Al Duerr is chief executive officer of General Magnetic International Inc.
What is General Magnetic International Inc. and what does it do?
Duerr: General Magnetic is a technology development and manufacturing company I founded in 2008 specializing in the application of permanent magnet motor (PMM) technology in the energy sector. PMM technology is particularly suited for applications in the petroleum industry as it can deliver energy efficiencies and significantly reduce maintenance costs.
The company has more recently added a number of tool and pump capabilities to the product mix. We do all of our research, development, and certification in Calgary and have a 100 per cent Canadian owned and operated factory in China. Our markets are local and international.
How did you get involved with this venture and why?
Duerr: I have always had a strong interest in the environment and finding ways to improve how we manage our resources. Prior to becoming mayor in 1989, I was a co-founder of a water and wastewater treatment company operating in Malaysia. At the time, we were delivering technologically superior, cost effective ways of treating complex industrial wastes that are often a major problem, especially in developing countries.
I sold my interest in that company to my partner after I was elected mayor. After I stepped down as mayor in 2001, I worked for a time in the venture capital sector, and ultimately came across PMM technology. While my initial interest was in using the technology in the diesel electric marine sector, we were approached by a group in the energy sector, who had been trying to develop a direct drive PMM top drive for progressive cavity pump applications without success. We did a proof of concept, and it worked.
Over the years, this product has gone through four generations of development from initial deployment. We also applied the technology to solar powered chemical injection for gas wells, and more recently have been active in commercializing some related downhole tool and pump technologies brought to the company.
How has business been for the company in the last few years considering the economic challenges?
Duerr: Business for General Magnetic, as for virtually all equipment manufacturing and supply companies in the oil and gas sector, has been challenging, especially in Alberta. With respect to our products for solar chemical injection, we have seen a fairly steady market over the years in Canada, with a significant increase over the past year given the focus on methane gas reduction.
Solar chemical injection is one of the most cost-effective ways to reduce greenhouse gas emissions in the energy sector, and the availability of carbon offsets in the Alberta market makes installation highly cost effective for producers.
General Magnetic was also a founding partner of TriCore Carbon Solutions Inc., which was established to provide financing for installs of equipment using the offset program. This allows companies who might be cash constrained to get access to new equipment that will improve operations and reduce operating costs while reducing their emissions footprint, all financed through the Alberta offset program. It is a wonderful example of how you can improve operations, reduce operating costs, all while achieving significant positive environmental outcomes.
Our other products predominantly target the heavy oil sector, and activity on that front came almost to a standstill in Alberta, especially for new technology. Fortunately, three years ago we made a decision to go international, as we identified a strong potential for the technology in other world markets where heavy oil was produced. To that end we have put a lot of focus on South America, and more recently the Middle East, where we are just starting to gain traction. Initial forays into Asian markets have also confirmed significant potential in specific niche markets.
Shifting our corporate focus to international markets a number of years ago has proven to be the right strategy for our company. While the heavy oil sector in Canada continues to suffer transportation capacity constraints, activity in international markets continues to flourish and in many jurisdictions is actually increasing.
As the Canadian heavy oil landscape will not be materially changing until additional export capacity is in place, we will continue to focus our heavy oil sector activities internationally.
What are your future plans for the company?
Duerr: It takes a fairly long period of time to develop new technologies in the petroleum sector for a variety of reasons, including system inertia, and the need to have a strong track record of success earned over many years of successful implementation. It frankly took a lot longer than I or my board of directors imagined. But we now have that track record and are being welcomed in international markets as the benefits of our technologies drive directly to the bottom line, both economically and environmentally.
While it took longer than expected to get to this point, the road ahead is far clearer than ever before. We will remain very active in Canada on the methane gas reduction front for years to come, as we have one of the most successful proven technologies to address that challenge while delivering operating cost reductions. We will continue to focus on international markets for our heavy oil technologies as that is where the activity is, and will be, for at least the next few years.
Over time, as capacity constraints are resolved and this sector begins to flourish again in Alberta, we will return to this market stronger than ever given our international experience.
No company stands still and constant innovation will continue to be critical to our success. Innovation has taken many forms. Sometimes it’s in a transformative new technology. More often than not, it’s in the hundreds of thoughtful tweaks to a product that continually improve performance. To be successful, you have to embrace both. The ‘wow’ moment and the grinding required to perfect an idea. That’s our culture and it will remain.
What did you learn from your experience as mayor of Calgary that has helped you in running a business?
Duerr: A city is a big, complicated organization literally composed of over a dozen quite distinct businesses. Unlike a private business, most city business is conducted under intense public scrutiny. You don’t have the advantage of quarterly reporting. Or the safety of in-camera caucus meetings. Municipal government is real time, all the time.
While I believe I brought experience and some strong skill sets to the mayor’s office, being a former city planner, land developer, environmental technology company entrepreneur and owner, as well as a former councillor, I realized very early on that humility was a critical asset if I wanted to be successful. Accepting that I could not be the expert on everything and gathering around me smart people and listening to their advice and counsel was probably the single greatest determinant of my success in public office.
At the same time, I learned the value of inviting in and creating a space for quite diverse opinions. Welcoming and trying to understand different perspectives also provided me with a greater breadth of knowledge and understanding of the nuance around complex issues. I discovered that there are new things to learn every day if you are willing and open and are prepared to take risks by reaching out beyond your comfort zone.
It’s the same in business. Companies that flourish are true learning organizations that embrace diversity of opinion and are constantly searching for ways to manage the complex of information available.
For years, our corporate boardrooms were dominated by often very talented but like-minded traditionalists trapped in group think. Fortunately, that’s changing, with board diversity being one of the major cornerstones of modern progressive corporate governance.
Companies that understand the value of diversity in their boards and leadership teams become the agile, responsive and innovative organizations of the future with the tools required for success in an increasingly complex operating environment.
– Mario Toneguzzi