventional Gas Technology Roadmap Steering Committee • Wolf movements in relation to natural and industrial landscape features panel discussion during the Plenary Session will bring together opportunities to create value through the leveraging of financial • Viscous Oil Recovery Steering Committee on caribou range in on east slopes of Rocky Mountains, BC international dignitaries from around the world to discuss the resources and intellectual expertise. Upgrading, Refining, Petrochemical challenges faced by industry in these difficult economic times. TEREE Technologies, and Transportation • REMVue Slipstream Pilot Validation - Phase 3 Peter Mansbridge, internationally acclaimed news anchor for In the difficult economic environment expected for 2009, SMEs • Upgrading, Refining, Petrochemical, and Hydrogen Committee • Fire-Tube Immersion Heaters Design Guide the Canadian Broadcasting Corporation, will moderate an will require more assistance to identify the technology needs of • Hydrogen Fuel Injection Unit (HFI) and Fuel Efficiency open dialogue focusing on the unique challenges for sustainable industry and provide technology solutions and suitable products Data Collection and Measurement 9 10

PETROLEUM TECHNOLOGY ALLIANCE CANADA 2008 ANNUAL REPORT PETROLEUM TECHNOLOGY ALLIANCE CANADA 2008 ANNUAL REPORT

PTAC offers a variety of services to its members, and provides opportunities to benefit the Canadian hydrocarbon energy industry.

For more information on the many benefits of PTAC membership please visit our website at www.ptac.org.

...facilitating Forums and Workshops Putting into practice its new targeted approach to events, PTAC Projects hosted four forums and four workshops in 2008, attracting over PTAC facilitated 25 research and development projects or new five hundred and fifty participants. These targeted events provide project phases valued at $4.9M during the course of 2008. PTAC industry members with an opportunity to gather with others to provides industry with a neutral forum to work in collaboration, share ideas, opinions, and learning on a specific technical subject. leveraging collective experience and expertise to identify In addition, over five hundred participants took part in the 2008 opportunities, challenges, and potential solutions that require Global Petroleum Conference. research or technology development. These discussions can lead to joint-industry projects where PTAC, as a neutral facilitator, PTAC forums focus on broader needs or technical areas. These Knowledge Centre Technical Steering Committees assists with soliciting proposals and launching projects through a events are comprised of presentations detailing new technologies, The PTAC Knowledge Centre provides public access to non- PTAC Technical Steering Committees consist of PTAC members fair and balanced process. PTAC also identifies existing research case studies, and the objectives and results of current research, as proprietary technical information on commercially available oil- representing various industry sectors, governments, and non- and development to raise industry awareness and minimize well as providing opportunities for questions and answers. The and-gas-related technologies pertinent to the hydrocarbon energy governmental associations. These technical steering committees duplication. goal of PTAC forums is to bring together the most up to date industry. The collection, which is updated on an ongoing basis, help to identify opportunities for collaborative research and information from across the industry into an enriching learning focuses on including sustainable, eco-efficient, energy-efficient, technology development, raise awareness of existing research and . . . networking experience. and GHG-reducing technologies. technology through planning events, find solutions to challenges through the process of soliciting proposals and launching new PTAC workshops provide opportunities for participants to work The Knowledge Centre offers access to core energy and premier projects, and promote involvement by informing appropriate Technology Information Sessions collaboratively in focused groups to clearly define research and technical databases. The Knowledge Centre Manager provides colleagues of Technical Steering Committee activities. In 2008, PTAC facilitated ten Technology Information Sessions development issues, identify potential solutions, and select the services to SMEs, technical steering committees, project (TIS) attended by over five hundred participants. As a service best approach to move forward. Industry members are provided performers, researchers, and others to help identify technologies to members, PTAC facilitates TISs for interested companies, an opportunity to share their needs, and R&D providers are and research needs, avoid duplicate research, and monitor industry providing benefits to both the presenting company and all those given an opportunity to hear about issues firsthand. Solutions trends. . . . communicating in attendance. The company presenting is provided a forum to are formed by leveraging the collective expertise and ideas of all solicit interest, feedback, participation or potential funding for participants, while protecting proprietary interests. PTAC hosts Knowledge Centre Services for PTAC members include literature Member Communications new research and development projects; find industry partners the workshops and is pleased to provide the necessary facilitation, searches, search alerts, contact information for subject experts PTAC is committed to ensuring effective communication with to complete proposed research or technology development such administrative support, and coordination to launch projects once in industry, government, and academia. PTAC members are members. The PTAC website provides members with access to as field tests or pilot sites; report on field test or pilot results; identified. invited to provide non-proprietary technical information on the most up-to-date information on PTAC projects, events, and provide information on technology-related services; and market their technologies to PTAC for display in the Knowledge Centre. activities as well as an extensive archive. Our bi-weekly newsletter, new technology to the Canadian oil and gas industry. Those in Relevant materials are accepted on an ongoing basis. e-talk, delivers all the latest information on upcoming events and attendance have the opportunity to be exposed to these new opportunities directly to members and interested stakehiolders projects and ideas through a targeted, facilitated presentation. through email.

. . . engaging . . . informing

. . . collaborating 11 12

PETROLEUM TECHNOLOGY ALLIANCE CANADA 2008 ANNUAL REPORT PETROLEUM TECHNOLOGY ALLIANCE CANADA 2008 ANNUAL REPORT

Volunteers - Our Core Strength and Foundation

Board of Directors Earle Shirley Air Research Planning Committee (as at December 31, 2008) Executive Manager, Applications Branch, - Mike Brown, Energy Resources Conservation Board Energy Resources Conservation Board - Glynis Carling, Imperial Oil Ltd. Fred Hutchings, Chair, PTAC - Randy Dobko, Alberta Environment Vice President and General Manager Chuck J. Szmurlo - John Drinkwater, BP Canada Energy Company - Acquisitions, ShawCor Ltd. Principal, Enbridge Pipelines Inc. - Henry Ewa, Energy Resources Conservation Board - Wayne Hillier, Husky Energy Inc. Soheil Asgarpour, President, PTAC Alison Thompson - Mike Layer, Natural Resources Canada (NRCan) Petroleum Technology Alliance Canada Project Development Manager Asset Management - Sean Reilly, Talisman Energy Inc. Nexen Inc. and Chairman/Executive Director, - Lisa Solomchuk, Shell Canada Limited Water Innovation Planning Committee - Steve Hogan, Petro-Canada Resources Unconventional Gas Technology Mike W. Ekelund CanGEA, Nexen Inc. - Tom Pye, Husky Energy Inc. (Industry Chair) - Russ Holowachuk, Canadian Fertilizers Limited Roadmap Steering Committee Assistant Deputy Minister, Energy Future and Strategic Soil and Groundwater Research - Brenda A. Austin, Energy Resources - Jim Kenny, Individual PTAC member - Roberto Aguilera, University of Calgary Relations Division, Alberta Department of Energy Murray Todd Committee and Salinity Working Group Conservation Board - Jay Kowaski, Air Liquide - Ken Brown, Alberta Research Council/AERI President, Todd Resources - Steve Kullman, Husky Energy Inc. (Industry Chair) - Carrie C. Dickinson, Energy Resources - Leah Lawrence, EnCana Corporation Alberta Energy Research Institute Cal Fairbanks - Gordon Dinwoodie, Alberta Environment Conservation Board - Frank Lin, Husky Energy Inc. - Mike Dawson, CSUG Canadian Society President and CEO, Canadian HSE Inc. (Regulatory Chair) - Marc Dubord, EnCana Corporation - Sandra Locke, Alberta Department of Energy for Unconventional Gas Enhanced Environmental - Paul Bacchus, Environment Canada - Chris Godwaldt, Alberta WaterSMART and PTAC - Richard Luhning, Enbridge Pipeline Inc. - Fillipo Ferri, Ministry of Energy, Mines, and Petroleum Michael Gatens Management - Boris Barkovic, City of Calgary - Thomas G. Harding, University of Calgary - Jim Maguire, Enerplus Resources Fund Resources, Province of British Columbia Chief Executive Officer, - Shaunna Cartwright, Energy Resources - Scott Hillier, ConocoPhillips Canada - Anna Maslowski, Alberta Department of Energy - Michael Gatens, Unconventional Gas Unconventional Gas Resources Canada Technology for Emission Reduction Conservation Board - Rebecca Jacksteit, EnCana Corporation - Brendan McGowan, Penn West Petroleum Ltd. Resources Canada and Eco-Efficiency (TEREE) Steering Committee - Kathy Cox, Enerplus Resources Fund - Bob Kutzak, Nexen Inc. - Jim McKay, Praxair Canada Inc. - Alain Kahil, Apache Canada Ltd. Gordon Goodman - Pierre-Yves Caux, Saskatchewan Industry - Susan Halla, Alberta Energy Resources - Jack MacDonald, - Gabe Nahas, TransCanada Pipelines Ltd. - Derek Krivek, Stealth Ventures Assistant Deputy Minister, Oil & Gas Division, and Resources Conservation Board Nova Scotia Petroleum Directorate - Dave Peet, Devon Canada Corporation - Kirk Osadetz, Natural Resources Canada (NRCan) Ministry of Energy, Mines and Petroleum Resources, - Norman Chen, Husky Energy Inc. - Ted Johnson, Talisman Energy Inc. - Keith Minnich, VEOLIA Water - Surindar Singh, AERI Alberta Energy - Duncan Stanners, Shell Canada Limited Province of British Columbia - Philip J. Croteau, Talisman Energy Inc. - Chris Meloche, Husky Energy Inc. - Richard Nelson, AERI Alberta Energy Research Institute - Alex Dickson, CETAC West - Michael Morden, Petro-Canada Resources Research Institute - Don Spencer, Devon Canada Corporation Viscous Oil Recovery Steering Committee Thomas Harding - Joe Dusseault, EnCana Corporation - Rick Scroggins, Environment Canada - Jennifer Saldana, Husky Energy Inc. - Charles Szmurlo, Enbridge Pipeline Inc. - Wayne Arnold, Pengrowth Management Limited Professor, University of Calgary - Geoff Frazer, Devon Canada Corporation - Natalie Shea, Natural Resources Canada (NRCan) - Greg Shyba, Alberta Research Council - Brian Watt, Husky Energy Inc. - Ted Cyr, Alberta Department of Energy - Lorenzo Hernandez, Husky Energy Inc. - Michelle Young, Imperial Oil Ltd. - Rudy Tamayo, Husky Energy Inc. - Malcolm Wilson, University of Regina - Maurice Dusseault, University of Waterloo Eddy Isaacs - Roy Kanten, Shell Canada Ltd. - Prasad Valupadas, Alberta Environment - Mark Yeomans, TransCanada Pipelines Ltd. - Marc Godin, Portfire Associates Executive Director, - Ibrahim Karidio, Alberta Environment Boron Working Group - Monica E. Varga, National Research - Tim Hancsicsak, Devon Canada Corporation AERI Alberta Energy Research Institute - Jerry J.A. Keller, Alberta Environment - Steve Kullman, Husky Energy Inc. (Industry Chair) Council of Canada Increased Recovery Steering Committee - Ted Heidrick, University of Alberta - Milos Krnjaja, BP Canada Energy Company - Gordon Dinwoodie, Alberta Environment - Keith Watson, Sustainable Development - Richard Baker, Epic Consulting Services Ltd. - Cal Hill, Energy Resources Conservation Board Mark Johnstone - Howard Loseth, Saskatchewan Industry - Tim Chidlaw, Northern Envirosearch Technology Canada - Ken Brown, Alberta Research Council/AERI - Les Little, AERI Alberta Energy Research Institute Director, Technology & Strategy in the Corporate and Resources - Bob Corbet, Access Labs Alberta Energy Research Institute - Howard Loseth, Strategy & Development Group, Suncor Energy Inc. - Angelo Mangatal, Natural Resources - Susan Halla, Energy Resources Conservation Board Alternative Energy Solutions Committee - Graham Campbell, Natural Resources Canada Ltd. Saskatchewan Energy and Resources Canada (NRCan) - Michael Harrass, U.S. Borax Inc. PTAC recognizes the contributions of the members of - Randy Cormier, Nexen Inc - Ron Sawatsky, Alberta Research Council Chris Lehecka - Jeremy Moorhouse, Pembina Institute - Phil Heaton, Maxxam Analytics the Alternative Energy Solutions Committee. However, - Fil Ferri, Ministry of Energy, Mines, and - Jerry Scoular, Husky Energy Manager, Technology & Optimization - Oil Sands for Appropriate Development - Greg Huber, Equilibrium Environmental Inc. to preserve confidentiality, the individual members of Petroleum Resources, Province of British Columbia - Doug Soveran, Saskatchewan Research Council ConocoPhillips Canada Limited - Richard Nelson, AERI Alberta Energy - Tony Knaftla, Equilibrium Environmental Inc. this committee are not listed. - Michael Gatens, Unconventional Gas Research Institute - Darlene Lintott, Bodycote Norwest Resources Canada Upgrading, Refining, Petrochemical Derek Normore - Gerald Palanca, Petro-Canada Resources - Pat Payne, Orphan Well Association Improved Oil and Gas Recovery - Tom Harding, University of Calgary Technologies, and Transportation President, Schlumberger Canada Limited - Bruce Peachey, New Paradigm Engineering Ltd. - Leanne D. Siebert, Imperial Oil Ltd. - Chris Lehecka, ConocoPhillips Canada Ltd. - Chris Piercey, Industry Canada CO Enhanced Hydrocarbon - Les Little, AERI Alberta Energy Research Institute Upgrading, Refining, Petrochemical, Ian J. Potter - Ron Quick, Sustainable Ventures Inc. Ecological Research Planning Committee 2 Recovery Steering Committee - Howard Loseth, Saskatchewan Energy and Hydrogen Committee Vice President Energy, Alberta Research Council - Brian Ross, Nexen Inc. - Amit Saxena, Devon Canada Corporation - Garth Ayres, Inter Pipeline Fund and Resources - Rob Birkholz, Shell Canada Limited - Jerry Shaw, Devon Canada Corporation (Industry Co-Chair) - Stefan Bachu, Energy Resources - Frank McIntyre, Husky Energy Inc. - Paul Clark, Nova Chemicals – Retired Ken Putt - Paul Slobodnik, ConocoPhillips Canada - Scott Johnson, Husky Energy Inc. (Industry Co-Chair) Conservation Board - Jerry Shaw, Devon Canada Corporation - Hal Gunardson, Air Products Canada Ltd. Independent Director - Al Smandych, Energy Resources - Terry Forkheim, Talisman Energy Inc. - Mark Bohm, Suncor Inc. - Gary Sikora, Taqa North - Josephine Hill, University of Calgary Conservation Board - Jennifer Hendricks, Nexen Inc. - Doug Bonner, ARC Resources Ltd. - Doug Soveran, Saskatchewan Research Council - Eddy Isaacs, AERI Alberta Energy Research Institute Randy Rudolph - Jim Spangelo, Energy Resources - Adam Judd, Nexen Inc. - Matthew Bower, EPCOR - Roger Soucy, PSAC Petroleum - Pat Jamieson, Nexen Inc. Principal, Millennium EMS Solutions Ltd. Conservation Board - Sandra Marken, ConocoPhillips Canada - Eric Delamaide, IFP Technologies (Canada) Inc. Services Association of Canada - Terry Kimmel, Canadian Hydrogen Association - Lynn Sveinson, Climate Change Central - Terry Osko, ALPAC - Kelly Edwards, Barrick Energy Inc - Duncan Stanners, Shell Canada Limited - Shunlan Liu, AERI Alberta Energy Research Institute Dave Rushford - Bill Wilson, Western Economic - Gary Sargent, CAPP - Christeen Finzel, Alberta Environment - Wayne Patton, ISEEE – University of Calgary Vice President, Calgary BU Upstream Diversification Canada - Dave Foster, Ferus Gas Industries - Ian Potter, Alberta Research Council Operations Onshore, EnCana Corporation - Philip K.S. Wong, Sustainable - Scott Gray, Praxair Canada Inc. - Todd Pugsley, University of Saskatchewan Development Technology Canada - Blaine Hawkins, Alberta Research Council - Ron Quick, Sustainable Ventures Inc. 13 14

PETROLEUM TECHNOLOGY ALLIANCE CANADA 2008 ANNUAL REPORT PETROLEUM TECHNOLOGY ALLIANCE CANADA 2008 ANNUAL REPORT

Auditor’s Report Measurement and Accountability

To the Members of PTAC PTAC PETROLEUM TECHNOLOGY ALLIANCE CANADA PTAC PETROLEUM TECHNOLOGY ALLIANCE CANADA Membership Revenue by Category Petroleum Technology Alliance Canada, STATEMENT OF FINANCIAL POSITION STATEMENT OF OPERATIONS As at December 31, 2008 For the Year Ended December 31, 2008 PTAC’s 2008 membership was comprised of 197 active members, We have audited the statement of financial position of PTAC grossing $613,326 revenue at year-end 2008. PTAC provides a

Petroleum Technology Alliance Canada as at December 31, 2008 ASSETS 2008 2007 REVENUE 2008 2007 variety of services and benefits to its members including and the statements of operations and changes in net assets, and collaborative research and technology development project Current Project and Service Revenue (Schedule 1) $ 1,324,234 $ 1,680,498 cash flows for the year then ended. These financial statements facilitation services, event coordination, event registration are the responsibility of the organization’s management. Our Cash $ 47,453 $ 4,952 Membership and Revenues 613,326 638,906 discounts, access to the knowledge centre, opportunities to serve responsibility is to express an opinion on these financial statements Marketable Securities 2,817,635 707,260 Event Revenues 410,414 300,699 on technical steering committees, and a complimentary bi-weekly based on our audit. Accounts Receivable 796,030 896,968 Canadian Association of newsletter. Prepaid Expenses 63,194 74,830 Petroleum Producers (CAPP) 150,000 200,000 Producers $ 292,066 We conducted our audit in accordance with Canadian generally Inventory - 6,324 Interest Income 60,570 20,886 accepted auditing standards. Those standards require that we plan 3,724,312 1,690,334 $ 2,558,544 $ 2,840,989 service & supply companieS 165,539 and perform an audit to obtain reasonable assurance whether the individuals 1,686 financial statements are free of material misstament. An audit Property And Equipment 68,827 74,341 includes examining, on a test basis, evidence supporting the $ 3,793,139 $ 1,764,675 EXPENSES government 53,805 amounts and disclosures in the financial statements. An audit also Salaries and Benefits $ 1,013,877 $ 1,128,563 transporters 41,077 includes assessing the accounting principles used and significant LIABILITIES Direct Project and Service Costs 679,023 959,309 learning institutions 23,560 estimates made by management, as well as evaluating the overall Current Rent 219,603 206,115 financial statement presentation. research providers 19,097 Accounts Payable and Accrued Liabilities $ 523,820 $ 615,092 Direct Event Costs 99,225 155,145 venture capital 11,656 Deferred Revenue 2,162,410 434,938 In common with many not-for-profit organizations, the Marketing 37,788 34,549 midstream processors 4,840 organization derives revenue from events and other sources, the $ 2,686,230 $ 1,050,030 Office and Equipment Lease 26,088 25,240 completeness of which is not susceptible to satisfactory audit Printing and Publications 23,095 15,024 verification. Accordingly, our verification of these revenues was NET ASSETS Amortization 21,422 22,224 limited to the amounts recorded in the records of the organization Invested in Property and Equipment $ 68,827 $ 74,341 Professional Fees and Bookkeeping Services 16,911 26,253 and we were not able to determine whether any adjustments might Unrestricted 1,038,082 640,304 Computer and Web Site 9,540 9,952 be necessary to revenue, excess of revenue over expenditures, 1,106,909 714,645 assets and surplus. Insurance 6,249 5,261 $ 3,793,139 $ 1,764,675 Bank Charges 4,520 4,730 In our opinion, except for the effects of adjustments, if any, which Training 7,495 17,000 might have been determined to be necessary had we been able Bad Debts 1,444 10,177 to satisfy ourselves concerning the completeness of the revenue $ 2,166,280 $ 2,619,542 referred to in the preceding paragraph, these financial statements Excess Revenue Over Expenses $ 392,264 $ 221,447 present fairly, in all material respects, the financial position of the organization as at December 31, 2008 and the results of its operations and its cash flow for the year then ended in accordance with Canadian generally accepted accounting principles.

Calgary, Alberta, Canada Certified General Accountants Project Expenditure February 15, 2009 Since inception in 1996, PTAC has facilitated the launch of 257 projects or new project phases valued at $137.6 M. Of those, PTAC facilitated 25 new projects or project phases valued at $4.9 M in 2008.