The oilsands could be sitting on a multibillion-dollar non-combustion supply opportunity — one that could lower emissions while creating a whole new sector supplying the automotive and construction industries with a highly coveted material.
The opportunity would create value from one of the properties of bitumen that is most troublesome today — the heaviest end of the barrel. If the asphaltene that makes bitumen heavy could be converted to carbon fibre — and Alberta Innovates thinks it can, at a cost that would drastically undercut today’s prices — it could grow the market ten-fold while boosting the value of each barrel several times over.
Such is the opportunity targeted by the provincial government agency’s Carbon Fibre Grand Challenge, a $15-million contest launched in January to commercialize techniques to convert asphaltenes — the organic molecules found in bitumen commonly used in asphalt — into carbon fibre.
The three-phase challenge runs through 2024. Three grand prizes of $3 million will be awarded to the winners who will be required to produce more than 10 kilograms of carbon fibre per day, with a line of sight to scale production to more than 250 tonnes per day.
The province is targeting an eventual 100,000-plus barrels of bitumen being used daily to produce carbonfibre. Bitumen sourced asphaltene will be provided to competitors through an asphaltene sample bank operated by InnoTech Alberta, an applied research subsidiary of Alberta Innovates. Deadline for Phase 1 applications is April 7.
Carbon fibre is just one of the opportunities identified by the government agency’s Bitumen Beyond Combustion (BBC) initiative. Others include the transport of asphalt at ambient temperatures — which if solved could open up vast new market opportunities in rapidly growing Asia — and extraction of other elements from bitumen, like vanadium for which there is a potential market in flow batteries. Alberta Innovates is investing some $2 million in almost a dozen other projects to take some of these other technologies closer to commercialization.
“We have a unique product, a carbon-rich product with constituents that are fundamental building blocks for non-combustion materials,” said Paolo Bomben, Alberta Innovates Senior Manager, Clean Technology Development - Clean Resources.
“If we’re able to think about the constituents of bitumen in a different way and split them out or use them in different chemical processes and develop different products, we can derive significant additional value to the barrel than what we can get today by simply handing it over to a refinery to decide what the end products will be. But we have to think differently than we've done in the past.”
Taking the bottom end of the barrel and using it to produce products like carbon fibre, transportable asphalt and polymers produce another benefit — lower overall carbon intensity. “These [non-combustion] products sequester the carbon — trap it so it doesn’t end up in the atmosphere. So these are tremendous end uses for oil. We're taking a vulnerability — the heavy parts of the barrel, the metals — and we're turning it into a value creator.”
Why carbon fibre?
With the exception of asphalt delivery, carbon fibre — which is far lighter and as much as 10 times stronger than steel — was identified as the nearest term, highest volume non-combustible opportunity to pursue, said Bryan Helfenbaum, Executive Director of Advanced Hydrocarbons – Clean Resources at Alberta Innovates. “Carbon fibre is the most significant in terms of the total value proposition. We’re not focusing on very niche applications — we're looking for large-scale opportunities.”
BBC falls within the Low Emissions Value Added Products theme of the Clean Resources Innovation Network (CRIN), which is led by Helfenbaum and includes a variety of stakeholders across the innovation ecosystem. Other focus areas in the theme include Partial Upgrading, Hydrogen, Carbon Capture Storage & Utilization, and Minerals. CRIN believes collaboration results in better opportunity identification, faster problem-solving, increased leveraging of financial and intellectual resources and improved technology and innovation solutions.
A 2018 BBC study authored by Stantec stated that if carbon fibre — “widely touted to become the material of the 21st century” — could penetrate just one per cent of the global steel market by 2030, it would require approximately 500,000 barrels per day of asphaltenes.
“This could represent a multibillion-dollar non-combustion supply opportunity if realized…. Considering the growth potential and relative early stage of development of the carbon fibre industry, there is a tremendous opportunity to work towards oilsands-based feedstocks becoming a major component in the evolving carbon fibre industry in the future. Additional aspects of carbon fibre production, such as spinning and end product manufacturing, could also present a major economic benefit for Alberta and Canada,” states the report.
The big opportunity lies in lowering the cost of production to a level where carbon fibre will go from a niche product — used in racecars and aircraft for example — to mass application — cheap enough for incorporation into mainstream vehicles and construction materials. The high cost of aerospace-grade carbon fibre is also a barrier to widespread use for purposes like commercialization of lightweight, high-pressure hydrogen and natural gas storage tanks. More niche markets include high end sporting equipment like bicycles and golf clubs.
The potential value-add is tremendous. By Bomben’s estimates, by capturing all the value of the supply chain to finished product, including manufacturing (spinning) and carbon fibre final product development, it could lift the value of a barrel of bitumen from $30 to $175.
Market demand shouldn’t be a problem, as long as costs can be brought down. “The U.S. Department of Energy has stated that if we can get to $5 a pound [from $8-$16 today, compared to about 40 cents for steel and 80 cents for aluminum, all figures US], the automotive industry will take up carbon fibres in their vehicles overnight. It would be a game changer,” said Bomben.
In fact, the U.S. DOE has its own initiative to bring down the cost of carbon fibre to that level, which it considers the magic number for widespread use. Carbon fibre-reinforced polymer composites can reduce passenger vehicle weight by 50 per cent, it says, improving fuel efficiency of gas vehicles up to 35 per cent and the range of electric vehicles without compromising performance or safety.
The lightweight, ultra-strong material can also help make clean energy technologies more efficient and reliable. For example, it allows manufacturers to build larger wind turbines with longer blades. In addition to steel replacement, corrosion-resistant carbon fibre can also be used to reinforce concrete and wood in the form of composites. Reinforcing plywood with carbon fibres adds rigidity, durability and longevity to that wood product, Bomben said. “We can potentially integrate it with our wood products in Alberta.”
“A key message is that this has the opportunity to open up entirely new markets to carbon fibre,” said Helfenbaum. “It’s less that we’re competing with current carbon fibre applications and more that by introducing a much lower cost carbon fibre, we see the market growing by 10 times, and the value of a barrel of oil increasing by four to eight times what a barrel is worth today.”
The compelling math behind carbon fibre
One of the biggest challenges in bringing down cost is the price of the precursor raw material used to make carbon fibre, synthetic polyacrylonitrile (PAN), which accounts for most of today’s carbon fibre production and makes up 33-40 per cent of the overall cost of carbon fibre. PAN, made from propylene, costs between $3-$6 per pound, making a $5 carbon fibre cost almost unobtainable. It is estimated asphaltenes, which typically constitute 15-18 per cent of a barrel of bitumen, can be sourced for much less than one dollar per pound.
“We believe that [$5 cost] can be done with asphaltenes,” Bomben said. “When we start at under $1 [feedstock cost], that becomes a much more realistic target. That is one of the reasons we’re so excited about carbon fibre [production] from a cost perspective is our feedstock — we believe there is significant opportunity to make that work.
“Now there's a lot of technology that has to be developed, because our asphaltenes are different than polyacrylonitrile, but that’s really one of our key starting points that makes us excited.”
The technology challenge
While the technology is still “very much at a lab scale,” Helfenbaum said Alberta Innovates believes production at commercial scale is possible. “We’ve seen enough proof-of-concept to know that the opportunity is real. There’s quite a bit of chemistry and physics that need to be optimized. But refining the process — not just how it’s done at small scale, but especially as we scale up — we basically need to reinvent how large scale commercial carbon fibre is manufactured, because current processes won’t be sufficient for the market that we're targeting.”
The Grand Challenge is “looking to engage with more and varied researchers internationally for initial development of the basis of the technology, and then scale-up and ultimately a pre-commercial demonstration,” he said. “An ambitious timeline would be five to seven years to commercial production.”
“We really want to be aggressive with the research and development to develop those processes now,” added Bomben. “By the end of 2024, we are targeting having three technologies that are pre-commercial, ready and investable.”
Another challenge is the fact that current production methods involve numerous complex chemical and mechanical steps that are highly energy intensive, to the point of almost cancelling out the energy saving benefit of putting carbon fibre into cars and trucks in some cases, necessitating research into better means of manufacture in an increasingly carbon-constrained world.
“We haven't determined the manufacturing process yet and we don't know exactly how energy intensive it will be,” said Helfenbaum. “That’s difficult to quantify because it’s so early.”
There are other hurdles too. “The technology barrier is core to what we are working on, though we are mindful of other non-technical challenges that will exist in terms of policy, supply chain, regulatory and others.”
But he added, “We don't see a major showstopper or barrier with respect to development — there’s always the challenge of something new, and regulators figuring out how to handle facilities that are making a product that's never been made before in the province.”
It’s been done before
Bomben points to a parallel with the multiyear, multimillion-dollar public-private research effort that went into the development of SAGD in the 1980s and 1990s, leading to the creation of the multibillion-dollar in situ oilsands production sector. Alberta Innovates believes that history can be repeated with carbon fibre.
“I would argue that the BBC opportunity is a lot less research intensive than the SAGD process was,” he said. “I think innovation pathway is a lot shorter, and it’s certainly something that we can do. We've done it before and we can do it again.
“And I truly believe that the bitumen beyond combustion idea, the concept of taking our barrel and turning into products, not combustion products but products that the world craves, is the next SAGD opportunity, the next multibillion-dollar opportunity in this province.”
If the carbon fibre nut can be cracked, there are other important benefits for the oilsands sector and beyond. “There's a strong synergy between the carbon fibre program and bitumen partial upgrading,” said Helfenbaum, noting that removing the asphaltenes partly upgrades the bitumen, giving it both a lower carbon intensity and a higher value. It could also reduce or eliminate the need for diluent — added to bitumen to make it flow — that currently takes up about a third of bitumen pipeline capacity, freeing up additional space on existing pipelines.
Outside of the oilsands, wider use of lower cost carbon fibre offers manifold opportunities to create efficiencies and reduce greenhouse gas emissions, for example due to improved vehicle mileage and longer life infrastructure.
“Through the long-term use of carbon fibre in infrastructure, in concrete, in buildings, we can increase the lifetime of those products and reduce the energy requirements and turnovers. If you take a concrete bridge, for example, if you put in carbon fibre instead of steel rebar, that bridge can now potentially last 100, 200 years instead of 50. The longevity that carbon fibre adds reduces energy requirements in construction.”
In the end, developing the market would not only add significant value to Alberta’s resources, but would help meet the needs of a growing global population that will be looking for materials for housing, transport, infrastructure, consumer goods and more, Bomben said. “And increasingly, consumers are asking for materials are made from sustainable products.”