About 45 minutes east of Calgary, in the hamlet of Carseland, Canada’s first commercial-scale gas-to-liquids facility is churning out premium synthetic fuels.
Rocky Mountain Clean Fuels Inc. currently uses natural gas as the feedstock for its operations. But chief executive Doug Geeraert says the fact that the technology is flexible and modular in nature means it stands to play an outsized role in the transition to cleaner fuels, for example by pivoting to biogas feedstocks.
The Carseland facility was first envisioned in 2010, and Mr. Geeraert said it wasn’t an easy road to complete the plant – especially when the pandemic hit, and capital markets dried up.
Then came another hurdle.
Rocky Mountain set up shop in Carseland with the intention of using raw gas from an adjacent oil and gas processing facility to turn it into diesel; a symbiotic relationship that would have saved that company operating costs.
Alas, the company next door went bankrupt while Rocky Mountain was under construction, Mr. Geeraert said, so his company ended up tying into the nearby TransCanada gas supply.
Rocky Mountain overcame those obstacles and, now that it’s up and running, has become the most recent recipient of funds from the Alberta Petrochemicals Incentive Program (APIP). The goal of APIP is to turn the province into a top global producer of petrochemicals, and the Carseland facility is the first site outside the Edmonton region to secure a grant.
Under the program, grants worth 12 per cent of a project’s eligible capital costs are issued to companies after a project is operational. Rocky Mountain will receive $20.8-million over the next three years.
“It’s certainly going to be welcome when it comes, and we’ll be able to put it towards lots of further capital improvements,” Mr. Geeraert said in an interview Wednesday.
Alberta has an abundance of natural gas at low prices, so the technology is “a great way to add value for oil and gas producers,” Mr. Geeraert said.
And because it is small-scale, it has the potential to be built in locations that aren’t right for huge processing operations that tend to be the norm.
Mr. Geerhaert said the technology is already seeing interest from around the globe, including jurisdictions that import their diesel but have significant natural gas resources.
“On the surface, our facility has a small footprint, but the economic spinoffs are going to be significant as the Carseland location is expanded and duplicated to other sites,” he said.
The technology is also flexible when it comes to the end product, be it synthetic diesel, jet fuel naphtha or hydrogen.
“Beyond that, the facility provides a tremendous way to transition to renewable fuels as well. And so that can be done with time,” Mr. Geeraert said.
“The energy industry is trying hard to get there, but one step at a time and we’ll get there.”
The Carseland facility can produce up to 25 million litres of synthetic diesel annually. Derived from natural gas, it’s a cleaner-burning, biodegradable alternative to traditional petroleum diesel with no sulfur and significantly reduced particulate emissions.
Interest in the fuel produced by Rocky Mountain has come primarily from marine markets, but Mr. Geeraert expects to soon target heavy industry and other transport sectors.
“Ultimately, the markets are going to grow very quickly once we get the product properly tested,” he said.
The company says the process is also ideal for the application of carbon capture, which would further reduce the plant’s environmental footprint.
Alberta has approved more than $620-million in funding grants under APIP since 2020, representing about $38-billion in total investments.
Announcing the Rocky Mountain grant on Wednesday, Energy Minister Brian Jean told media the company represents the “tremendous opportunities to capitalize on the growing global petrochemical sector” and further diversify Alberta’s economy.
“According to Alberta’s Industrial Heartland Association, there’s an opportunity to grow the province’s petrochemical sector by more than $30-billion by 2043. That’s a lot of money and a lot of investors,” he said.