Upstream Dialogue January/February 2012

Upstream ISSUE 18 I JANUARY/FEBRUARY I 2012

Dialogue

CAPP ‘s Guiding Principles and Operating Practices for Hydraulic Fracturing guide responsible water management and continual improvement of environmental performance for shale gas and tight gas development in Canada. uR ead more about the Guiding Principles and

Operating Practices.

CAPP Events & Updates

Inside Canada’s oil sands producers form new alliance u Will accelerate pace of environmental performance in oil sands. PAGE THREE

Industry in the news PAGE FOUR David Wilkins

CAPP Speaker Series, Ambassador David Wilkins, Former U.S. Ambassador to Canada March 13, 2012 12 p.m.

Calgary, Alberta

Relationships behind the resource u Energy in Action will visit nine communities in Alberta, British Columbia Saskatchewan and the Northwest Territories. PAGE SIX

Employee perspectives u Meet Alain Fair, executive director of the Oil Sands Tailings Consortium.

PAGE SEVEN

2012 Responsible Canadian Energy Awards Dinner March 21, 2012 5:30 p.m.

Calgary, Alberta

Innovation and technology

CAPP Investment Symposium Late fall 2012, Toronto, Ontario

Industry practice and regulations PAGE NINE

u Hundreds of scientists are working to develop tailings management solutions for the Oil Sands Tailings Consortium. PAGE EIGHT

Keeping employees informed about Canada’s oil and gas industry I www.capp.ca

CAPP Hydraulic Fra

cturing Operating

Industry Collaborati

on:

CAPP HYDRAULIC FRACTURING GUIDING PRINCIPL ES AND OPERATING PRAC TICES

Practice: FRACTURING FLUI D ADDITIVE RISK ASSE SSMENT AND MANAGEMENT OVERVIEW

To support CAPP’s Guiding Principles for Hydraulic Fractur developed in collabo ing, six Operating Practic ration with CAPP membe es have been r companies. These commitment to continu Operating Practices ous performance improv strengthen industry’s ement in shale gas and tight gas develo pment.

The Fracturing Fluid Additive Risk Assessme nt and Management Practice supports the Operating Guiding Principles: “We will support the of fracturing fluid addit development ives with the least environmental risks will continue to adva ”; and “We nce, collaborate on and communicate techn and best practices ologies that reduce the pote ntial environmental hydraulic fracturing risks of .”

WHAT

DOES THIS PRACTIC E MEAN? GUIDING PR INCIPLES FO R HYDRAULIC FRAC TURING

Recognizing the increas CAPP and its membe ing importance for r companies are commi the energy industry commitment to respon tted to reducing the to be transparent and additives in fractur sible energy develo environmental risks clearly demonstrate ing fluids. Hydraulic pment, CAPP establi associated with the a 2010. The mandate fracturing fluids are shed a Shale Water small amount of chemic of the committee was primarily comprised Steering Committee al additives. This practic of water, sand and to work collaboratively in Practices for hydrau a very e outlines the require to create Guiding Princip and manage the potent lic fracturing that guide ments for companies les and ial health and environ Operating water management to better identify tight gas development mental risks associ and improve practic fracturing fluids with in Canada, in many ated es with for shale these lower gas and additives; where possib cases above what risk profiles can be contributed to this is regulated by govern selected. le, effort. ment. Many compa Canada’s shale gas Market demand for and tight gas nies respon indust sible fractur ry suppo Canada’s upstream ing fluids leads to the rts a respon committed to contin sound sible petroleum industry development of new, approadvanc produc ach toes ts. These uous performance water has a strong track manag more environmental in techno ement improvement gas. With the increas record ashandli and industr logy is ly help drive . Protec a safengand improv tingCollab e in natural gas produc is areliable ement. water key priority y’s environmental perform resour produc oration ces er for of during our tion natural is the key to the industry. We suppo from unconventiona sourci ance us they want more ng,ssion, use and progre l source rt andlogies operat techno information about how development and implem s such abide ions, bywill as use water that shale, all reduce regulations Canad and industry uses and protec iansprotec entation of new water our industr govern told tion. In CAPP’s Guiding Princip y’sing hydrau effect on the licenviron ts water. We respec addition, we comm fracturment. ing les and supporting t that request, and it to following these Operating Practices and water protection guiding principles: articulate our water practices, as well as management objecti our focus on improv ves ing our water perform ance To protect Canada’s time.

We willover water resources and safeg uard the quality andUnder this Operating Practice, companies will to maintain industr industry to share best quant assess the potential y’s license to operat create of region riskity practices and to demon manag risks of fracturing fluid e,resou it is import surfac emental e andelygroun plans rces,antthrou for gh sound to effectiv strate a commitment additives and dwate Members of CAPP manag r e the additiv to using and handlin wellbospecifi continue to work togeth c plans re const es, and make the proces publicl ructio g water responsibly. y availab n pract le. This er on these issues s used to develop ices, assess sourc improve industry perform ingment to foster and implemalternatives where freshinclude s: water • Identifying chemic ance in hydraulic fracturi ent innovative ways appropriate, and recycling water al ingredients and to ng operations across for reuse ascharac teristic Canada. s of each additive. much as The Shale Water Steerin • Assessing potent pract ical. ial health and environ g Committee brings mental risks of each together decades of improved water perform additive. experience and technic We will • Defining operational measse ance for shale gas ureinto and disclose our al experti practices and contro and tight gas develo water use with the millions of dollars and ls for pment. Together, industr identified risks. services in-kind to • Incorporating of continuing the our effect y has contrib risk managgoal water research related on theuted to reduce ement plans environment. through partnerships for each well to unconventional fractured. such as the Alberta gas development Upstream Petroleum Community Environ Research Fund (AUPR mental Knowledge F), the BC (SCEK Scienc ) and Geoscience e and support practical studies BC. These researc and technology develo h funds and partne We rships will support the pment.

HOW WILL THIS WO

RK?

NEW CAPP PUBLICATIONS

1

Hydraulic Fracturing Guiding Principles and Operating Practices

2

For more information,

2011-0026

3

please contact: commu

Last Updated: Decembe

r 2011

nications@capp.ca

4 5

environmental risks.

We will support the

development of fractu

disclosure of fracturing

ring fluid additives with

the least

fluid additives.

We will continue to

advance, collaborate on and communica technologies and best te practices that reduc e the potential enviro risks of hydraulic fractu nmental ring.

Shale gas and tight gas, for the purpose of these principles, unconventional gas refers to resources from low permeability reserv developed using horizo oirs being ntal wells with multi-s tage hydraulic fractur ing.

In an effort to improve water management and water and fluids reporting for shale gas and tight gas development across

New natural gas ind ustry guiding principle s and operating practices for hydraulic fracturin g.

Canada, Canada’s natural gas producers developed a worldleading set of Guiding Principles and Operating Practices for Hydraulic Fracturing.

“We know that our industry is dynamic and constantly

“Protecting Canada’s water resources is fundamental to our

changing,” said Payment. “These principles and practices will

social licence to operate and to grow,” said CAPP President Dave

be updated over time to ensure we are always upholding the

Collyer. “Applying these new principles and operating practices

integrity of our operations.”

will contribute to improving our environmental performance and

Canada has abundant natural gas resources, including shale

transparency over time, both of which contribute to stronger understanding of industry activity and better relationships with the public, stakeholders and government.”

gas. Technological innovations, particularly horizontal multi-well pad drilling and hydraulic fracturing have made it possible for industry to economically develop shale gas resources in tight

In 2010, CAPP established the Shale Water Steering Committee

rock formations. The application of hydraulic fracturing technology

to collaborate on creating the Guiding Principles and Operating

requires the use of significant quantities of water, which

Practices for Hydraulic Fracturing. The principles and supporting

necessitates increased focus by industry on both water use and

practices guide responsible water management and continual

water quality.

improvement of environmental performance for shale gas and

“The Canadian natural gas industry supports all regulations that

tight gas development in Canada.

govern hydraulic fracturing, water use and water protection,

“Collaboration and sharing of best practices continues to drive

because we recognize water is a valuable resource,” said Michael

industry’s environmental performance,” said Tara Payment, CAPP’s

McAllister, executive vice-president of Encana. “Strong regulations

manager of water and reclamation. “We want to demonstrate

exist in regions of active unconventional gas development. Similar

that we are listening to our stakeholders and that we are working

regulations are being developed in regions with an emerging

together to create solutions that demonstrate our responsible

unconventional natural gas sector, to ensure protection of water

development of shale gas and tight gas resources.”

resources and provide the public confidence that these resources

Members of the Shale Water Steering Committee continue to work together on these issues to foster and implement innovative ways to improve industry performance in hydraulic fracturing operations across Canada.

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are being developed responsibly.” u Read CAPP’s Guiding Principles for Hydraulic Fracturing

and the Hydraulic Fracturing Operating Practices.

Canada’s oil sands producers launch environmental performance alliance Canada’s oil sands producers formed

help the industry address environmental

a new alliance, Canada’s Oil Sands

challenges by breaking down the barriers

Innovation Alliance (COSIA), focused

to funding, intellectual property and human

on accelerating the pace of improving

resources that may otherwise impede

environmental performance in Canada’s

progress on environmental performance.

oil sands.

“I am confident COSIA will greatly

Chief executive officers of 12 companies

accelerate innovation and environmental

signed the alliance’s founding charter on

performance in priority areas that

March 1, 2012, committing to COSIA’s

Canadians care most about,” said Dr. Dan

vision to “enable responsible and

Wicklum, the chief executive of the new

sustainable growth of Canada’s oil sands

alliance. “This is just the beginning and I

while delivering accelerated improvement

am excited to be part of this new alliance.

in environmental performance through

We understand we have a lot of work to

collaborative action and innovation.”

do and we are looking forward to working

Dr. Dan Wicklum

COSIA BP Canada Energy Company Canadian Natural Resources Limited Cenovus Energy Inc. ConocoPhillips Canada Devon Canada Corporation Imperial Oil Resources

Nexen Inc. Shell Canada Energy Statoil Canada Ltd. Suncor Energy Inc. Teck Resources Limited Total E&P Canada Ltd.

to evolve. We want to meet those

COSIA will establish structures and

Working together through the Oil Sands CEO Council

expectations and we’ll work collaboratively

processes through which oil sands

COSIA is one of four areas of focus for

to do so, building on previous joint

producers and other stakeholders

the Oil Sands CEO Council, comprised

successes,” said John C. Abbott, executive

can collaborate openly and work for

of the CEOs of most of Canada’s oil

vice-president, heavy oil, for Shell Canada.

the benefit of the environment. The

sands producers. The council provides

“Coming together today to sign the charter

alliance will identify, develop and apply

an integrated forum for advancing the

is a significant and important step for all

solutions-oriented innovation around the

interests of Canada’s oil sands industry,

our companies and marks a pivotal point

most pressing oil sands environmental

addressing environmental innovation,

for our industry.”

challenges, specifically water, land,

regional issues, policy advocacy and

greenhouse gases and tailings, and will

communications and outreach.

transparently communicate COSIA

CAPP will be working closely with

“The public’s expectation of environmental performance in the oil sands continues

The creation of COSIA as an independent alliance builds on work done over the past several years by both the oil sands industry and research and development organizations. COSIA will take these efforts to a much larger scale and will

with our stakeholders and reporting on our progress along the way.”

efforts and successes in addressing those challenges. u For more information about COSIA,

please visit www.cosia.ca.

COSIA under the auspices of the Oil Sands CEO Council to represent an integrated and solutions-oriented approach to the future direction of the oil sands business in Canada.

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Industry in the news

British Columbia’s natural gas and LNG strategies

The proposed Kitimat LNG terminal.

Source: Apache Canada

The Government of British Columbia released its Natural Gas Strategy and complementary Liquefied Natural Gas Strategy on February 3, 2012. The strategies focus on the important role natural gas plays in the B.C. economy and opportunities to align growth in natural gas development and markets with provincial economic and environmental priorities.

Two of North America’s most promising natural gas plays — the Montney and Horn River — are located in B.C. Together, they’re estimated to contain up to 262 trillion cubic feet of natural gas.

Given the challenges and opportunities for Western Canadian natural gas producers, CAPP is encouraged by the leadership the B.C. government is demonstrating with the timely development and implementation of balanced strategies for natural gas and liquefied natural gas. u Read the Natural Gas Strategy and the Liquefied Natural Gas Strategy.

Oil sands industry supports integrated environmental monitoring plan

Canada’s Environment Minister Peter Kent and Alberta’s Minister of Environment and Water Diana McQueen announce a joint Canada and Alberta monitoring system for the Alberta oil sands.

Source: Edmonton Sun

The Canadian and Alberta governments

system that will be based on sound

will help industry, governments and other

have created a new, integrated and

science and provide transparency

stakeholders achieve the goal of long-

transparent environmental monitoring

regarding the environmental performance

term, responsible oil sands development

program that will be one of the most

of the oil sands industry,” said CAPP

and assist industry in delivering continuous

progressive and comprehensive of any

President Dave Collyer. “A world-class

performance improvements.

industrially developed region in the world.

environmental monitoring system will

“We are pleased the federal and Alberta governments are working together developing and implementing a single,

PAGE FOUR SEND US YOUR FEEDBACK

reporting, regional planning and industry performance improvement as the oil sands

as partners to provide leadership in government-led oil sands monitoring

contribute to improved performance

industry continues to grow.”

A robust, transparent monitoring system

I www.capp.ca

u Read the Joint Canada-Alberta

Implementation Plan for Oil Sands Monitoring. u Read CAPP’s news release on oil

sands environmental monitoring plan.

Industry in the news Concerns about hydraulic fracturing intensity January 31, 2012, The Saskatoon Star Phoenix u Environmental writer Paul Hanley presents his concerns about hydraulic fracturing intensity. u David Pryce, CAPP vice-president, operations, responds to Hanley’s column on February 9, 2012.

Why natural gas is not an environmentally friendly fuel January 27, 2012, The Toronto Star u Peter Gorrie argues against the environmental benefits of natural gas as a transportation fuel in his Toronto Star column. u Tom Huffaker, CAPP vice president, policy and environment, responds to Gorrie’s column in a letter to the editor.

The Responsible Canadian Energy Awards is an annual event to recognize CAPP members who demonstrate exceptional performance and commitment to the responsible development of Canada’s petroleum resources.

Don’t miss keynote speaker Alberta Premier Alison Redford.

For tickets or for more information please visit www.cvent.com/d/7cqlbq.

Water contamination – Fracking is not the problem

Check out last year’s award nominees

January 25, 2012, Scientific American

and winners at capp.ca/RCE.

u Energy research engineer Scott McNally blogs about hydraulic fracturing and the myths surrounding contamination of water sources.

Canada’s oil and gas industry takes on Responsible Canadian Energy February 27, 2012, The Globe and Mail u J anet Annesley, CAPP vice-president, communications, outlines Responsible

March 21, 2012 5:30 p.m. to 9:00 p.m.

The Westin Calgary 320 – 4th Avenue SW

Canadian Energy CAPP’s Ottawa office CAPP established an Ottawa office in the fall of 2011 to enhance its presence in Ottawa. The decision to open the office was influenced by the diversity and importance of the federal policy files on which CAPP is engaged, and by the desire for the upstream oil and gas sector to be more visible and accessible in Central Canada.

Bob Bleaney, CAPP’s vice-president, external relations – Ottawa, is based in the office, which is part of a larger space shared with the Canadian Petroleum Products Institute. Bleaney brings over 35 years of upstream oil and gas experience in exploration, project development, business development, and production operations across Canada and in West Africa.

He can be reached at (613) 228-2126 or by email at bob.bleaney@capp.ca.

CAPP’s Energy in Action receives Friends of Education Award On November 22, 2011 CAPP was awarded the Alberta School Boards Association’s Friends of Education Award for Energy in Action.

The award recognizes individuals and organizations that make special contributions to school boards and their students, and those who demonstrate commitment to the improvement of education in Alberta.

CAPP’s Laura Perry and Kimberly Gray receive the Friends of Education Award. From left to right: Walter Hrycauk, chairperson of Northern Light School Division, Kimberly Gray, Laura Perry, Jacquie Hansen, president of the ASBA board of directors.

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u Please read the news release about the award. u See page seven for more information on Energy in Action in 2012.

Mark Wilfur of Talisman volunteered for Energy in Action 2011 at Ecole Westhaven School in Edson, AB. This year Talisman will host Energy in Action in Hudson’s Hope, B.C.

Relationships behind the resource

Energy in Action visits Western Canada in 2012 Energy in Action (EIA) is back in 2012 for

learning space or working with local

another great season of inspiring students,

environmental groups on a community

facilitating relationships with companies

greening project. opportunity for CAPP member companies

2012 Communities

EIA is a hands-on, educational

to demonstrate their commitment to

Lac La Biche, Alta.

program that teaches students about

Responsible Canadian Energy and to

environmental stewardship.

engage with people who live in the

and connecting teachers with energy education resources.

Energy in Action is an excellent

Anzac, Alta.

communities where we operate.

Rocky Mountain House, Alta.

u Does your company want to get involved

Bonnyville, Alta.

program to the nine communities that have

with Energy in Action? Contact Laura

been confirmed so far. Energy in Action will

Perry at (403) 267-1143 or laura.perry@

Fort Liard, N.W.T

EIA will be teaming up with Inside Education to bring this award-winning

run from May 3 to May 31.

One-day events in each community include interactive classroom sessions and custom environmental renewal projects – like turning a patch of schoolyard into a natural

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capp.ca

u Watch a video to learn more about

Energy in Action. u Follow Energy in Action 2012

on Twitter.

I www.capp.ca

Arras, B.C. Hudson’s Hope, B.C. Weyburn, Sask.

Elrose, Sask.

Employee perspectives

A life in the oil sands Name: Alan Fair Title: Executive Director Company: Oil Sands Tailings Consortium (OSTC) Location: Edmonton Years of Experience: 33 Best part of the job: “It has been a long-held personal desire of mine to see industry come together on tailings research in a truly collaborative way towards improved solutions. To now have the chance to be a part of this feels good.”

Alan Fair answers reporters’ questions about tailings technology at Shell’s Muskeg River mine.

When Alan Fair first started working

in a much better position to get those

because of some concern about

in the late 1970s, he had recently

answers,” Fair says. “In my last few years

intellectual property,” Fair says. “Syncrude

completed a bachelor’s degree in

at Syncrude, I was very active in promoting

and more widely the oil sands industry

geological engineering at the University

collaboration and not just among the

does have a good track record in terms

of British Columbia. He was planning to

industry, but among the broad industry, the

of their willingness to very broadly share

be a consultant and work in a variety of

academic institutes, the government labs

research and development related to

industries but after one year he changed

and the service supporters.”

environmental issues.”

“When we’re successful, we’re not going to have eliminated the tailings ponds. They are essential for a water-based extraction process.

But we certainly will have drastically reduced the time it takes to reclaim them, and by doing so, we will have reduced the number of and the size of the tailings ponds.”

Fair says while it’s still the early days for

his plan. “As I spent a little more time in the consulting game I realized I was perpetually travelling. I was recently married and realized this was not the life I wanted.” So he accepted what he thought would be a temporary position with Syncrude in Fort McMurray.

“Like many people who worked at Syncrude at that time I expected to be there for a couple years and then go

As such, Fair was well suited to head

and do something different,” he says.

up the newly formed Oil Sands Tailings

“But 32 years, three kids and a bunch

Consortium (OSTC – see the full OSTC

of other things later, here we are.”

story on page eight), a collaboration of oil sands mining companies — Syncrude

Fair retired from Syncrude last June

Canada Ltd., Canadian Natural Resources

after holding a number of different engineering and operations roles within the mine, extraction and technology areas.

He spent the last seven years as manager of research and development in Edmonton, and that’s where he started to see collaboration as the key to success, not just for Syncrude but for the entire industry.

“We don’t have all the answers but if we work with others we’re going to be PAGE SEVEN SEND US YOUR FEEDBACK

Limited, Imperial Oil, Shell Canada, Suncor Energy, Teck Resources and Total E&P Canada. As executive director, Fair is leading the charge as the member companies work together to clean up the oil sands tailings ponds.

“I believe that the average Canadian and our stakeholders don’t want to hear that we’re not willing to work together

I www.capp.ca

the OSTC, there is already an impressive effort to collaborate and a number of promising technologies are being developed to better manage tailings.

Fair notes in 2011 alone the industry spent more than $90 million on research and development improving tailings management.

Fair notes tailings ponds will always be a part of water-based extraction in the oil sands. “People need to understand that we can make the tailings ponds smaller and we can make fewer of them, but we’re not going to get rid of them. They’re an essential part of the oil sands recycling operations. They enable the oil sand plants to recycle in excess of 85 per cent of the water used in the extraction process”.

While details are still being worked out, efforts are under way to bring the OSTC’s progressive tailings technology into the COSIA structure (see page three) over the next year.

Innovation and technology

Industry joins forces to take on tailings

Alan Fair (left), executive director of the Oil Sands Tailings Consortium, explains Syncrude’s water capping tailings technology.

Tailings after treatment by Shell’s Atomospheric Fines Drying process, which releases water and gains strength in weeks rather than decades.

Canada’s major oil sands mining

upper water layer, a layer of fine clay and

companies are working together to reduce

water called mature fine tailings (MFT)

tailings technology specific to the

the number and size of tailings ponds

forms in the lower portion of the ponds.

Paraffinic Froth Treatment process,

and speed up their reclamation. The Oil

Left on its own MFT takes many decades

which facilitates faster MFT settling,

Sands Tailings Consortium (OSTC) was

to dry out and separate.

rapid dewatering and early reclamation

formed in December 2010 and it was the first consortium of its kind in the industry, according to its executive drector, Alan Fair

Hundreds of chemists, biologists, engineers and other scientists are

• Imperial Oil is working to develop a

of tailings.

• Total is working to develop a Tailings

working on promising technologies to

Management System which segregates

speed up that process, but there is no

the tailings into three streams according to

“It is a principle-based organization

silver bullet to tailings pond management.

their ability to consolidate and release water.

where public transparency is promoted,

Each site will need to implement its

knowledge is freely shared amongst the

own tailings management solution. “The

participants and with others, the R&D work

issue is that each of the sites has unique

is done collaboratively and there are no

characteristics, including the oil sands

monetary or intellectual property barriers

itself. The percentage of fine particles in

among the participants,” Fair said.

the ore can be anywhere from 10 to 40 per

(See Fair’s profile on page seven).

Syncrude Canada Ltd., Canadian Natural Resources Limited, Imperial Oil, Shell Canada, Suncor Energy, Teck Resources

cent resulting in very different amounts of fine tailings at the end of the process,” says Fair. “There is no one-size-fits-all answer.”

and Total E&P Canada joined to form

OSTC members are working on different

the OSTC in part to respond to a recent

technologies including:

Alberta government regulation —Directive 74 — that requires more effective management of tailings. “Companies are finding it a challenge to comply with the

• Suncor’s Tailings Reductions

levels of government to collect hundreds of other ideas and evaluate them, either individually or collectively. In either case, that information also will be shared, which will not only lead to better tailings management but also to a new collaborative model for the industry to solve environmental challenges, says Fair.

“The OSTC will serve as the example as to how industry needs to work together to improve its efforts to develop and

Operations dries tailings out in weeks

commercially implement new technologies,

instead of years.

which will ensure that the oil sands are

• Syncrude is developing centrifuge

directive and are relying on the efforts of

The OSTC also works with different

developed responsibly.”

the OSTC to develop technologies that will

technology, water capping tailings

While details are still being worked out,

ensure they are able to comply,” said Fair.

technology and composite tails.

efforts are under way to bring the OSTC’s

Tailings ponds — which consist of water,

• Shell’s Atmospheric Fines Drying

coarse sand, silt, clay particles and small

speeds up the release of water from

amounts of bitumen and asphaltenes

the tailings.

left over after the bitumen has been

• Canadian Natural uses waste carbon

processed with warm water — cover about 170 square kilometres in northern Alberta. Once the sand has settled in the PAGE EIGHT SEND US YOUR FEEDBACK

dioxide to settle the tailings faster and reduce the amount of water needed.

I www.capp.ca

progressive tailings technology into the COSIA structure (see page three) over the next year. u Read a profile of Alan Fair, the executive

director of OSTC, on page seven. u Learn more about the work that the OSTC is doing.

Industry practice and regulations

NEB’s National Report on the Arctic Offshore Drilling Review The National Energy Board (NEB) released its National Report on

in the technologies used to meet regulatory requirements, which

the Arctic Offshore Drilling Review on December 15, 2011.

allows industry to be innovative in its approach. While industry

The Review was initiated immediately following the Deepwater Horizon incident in the Gulf of Mexico in April 2010, with the

uncertainty in the regulatory approval process.

stated purpose to review safety and environmental requirements

The report also reinforces Canada’s high regulatory standards for

for offshore drilling in Canada’s Arctic. The report is based on

environmental protection and safety in the offshore industry. CAPP

extensive consultation with stakeholders and lessons learned from

continues to supports high regulatory standards coupled with the

the incident in the Gulf of Mexico.

latitude for industry experts to choose which technology is used to

CAPP provided an overview of potential industry activities in the

drill safely.

Beaufort Sea as part of the review process. CAPP’s input to the

Canada’s offshore industry has a strong safety culture with the

NEB focused on the need to maintain a priority on safety and that

frequency of recordable injuries among the lowest of any industry

focusing on the goal-oriented regulatory approach was the best

and falling each of the last three years. The offshore industry also

way to address the challenges of drilling in the Arctic.

has demonstrated continuous improvement in spill incidents year-

One of the key findings in the NEB’s report was to reaffirm the NEB’s Same Season Relief Well Policy. This policy requires future applications for wells to demonstrate how they would kill an out-

NEW CAPP PUBLICATIONS

welcomes this flexibility, it has noted that it will potentially add

over-year, with the volume of spills dropping by approximately 86 per cent over the last three years. u Read the National Energy Board’s release on the Arctic

of-control well in the same season in order to minimize harmful

Offshore Drilling Review. Also read a backgrounder on

impacts on the environment. CAPP supports the NEB’s flexibility

the NEB Report on the Arctic Offshore Drilling Review.

Dialogue

The Facts on Natural Gas and Les faits sur le gaz naturel

LES FAITS SUR

turel le Gaz na

Upstrea

m

Dialogu

e

The Upstream Dialogue tool kit continues

Facts on Natural Gas is designed to give

to expand with the The Facts on Natural

you fast, easy access to natural gas facts

Gas and its French companion book, Les

that will help you get in on the discussion.

faits sur le gaz naturel.

Facts are sourced from third parties or are

Upstream Dialogue started in 2008 as CAPP’s e-newsletter – providing broad

The fa C NADIENNE cTCIAT s oION ASSO n: URS PÉTROLIE1RS PRODUCTE

ACPP Natur al Ga s DES

industry information and stories in an easyto-read, non-technical format. The first

against other public data sources, including government reports. u Access the online version of The Facts

resource-specific fact book released was

on Natural Gas and Les faits sur le

The Facts on Oil Sands.

gaz naturel.

Our research indicates that Canadians

u To order printed copies of either

want a balanced discussion about energy,

book, please send your request to

the economy and the environment. The

UpstreamDialogue@capp.ca.

1

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developed using CAPP data that is checked

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2012

Industry practice and regulations continued

Nominees unveiled for the 2012 Responsible Canadian Energy Awards

Mason, one of Statoil Canada’s scat dogs, sniffs out animal scat as part of their wildlife monitoring program.

What do slant-drilling rigs and scat-

for their Horizon Oil Sands wildlife

smelling dogs have in common? Both

management system and for the

management system implementation

are competing for the 2012 Responsible

electrification of their Septimus Gas

project

Canadian Energy Environmental

Processing Plant

Performance Award.

• ConocoPhillips Canada for reducing fuel

The nominees for the 2012 Responsible

gas consumption and exceeding targets

Canadian Energy Awards feature a variety

at Elmworth Gas Plant

of projects competing for five awards.

The Environmental Performance Award recognizes projects that seek to minimize the environmental impacts of oil and gas operations. The Health and Safety Performance Award is given to projects

• Devon Canada for their in-situ oil sands winter wildlife monitoring program and for their land footprint reductions using slant rigs for oil sands exploration • Shell Canada for their Groundbirch

that work to increase safety around the

water management strategy and for their

industry. The Social Performance Award

Waterton semi-straddle plant project

acknowledges companies that have done exceptional work in community investment, stakeholder/community consultation or philanthropy.

This year a new Chair’s Award will be given to a smaller Canadian company whose activities or projects demonstrate exceptional performance in any one category or incorporate elements of all three. This award is granted by the Responsible Canadian Energy Advisory Group, which judges all of the categories.

The final award is the President’s Award, which is also awarded by the Responsible Canadian Energy Advisory Group, to a

• Southern Pacific Resources for their STP McKay thermal project water recycle redesign project • Talisman Energy for their Ansell high speed engine fuel management project • Nexen for their studies addressing the decline of boreal caribou and for their water flows study • Cenovus for their blowdown boiler technology project • Statoil Canada for their scat dogs sniffing out new answers for environmental performance project.

• Southern Pacific for their HSE

• Suncor for their leading by metrics project The 2012 Social Performance Award nominees are: • Arc Resources for their summer student community investment project • ConocoPhillips Canada for their aboriginal network program • Devon Canada for their Conklin gets a high school project • Encana for their Ch’nook initiative and for their Race Against Hunger project • Shell for their reduced flaring multi-pig launcher and for their Energy Diet Challenge • Talisman Energy for their Williston reservoir water pipeline • Quicksilver Resources for their timber utilization project in northeastern B.C. u Look for full project descriptions

on the CAPP website in mid-March. u The 2012 Responsible Canadian

Energy Awards will be held on March

project that demonstrates exceptional

The nominees for the 2012 Health and

21, 2012, at 6:30 p.m. at The Westin

performance in any of the three areas.

Safety Performance Award are:

Calgary with keynote speaker Alison

The 2012 nominees for the Environmental

• Encana for their safety essentials at Encana project

Performance Award include: • Birchcliff Energy for their Pouce Coupe

• Shell Canada for their worksite hazard management project and for

sour gas plant project • Bonavista Energy for their benzene reduction project

their Scotford tri-partite safety leadership initiative

tickets here. u The full report can be found at

www.rce2010.ca. u Join in the discussion about

Responsible Canadian Energy on the RCE 2010 discussion board.

• Canadian Natural Resources Limited

PAGE TEN SEND US YOUR FEEDBACK

Redford. Learn more and buy

I www.capp.ca

Industry practice and regulations continued

Safety training launched for new employees New and inexperienced workers entering the upstream oil and gas industry in Canada will soon have access to an

Kerry Lethbridge and Valerie Griffiths receive their 2011 Flight 491 Memorial Bursaries to attend the College of the North Atlantic.

Honouring Flight 491 In March 2009, 17 people were

The Flight 491 Legacy Fund Committee

killed when Flight 491, headed for the

was established by industry partners, the

Hibernia offshore oil field, crashed into

Newfoundland Oil and Gas Industries

the Atlantic Ocean.

Association (NOIA), the Canadian Association of Petroleum Producers

Following the accident, the oil and gas

(CAPP) and the St. John’s Oilfield Technical

industry in Newfoundland and Labrador

Society (OTS).

launched the Flight 491 Legacy Fund,

electronic General Safety Orientation (eGSO) that they can complete prior to starting their new job.

The new eGSO is an online course – provided by Enform at no cost – that will provide a solid workplace safety foundation that will be supplemented by company and site-specific safety training.

The 30-minute course is an important first step in ensuring new workers will be prepared to ask the right questions and be able go home safely at the end of every shift.

a scholarship and bursary program with

The recipients of the 2011 College of

College of the North Atlantic (CNA),

the North Atlantic Flight 491 Memorial

Memorial University and Marine Institute.

Scholarships and Bursaries include:

“After significant research and consultation

• Gregory Baird – CAS Transfer: CollegeUniversity, Grand Falls-Windsor campus

will streamline the relationships between

• Kelsey Barrett – CAS Transfer: CollegeUniversity, Carbonear campus

is supported by the CAPP membership for

• Erin Beresford – CAS Transfer: CollegeUniversity, Grand Falls-Windsor campus

contractor community.

• Shalyn Penney – Office Administration, Clarenville campus

CAPP member companies as well as the

• William Smith – Business Administration, Carbonear campus

Enform. The course launches the latest

• Terrilynn Clarke – Mining Technician, Labrador West campus

for the upstream oil and gas industry in

• Valerie Griffiths – First-Year Engineering Technology, Ridge Road campus

lead for Strategic Safety at Encana.

• Jennie Morey – Office Administration, Grand Falls-Windsor campus

information that every new employee

• Courtney Coffin – Office Administration, Grand Falls-Windsor campus

and meets or exceeds the regulatory

• Kerry Lethbridge – Instrumentation & Control Technician, Seal Cove campus

Columbia, Alberta and Saskatchewan.

with a broad range of industry members, we determined that the establishment of the Flight 491 Legacy Fund would be the most fitting way to make a contribution to the memory of the people of Flight 491,” said Brian Henley, president of the Alec G. Henley Group.

The fund was developed through consultation with CNA’s division of development and college advancement.

Corinne Dunne, vice-president of the division, said the program will be a lasting tribute to those who lost their lives on that fateful day.

“We are a province and a people that have been tied to the sea for generations.

Through this legacy program we will hopefully bring some comfort to the families in knowing that the memories

The eGSO is supported by a new industry general safety orientation process that producers and contractors. The process our own workers as well as those in our “I’m excited by both the level of support of level of engagement we have seen from in current health and safety perspectives Canada.” said Murray Sunstrum, group The tool will standardize the initial safety requires before stepping onto a worksite requirements for orientation in British The eGSO will be utilizing Enform’s

of those on Flight 491 will be preserved

new Connect technology which also

and honoured by future generations,”

allow employers to track which of its new

Dunne said.

employees have received the training.

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Industry practice and regulations continued

Saskatchewan seeks input into new environmental regulations The Saskatchewan government is seeking public input into their

The code focuses on the following five key environmental areas:

draft Saskatchewan Environmental Code.

air management and protection; land management and protection;

The draft code is an important part of the province’s new resultsbased model for environmental regulation. By focusing less on

water management and protection; natural resource management and environmental protection; and waste management.

process and rules and more on achieving critical environmental

The adoption of results-based regulation will put the focus on

outcomes, the new model will improve environmental protection

environmental performance. The government will determine what

while fostering innovation and efficiency for both government

the environmental outcomes should be and it will be up to industry

and industry.

to determine how to achieve them. The new model represents a

“This new approach will help us meet the challenges of economic growth with a new program-delivery model and a stronger, more efficient organization,” said Dustin Duncan, Saskatchewan minister

significant shift away from prescriptive legislation and regulations to a focus on holding industry accountable for achieving desired environmental outcomes.

of environment. “For those we regulate, the code will mean

The government will be accepting comments on the code chapters

greater legal certainty. Along with clearer expectations about the

until March 16, 2012.

environmental results they must achieve comes greater flexibility around exactly how proponents get there.”

u For more information and to view the Saskatchewan

Environmental Code please click here.

Saskatchewan joins petroleum registry Oil and gas operators in Saskatchewan will be able to electronically report volumetric and infrastructure data starting in April 2012.

The Saskatchewan government has adopted the Petroleum Registry of Alberta

Saskatchewan Legislative Building

as a secure web-based system to collect

Resources and industry will make the

The Government of Saskatchewan has

and disseminate well information for the

change worthwhile.”

prepared a Registry Saskatchewan

Ministry of Energy and Resources.

The ministry’s switch to the Petroleum

Inclusion Project Readiness Handbook that will help industry members adapt to

“The months leading up to the registry

Registry of Alberta will leverage an

implementation in Alberta will be exciting

existing system already widely used

and demanding for all participants,” said

by industry and standardize business

Kent Campbell, deputy minister of energy

and operational processes between

Saskatchewan Inclusion Project please

and resources. “But the anticipated

Saskatchewan and Alberta.

visit the Petroleum Registry of Alberta

benefits for the Ministry of Energy and

PAGE TWELVE SEND US YOUR FEEDBACK

the new reporting system. u For more information on the Registry

website.

I www.capp.ca

Industry practice and regulations continued

CAPP files protest on pipeline rates CAPP filed a protest with the U.S. Federal Energy Regulatory Commission (FERC) requesting a dismissal of Enterprise Products Partners LP and Enbridge’s application to charge market-based, versus cost-based or negotiated, rates to shippers on their Seaway pipeline that will transport crude oil from the Cushing, Oklahoma hub to refineries on the Gulf Coast.

When Enbridge bought a 50 per cent interest in the Seaway pipeline in

N

November 2011. The remaining 50 per cent interest in the pipeline is held by Enterprise.

Recent increases in production from Western Canada and the Bakken play in North Dakota have left excess crude supply stranded in the mid-continent.

In an effort to ease this excess supply, Enterprise and Enbridge have begun the process of reversing the flow of the Seaway line, which when fully completed could bring almost 400,000 barrels of crude oil per day from Cushing to Gulf Coast refineries in Texas.

A market-based rate means Enterprise and

relies on insufficient factual support and

Enbridge can charge whatever the market

incomplete analysis.

will bear to ship oil to the Gulf Coast from Cushing. To do this they must receive permission from the FERC, which requires them to prove they lack significant market power. It is on this basis CAPP filed the protest. CAPP argued Enterprise and Enbridge have failed to sustain the claim they lack market power as the application

Canadian Association of Petroleum Producers (CAPP) The Canadian Association of Petroleum Producers (CAPP) represents companies, large and small, that explore for, develop and produce natural gas and crude oil throughout Canada. CAPP’s member companies produce more than 90 per cent of Canada’s natural gas and crude oil. CAPP’s associate members provide a wide range of services that support the upstream crude oil and natural gas industry. Together CAPP’s members and associate members are an important part of a national industry with revenues of about $100 billion-a-year.

If you would like to receive this newsletter directly from CAPP, email your request to upstreamdialogue@capp.ca.

PAGE THIRTEEN SEND US YOUR FEEDBACK

CAPP recognizes there is an urgent need for the pipeline capacity that would be provided by the reversed Seaway line, but considers the initial transportation rates on the line should be either cost-based or the product of negotiation with shippers.

A decision on the filing is expected in the near future.

2100, 350 – 7 Avenue S.W. Calgary, Alberta Canada T2P 3N9 1000, 275 Slater Street Ottawa, Ontario Canada K1P 5H9 403, 235 Water Street St. John’s, Newfoundland and Labrador Canada A1C 1B6 CAPP is on Twitter.

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