B.C. Oil and Gas Report 2018

2018-2019

Publications mail agreement #40934510

LNG promises a new future for B.C. energy development TransCanada’s Coastal GasLink Pipeline project makes steady progress Business is booming in northwest B.C.

WE BUILD

PIPELINES AND PARTNERSHIPS.

With over 85 years and 11,500 skilled members The International Union of Operating Engineers Local 115 is your natural resource for the skilled and dependable men and women needed to complete pipeline or resource projects. Our trainers are content experts, providing advice on the establishment of national trades standards. Since 1931 we have trained thousands of tradespeople to excel in B.C. industry. We invite you to partner with us and benefit from our unmatched experience, training and record of success.

1-888-486-3115

I U O E 1 1 5 . c a

rise above

‘Excellence is our foundation.’

est since 1986

Locally Owned & Operated

• Above Ground Insulated Piping • Utilidor Self-Framed Buildings • Removable Insulated Covers • All Your Insulating & Specific Oilfield Needs

D & D Insulators Ltd. 8603-101 Street, Fort St. John, BC V1J 5K4 250-785-3263

Destiny Peebles, Darren Peebles (Directors/Owners)

Tank Terminal Ad 7 x 9.5.pdf 1 9/24/2018 2:41:11 PM

C

M

Y

CM

MY

CY

CMY

K

We do self-framing metal buildings, utilidor buildings, commercial buildings, pipe and vessel insulation, building maintence and repairs, and much, much more. We provide fast, free quotations as well as a one year warranty on our products.

Top quality customer service from start to finish on every project. 24-hour service means we get people and materials where you want them, when you need them.

• Metal Buildings • Panel and Utilidor Buildings • Pipe Insulation • Vessel and Tank Insulation • Glycol Heat Tracing • Removable and Reusable Covers

• Scaffolding • Pipeline Pillows • Sheet Metal • Aluminum Extrusion • Windows, Doors and Hardware • Fans and Ventilation

WWW.TRANSPEACE.COM GRANDE PRAIRIE 9626 - 69 Avenue, Clairmont, AB main: 780-539-6855 • fax: 780-539-3158 email: reception@transpeace.com

FORT ST. JOHN 7315 - 93 Ave., Fort St. John, BC main: 250-785-6926 • fax: 250-785-1223 email: info@transpeace.com

In this issue

B.C. Oil & Gas Report is published by

Message from the editor, Shayna Wiwierski.....................................................................8 Message from the Premier of British Columbia, the Honourable John Horgan.......................................................................................... 10 Message from the Minister of Energy, Mines and Petroleum Resources, Michelle Mungall.........................................................................12 Message from Canada’s Minister of Natural Resources, the Honourable Amarjeet Sohi........................................................................................ 13 LNG promises a new future for B.C. energy development........................................... 14 Keeping our land clean: Environmental risk assessments and abandoned wellsite remediations..................................................... 16 Canada desperately needs an honest conversation about oil and gas........................ 18 Leading innovation and technology in desanding solutions........................................ 20 Seeking clues on how to improve perceptions of Canadian sustainability................. 23 BC Oil and Gas Commission taking steps to improve the detection and mitigation of industry-related seismic activity............................... 24 B.C. will produce the world’s lowest-carbon footprint LNG......................................... 26 An industry united........................................................................................................... 28 A milestone project: Coastal GasLink project update................................................... 30 Business is booming in northwest B.C........................................................................... 32

DEL Communications Inc. Suite 300, 6 Roslyn Road Winnipeg, Manitoba Canada R3L 0G5 President David Langstaff Associate Publisher Jason Stefanik Managing Editor Shayna Wiwierski shayna@delcommunications.com Sales Manager Dayna Oulion Account Representatives Brian Gerow | Jennifer Hebert Mic Paterson | Anthony Romeo Contributing writers Amal Al-Borno | Richard MacIntosh Geoff Morrison | Stewart Muir Danielle Myles | Jess Sinclair Patrick Smyth | Tom Whalen Production services provided by S.G. Bennett Marketing Services www.sgbennett.com art Director / design Kathy Cable

Liquid natural gas: A safe, clean investment in the future.......................................... 34

Advertising art

Do you own or operate a boiler plant?............................................................................ 36

David Bamburak | Dana Jensen

Pipeline coating failure analysis and investigation....................................................... 38

Index to advertisers BK Two-Way Radio Ltd......................................27

Kitimat LNG........................................................31

Bracewell Marine Group....................................15

Lhi Tutl’it Services Inc..........................................9

Chamber of Shipping BC...................................25

Netzsch Canada, Inc.........................................4

Charter Coating Service.................................. IBC Compass Bending Ltd.......................................18 D&D Insulators Ltd..............................................3 Factors Western..................................................18 Horizon Testing Inc............................................11 International Brotherhood of Boilermakers......35 International Union of Operating Engineers Local 115....................................IFC

Rosenau Transport Ltd...................................OBC RTC Rail Solutions Ltd.......................................14 Society of Petroleum Engineers........................19 Specialized Desanders Inc.................................21 Technical Safety BC...........................................37 Trans Peace Construction (1987) Ltd.................5 Van Houtte Coffee Services.................................7

© 2018 DEL Communications Inc. All rights reserved. Contents may not be reproduced­by any means, in whole or in part, without the prior written permission of the publisher.

While every effort has been made to ensure the accuracy­of the information contained herein and the reliability of the source, the publisher­ in no way guarantees nor warrants­the information­and is not responsible­for errors, omissions or statements­made by advertisers.

Opinions and recommendations made by contributors or advertisers are not necessarily those of the publisher, its directors, officers or employees.

Publications Mail Agreement #40934510 Return undeliverable Canadian addresses to: DEL Communications Inc. Suite 300, 6 Roslyn Road Winnipeg, Manitoba R3L 0G5 Email: david@delcommunications.com

Cover photo courtesy BC LNG. 6

B.C. Oil & Gas Report • 2018-2019

Printed in Canada | 10/2018

PROUD PARTNER FOR YOUR

BUSINESS COFFEE SOLUTIONS SPECIALIZING IN PROVIDING COFFEE SERVICES TO THE OIL & GAS INDUSTRY FOR OVER 30 YEARS From remote field sites to large corporate offices, we offer a variety of coffee-brewing equipment, coffee & hot beverage products, water cooler solutions, and best-in-business service that’s right for the fast moving oil and gas industry. .............................................................................................................................................................

For more information, visit us at:

vhcoffeeservices.com

Message from the editor

shayna wiwierski

Lots has been happening lately when it comes to oil and gas in B.C.

T

his past May, Kinder Morgan, Inc. announced that the board of directors had agreed to the purchase of the Trans Mountain Pipeline system and expansion project by the Government of Canada for C$4.5 billion. This fall, LNG Canada is expected to announce its final investment decision on its proposed liquid natural gas export terminal in Kitimat, B.C. TransCanada is also making steady progress on its Coastal GasLink Pipeline project.

As you can see, there is no shortage of news coming out of the oil and gas industry in British Columbia.

In this issue of the B.C. Oil and Gas Report magazine, we explore the current policies that position LNG as the lowest carbon footprint LNG in the world, as well as why the province – and the nation – needs this resource. We also take a look at the companies working in the field and what these new LNG facilities mean to the province’s northern communities.

I hope you enjoy this issue of the B.C. Oil and Gas Report magazine, and if you have any questions, comments, or story ideas, feel free to send them my way.

Shayna Wiwierski shayna@delcommunications.com @DELCommInc n

8

B.C. Oil & Gas Report • 2018-2019

Message from the Premier of British Columbia

the honourable john horgan

Working together to build a better British Columbia – now and into the future

O

ur government is working hard to make sure every British Columbian has the opportunity to build a better life for themselves and their families. That includes a natural gas sector that welcomes investment and puts our province’s people and future first.

Natural resources are critical to the livelihoods of British Columbians and local economies. Over 12,000 people benefit from good jobs in – or directly related to – B.C.’s oil and gas sector. As we move forward with LNG, our job is to get the best deal for people now, and for generations to come.

We are working to take British Columbia’s economy to the next level as our natural gas sector diversifies. Our new natural gas framework removes barriers and costs so the liquefied natural gas (LNG) export industry can invest today, build today, and create good jobs for people in B.C. – now and into the future. We’re creating a level playing field by giving the industry the ability to grow and access new markets. That includes reaching out to our neighbours to the south, and to economic partners across the Pacific to expand markets and attract investment to B.C. We are also working to grow British Columbia’s economy and create opportunities for people as our natural gas sector diversifies. We believe that an LNG industry can thrive in British Columbia, and are encouraged by the commitment and progress of our LNG sector partners. As this

10 B.C. Oil & Gas Report • 2018-2019

publication heads to press, we are moving towards a final investment decision on an LNG project that, if approved, is expected to create up to 10,000 construction jobs and up to 950 full-time jobs in northern B.C. Our government is building up B.C.’s next generation of workers by investing in skills training throughout the province. We’re working to attract, retain, and advance more women in the construction trades by removing barriers for women’s participation.

That means giving women better access to the support, mentorship, training, and opportunities they need to get ahead. We’re also investing in Indigenous peoples and First Nations by funding community-driven skills training, apprenticeships, and education to make sure people are ready for new jobs and opportunities where they live.

As the industry develops and we open the door to new markets, we also strengthen our capacity to provide cleaner energy sources for growing economies, while protecting our air, land, and water.

We’re committed to true, lasting reconciliation with Indigenous peoples in British Columbia.

As part of those commitments, we’ll continue to work in partnerships with First Nations to advance reconciliation, create jobs, economic stability, and shared prosperity.

Together, we’ll keep working to grow our energy sector, while building a strong, sustainable economy that works for the people of British Columbia. n

Horizon Testing Inc. is pleased to offer the following services:

• Eddy Current Surface Inspection

• C1 Spider Tank Inspection

• Eddy Current for Non-Ferrous Tubing • Inspection • • Pulse Eddy Current Thickness • Through Insulation • • Remote Field Testing of Carbon Steel • Tubing • External Reference Remote Field Testing (Carbon Steel Fin Fan Tubes) • Analysis Near Drum Inspection System (Ultrasonic) • Phased Array Inspection: Gear & Corrosion Mapping and Pin Inspection

Industrial Radiography Inspection Liquid Penetrant Inspection Magnetic Particle Inspection Ultrasonic Inspection Fiberglass Reinforced Plastic Ultrasonic Inspection (in conjunction with UTComp©)

• Reinforced Plastic Visual Inspection • API 510 Pressure Vessel Inspection • API 653 Tank Inspection • Lifting Device Inspections

18-556 North Nechako Rd., Prince George, BC V2K 1A1

Office: 236-423-0447

Fax: 236-423-0448

Message from the Minister of Energy, Mines and Petroleum Resources

Michelle mungall

Strengthening the natural gas sector to build a better B.C.

B

ritish Columbia has an abundant supply of natural gas resources.

Your government is working to manage this resource to help build a strong, innovative economy that works for everyone.

We know industries can flourish and take our economy to the next level in an environmentally sustainable way. We are working towards having the cleanest natural gas sector possible so it can provide clean, low-carbon energy for global markets. Earlier this year, we introduced a new policy framework that put natural gas development on a level playing field with other industrial sectors. This will help us attract investment and create thousands of well-paying jobs.

Your government believes that success is ultimately about making sure that the industry benefits British Columbians, that we are seeing meaningful partnerships with First Nations, that the industry gives jobs and training opportunities to local people, and that we are doing all of this while responding to the biggest issue our world is collectively facing climate change.

In the near future, we will detail our plans for a Clean Growth Future – a plan that will drive innovation, expand energy-efficiency, and support conservation programs. The oil and gas sector has an important role to play in our future as we look to supply cleaner energy to global markets and produce resources here at home in an environmentally safe, responsible way.

We are laying the foundation of a promising future with our efforts to create investment and good, long-term jobs for British Columbians.

Together, we will continue to build a better B.C. n

12 B.C. Oil & Gas Report • 2018-2019

Message from Canada’s Minister of Natural Resources

THE HONOURABLE AMARJEET SOHI

R

ising oil prices and growing global demand for natural gas are like wind in the sails of British Columbia’s oil and gas industry, and our government is determined to see it all turned into new opportunities and more good jobs in Canada’s energy sector.

In fact, it’s already happening.

As the world moves to a low-carbon future, Canada is leading the world in its ability to grow the economy and champion strong environmental protection. That’s a great advantage for Canadian oil and gas producers, and it’s something our government is immensely proud of.

How are we doing this?

One key way is through our Oil and Gas Clean Tech Program, a $50-million investment to support innovative projects that make oil and gas production in Canada greener, and the use of those fuels cleaner. That includes CMC Research Institutes’ pilot facility in Richmond, B.C. to scale up and test carbon capture and conversion technologies.

This is how governments can help drive clean growth, support tomorrow’s technology breakthroughs, and improve the oil and gas industry’s environmental performance.

The program is straightforward: with every dollar we invest through the Oil and Gas Clean Tech Program, we leverage many more dollars from the private sector and other funding partners to build a cleaner future.

It also supports our vision for Canada in this cleangrowth century – a vision that includes building the infrastructure we need today to get our resources to market and using the revenues they generate to further invest in tomorrow’s clean solutions.

Our decision to purchase the Trans Mountain pipeline is a great example. We are also ensuring the Trans Mountain Expansion project goes ahead, which will open access to new markets abroad while creating more good jobs at home.

But our efforts do not end there.

Over the past 18 months, our government has been consulting with Canadians about our energy future.

It’s called Generation Energy and the message we’ve heard is clear: Canadians want a thriving, lowcarbon economy. They want us to be a leader in clean technology. And they want an affordable and reliable energy system – one that provides equal opportunities to all Canadians without harming the environment. And one that recognizes the strengths and ingenuity of our energy sector.

All of this is captured in a new report produced by our 14-member Generation Energy Council, which was appointed to bring together everything Canadians had told us. The council’s report distills all of the ideas into four key pathways to our clean-energy future, including a focus on producing cleaner oil and gas, as well as wasting less energy, switching to even more clean sources of electricity, and using more renewable fuels.

Governments have a central role to play in driving their countries’ clean-energy transitions – even as we rely on the creative genius of the private sector to innovate and create new technologies. Governments also have a responsibility to ensure Indigenous peoples are full participants in the energy transition, and are able to reap the economic and social benefits of major energy and infrastructure investments in their communities.

Canada’s major economic and environmental priorities – including promoting clean growth and advancing reconciliation with Indigenous peoples – will take centre stage when we host the global Clean Energy Ministerial and Mission Innovation meetings in Vancouver next spring. I can’t wait to have energy ministers from the world over in Vancouver to see how much progress Canada is making in building a clean economy.

Canada can lead by example. By working together, we can develop our world-class energy reserves – competitively and sustainably – as we also create new jobs, cleaner energy, and a brighter future than we might have ever thought possible.

We know it’s possible from the promising winds at our backs. n B.C. Oil & Gas Report • 2018-2019

13

LNG promises a new future for B.C. energy development

By Geoff Morrison, manager of British Columbia, Canadian Association of Petroleum Producers

T

his is an exciting time for British Columbia, and the beginning of what promises to be a new chapter for the province’s natural gas industry.

Although natural gas development is not new to British

Columbians, the sector is constantly evolving, particularly with the rise in shale gas exploration and development. Wells are even more productive today than before. Although the

This is good news for a province on the verge of having a thriving liquefied natural gas (LNG) export industry. With an estimated 576.2 trillion cubic feet of marketable natural gas in the province, according to the National Energy Board, B.C.’s resources are significant. But if we want to provide energy for the world, we need to find new markets to benefit from this clean-burning resource.

province is drilling fewer wells, it is increasing production, all

The Government of B.C. has recognized the potential of LNG

the while reducing its footprint.

with the introduction of a natural gas development framework

14 B.C. Oil & Gas Report • 2018-2019

aimed at encouraging investment in the province, and addressing the cost-competitive challenges to bolster positive LNG investment decisions in B.C. B.C. envisions a future that combines economic prosperity and environmental stewardship with reconciliation of Indigenous peoples. It has announced a clean growth strategy that will not only take action to help address the competitiveness of B.C.’s energy sector, but help reduce greenhouse gas emissions in other jurisdictions, create jobs for British Columbians, and generate revenues in support of government programs.

By implementing these policies, the government is sending a signal to industry and investors that B.C. is ready for LNG. Royal Dutch Shell and its joint venture partners in the $40-billion LNG Canada are expected to make final investment decision by the end of 2018. The $1.8-billion Woodfibre LNG project was sanctioned in 2016 and construction plans are underway.

If we want B.C.’s LNG industry to be successful, grow the economy, and address global climate change, it’s imperative we meet growing Asian demand for energy. In 2017, China

increased its LNG imports by 30 per cent and was the main reason why global imports set a new record for LNG trade. As global demand grows, there is a window of opportunity for western Canadian LNG exports to reach Asian markets around 2024.

However, the competition to fill this demand in China and other countries in the Asia Pacific is fierce. If Canada wants to be the world’s supplier of choice, we need to have a stable and competitive fiscal environment in place, and an efficient regulatory process that ensures projects get built in a timely fashion.

At present, the U.S. is already exporting LNG and has set its sights on about 30 LNG export projects – each in various stages of development and some with the necessary federal approvals already in place to begin exporting.

Canada’s natural gas industry has proven that economic and energy prosperity go hand-in-hand with environmental stewardship. B.C. is creating an LNG industry that will not only change the face of our province and country, but make the world a better place for everyone. n

ELL BRACEaW ns

me

built well

Yard Services • Millwork • CSI • Refits • Repower Machine Shop • Painting • New Builds • Winches

Now supplying all of your shafting and bearing needs. Prop shafts in 316, Aqualoy 17, 19 and 22 – any size & length as needed up to 6” diameter and 24’ long. We have 316 shafting for rudders or other needs.

Cutlass Bearings in assorted sizes in metallic, non-metallic and flanged.

Phone 604-821-1890 Email info@bracewellmarinegroup.com

www.bracewellmarinegroup.com

B.C. Oil & Gas Report • 2018-2019

15

Keeping our W land clean

estern Canada’s oil and gas industry is recognized as one of the world’s most rigorously regulated. Many Canadians are natural conservationists, and the individuals that make up the government and industry bodies that oversee exploration and production activities are no exception. Part of their role is enforcing the laws created to ensure that land used for hydrocarbon production is reclaimed to its former glory.

The issue of orphan wells (having no owner to deal with abandonment and reclamation responsibilities) has received significant press recently as energy companies attempt to weather a severe downturn brought about by lack of market access and low commodity prices. Reclamation regulations were not always so robust, and companies that have been around for many years, or acquired others that have been in operation for some time, are well aware of their responsibility to remediate sites with ongoing issues.

Environmental risk assessments and abandoned wellsite remediations

By Jess Sinclair SECURE Energy Services takes on the important work of reclaiming abandoned wellsites for use of future generations.

16 B.C. Oil & Gas Report • 2018-2019

That’s where companies like SECURE Energy Services, a CAODC associate member since 2015, come in. SECURE’s Dr. Erik Martin was kind enough to sit down with members of the association’s communications team to outline some of the steps that are being taken across Canada (and particularly Western Canada) to address the orphan well issue. An expert in environmental risk assessment and toxicology, Martin is also experienced in all facets of contaminated site management and has worked in multiple provinces, including Ontario, British Columbia, and Alberta.

There are over 50,000 inactive, suspended, or abandoned wellsites in Alberta and 10,000 in British Columbia.

An abandoned well is defined by the Alberta Energy Regulator as a site that is no longer needed for oil and gas

development and has been permanently dismantled, plugged and capped, and left in a safe and secure condition.

Activities at an inactive well have been stopped for technical or economic reasons. Suspended wells are no longer producing, but have not yet been capped and are also monitored by provincial regulatory bodies.

In each of these provinces and across Canada, environmental risk assessment (ERA) is a specialized tool that can be used to manage contaminated sites and ultimately obtain regulatory closure.

The process takes several initial issues into consideration, including the relative age of the site; its potential effects upon human, animal, and plant receptors in the area; and potential pathways for exposure to contamination.

“In the case of older wellsites, we are sometimes dealing with 70-plus years of paperwork across multiple companies,” says Martin. “Sometimes we have too much information, sometimes far too little. The level of detail varies by company and, especially, by how long a site has been around.”

Some observers outside of the industry are unaware that we operate on a “polluter pays” basis. Companies understand that, by law, it is their obligation and theirs alone to bring a site back to its original state, whether the local environment exists in a state of nature or is being used for agricultural purposes. These sites also exist in urban or residential areas, a factor that Martin says his team takes into consideration in its approach to the ERA process.

There are over 50,000 inactive, suspended, or abandoned wellsites in Alberta and 10,000 in British Columbia.

3. R isk with a requirement for remediation.

The ERA process initially involves environmental site assessment (ESA) works. A Phase 1 ESA is completed to determine whether contaminated areas are potentially present within an abandoned wellsite. If the site “fails” this initial assessment, specialists are employed to go out to the site and complete a Phase 2 ESA wherein environmental samples (soil, groundwater, surface water, sediment) are collected with the objective of developing a conceptual site model.

At that point, decisions will be made about the best way to remediate the site. This commonly involves leaving the contamination in place to decrease over time (natural attenuation) or transporting contaminated material to a landfill facility. Martin says that the first approach is often an underrated one.

1. No risk, meaning no further work is required.

“Landfills are generally low-oxygen environments,” he explains. “It can take longer for chemicals to break down when they are stored in this manner as opposed to leaving contamination at a site.”

2. Some risk with a requirement for ongoing monitoring.

Martin says that the exploration and production companies they deal with

The basic application of ERA has three possible outcomes:

are remarkably cooperative. “They want these liabilities off of their books,” he says. To that end, the goal of any reclamation effort is to bring the environmental liability of a site to zero and secure a Reclamation Certificate (in Alberta) or a Certificate of Restoration (in B.C.).

ERA is founded in sound science, but at times it can also be an art. The successful completion of the process relies upon the instincts and creativity of the environmental scientists involved, as well as their formal training. Scientists need to be able to see beyond the early stages of the process before it begins in order to ensure that the ERA is a suitable tool for an impacted site. Done properly, the process can represent significant cost-savings for obtaining site closure, as well as speeding up and improving the efficacy of remediation efforts.

From exploration and production companies to environmental scientists to the regulators who sign off on reclamation certificates, they all share a common goal: rehabilitating our abandoned wellsites for use by future generations – human, animal, and plant. n

B.C. Oil & Gas Report • 2018-2019

17

Canada desperately needs an honest conversation about oil and gas

By Tom Whalen, president and ceo, petroleum services association of canada

W

e hear incessantly that joining the middle class is the great Canadian ambition and government needs to make that its top priority. Unfortunately, for those struggling to enter the middle class, their federal politicians are enacting a whole slate of energy policies that point toward the exact opposite outcome.

Where Canada could be leveraging the fruit of the land we’ve been blessed with, it is deserting the playing field altogether.

Instead of building bridges to prosperity,

new legislation is coming that will choke the oil and gas industry. Much of this is in the name of environmental goals, even though Ottawa has yet to show how displacing oil and gas production from one of the best-regulated jurisdictions on the planet, to some of the worst, is ecofriendly.

In 2017, during a year of rebuilding for the industry, oil and gas contributed a trade surplus of over $60 billion to the economy, a level no other industry comes remotely close to matching. Most of this

was generated by crude oil, Canada’s largest merchandise export item. The surplus allowed Canada to reinvest in its machinery, labour force, and economy – the building blocks of middle-class prosperity.

Without such investments, all the talk of upward mobility, creating benefits for children, protecting wage earners, and providing more affordable housing is just empty rhetoric.

Industry has no quibble with tough, evidence-based regulation that holds

Two is stronger than one.

ARE YOU TIRED OF WAITING TO GET PAID FOR YOUR INVOICES? LET US HELP YOU IMPROVE YOUR CASH FLOW!

WE CAN QUICK PAY YOUR INVOICES Does your business have:

• Growth objectives • Restricted bank credit • Inconsistent cash flow • Credit worthy customers Factors Western can help:

• Factoring frees cash tied up in accounts receivable.

• Factoring converts your invoices to cash immediately allowing you to meet and exceed current cash flow needs giving you opportunity to take on more business.

Suite #204

Corporate Head Office: 4321 23B Street NE Calgary, AB T2E 7V9

Phone: 1-877-717-2922 Fax: 403-250-3150 Vancouver: 604-800-5181 Explore The Advantage

18 B.C. Oil & Gas Report • 2018-2019

www.factorswestern.com

Compass Bending has doubled in size to serve you better We have doubled in size to provide our customers the highest possible level of quality and service.

Additional Services:

• Insulation, taping and coating, including YJ bends • 3D and 5D bends • 10” and 12” bends • Structural Bending

Experience, Quality & Service.

CompassBending.com 7320 30 Street S.E. Calgary, Alberta T2C 1W2 • Phone: (403) 279-6615 • Fax: (403) 236-4249 • Toll free: (800) 708-7453

us to account for environmental performance. What concerns us is a capricious and politicized approach to decision making.

Bill C-69 is the most worrisome measure on the table. Among other things, it shunts aside the internationally respected National Energy Board and moves key functions away from the West, which is where the energy expertise resides.

A new, Ottawa-based agency will preside over a revamped project approval process that officials claim will be more streamlined, yet contains oddities such as requiring project proponents to take into account factors like “the intersection of sex and gender with other identity factors”.

Many have come to believe Bill C-69 will contribute to making major new energy infrastructure, such as pipelines, all but impossible to build.

While we argue and dither, industry

bleeds out. Every energy executive in Canada today knows someone who has saved their business by making the difficult decision to move their talents and equipment south of the border. Strong pull factors caused by a more welcoming U.S. business environment are hard enough to resist. Adding push factors that drive businesses away is too much.

Meanwhile, we are forced to watch from the sidelines as the United States is left to play winning hands on pipelines, NAFTA, aluminum and steel tariffs, softwood lumber, and lower taxes that promote a sustainable competitive advantage.

There’s a reason we never hear protesters raging against the pervasive benefits of hydrocarbons. They know the public would not be interested in the message.

Instead, the focus is on creating unfounded fears about the manageable risks that come with development. It’s time to challenge the inherent hypocrisy

of such an approach. Canada desperately needs an honest conversation, one that acknowledges oil and gas as a necessary and desirable – and eminently improvable –element of everyday life and economic success.

The current situation brings back some memorable words of that great Canadian entertainer Stompin’ Tom Connors, in his 1997 song “Believe in Your Country”:

I know the times are changing, factories closing down But if you stay and help us, we can turn things around.

Stopping Bill C-69 this fall will help to win us that turnaround. It’s how we can keep the pathways to middle class open for present and future generations of Canadians.

Tom Whalen is president and CEO of the Petroleum Services Association of Canada (PSAC), based in Calgary, Alberta. n

The Montney - Pushing the Limit 6–7 November 2018

|

Calgary, Alberta | www.spe.org/go/18ACA1

Save $200. Register by the early bird deadline: 22 October 2018

Photo: Seven Generations Energy

The 2018 Montney Workshop will explore operator perspectives on competitive and profitable production advancements made to date in the play, and what can be done to push the limit further.

B.C. Oil & Gas Report • 2018-2019

19

Specialized Desanders’ vessels rely on gravity separation rather than hydro-cyclonic or filter principles, meaning that its engineered solution is an application of Stokes’ Law that allows the sand to fall to the bottom.

Leading innovation and technology in desanding solutions

H

eadquartered in Calgary, Alta., Specialized Desanders Inc. (SDI) exclusively provides well desanding solutions to the oil and gas industry for almost 20 years.

With steady growth, SDI has three field

offices in Alberta and three in the USA; Pittsburgh, PA, Oklahoma City, OK, and The Woodlands, TX. As the industry leader in sand management, SDI focuses on innovative solutions that provide top performance for their clients.

Specialized Desanders was founded in 2001 by three energy sector veterans who saw a need for horizontal well technology. With sand being a major concern for oil and gas producers, it continuously blasts away your

Sand Sentry is a web-based, on-site sand monitoring system that will monitor your sand production automatically and make sure you know when cleanouts are required.

20 B.C. Oil & Gas Report • 2018-2019

SPECIALIZED DESANDERS INC.

TM

The Most Trusted Sand Solution

mission-critical equipment and increases

SDI has been an industry innovator for almost two decades, earning the trust

operating costs. Their team of engineers have designed over 78 desanders to date, earning 20 patents worldwide, focusing on reducing downtime and maximizing output.

Sand Sentry Exclusive to Specialized Desanders, Sand Sentry is a web-based, on-site monitoring system that operates in real time and can be integrated into a well site SCADA system. Sand Sentry measures weight,

Engineered for performance

pressure, and volume of units using a

solving the most

The SDI elite engineering team has

can access data anytime, anywhere, and

designed a portable, patented desander

challenging sand

will be notified by SMS or email when

that is installed upstream of surface

cleanouts are required. Sand Sentry is the

equipment. The exclusive focus is

first real-time monitoring system on the

sand extraction from oil and gas wells.

market. SDI’s solid steel vessels can’t be

Specialized Desanders vessels rely on

seen through, but the Sand Sentry will

gravity separation rather than hydro-

indicate how much sand is in the vessel.

of their clients by

dilemmas.

cyclonic or filter principles. Its engineered solution is an application of Stokes’ Law

SynPOL™ Series

that allows the sand to fall to the bottom of

Specialized Desanders designed the

the unit. This method reduces part erosion

SynPOL™ desanders to offer secondary

and failure, eliminating maintenance costs

options to high-capacity gravity desanders

for your operation.

following the initial production phase.

SDI has been an industry innovator for almost two decades, earning the

Sand can inflict expensive damage and shut down production for weeks at a time. The risks range from $10,000 seals and $30,000 pumps to regulatory injunctions and multimillion-dollar catastrophic failures.

22 B.C. Oil & Gas Report • 2018-2019

self-contained solar power. Operators

SynPOL™ is engineered to provide a long-term solution to allow for safe and economical operation of wells during mid-

trust of their clients by solving the

to-final production phases. The vertical

most challenging sand dilemmas. With

configuration allows for ease of cleanout,

the largest fleet of desander units and

with backflush or blowdown. The state-

exclusive focus on desanding services,

of-the-art synthetic barrier technology

they have set the industry standard in

allows the SynPOL element to have a burst

which competitors are measured.

strength rating higher than the MAWP of

Safety focus Protecting well site workers and downstream facilities from the devastation of sand is the top priority. All pressurized vessels are certified and registered with

the vessel, meaning no more collapsed filters or downtime.

Sand can inflict expensive damage and shut down production for weeks at a time. The risks range from $10,000 seals and $30,000 pumps to regulatory

the Alberta Boilers Safety Association

injunctions and multimillion-dollar

(ABSA) to maintain safe operation. All

catastrophic failures. Unabated sand

employees, supervisors, and management

flow compromises the integrity of

share safety responsibility, from technical

infrastructure and corporate reputation.

shops to well site locations, ensuring

Get production peace on mind and

safety risks are always mitigated. SDI

solve your sand problems at the source.

equipment protects operators from

Rely on SDI, the industry’s most trusted,

operation risks and is regularly tested and

effective, experienced, and reliable sand

maintained.

management solution. n

Seeking clues on how to improve perceptions of Canadian sustainability

By Stewart Muir

I

n 2015, the 193 member states of the United Nations General Assembly approved 17 sustainable development goals for the world to achieve peace, prosperity, social justice, and environmental protection for all. Known as the Sustainable Development Goals (SDGs), this index is described as a universal call to action to end poverty, protect the planet, and ensure that all people enjoy peace and prosperity.

So why is it that activism is focused on high-

Canada ranks, perhaps not surprisingly, quite close to the top: 17th place among all countries. We’re not the best, but that’s a long way from the worst. We scored particularly high for good health and well being, education, affordable and clean energy, innovation, and sustainable cities and communities.

that? What if the activists who devote themselves

Now compare this to the negative picture of Canada that comes from various initiatives intended to prevent the development of Canadian oil and gas resources.

For every activity required to sustain our quality of life today, there is someone with a plan on for how to turn voters against it. On these issues, there is clearly a great disparity between the real and the imagined. But what can the truly sustainability-minded do about it?

performing Canada, and we hear little or nothing about other countries? There is clearly a double standard at work.

It’s clear to see that efforts to block or impede the production and marketing of Canadian crude oil have serious implications for global sustainability goals. Could the SDGs be of help in changing to the frenzied creation of public doubts about Canadian energy, while turning a blind to practices elsewhere, were accountable to a neutral, broadly agreed standard of what does, and does not, constitute sustainability?

SDGs are being embraced in all kinds of different ways. The City of Fort St. John incorporated SDGs in its strategic plan for 2018-2023. City mayor Lori Ackerman recalls informing federal officials in Ottawa about the goal that calls on countries to ensure access to affordable, reliable, sustainable, and modern energy – something the

At Resource Works, we decided to see how Canada stacks up against other oil-exporting countries: in particular, those that sell crude oil to Canada. To do this, we adopted the SDG framework to independently calculate an SDG Sustainable Oil Index that ranks national scores in terms of crude oil imports into Canada and the United States.

diverse energy producing area of northeast British

Highlights from our research:

Energy people are legendary for tackling every

• 95 per cent of the crude oil Canada imported in 2017 came from producer nations with lower SDG scores than ours;

Columbia has in spades.

“They need to understand that by getting our commodities to market, we can be better global citizens and assist in achieving these goals,” Mayor Ackerman said.

material problem they encounter. When it comes to the public conversation, they often feel excluded and powerless. The SDG Index offers fresh hope that progress is still possible.

• Canada was heavily reliant over the past five years on oil from ultra-low SDG countries, including Saudi Arabla (101), Nigeria (145), and Angola (136).

Stewart Muir is the founder of the Resource Works Society, based in Vancouver. n

B.C. Oil & Gas Report • 2018-2019

23

The BC Oil and Gas Commission will be adding new seismic stations to the regional monitoring array in northeast British Columbia.

BC Oil and Gas Commission taking steps to improve the detection and mitigation of industry-related seismic activity

T

he BC Oil and Gas Commission will be adding new seismic stations to the regional monitoring array in northeast British Columbia to improve the detection and mitigation of induced seismicity, which can be triggered by oil and gas activity.

Through a partnership with Natural Resources Canada (NRCAN), and with direct input from the Canadian Association of Petroleum Producers, the additional new monitoring stations will be strategically placed within the Montney trend, where the majority of new industry activity is taking place.

The commission’s share of the project is

24 B.C. Oil & Gas Report • 2018-2019

$150,000, which will be used to purchase accelerometers, telemetry equipment, and to fund station deployment costs.

NRCAN is supplying the broadband sensors, technical expertise, and assistance with deployment. Further deployment assistance will be provided

by McGill University. The new stations will increase seismic event location accuracy and lower the detection threshold.

The commission has taken a leadership role in the detection and mitigation of induced seismicity associated with unconventional gas development in North America and globally.

Commission studies in 2012 and 2014 led to regulatory and oversight enhancements, such as the introduction of seismic monitoring stations and mitigation measures which require the immediate suspension of drilling activities if a magnitude 4.0 or greater event is recorded.

Additional permit conditions as of June 1, 2016 and updated Jan. 1, 2018 require the presence of ground motion monitoring during hydraulic fracturing activities for areas where previous seismic activity occurred, as well as reporting of events.

Earlier this spring, the commission

The commission has taken a leadership role in the detection and mitigation of induced seismicity associated with unconventional gas development in North America and globally.

Addressing seismicity was only the first step. During the summer, the commission became part of a community-driven working group to tackle some of the other issues related to the pace of oil and gas activity, including noise, dust, air quality, light, and road traffic.

By addressing seismicity and these other quality of life indicators through community engagement, the commission hopes to strike a balance between supporting responsible resource development and respecting those affected by oil and gas activities. n

issued a special project order requiring permit holders within the Kiskatinaw Seismic Monitoring and Mitigation Area (KSMMA) – roughly between Fort St. John and Dawson Creek – to undertake numerous measures prior to, during, and following hydraulic fracturing operations. Some of those measures include: • Submit a seismic monitoring and mitigation plan that includes a preassessment of seismic hazard and a seismic monitoring and mitigation outline.

• Deploy an accelerometer within three kilometres of the common drilling pad.

• Have access to a seismic array providing real-time seismicity readings.

The overall intent of the order is to ensure companies are notifying residents when undertaking completion operations at a well where there could be induced seismic – and felt – events.

Opening lines of communication with those most likely to be affected can help reduce concerns and provides residents with a contact person to notify, if an event occurs.

Prior to the introduction of the special project order, the commission heard from land owners regarding felt seismic events related to increased development in their area.

100 - 1111 West Hastings Street Vancouver, BC V6E 2J3

604.681.2351

B.C. Oil & Gas Report • 2018-2019

25

B.C. will produce the world’s lowest-carbon footprint LNG Carbon taxes collected from the B.C. LNG industry can be used to further reduce greenhouse gas emissions along the entire natural gas value chain and in other industrial sectors.

G

lobally, demand for natural gas is predicted to increase 20 per cent by 2030 and 45 per cent by 2040 as other countries that currently use coal to produce heat and electricity look to meet their climate targets by switching to a cleaner source of energy.

and industrial use emits up to two-

This means B.C.’s proposed LNG

thirds less carbon and helps reduce air

facilities will have about 50 per cent

pollution and smog. Most of the increase

fewer greenhouse gas emissions

in natural gas demand will be in China,

than the average of all LNG facilities

India, and other Asian countries where

operating around the world today, and

air quality is a significant threat to

30 per cent fewer emissions than the

public health.

most efficient global LNG facilities

B.C. has the opportunity to build an entirely new industry that can benefit the province, the country, and the world.

By developing a globally competitive, liquefied natural gas (LNG) industry, B.C. can market its abundant natural gas, exporting responsibly developed natural gas to countries that need cleaner fuels to power their economies. We can help those countries address their energy, climate, and air-quality goals, while meeting B.C.’s strict climate targets.

LNG from B.C. will have the lowest

When compared with coal, natural gas for power generation, residential heating, 26 B.C. Oil & Gas Report • 2018-2019

carbon footprint in the world due to the province’s world-leading GHG

currently operating, making B.C.’s facilities the lowest-emitting in the world.

emissions policies and rules. These

As an example, a large LNG plant in

include:

Louisiana on the U.S. Gulf Coast that

• An economy-wide carbon tax of $30/ tonne, which will increase by $5/tonne per year to $50/tonne; • Regulations that require LNG facilities to limit carbon emissions; • The requirement to reduce methane

runs on highly efficient gas turbines still runs less efficiently than a similar plant in B.C. due to warmer Gulf Coast temperatures. Gulf Coast facilities also don’t have access to renewable hydroelectric power. These relatively new facilities operate at a GHG intensity

emissions from upstream natural gas

that is roughly 60 per cent higher than

production by 45 per cent by 2025.

the LNG Canada and Woodfibre LNG

LNG from B.C. will have the lowest carbon footprint in the world due to the province’s world-leading GHG emissions policies and rules.

facilities proposed for Kitimat and Squamish.

Upstream emissions – from producing the natural gas to supply LNG facilities – are set to decrease significantly under policies already underway to reduce methane emissions. In addition, the increase to B.C.’s carbon tax provides incentives for electrification. The use of B.C.’s renewable electricity for upstream gas-processing facilities and anticipated technology advancement in drilling, completion, and gas processing will contribute to further reductions in emissions from natural gas production.

Carbon taxes collected from the B.C. LNG industry can be used to further reduce greenhouse-gas emissions along the entire natural gas value chain and in other industrial sectors – wherever needs are greatest. Carbon taxes directed toward an effective technology fund can help advance innovative green-technology projects in B.C. and help those projects get over early financial hurdles to being successful, while generating more jobs in B.C. and reducing the province’s GHGs.

Prince George 3963 15th Ave 250-562-4856 1-877-898-4856

Quesnel

1195 Highway 97 N 250-992-9007

Current policies position B.C. LNG as the lowest carbon footprint LNG in the world with the fewest emissions. If we are serious about leaving a better world for future generations, fostering unprecedented economic participation

by First Nations, and creating opportunities for British Columbians and all Canadians, we should be actively working toward ensuring B.C. is ready to meet the next window of opportunity for LNG demand. n B.C. Oil & Gas Report • 2018-2019

27

An industry united

By Patrick Smyth, vice-president, performance at cepa

A

s an industry, we know that one of the keys to having Canadians accept major pipeline projects is through demonstrating that they truly are in the national interest, in terms of safe operation and environmental protection, as well as through the contributions these projects make from coast to coast.

That’s why nothing is more important to members of the Canadian Energy Pipeline Association (CEPA) than the safety of those who live and work around pipelines, protecting the environment, and ensuring that Canadians realize the social and economic benefits associated with these major infrastructure projects.

Pipelines are an important part of our everyday lives as we rely on them to supply the energy needed to enable the high standard of living we have grown accustomed to in Canada.

Canadians have the right to know what operators are doing to keep pipelines safe and communities protected.

CEPA Integrity First® (Integrity First) demonstrates the pipeline industry’s proactive commitment to Canadians to continuously improve in the areas of safety, environment, and socioeconomics.

Integrity First brings together the transmission pipeline industry to share, measure, and implement leading practices proactively. It focuses on continuous improvement and works to build Canadians’ trust and confidence 28 B.C. Oil & Gas Report • 2018-2019

in industry’s ability to safely transport the oil and gas products we depend on every day.

A brief history of CEPA In the past, pipelines were constructed and operated without significant public involvement or attention. Public perception and expectations have changed due to high-profile incidents which brought international attention and increased scrutiny.

Recognizing the industry’s need for change, CEPA began the journey of defining the path forward and what an industry vision that addresses safety, the environment, and socio-economic benefits might look like.

CEPA member companies and other industry stakeholders initiated a collaborative consultation process to ensure both individual companies and the industry were united in purpose: focused on collaboration, continuous improvement, and achieving measurable safety improvements to help our industry regain public trust.

Launched in 2012 to drive continuous improvement, Integrity First follows a plan-do-check-act model to continually improve companies’ systems and operations. It enables companies to assess their own systems in a consistent manner, providing a platform for comparison and improvement in the industry.

No incident is acceptable and our industry’s commitment to

Canadians is to work collectively to continuously improve industry safety and performance in the transmission pipeline industry.

Committed to continuous improvement Integrity First brings together the industry’s greatest minds and most influential leaders, all of whom put competition aside to focus on defining, sharing, and implementing leading practices to improve operational performance.

Simply put: when it comes to safety and operational performance, CEPA members do not compete.

Participation in Integrity First is a mandatory requirement for CEPA membership along with the understanding that our industry’s goal of reaching zero incidents will only be achieved by working together in the true spirit of collaboration.

Only by committing to work together can we ensure our actions lead to measurable industry-wide improvements. One incident is everyone’s incident and one success is everyone’s success.

How does Integrity First work?

First, CEPA members work together to identify priority areas under the principles of safety, environment, and socio-economics. Guidance documents are developed for each priority area,

which help member companies assess

venue and vehicle for our members to

their systems, processes, and practices.

come together so they hold each other

Through that self-assessment, member companies identify areas of improvement and work together to share and implement leading practices so industry can achieve overall

accountable and constantly raise the bar on performance.

CEPA’s 2018 Transmission Pipeline Performance Report We understand that as an industry we

improvement.

A third party then evaluates each member company’s self-assessment results for a specific priority and assesses the company’s adoption of Integrity First, helping to ensure a systematic approach.

need to do more than just talk about our commitment to safe and responsible operations, CEPA members have to show Canadians what they are doing.

That’s why we produce our annual performance report which focuses on industry’s performance in the areas

CEPA guides the participation of

of safety, the environment, and socio-

our members, facilitates and offers a

economics.

The 2018 Transmission Pipeline Performance Report was released on September 26, demonstrating our continued commitment to the highest level of accountability. This year’s report can be found at pr18.cepa.com.

By measuring our contributions, investments, incidents and responses, we can track industry progress. The Canadian transmission pipeline industry is a world leader in safe operations, and every CEPA member continuously strives to exceed past performance.

By working together, we can build a smarter energy future that includes pipelines built by Canadians for Canadians. n

SUITE 300, 6 ROSLYN ROAD, WINNIPEG, MANITOBA, CANADA

www.delcommunications.com

The key to publishing success.

We offer outstanding personal service and quality in the areas of: • Creative Design • Advertising Sales • Trade Publication • Video Production & Editing • Qualified Sales & Editorial Team

B.C. Oil & Gas Report • 2018-2019

29

A milestone project Coastal GasLink project update The 670-kilometre Coastal GasLink Pipeline project, designed to carry natural gas from the Dawson Creek area to the LNG facility in Kitimat, B.C., first received its regulatory permits from the B.C. EAO back in 2014.

S

ince it was first proposed in British Columbia in 2012, TransCanada’s Coastal GasLink Pipeline project has made steady progress in advancing the project.

Faced with difficult economic changes surrounding global gas prices within the natural gas industry, Coastal GasLink has overcome many hurdles over the last six years to make it to this important stage. As we continue to celebrate the advancement of the project with the recent positive Final Investment Decision (FID) from LNG Canada, we stop to reflect on some of the key milestones that brought the pipeline project to this point, helping to secure it as the pipeline of choice for the first major LNG project in B.C.

permits from the B.C. Environmental Assessment office (EAO) back in 2014.

Shortly afterward, permits from the B.C. Oil and Gas Commission followed, providing the project with all the necessary valid permits to construct and operate the pipeline project in B.C. Before receiving those approvals, the pipeline underwent an extensive two-year environmental and technical review by both the EAO and the OGC, including a thorough stakeholder and First Nations engagement program that provided opportunities for comments, feedback, and First Nations participation throughout the project planning process.

Since that time, the project has celebrated some important

The 670-kilometre pipeline project, designed to carry natural gas from the Dawson Creek area to the LNG facility in Kitimat, B.C., first received its regulatory 30 B.C. Oil & Gas Report • 2018-2019

announcements on its journey toward a FID decision.

On June 26, the project selected its

four prime contractors for construction, valuing approximately $2.8 billion in contracting agreements. The contractors were chosen based on TransCanada’s core principles of safety, environmental stewardship, and stakeholder engagement, as well as their experience in safely building complex infrastructure projects.

Following closely behind on July 3 was the announcement of an unprecedented $620 million to First Nations businesses for contracting and employment opportunities for the project. This total set a new precedent for First Nations contracting work within the province and in the pipeline industry.

The addition of another $400 million in contracting opportunities to both First Nations groups and local northern B.C. communities once construction begins, brings the total to over $1 billion for the province of B.C.

Finally, the project recently announced the signing of 100 per cent of its project agreements with First Nations communities along the route. The amount, totaling 20 agreements, showcases the strong support received from First Nations communities across the province to date. The agreements contain long-term benefits programs and tailored employment plans designed specifically for each First Nations community along the route, providing Indigenous groups with opportunities for sustainable sources of revenue over the life of the project.

We are grateful to our First Nations communities for providing us with an opportunity to partner with them to achieve this important goal and we appreciate all the support they have shown us over the years.

These announcements, along with the detailed work completed over the past six years, signals the collaborative effort undertaken from all sides to move this project forward, and reinforces

the importance of this pipeline to B.C.

GasLink and its LNG Canada partner

communities, First Nations people, and

will ensure it is done safely, reliably, and

the province as a whole. Communities

environmentally responsibly.

along the route understand the economic benefits, job opportunities,

For more information,

and local business stimulus the project

please visit our website at

will bring, and trusts that Coastal

www.CoastalGasLink.com. n

&RQQHFWLQJ 0DUNHWV &RQQHFWLQJ 2SSRUWXQLWLHV

'HOLYHULQJ 2XU 5HVRXUFHV WR WKH :RUOG 0LFKDHO 'HZDU (FRQRPLF 'HYHORSPHQW PGHZDU#NLWLPDW FD

B.C. Oil & Gas Report • 2018-2019

31

Business is booming in northwest B.C.

By Danielle Myles

LNG Canada’s $40-billion LNG facility is proposed for a site 60 kilometres south of Terrace, B.C.

T

he northwest corner of British Columbia is waiting with bated breath for the largest single infrastructure project in the province’s history to proceed. Today, uttering the words “FID” in this region will get you a variety of reactions from excitement to eye rolls. Cautious optimism is only natural in a climate requiring resilience and adaptation to ever-changing commodity markets – but rest assured, we are ready.

Positioned centrally in northwest B.C., the city of Terrace has weathered many economic cycles due to the growing diversity of services within the community that cater to larger projects in the transportation, mining, forestry, and energy sectors. LNG Canada’s $40-billion LNG facility is proposed for a site only 60-kilometres south in our neighbouring community of Kitimat.

This summer, Terrace is bustling with activity and anticipation that this 32 B.C. Oil & Gas Report • 2018-2019

project really is a go. Our business community has been perched in a heightened state of readiness for some time now to take advantage of this unprecedented opportunity.

environment around us has shaped the identity of the settlers, as well as the Tsimshian First Nations peoples who lived on this land for millennia before us.

We are a traditionally a logging town

The gas industry is welcome in northwest B.C. And with project postponements, communities have had time to breathe, to reflect, and to plan so that we can leverage the LNG Canada and Coastal Gas Link projects, but also use the limelight to send a signal to the broader gas industry that we are open for business.

with pioneering history stemming

The history of Terrace and its people highlights a strong theme of confluence – situated at the intersection of the mighty Kitsumkalum and Skeena rivers, and occupying a wide valley of steeped terraces and foothills, confluence is a core part of our identity and what makes us unique. From river to rail to highway, our location and the

reach with spin-off dollars flowing into

back to the Gold Rush and building of the Grand Trunk Pacific Railway. The mining and transportation sectors have resulted in a number of major projects in more recent years that have spurred significant growth and development.

None of these projects have happened in Terrace, but are all within close town, materializing into enhanced amenities, residential and commercial developments, increasing levels of services and contracting opportunities.

By any mode of transportation, industry flows in and through Terrace and for some, choosing to locate here is preferred for regional accessibility.

From river to rail to highway, Terrace’s location and environment has shaped the identity of the settlers, as well as the Tsimshian First Nations peoples who lived on this land for a millennia before us.

Terrace’s vision is to transition from its historically cyclical nature to an increasingly robust and diversified economy.

Natural gas has an important role to play in that.

We are a traditionally a logging town with pioneering history stemming back to the Gold Rush and building of the Grand Trunk Pacific Railway.

The City’s vision is for Terrace to transition from its historically cyclical nature to an increasingly robust and diversified economy, and natural gas

50 per cent over the same period last year and several large infrastructure projects are currently underway, including the fully-serviced 2,400-acre Skeena Industrial Development Park, a revitalized aquatic centre, an expanded airport, trades training centre, and a neighbourhood revitalization in the downtown core. High-pressure natural gas infrastructure runs through our industrial lands, as well as high-voltage transmission lines – there is ample infrastructure for any type of service or manufacturing venture, as well as smaller-scale LNG and value-added gas projects.

has an important role to play in that.

The building of the Coastal Gaslink Pipeline project to its terminus at the LNG Canada facility offers huge advantages for a city built in the heart of transportation corridors. We are already seeing the signs that change is afoot.

As of July 2018, real estate sales are up

We are also seeing a demographic shift backed up by census data.

Younger people aged 20 to 34 are flocking to Terrace correlating with a rise in those reporting employment in the professional and technical fields.

This is also occurring at a time when jobs in construction and trades are

on the rise regionally. You need only visit some of our local establishments to hear countless stories of those new transplants, migrating from larger urban centres for the exciting professional opportunities and quality of life that Terrace has to offer. They are drawn here in part because of the buzz that the LNG industry has created and the community vibrancy that this scale of development can promise.

It is often the spectacular mountains and rivers that entice one’s first visit to Terrace – but it is the fulfilling livelihood promised by a diverse economy that includes natural gas and LNG that will encourage more families to set down roots in our community. There is room to grow here and these are exciting times.

Danielle Myles is the manager of economic development for the City of Terrace. Reach her at dmyles@terrace.ca. n B.C. Oil & Gas Report • 2018-2019

33

Liquid natural gas:

A safe, clean investment in the future

By Richard MacIntosh

A

lthough the recent federal court ruling on the government-backed Trans Mountain pipeline twinning seems – for the time being – to consign the project to limbo, there is still good news pending in Canada’s western energy sector. This fall, LNG Canada is expected to announce its final investment decision on its proposed liquid natural gas export terminal in Kitimat, B.C. LNG Canada – a consortium of Royal Dutch Shell, PetroChina, Mitsubishi, and Korea Gas Corp. – has already committed to build the project, and the investment is widely expected to be in the neighbourhood of $40 billion. It will be the largest single infrastructure investment in the province’s history.

The economic benefits will be colossal. At the peak of the construction phase, expected to be in 2021, up to 10,000 workers will be busy erecting the facility’s infrastructure. The construction of its massive twin storage tanks alone will employ 500 workers, many of whom will be members of the union I represent.

The aim of the grand undertaking is couched in sound environmental thinking. Its target market is industries in China, now heavily reliant on coal-burning plant, for whom a swing to liquid natural gas would translate into a huge cut in carbon emissions – a benefit for humankind the world over. Indonesian and Korean business interests are likewise eager for shipments of B.C.’s cleaner, cheaper LNG.

Skilled boilermakers will be instrumental in the construction and maintenance of the LNG Canada terminal at Kitimat, B.C.

34 B.C. Oil & Gas Report • 2018-2019

Liquid natural gas is fast becoming a wave of the future. There are already 400 carriers of LNG plying the world’s oceans, and the Kitimat terminal aims to be the most advanced facility

to fill them on the globe. B.C.’s proximity to its intended far eastern customers is one key to its potential. A top priority for LNG Canada is the minimalization of potential environmental impacts. When completed, the Kitimat terminal will be one of the cleanest in the world, producing less than half the emissions of the average LNG facility elsewhere.

For natural gas to be exported, it must first be turned into its liquid form by cooling it to –162 degrees Celsius. This results in a 600-fold reduction of its volume, making its transport by ship economically feasible. The resulting liquid is colourless, odourless, non-toxic, non-corrosive, and non-flammable. LNG doesn’t spill; rather, it warms and evaporates in the event of an accidental leak.

Therein lies one of its chief environmental benefits. There is no danger of toxic spillage inflicting damage to B.C.’s sensitive coastal waters. This is no doubt one of the reasons why the B.C. government is keen on the Kitimat project – and on natural gas projects in general – while it balked on the Trans Mountain endeavour involving heavier oil products.

LNG technology, still relatively young, already has a proven track record in safe maritime transport. Since its inception in 1964, over 80,000 loads of LNG have shipped without a single cargo loss.

Clean-burning, spill-safe, and carbon-frugal, liquid natural gas is a natural fit for forward-thinking, green-conscious nations like ours. LNG Canada’s plan enjoys the enthusiastic support of local B.C. communities and the Haisla First Nation, on whose land the Kitimat terminal will be built.

Use of liquid natural gas is growing, to the betterment of the planet. Even cargo ships are switching to LNG power. At B.C.’s Victoria Shipyard, boilermakers from my union have been team members on the conversion of a ship to a dual-fuel platform that supplements diesel with cleaner LNG. More conversions are upcoming. There is a potential for further infrastructure investments in safe LNG refuelling stations along the Pacific coast. Continued growth in utilizing LNG will boost B.C.’s economy and job prospects further, and go a long way toward reducing greenhouse gases in our pursuit of Paris Accord targets.

Although the Trans Mountain upgrade has had new hurdles plunked in its path, for now, the LNG Canada project promises to take up the economic – and environmental – baton, and run with it.

Richard MacIntosh is a Vancouver-based representative for the International Brotherhood of Boilermakers. He can be reached at 604-219-3589. n

B.C. Oil & Gas Report • 2018-2019

35

Apply through a Technical Safety BC online services account for boiler plant operating permits.

Do you own or operate a boiler plant?

Pressure Vessel and Refrigeration Safety Regulation

Why do I need to register and obtain an operating permit for my plant?

(PEBPVRSR) require owners of boiler plants that are

Technical Safety BC is aligning its permitting practices

fifth class and above, and all oil well boiler plants,

with other provincial jurisdictions. As such, we require the

to register their plant and obtain a boiler plant

registration of a plant as a whole operating system (e.g.,

Recent changes to the Power Engineers, Boiler,

operating permit.

The regulation change came into effect on October 2, 2017. Qualifying plants commissioned since October 2, 2017 must register now and obtain a valid plant

a single large boiler or an array of multiple small boilers) to confirm and classify the plant’s use, and assignment of certified operators. The plant operating permit records the size, assembly, configuration, and staffing, accurately confirming and displaying your compliance to B.C.’s regulatory requirements.

operating permit. Plants operating prior to October

“By understanding the connected set of boiler equipment as

2, 2017 need to register by October 1st, 2019. We

a system, Technical Safety BC can better assess areas of risk

encourage all plants to register without delay to ensure compliance by the deadline.

Apply through a Technical Safety BC online services account for boiler plant operating permits.

and provide clarification on plant classification and staffing requirements to owners and the certified individuals who oversee plant operations,” explains Richard Miller, Technical Safety BC product leader. “Owners will gain confirmation of compliance, understand required operator qualifications, and enable more effective safety oversight. This also facilitates

Applications received from now up to October 1, 2019

more efficient tracking of power engineer’s professional work

will have zero fees until renewal in October 2020.

experience [firing time] and linkage to the plants they operate.”

36 B.C. Oil & Gas Report • 2018-2019

What information is required for a boiler plant operating permit?

To register a plant and obtain a boiler plant operating permit, plant owners are required to define the configuration and makeup of their plant, including the boiler(s) and header connections on each site. They need to identify the certified power engineer or operator, and designate them as responsible for plant supervision.

2. If you need a new account, register here: https://www. technicalsafetybc.ca/registration-new-online-account.

You will receive an email invitation to activate your new account.

3. Once you are logged into your account, you can register your plants.

For more information, please refer to https://www.technicalsafetybc.ca/boiler-plant-operating-

Registration process

permits. You can also email Technical Safety BC at

Boiler plant registration is only available online through a Technical Safety BC online services account. For permit applications up to, and including October 1, 2019, there will be no fees applied until renewal in October 2020. Permit applications submitted after October 1, 2019 will be subject to the fees for the relevant class of plant. Boiler plant operating permits are to be renewed annually.

To register, you will need to: 1. Login to your online services account: https://portal.technicalsafetybc.ca/login

boilerplantreg@technicalsafetybc.ca, or call 1-866-566-7233.

This article was supplied by Technical Safety BC (formerly known as BC Safety Authority). Technical Safety BC is an independent, self-funded organization mandated to oversee the safe installation and operation of technical systems and equipment. In addition to issuing permits, licenses and certificates, we work with industry to reduce safety risks through assessment, education and outreach, enforcement, and research. Learn more about our evolving services and how we share safety knowledge at www.technicalsafetybc.ca. n

DON’T MISS THE DEADLINE All boiler, pressure vessel and refrigeration certificates of qualification* must be renewed by December 2, 2018.

For more information and to renew visit www.technicalsafetybc.ca/certification Renewal is free prior to December 2, 2018 and certification is valid for three years.

QUESTIONS? Contact us at contact@technicalsafetybc.ca or at 1 866 566 7233

* Renewal applies to certificates of qualification issued without an expiry date under the Power Engineers, Boiler, Pressure Vessel and Refrigeration Safety Regulation.

B.C. Oil & Gas Report • 2018-2019

37

Pipeline coating failure analysis and investigation

F

ailure analysis is one of the most interesting aspects of the work we do as a laboratory specializing in protective coating testing. Coating failures can be attributed to various causes, however, facets of the coating application process are often found to be one of the contributing factors.

Coating application has several phases that introduce many opportunities for error including: coating storage, component temperature, mixing-ratios, substrate preparation, substrate temperature, cure time, cure temperature, and film thickness. Another common factor contributing to coating failure relates to service conditions as there is an increasing demand on many internal pipeline coatings to operate at higher temperatures. Other factors including transportation, handling, and storage can cause stress on the coating, and outside storage can cause UV degradation and chalking.

Figure 1 outlines the general procedure we follow to investigate the cause of coating failure. Once failure has been identified, the location where the failure took place is examined. A site visit may be required to assess the pipe and surrounding field environment on location. If laboratory analysis is required, then samples from the failed pipe are cut and sent to our facility in Calgary, Alta. Samples from the failed pipe are examined and analyzed, ideally in conjunction with analysis of a section of coated pipe from the same service where a failure has not occurred. Usually pipe samples will provide an indication as to which factors are most likely contributing to the failure. When a conclusion

38 B.C. Oil & Gas Report • 2018-2019

By Amal Al-Borno, PhD

about the possible cause(s) of coating failure has been drawn, it is carefully evaluated to determine a level of confidence as findings are important for future recommendations and potential legal action. Once the coating sample has been evaluated and the suspected causes of failure have been reported, we consult with the client to help determine possible contributing factors in operation and provide recommendations to implement preventative actions for future projects.

Figure 2 shows some examples of coating failures. It is more likely to see a failure in spools, near joints, or on welds rather than on long straight runs of pipe that have been factory coated, however, this does not make determining the cause of the failure any easier. The most important steps during the investigation of the failure to determine the probable main cause includes collecting background information of the coating type, application procedure, service history and environment, and analyzing the physical evidence of the failed coating. Failure analysis should go beyond identifying the possible cause(s) of failure to include consideration of remedial action, when appropriate, both at the failure location and in other locations on the pipeline that may be affected in the same way. In addition, there should be recommendations made to implement actions during future projects to minimize repeating issues identified during failure analysis and investigation.

Amal Al-Borno, PhD is the president and CEO of Charter Coating Service (2000) Ltd. n