Feature: Chemical Engineering

Special Report for the International Year of Chemistry

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Enhance Energy president Susan Cole’s quest to clean up the oil industry by creating the world’s largest CO2 capture, transport and storage pipeline makes her a rose among the roughnecks.

By Brian Bergman

A decade ago, Susan Cole was named co-winner of Saskatchewan’s "Oilman of the Year” award in recognition of her role managing the world’s largest carbon dioxide (CO2) injection and storage project near Weyburn, Sask. But if the British-born chemical engineer and entrepreneur sees anything amiss in that gender-specific honorific, she isn’t letting on. “I find when audiences hear that, you do get a lot of laughter,” she acknowledges. “People see the irony in it, but I don’t really think about it too much. I’ve been working in the energy industry for 25 years and I haven’t really had any issues when it comes to my gender.”

Cole’s impressive career would appear to attest to that. A graduate of the University of Calgary’s Schulich School of Engineering (she later returned to earn an MBA from the same institution), Cole spent six years overseeing — from conception to startup — the showcase Weyburn project initiated by PanCanadian Energy Corporation (later part of EnCana, now Cenovus Energy). The Weyburn facility remains the most significant test case to date of using CO2 to generate enhanced oil recovery (EOR) in depleted oil fields and then storing that CO2 underground indefinitely to avoid greenhouse gas emissions.

Cole has also held various roles with Norcen Energy Resources and PanCanadian — including reservoir engineering, oil and gas marketing and corporate planning — and served as Team Lead of EnCana Corp.’s Athabasca Oil Business Unit, where she managed EOR operations at the Pelican Lake heavy oil fields in northern Alberta.

Enhance Energy president Susan Cole

After two decades of working for large energy companies, Cole struck out on her own in 2005 to become the founding president of Enhance Energy Inc., a Calgary-based company that is currently building the world’s largest pipeline system for capturing, transporting and storing industrial CO2. The 240-kilometre Alberta Carbon Trunk Line (ACTL), expected to come on stream in 2013, will gather and compress CO2 from central Alberta oil sands refineries, natural gas processing facilities, chemical manufacturers and coal-fired power generation plants. The CO2 will be pipelined to aging conventional oil fields where, using proven and safe technology, it will be injected into reservoirs to make the remaining tough-to-extract oil flow more freely. The CO2 will then be permanently sequestered in the same reservoirs.

At full capacity, the ACTL will handle up to 40,000 tonnes of CO2 per day, or up to 14.6 million tonnes of CO2 per year. That’s the equivalent of eliminating 2 emissions from 2.6 million cars — or about a third of all registered vehicles in Alberta. Moreover, Enhance Energy is projecting that, over a 30-year timeframe, the injected 2 will result in the recovery of an additional one billion barrels of oil and generate an estimated $15 billion in royalties for the Alberta government.

Dressed in blue jeans and a plain black shirt for a “casual Fridays” interview in the modest boardroom of Enhance Energy’s 9th floor downtown Calgary office, Cole explains why she decided to take the plunge as an entrepreneur. “It was all about timing,” she says. “Six years ago, we started to see a big jump in oil prices. At the same time, there was an increasing awareness globally that we need to do something to reduce CO2 emissions. Those two factors together allowed us to kick-start this project.”

Cole notes there is a long track record of successful CO2/EOR projects in the United States. But companies there have access to naturally occurring CO2, which is pumped from the ground like natural gas — a much less expensive proposition than capturing the 2 that is a waste byproduct of industrial development. And while the Weyburn project demonstrated the efficacy of using industrial CO2 emissions to revive declining oil reservoirs, that facility is dependent on CO2 supply from a coal gasification facility in North Dakota.

“We knew from the start we could do what we were doing in Weyburn on a much larger scale in Alberta,” says Cole. “That’s because this province has the unique combination of a ready supply of industrial 2 in close proximity to a number of potential EOR customers. For example, the central Alberta region where our pipeline is being built generates 52 per cent of the province’s total 2 emissions, most of it from the coal-fired power sector. In the same area, there are a number of declining conventional oil fields that can benefit from CO2 injection and are ideal for long-term storage of CO2.”

The Alberta government also committed $2 billion to support the advancement and implementation of carbon capture and storage (CCS) technology. The government projects CCS technology will be responsible for 70 per cent of the province’s CO2 emissions reductions by 2050.

As it turned out, Cole’s timing was indeed fortuitous. In 2007, Alberta became the first jurisdiction in North America to effectively put a price on carbon. Facilities that emit more than 100,000 tonnes of greenhouse gas emissions were henceforth required to meet targeted reductions in their emissions intensity. If they did not, they had the option of contributing $15 a tonne for emissions over the target into a fund supporting the development of emissions-reducing technologies.

Given that backdrop, it was perhaps only a matter of time before Cole and the Alberta government forged a symbiotic partnership. Earlier this year, Enhance Energy and Northwest Upgrading (a key initial 2 supplier for the ACTL) reached a formal agreement to receive $495 million from Alberta’s CCS fund for the planning, development and construction of the proposed pipeline. The project has also received $63 million in federal government support.

Cole makes no apologies for seeking out government funding for what is, in the end, a private sector initiative that hopes to generate profits for its investors. Her marketing experience is evident in the way she has pitched the Alberta Carbon Trunk Line as a 21st century version of the Alberta Gas Trunk Line (AGTL). In a 2009 open letter on the Enhance Energy website, Cole explained the decision to christen the 2 pipeline the ACTL as follows: “Cast your mind way back to 1954, when the Alberta Government was under pressure to allow the export of natural gas via federally incorporated pipelines. To ensure Albertans would have control over their resources, legislation was enacted to create [the AGTL]. This orderly, unified pipeline system proved to be a boon to the province’s natural gas industry and played a crucial role in establishing the petrochemical industry here. Fast forward to today and we Albertans face a similar challenge: ensure that we once again have control over our own resources while developing a solution to permit the sustainable production of bitumen.”

In an interview with ACCN, Cole offers another analogy. “I also like to describe it as akin to building the TransCanada Highway,” she says. “It’s building the linkages that allow someone in Nova Scotia to sell goods to Vancouver. No one company could afford to build that highway, but by the government doing so, you make this kind of commerce possible. We’re trying to do a similar thing — build the linkages so people can access and use CO2 and, collectively, reduce CO2 emissions.”

Warming to her subject, Cole adds that government funding has allowed Enhance Energy to expand the scope of the project and to begin planning work on lateral extensions to the original pipeline that will help maximize its long-term viability and impact. “Going back to those analogies, you know, we could start really small, just like when we started in-house with one project,” she says. “But if we are really going to get hold of our emissions problem in Alberta and in Canada, governments are going to have to pave the way for multiple projects, not just one. Because we can’t solve our problems with just one project — we need a lot more.”

As for Enhance Energy’s other investors, Cole declines to name them; “we are a private equity company, so we don’t disclose.” But there is one exception. In November 2007, the venerable British-based commodity bank, Barclays Capital, publicly announced “a significant investment” in Enhance Energy. In a news release, Barclays cited Alberta’s recently enacted climate change regulations and the bank’s desire to invest in market solutions to environmental challenges.

“People really are interested in investing in our project because of its dual nature,” observes Cole. “It has that ‘green’ aspect, but it’s also an economic proposition. At the same time, this is a very long-term project, so we need investors who are patient and not looking for a quick payoff.”

Earlier this year, Enhance Energy and Northwest Upgrading reached a formal agreement to receive $495 million from Alberta’s CCS fund for the planning, development and construction of the proposed pipeline.

Cole credits her training as a chemical engineer with setting her on the right path. “Rather than using your thermodynamics or fluid mechanics equations directly, I find engineering degrees are a way of teaching people how to solve problems, which is really what we do in the oil and gas industry.” Similarly, the MBA helped prepare Cole for being her own boss. “When you work for a large company, they set the budgets for you, and you execute. When you have your own small company, you have to know where the money is coming from, not just how to spend it.” This last statement is delivered with a broad smile.

After a quarter century, Cole clearly remains fascinated by her chosen profession. “I think the oil and gas industry is very creative,” she says. “From the outside, it probably looks somewhat boring. But we’re always trying to improve the way we do things and we are always challenged; that’s what keeps us going. There’s never a dull moment.”

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