Inside the Bet on Underground Upgrading

NanosTech’s 2025 field test could open a path to lower emissions and more efficient oil sands production

10 Nov 2025

A planned field trial of a new catalyst-based upgrading method is drawing attention across Canada’s oil sands sector as producers look for ways to cut emissions and manage operating costs. Interest has grown as NanosTech prepares a large-scale demonstration in 2025, though companies stress that any strategic impact will depend on how the technology performs outside laboratory conditions.

NanosTech, supported by Emissions Reduction Alberta, aims to test a catalyst that improves bitumen quality before it reaches the surface. The process would reduce the need for standard surface upgrading, a step that typically requires substantial heat and infrastructure. Early laboratory and pilot work has attracted industry interest, but analysts note that field conditions, including reservoir variability and operating constraints, will be decisive.

The trial comes as forecasts point to steady but modest production growth. S&P Global Commodity Insights expects output to rise through the middle of the decade, though projections remain sensitive to global prices and capital discipline. Producers are prioritising efficiency in existing assets, and the prospect of a technique that could lower emissions while improving long term costs has positioned catalyst-based upgrading as a development to monitor.

Supporters argue that shifting part of the upgrading process underground could reduce steam use, shrink surface facilities and limit land disturbance. These changes could translate into fewer emissions and more streamlined regulatory reviews. Sector consolidation and renewed investment have also increased the focus on technologies that can demonstrate credible emissions reductions.

Engineers caution, however, that geological differences across projects could affect results. Regulators are also expected to seek clear evidence that underground catalyst use poses no environmental risks. One industry executive said that "if performance in the field matches earlier testing", the technology could gain momentum quickly, but added that widespread deployment would require "strong data from operating conditions".

As investment plans evolve and innovation gathers pace, the oil sands industry is entering a period of closer scrutiny of new production methods. The outcome of NanosTech’s 2025 demonstration is likely to shape expectations about whether catalyst-driven upgrading can support a future of more efficient operations and lower emissions.