Forget the old image of a straight vertical oil and gas well.In Western Canada, engineers now steer wells for kilometres underground with remarkable precision, tapping vast energy resources from a single spot on the surface.The sector is continually evolving as operators pursue next-generation drilling technologies that lower costs while opening new opportunities and reducing environmental impacts.But many promising innovations never reach the market because of high development costs and limited opportunities for real-world testing, according to Emissions Reduction Alberta (ERA).That’s why ERA is launching the Drilling Technology Challenge, which will invest up to $35 million to advance new drilling and subsurface technologies.

“The focus isn’t just on drilling, it’s about building our future economy, helping reduce emissions, creating new industries and making sure we remain a responsible leader in energy development for decades to come,” said ERA CEO Justin Riemer.

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And it’s not just about oil and gas. ERA says emerging technologies can unlock new resource opportunities such as geothermal energy, deep geological CO₂ storage and critical minerals extraction.

“Alberta’s wealth comes from our natural resources, most of which are extracted through drilling and other subsurface technologies,” said Gurpreet Lail, CEO of Enserva, which represents energy service companies.

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ERA funding for the challenge will range from $250,000 to $8 million per project.

Eligible technologies include advanced drilling systems, downhole tools and sensors; AI-enabled automation and optimization; low-impact rigs and fluids; geothermal and critical mineral drilling applications; and supporting infrastructure like mobile labs and simulation platforms.

“All transformative ideas are really eligible for this call,” Riemer said, noting that AI-based technologies are likely to play a growing role.

“I think what we’re seeing is that the wells of the future are going to be guided by smart sensors and real-time data. You’re going to have a lot of AI-driven controls that help operators make instant decisions and avoid problems.”

Applications for the Drilling Technology Challenge close January 29, 2026.