The focus of this paper is innovation in oil sands recovery technology. Canada hosts the third largest reserves of petroleum in the world, mostly in heavy oil/oil sands reservoirs. The two commercial in situ recovery technologies, Cyclic Steam Stimulation and Steam-Assisted Gravity Drainage, were both invented >30 years ago; both use large amounts of water and emit carbon dioxide. Industry is facing a critical point where it is imperative to find new technologies. It has been a significant challenge to find new processes with large reductions of water and carbon dioxide emissions. Another critical issue is adoption time scale – in the past, new technologies have taken 10–20 years to become commercial – this pace must be accelerated. The oil sands industry needs to improve the innovation cycle of oil sands extraction technologies. The objective here is to understand how to do this, to describe factors that encourage and discourage innovation, and to recommend strategies to enable and stimulate non-incremental innovation. It is interesting to note that despite only a few oil companies still having research laboratories and permanent research staff, abundant potentially inventive scientific, engineering, and management staff exist in oil companies. So the question becomes: what is preventing them from developing a plethora of inventions and bringing creativity to issues confronted by the oil sands industry? It does not appear to be only a technical issue but also a social one. Market, resource, and social issues lead to this result: most petroleum funding directed at near market iterations, short term incentives (increasing shareholder value), government funding matched to current industry activity and thus linked to market forces, low funding levels, culture of risk adversity and fear of risk, innovation curbed by regulatory factors or internal work overload, and high costs due to investment, variable resource quality, high capital costs, and oil price volatility.

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