A challenge is an opportunity in disguise: Bluesource Methane helps take Alberta in a new direction
By March 2021 edition of Business in Calgary, and Business in Edmonton 1 April 2021 3 min read
Bluesource Methane is changing how Alberta’s energy companies handle emissions, while creating incredible opportunities and showcasing the province’s resources on the international stage.
Since 2001, Bluesource has been a pioneer in the field of defraying climate risk by curating sustainability strategies for industries, corporations, non-profits, and governments. Bluesource Methane, a division of Bluesource, is headquartered in Calgary.
“We are one of the largest developers of greenhouse gas emission projects in Canada,” explains Yvan Champagne, president of Bluesource Methane. “We develop opportunities for large scale reductions in various sectors and help those projects move forward. Our expertise is quantifying those emission reductions and marketing and selling them.”
Champagne admits that the concept of Bluesource Methane can be difficult to understand. He explains further about how the company came about, the solutions it creates.
“Before 2015, there were few barriers to getting capital and approval for energy projects in Alberta. Then, with the downturn in pricing, we saw that even good projects were not getting funded because of balance sheet and oil and gas pressures. Around the same time, Canada, the United States, and Mexico took on aggressive methane reduction targets in the oil and gas sector. With this target came new emissions regulations in Alberta from the federal government. In some cases, those emission reductions can be turned into carbon credits. Clients were having trouble getting funded and had regulatory obligations requiring them to significantly reduce emissions. Bluesource saw an opportunity. We knew we could apply carbon finances to tackle the problem.”
Bluesource Methane was created in 2017. The company identifies emission reduction opportunities, procures new equipment, and manages all the logistics required in replacing and installing the upgrades. Bluesource Methane then quantifies the reduction in emissions and once it receives payback for the capital invested, shares the proceeds among its partners. This carbon finance approach takes on the capital investment risk, helps oil & gas companies meet or exceed regulations, and provides a potential new revenue stream.
Champagne continues, “It’s time and labour intensive to replace and install equipment, so we leveraged existing companies to do this. Over the last three and a half years we have worked with nine electrical and instrumentation (E&I) companies across the province and provided employment for 120 people during these economically challenging times.”
In the short time that Bluesource Methane has been active, it has removed, replaced and retrofitted 11,000 devices in more than 35 companies across Alberta. This will reduce emissions in the province by close to three million tons by 2022 – the equivalent of removing emissions from 80 per cent of all the cars in the City of Edmonton for a year.
“We took an innovative approach, taking on all the risk by using carbon financing to solve the problems in emissions in a fast and profitable way,” says Champagne. “We are very excited by the results so far. The provincial government is impressed by what we have achieved. It’s a win for us, for industry, and the environment.”
But it’s a complicated strategy, which meant many lenders shied away from funding the model – but not ATB.
“Without carbon credits it is a losing money proposition; and carbon markets are esoteric,” admits Champagne. “Lenders thought our idea was too risky, too unknown, and didn’t fit with established business models. However, ATB ultimately understood the strategic importance of what we were trying to achieve. If we were successful, it would have significant benefits for their clients and also for Alberta. That goes to ATB’s mandate of thinking of not just financing entrepreneurs and businesses in Alberta, but what is important to Alberta.”
Champagne continues, “ATB is a critical, and fantastic partner. We wouldn’t have gotten off the ground without them. They were willing to take a chance on carbon financing and it has worked out exceptionally well for all involved.”
Bluesource Methane is determined to continue providing solutions to industry and furthering the benefits of carbon finance.
“Alberta has a great story to tell, but we have to find room to elevate the conversation,” Champagne concludes. “It’s been tough with the cancelation of Keystone; the province has some challenges ahead. We have some of the most innovative oil and gas companies in the world that are always thinking of lowering emissions. This is an industry-wide strategic objective. If we can show how Alberta is a reliable, low carbon source of fossil fuel, we’ll be better able to compete for the long-term.”
With its innovative programs and financing partners like ATB, Bluesource Methane is on the way to showcasing Alberta’s strengths on the world stage.
From the March 2021 edition of Business in Calgary, and Business in Edmonton. Shared with permission.