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Volume 6, No. 02 September/October 2011
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OIL SANDS
A global sustainable energy leader?
PM 40069240
That’s what a Deloitte report proclaims if industry heads step up before the moment passes
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HIGHLIGHTS THAI lightens heavy oil extraction Cougar Tools stays CNC sharp Superglass: future energy saver Video collaboration on or off site 11-10-19 5:23 PM
THE WAY WE WORK: no.
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IT’S ABOUT STAYING POSITIVE
BUSINESS BANKING IS ABOUT A SHARED PERSPECTIVE. Being headquartered in the West has its advantages. We know your business environment better, understand local markets and make timely decisions. More importantly, we can work closely with you to find solutions perfectly suited to your business banking needs. Learn more at theworkingbank.ca.
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Editorial
Climate change: Less talk, more action
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t is not an exaggeration to suggest Canada is among the countries least likely to be recognized for leadership on the climate change file. Output from Alberta’s oil sands is drawing condemnation from among others, the European Union and celebrities as diverse as Dave Thomas, the Dalai Lama and Dr. Desmond Tutu. And Canada’s government is chided for missing its Kyoto commitments by miles while doing little to rectify the lapse. Not that the world is doing such a great job. Despite years of effort, a report from the International Energy Agency (IEA) revealed greenhouse gas emissions are reaching record highs. Carbon emissions account for a worldwide total of 30 gigatons, 5% more than the previous record set in 2008. Even so, Canada has been a stumbling drunk when it comes to climate change policy and action. A federally appointed environmental auditor has dealt yet another blow to the nation’s green cred with a report that says the government’s knowledge about greenhouse-gas emissions and oil sands pollution is a bit thin, yet decisions are being made without fully understanding the consequences. Environment Commissioner Scott Vaughan’s report found the federal government’s approach to climate change was “disjointed, confused and non-transparent,” making it difficult to discern whether Ottawa’s dramatically scaled back targets are going to be met. Those targets, recalibrated to a 17% reduction by 2020 (from a 2005 baseline), are 90% lower than they were four years ago. And more good news: so far these inadequate efforts have cost $9 billion. The report also notes few of the government’s programs are monitored. Worse, about $6-billion worth of initiatives won’t achieve much in the way of emission reductions. An annual federal progress report on emissions reductions earlier this year shows a four-megatonne cut in 2009 from a total of 694 megatonnes. That means Canada’s efforts are responsible for a measly 0.5% reduction. Annual emissions have increased by 142 million tonnes between 1990 and 2008 and stabilized between 2004 and 2008, but the Conference Board of Canada says a strong downward trend is yet to emerge. Also troubling is the federal government’s tenuous grasp of the impact oil sands development is having on Alberta’s environment as adversaries in the US and Europe wage campaigns to blacklist the “dirty oil” produced there. Indeed, Vaughan says Fisheries and Environment Canada have warned for more than a decade they lack the data needed to assess the impact developments are having on the region. Environment Minister Peter Kent insists the federal government does have a plan and the big moves are coming. They’ll include regulations for coal-fired power plants and the oil sands over the next couple of years: a slow ramp up, he says, until emissions are under control by 2020. And a monitoring regime was implemented in July that could be a game-changer, says Vaughan. But the Conference Board warns that unless the pace picks up, Canadian and provincial governments are unlikely to meet their targets. What’s the answer? Let’s start with a co-ordinated effort involving the provinces, which the Conference Board contends will be more likely to reduce emissions at a lower cost, while helping the governments learn from the experience of others. Some of the big energy players are calling on Ottawa to work with them to establish some across the board regulations that meet targets but don’t place an onerous burden on industry. The Conservative government has a majority. Business wants clarity. People want action. It’s time to demonstrate Ottawa intends to do more than talk about climate change measures. Joe Terrett, Editor Comments? E-mail JTerrett@plant.ca.
Vol. 6, No. 02, September/October 2011 A supplement to Canadian PLANT Publisher: Tim Dimopoulos 416-510-5100 TDimopoulos@canadianmanufacturing.com Group Editorial Director: Lisa Wichmann 416-510-5101 LWichmann@canadianmanufacturing.com Editor: Joe Terrett 416-442-5600 ext. 3219 JTerrett@plant.ca Contributing Editors: Ron Richardson, Steve Gahbauer Art Director: Kathy Smith 416-442-5600 ext. 3215 KSmith@plant.ca Junior Web Producer: Jessica Mirabelli 416-442-5600 ext. 3227 JMirabelli@canadianmanufacturing.com
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District Sales Managers: Amanda Bottomley 416-859-4527 ABottomley@canadianmanufacturing.com Catherine Martineau (Quebec) 647-988-5559 cmartineau@bizinfogroup.ca Deborah St. Lawrence 416-510-6844 DStLawrence@canadianmanufacturing.com Derek Morrison 416-510-5224 DMorrison@canadianmanufacturing.com Ilana Fawcett 416-510-5202 IFawcett@canadianmanufacturing.com Market Production: Barb Vowles 416-510-5103 vowlesb@bizinfogroup.ca Circulation Manager: Diane Rakoff 416-510-5216 DRakoff@bizinfogroup.ca Editorial Advisory Board: Robert Hattin, Hattin Holdings • Ron Harper, Cogent Power • Greg MacDonald, Wentworth International Services • Roy Verstraete, Anchor Danly BIG MAGAzINES LP Vice-President of Canadian Publishing: Alex Papanou President of Business Information Group: Bruce Creighton
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Features
>> SUSTAINABILITY 5
EmissioNs REduCTioN Petrobank Energy Resources is extracting hard-toget-at bitumen using a process that doesn’t consume water or natural gas.
>> MANAGEMENT 6
REsouRCE dEvELoPmENT A Deloitte report suggests Alberta’s oil sands could be a global sustainable energy leader if the industry acts quickly, before the opportunity passes.
>> OPERATIONS 7
CNC APPLiCATioN Cougar Tools in Edmonton relies on MAG DUS lathes to turn tools and parts for the global oil industry into profits.
>> TECHNOLOGY 8
PLANT iNTEL Librestream’s OnSight video collaboration system solves plant issues wherever they may be by bringing the problem to the experts.
>> INNOVATIONS 9
NEw mATERiALs UBC and FPInnovations use a pulp chemical to create a tuneable glass that will be developed into an energy saver.
departments
4 Industry View PLANT Pulse Events 10 Product Showcase 11 Postscript
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COVER: SHELL, ATHABASCA OIL SANDS
Canadian PLANT—established 1941, is published by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd. Tel: 416-442-5600, Fax: 416-510-5140 80 Valleybrook Dr., Toronto, ON M3B 2S9 PrIVACy NOTICE: From time to time we make our subscription list available to select companies and organizations whose product or service may interest you. If you do not wish your contact information to be made available, please contact us via one of the following methods: Phone: 1-800-668-2374 Fax: 416-442-2191 E-mail: privacyofficer@ businessinformationgroup.ca. Mail to: Privacy Officer, 80 Valleybrook Drive, North York, ON M3B 2S9 SuBSCrIBEr SErVICES: To subscribe, renew your subscription or to change your address or information contact us at 1-866-236-0608 (English) or 1-866-236-2125 (French). SuBSCrIPTION PrICE: Canada $69.00 per year, Outside Canada $141.00 US per year, Single Copy Canada $5.50. Plant is published 6 times per year except for occasional combined, expanded or premium issues, which count as
two subscription issues. Contents of this publication are protected by copyright and must not be reprinted in whole or in part without permission of the publisher. Publications Mail Agreement #40069240. Performance claims for products listed in this issue are made by contributing manufacturers and agencies. No responsibility for the accuracy of these performance claims can be assumed on the part of Canadian PLANT or BIG Magazines LP. Contents copyright© 2011 BIG Magazines LP, may not be reprinted without permission. Canadian PLANT receives unsolicited materials including letters to the editor, press releases, promotional items and images from time to time. Canadian PLANT, its affiliates and assignees may use, reproduce, publish, re-publish, distribute, store and archive such unsolicited submissions in whole or in part in any form or medium whatsoever, without compensation of any sort. This statement does not apply to materials/pitches submitted by freelance writers, photographers or illustrators in accordance with known industry practices. We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund CPF for our publishing activities.
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departments
>> Industry View NEW LifE To uSEd EV bATTEriES
ECONOMIC DEVELOPMENTS AND TRENDS
ECoNomy SLoWS, ALbErTA LEAdS
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TD Economics report noted Canada’s fortunes as a small, open economy remain closely tied to developments abroad, so slow growth in the US, Europe’s ongoing debt crisis and financial-market jitters will likely “significantly constrain” Canada’s rate of expansion over the next several quarters. These conditions are trickling down to cramp provincial growth projections. TD Economics is forecasting growth in 2011 at 2.2%, and 1.9% next year. RBC Economics was more optimistic with a forecast of 2.4% this year and 2.5% next year. Provincially, resource provinces such as Alberta, Saskatchewan and Newfoundland and Labrador will lead in this subdued environment. There was little employment change in Alberta in August: its unemployment rate remained unchanged at 7.5%. However, Alberta’s employment growth over the year was above the national average at 4.2% (86,000 jobs). Ontario posted the second highest growth rate of 1.5% (102,000 jobs). Canadian real gross domestic product (GDP) rose 0.3% in July after a 0.2% gain in June, but the number of main industrial sectors registering increases equalled those showing declines. Manufacturing and to a lesser extent wholesale trade and transportation equipment were behind a 0.3% boost to GDP. Manufacturing was up 1.4% thanks to a 2.1% increase in durable goods and a 0.5% increase in non-durable goods. TD Economics notes manufacturing led the way for the month after three months of declines, followed by gains in wholesale trade and transportation services. Utilities and the public sector also recorded increases. Declines came from retail sales, mining, oil and gas extraction, construction, and finance and insurance. Sales of manufactured goods in Alberta rose 3.0% in July, reflecting advances in the petroleum and coal product, chemical and fabricated metal product industries. The gains were partially offset by a 2.5% decline in the machinery industry. The Washington-based International Monetary Fund expects Canada’s unemployment rate will rise from the current 7.3% to the mid-seven per cent range and above.
Filling up at Encana’s new CNG station in Strathmore, Alta.
PHOTO: ENCANA
NEW ENCANA STATioN To fuEL CNG fLEETS STRATHMORE, Alta.: Encana Natural Gas Inc. has opened a compressed natural gas (CNG) station in Strathmore, Alta. to serve its own natural gas-powered vehicles and to encourage others to switch to the cleaner-burning fuel. The station, near Calgary, will service 39 natural gas vehicles at Encana’s Clearwater business unit. The natural gas company has converted 128 of its 1,400-vehicle North American fleet to the fuel. Starting next year, Encana Natural Gas, a subsidiary of Encana Corp. in Calgary, plans to offer the station’s fuelling services to other corporate fleets in the area, and to the public at a later date. “Encana is leading by example as we convert our own vehicle fleets to natural gas and help build the necessary infrastructure to support its expanded use as an alternative fuel to gasoline or diesel,” said Randy Eresman, Encana’s president and CEO. The Strathmore opening follows others during the summer in Fort Lupton, Colo. and Sierra, BC. Encana also has an operational CNG station in Parachute, Colo. and Red River
Parish, La., the latter of which opened to the public in March. Cars and trucks fuelled with CNG or liquefied natural gas (LNG) operate similarly to gasoline-powered vehicles. There are currently more than 960 natural gas fuelling stations in the US servicing about 110,000 natural gas vehicles. Canada has a network of approximately 80 public fuelling stations in five provinces.
WINNIPEG: Electrovaya Inc. is launching a $7.6 million project that will put end-of-use electric vehicle batteries to work as part of a utility sized stationary battery system. The Toronto-based developer and manufacturer of lithium ion battery technology said the repurposed batteries could be used to store electricity generated by renewable energy systems, such as wind and solar power. The system will be implemented at the Manitoba HVDC Research Centre facility, a subsidiary of Manitoba Hydro based in Winnipeg, with participation from the University of Manitoba. Some of the project funding will come from Manitoba Hydro and $3.36 million from the Government of Canada’s Clean Energy Fund. Bob Brennan, CEO of Manitoba Hydro, said repurposed lithium ion battery technology has excellent potential for grid storage application, while reducing diesel consumption in remote Northern communities.
$60m dEAL To ProCESS SyNCrudE TAiLiNGS CALGARY: Newalta Corp. has signed a contract worth $60 million with Alberta oil sands developer Syncrude Canada Ltd. for a demonstration project that will process mature fine tailings (MFT) resulting from oil sands mining. Newalta, a Calgary-based environmental services company with offices across Canada and in the US, said the project follows two years of trial projects with Syncrude to prove the application of centrifugation (use of centrifugal force to isolate suspended particles from water) for processing MFT. The three-year contract, which involves a capital investment of between $25 million and $30 million, is expected to generate revenue of about $20 million per year over a three-year period at Syncrude’s oil sands mine operations near Fort McMurray, Alta. “The contract with Syncrude builds on our current base of eight contracts including customers that are using steam assisted gravity drainage (SAGD) production,” said Craig Wilkie, executive vice-president of Newalta. The demonstration project will involve 30 Newalta people.
>> Events
Profit from the Synergy of two great products ... Venanzetti Vibrators
Global Clean Energy Congress and Exhibition WAdE Canada, CEd Nov. 1-3, Calgary The latest innovations in clean energy technology from a global perspective, plus a three-day congress and exhibition with international leaders in clean energy. Presented by WADE Canada and Calgary Economic Development (CED). Visit www.globalcleanenergycongress.com. CANSmArT CiNdE Nov. 2-4, montreal The Canadian Institute for NDE (CINDE) presents the CANSMART International Workshop on Smart Materials & Structures and NDT in Aerospace, in conjunction with the NDT in Canada 2011 Conference. Visit http://events.cinde.ca.
ROSTA Screen Mounts
Make an impact on your bulk processing! Use the Venanzetti Vibrators in conjunction with the ROSTA Screen Mounts. 4 Canadian PLANT WEST
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ROSTA Inc. 12 Douglas Road, Unit # 6, CA-Uxbridge, Ontario L9P 1S9 Phone ++1 (905) 852 19 29, Telefax ++1 (905) 852 18 61 info@rostainc.com, www.rostainc.com
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fAbTECH 2011 SmE Nov. 14-17, Chicago North America’s largest metal forming, fabricating, finishing and welding event, presented by the Society of Manufacturing Engineers (SME). Visit www.fabtechexpo.com.
September/October 2011
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Emissions reduction << Sustainability
Petrobank’s
THAI solution
a LiGHTEr TOuCH FOr HEaVy OiL ExTraCTiOn
Toe-to-heel air injection reduces emissions, doesn’t consume water or natural gas and recovers up to 80% of hard-to-reach bitumen. By Kim Laudrum
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il sands producers face a challenge: to improve both bitumen recovery and refinement while reducing the environmental footprint of the process. Can it be done? David McLellan of Petrobank Energy and Resources Ltd. says he believes it can. The manager of patents and intellectual property for the oil sands producer based in Calgary, McLellan says such challenges are driving innovation in the field. “Most of the light, sweet crude is gone.” Such conventional oil is easily drilled and pumped and is now in dwindling supply. Still, worldwide energy demand is expected to increase 36% between 2008 and 2035. Supply from renewable resources will double from 7% to 14%, according to the International Energy Association, but fossil fuels – oil, coal and natural gas – will remain the dominant energy source with oil alone providing 28% of the mix. Alberta’s abundant oil sands reserves, the third largest source of oil on the planet, could play a vital role in meeting the world’s needs. As the number one exporter of oil to the US, Canada can ensure security of supply. Production in the oil sands is expected to increase 230% – from 1.3 million barrels per day (bpd) to 3 million by 2018. Until late in the last century, extracting oil from the sticky tar-like substance was thought to be too difficult, too costly and too disruptive to the environment. Unlike conventional drilling, extracting the oil from the heavy sand, particularly
Can you spot Petrobank’s THAI operation in this pastoral photo of the Kerrobert area of Saskatchewan? Hint: there's a farm nearby.
in situ, consumes significant amounts of water and natural gas. In the process, tailings ponds are created and the surface land is disturbed. Alberta requires heavy greenhouse gas emitters to pay $15 per tonne of CO2 emitted above target levels. These targets are 12% less than the company emitted in 2005. It’s one of the reasons why it’s more expensive to produce one barrel of crude from an in situ site than it is to drill for it. “You have to be innovative to extract it,” McLellan says. “The question is, how do you get the bitumen to flow into the production well? We have developed a technology that mitigates emissions, doesn’t consume water or natural gas, recovers up to 80% of the bitumen in difficult mines and actually treats the oil in the process so that it requires less upgrading and refining.” The technology McLellan is referring to is called toe to heel air injection, or THAI. This heavy oil recovery process is
ENErgy FyI 36% Expected increase in worldwide energy demand between 2008 and 2035, according to the international Energy agency. 28% Percentage oil alone is expected to provide of the world’s energy mix by 2035. 230% anticipated growth in Canada’s oil sands production, from 1.3 million barrels per day to 3 million, by 2018. 3 ranking in the world of Canada’s crude oil reserves, behind Saudi arabia and Venezuela. $800 billion amount oil sands investments that will have contributed to Canada’s gross domestic product between 2000 and 2010. $1.7 trillion Estimated amount oil sands investment will generate in economic activity over the next 25 years. 465,000 direct and indirect jobs created by oil sands investments over the next 25 years. 39% Percentage of Canada’s total oil production that comes from oil sands. 80% Percentage of Canada’s oil sands projects that are in place or in situ, too deep for open pit, or surface mining.
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a new configuration for in-situ combustion. It combines a horizontal production well with a vertical air injection well placed at the toe and involves injecting air into the heated zone to initiate combustion. As the combusted area moves, air flows over the coke to increase heat, like a charcoal briquette. There’s no open flame in the reservoir. Gravity is still the dominant force pushing the material toward the production well.
Controlling the burn In-situ combustion is not a new technology, McLellan explains. Adding oxygen to a reservoir to get combustion has been going on around the world since 1928. “The knocks on it at the time were that you couldn’t control its direction.” That changed with the advent of horizontal drilling. Dr. Alex Turta at the Petroleum Recovery Institute in Calgary and Dr. Malcolm Greaves at the University of Bath in the UK first developed the THAI technology in 1993. Dr. Conrad Ayasse enhanced it in 1996 by adding a catalyst around the horizontal well bore. Called CAPRI, this technology made it possible to double the degree of upgrading the oil goes through in situ, bringing it closer to pipeline grade. Ayasse brought the patents for both technologies to Archon International Technologies Inc., the research arm of Petrobank Energy and Resources Ltd. McLellan says about 20 years ago, steam assisted gravity drainage, or SAGD, came along. “It became commercial in the last decade or so, but [the process] consumes natural gas and water.” SAGD technology requires the drilling
PHOTO: PETROBANK
EmITTErS Cough uP Since 2007, regulation obligated alberta companies that produce more than 100,000 tonnes of greenhouse gas (GHG) emissions to report and comply with performance standards to achieve a 12% reduction from their 2005 levels. One compliance option is for the heavy emitters to pay into the Climate Change and Emissions management Corporation (CCEmC) Fund at $15 per tonne emitted over target. The monies collected are diverted to the CCEmC and are intended to leverage financing for innovative projects that mitigate GHG emissions.
of two parallel horizontal wells through the oil-bearing formation. Steam is injected into the upper well creating a high-temperature steam chamber. The increased heat loosens the thick crude oil causing it to flow downward in the reservoir to the second horizontal well that’s located parallel to and below the steam injection well. This heated, thinner oil is then pumped to the surface via the second horizontal, or production well. Between 25% and 75% of the bitumen is recovered, and about 90% of the water can be recycled. Water is injected into the bitumen-drained area to maintain the stability of the deposit. By mid-2006 Petrobank’s Whitesands THAI pilot project started operations, generating 12,000 bpd at Conklin (which has recently suspended operations after completing “near term” testing and is finalizing plans for the site). Some of the advantages of the THAI process over SAGD demonstrated by the Continued on page 6
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management
Less ghg than SAgD
>> resource development
Alberta’s oil sands
a GLOBaL SuSTainaBLE EnErGy LEadEr?
Continued from page 5
pilot project include: • reduced demand for natural gas used to heat the water to create steam; • it doesn’t consume water; • a smaller environmental footprint; • about 34% less greenhouse gases than a SAGD process; • and because THAI doesn’t burn natural gas, it doesn’t generate nitrogen compounds with oxygen (NOx). “On a capital basis, we found THAI very competitive – about two-thirds the cost of SAGD,” McLellan says. Not building water-handling facilities or the natural gas piece saves costs, the surface footprint is smaller and only one horizontal well is drilled instead of two. Plus, THAI improves SAGD’s average percentage of recovery from 30% to as much as 80%. With the ancillary CAPRI technology upgrading the bitumen to close to pipeline grade, he says the downstream costs are also reduced. It’s also possible to generate electricity by capturing the heat in the steam and hot oil. The idea one of these plants could be set up in remote, inhospitable terrain and yet be fully self-sufficient is enticing. Petrobank hopes to license the technology to other producers in the oil sands. In addition to the Whitesands project at Conklin, for example, Petrobank has a 50/50 joint venture using THAI with Baytex Energy Trust at the Kerrobert project in Saskatchewan. Production began at the site in October 2009. Expected maximum output is 72,000 bpd. The partners believe a significant portion of the estimated 20 billion barrels of unrecovered conventional heavy oil resource in Saskatchewan can be commercialized using THAI. Petrobank’s May River project, the first large-scale commercial application of THAI, builds on the experiences gained from Conklin and Kerrobert. Ultimate capacity is 100,000 bpd. McLellan says the project is designed to be a net water producer rather than a water consumer, making this a much more environmentally sustainable process for oil sands and heavy oil development. Petrobank also has a licensing agreement with Duvernay Oil Corp., now Shell Canada Ltd., for a THAI project at Dawson in the Peace River region of Northwest Alberta. The resource potential is 100 million barrels highly suited to THAI development. Once final regulatory approvals are received, construction begins on a Petrobank project that will show how heavy oil can be extracted with a lighter touch. Kim Laudrum is a Toronto-based business writer who specializes in manufacturing issues. E-mail klaudrum@ rogers.com. Comments? E-mail JTerrett@plant.ca.
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Access to new markets will be key to Canada achieving energy superpower status. PHOTO: SHELL
a deloitte report says the potential is there and cites 10 issues that need to be dealt with.
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here are many critics worldwide who see Alberta’s oil sands development as an environmental catastrophe in the making, and with additional vocal and well-publicized opposition to the Keystone XL pipeline project, it’s hard to imagine Canada being described as a potential leader in sustainable energy resource development, yet that is what a recent Deloitte Canada report suggests. Indeed, the global consulting and professional services firm declares the opportunity is at hand for Canada to do for global hydrocarbon-based energy development what Germany has done for the renewable energy research and development (R&D) and manufacturing sectors. “No other jurisdiction in the world with this magnitude of resource potential has anywhere near Canada’s combination of political stability, advanced education, technical prowess and ongoing improvements in developing the oil sands with an increasingly minimal environmental impact,” says Chris Lee, leader of Deloitte Canada’s national energy and resources practice. But Lee said achieving energy superpower status would require industry heads “to step up to the plate before our moment passes.” Gaining Ground in the Sands 2012 says getting access to new markets is key to achieve and maintain global leadership. Unless that access becomes available over the next five to 10 years, much of the growth potential will be lost. Some of the top challenges identified in the report include: • Demographic transformation – hiring and rewarding Generation Y. Looming waves of Baby Boomer retirements combined with little planning to retain talent and institutional memory suggests skill shortages will persist and worsen. Separation and replacement costs for talent can vary from 25% to 200% of a position’s annual compensation. Companies need to create cultures that attract and nurture members of Generation Y. • Labour logistics. By using the basic supply chain pillars (process, technology and people), improving information management and developing intimate supplier relationships, organizations can build more efficient people supply chains while realizing additional non-economic benefits. Industry-government investment must include significant education opportunities and expanded community support. • Automation. More attention needs to be paid to advanced technologies developed elsewhere in the world and/or in other sectors that carry potential benefits to oil sands operations,
especially when many of these technologies can help alleviate labour crunches. • The NOC wildcard. National oil companies (NOCs) will continue to play a role in development of the oil sands next year. Deloitte anticipates one or two major non-Chinese deals. This involvement could lead to increased sourcing and development of design and operational talent from NOC home bases. • Identify and focus on core competencies. In core areas like safety training and the environment where all companies must meet minimum standards, collaborate to define, design and deliver a singular and shared contractor orientation that would meet everyone’s needs and certify contractors at all relevant sites. Decentralizing some support and/or infrastructural tasks will free up existing labour for higher value activities. • Internal rigour around operational excellence. Companies need to engage in a deep review of their organizational structures, including hiring, communications and quality control processes. Placing greater resources and intelligence on benchmarking and extra-industry best practices results in better organizational awareness and the ability to better anticipate, avoid or respond to larger unforeseen developments. • Improved accountability. The pace and scale of development over the last decade has also made cost overruns almost the norm. Producers need to rethink approaches and policies that pertain to big-ticket items such as engineering, procurement, labour and construction. • Adopting models from other sectors. Borrowing from the automobile and hi-tech sectors, many oil sands producers are implementing contemporary manufacturing approaches such as lean and Six Sigma for significant savings and efficiencies. Among these are reducing cycle times by 30% to 50%, reducing overall operational costs by 15% to 20%, and eliminating nonproductive activity by more than 50%. • Enhanced collaboration. Strides toward greater collaboration within and between companies are being matched by industry associations in a variety of strategic areas, including technology development, environmental protection and social engagement with multiple stakeholders. • Reset public perception. Swaying public perception is often a game of inches and success comes from hard work, tailored communication and synergies between all players. “It’s difficult to self-proclaim to be an energy superpower when we can serve only two markets – our own Canadian market and the US,” says Lee. “Canada needs to take its rightful place on the energy side where international markets are concerned.” Click on www.deloitte.com/ca/oil-sands for the report.
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CNC Application << Operations Operator sets tooling position before running his program using handwheel controls. The part is a 4330 VMod piston sub. The outside diameter will be turned using a carbide insert. PHOTO: COUGAR TOOLS
motor rated 33 hp (25 kW). Cougar’s VDF 800 DUS machine, by contrast, takes part weights up to 8,816 pounds (4 tonnes), and lengths to 110 inche (2,794 millimetre), with an 18 inches (457 millimetres) chuck and swing overa bed of 32 inches (820 millimetres). Its 62 hp (46 kW) spindle motor provides speeds of 6 to 1,600 rpm through a twospeed gear box. Z-axis feed force is 2,800 pounds (12.5 kN).
Conversational programming
Sharpening Cougar’s teeth Lathes turn parts for profits in global markets Cougar Tools oilfield equipment shop uses DUS lathes to make drilling tools for the oil industry.
C
ougar Tool Inc. has been on the job since 1969 making drilling equipment for the oil industry. The family owned business has facilities in Canada, the US and the Middle East where it sells its specialized “downhole” tools. Key to delivering short-runs of large, heavy parts to these markets as well as refurbishing rented tools and producing prototype designs are 14 VDF DUS lathes from MAG, a global manufacturer of CNC machines with offices in Mississauga, Ont. “We compete with the best in every corner of the globe from our 100,000-square-foot Edmonton facility, so cost-efficient manufacture of turned parts is a core competency,” says manager Gary Spencer. “Our shop is also key to our R&D capability. The ability to add one-off R&D parts into our work flow, with programming by the operator on the floor, has been a big plus for us.” The conversationally programmed CNC machines are used to manufacture Cougar’s line of specialized downhole tools, as well as boring holes to a 32-inch (813-millimetre) depth, profiling internally and externally, or cutting/re-cutting threads. The company’s product lines include single and double-acting drilling jars, shock tools, Mech-Thrusters, mud motors, drill bit protection devices, stabi-
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lizers/reamers, and a range of support tools. About 80% of the company’s $50 million in annual sales is derived from its rental business, so the shop is constantly refurbishing worn and damaged tools to ensure availability. “We are also developing new lines all the time, always looking for new points of entry into the market,” says Spencer, who stresses the downhole tool business is all about cylindrical, turned parts. “We make the whole tool when it comes to hydraulically or mechanically acting drilling jars and shock tools, which consist of about 15 external and 10 internal parts, all screwed or fitted together to make a functioning tool.”
Stringent processes Drilling jars “jar” stuck drilling tools to free them, while shock tools and MechThrusters protect drill strings and bits from transient shock loads, ensuring optimum weight-on-bit, penetration and bit life. These tools commonly operate in deep, hot wells and are subjected to high torques and corrosive environments. As a result, the company is a heavy user of high-carbon steels, such as 4330 VMod and 4145, heat treated and stress relieved. Cougar’s processes are stringent, using computer-aided design, finite element analysis and CAM. Sliding and sealing interfaces require tolerances to 0.001
inches (0.025 millimetres), often followed by honing and chrome finishing of some bore surfaces. “We put the biggest pieces of steel into our VDF DUS machines that we can – often 72 inches (1,829 millimetres) long and 10 to 12 inches (254 to 304 millimetres) in diameter,” says Cougar production manager Dave Hemmerling. “We standardized on these machines because the Siemens control is easy to use, the machines hold excellent accuracy over long cuts, they are built for heavy use, and it’s easy to cut/re-cut taper or straight threads on them. Just about every part we machine has a thread at one end or both, and at least 50% are taper threads.” He says the Siemens control makes it easy to cut new and re-cut old threads. The programming is fast, and the spindle rpm can be changed in cycle to control vibration. “Our tooling is relatively basic, involving no turret and no probing capability. We do a lot of deep boring to produce the long housings required for drilling jars.” Parts are chucked, using a tailstock and steady rest for support, if needed. To take some of the heavyweight work off its 12 VDF 560 DUS machines, Cougar moved up to a VDF 800 DUS in July 2008. The 560s handle part lengths of 40 to 315 inches (1,000 to 8,000 millimetres) and virtually any weight, with chuck capacity of 11 inches (280 millimetres), swing over the bed of 22.4 inches (570 millimetres) and spindle
Designed for constant duty, VDF DUS lathes have the transmission mounted behind the headstock to eliminate thermal effects caused by the gearing, with a backlash-free overload coupling to protect the gearbox. The VDF 800 DUS machine’s A-11 spindle is supported with a thermally optimized arrangement of lifetime-lubricated bearings. A Meehanite cast iron bed retains its core sand to enhance vibration damping, while hardened double-V guideways distribute high axial cutting forces and prevent skewing. Larger models of the machine handle part lengths up to 787 inches (20,000 millimetres). Although Cougar relies heavily on conversational programming through the CNC, the VDF DUS machine has an ergonomic operator panel and handwheels. “Standardization on these machines has been very helpful, allowing us to transfer part programs from one facility to another over our Predator network,” says Hemmerling. “All our drawings are generated in our CAD/CAM system. The majority of our programs are already produced and stored in our DNC system, but we can produce part programs on the lathes by programming off our drawings.” All programs made by the machinists are double checked by the shop foreman before running. By repeating this process, the machinists get trained, and only proven programs go to the DNC system for storage. Hemmerling says the manual mode is used often for simple operations such as facing, turning steady pads and test cuts for measuring tooling. “We work these machines hard, and they have proven themselves oil-field tough, with excellent longevity, backed by excellent service here in Canada,” says Spencer. “We recently sold our first VDF DUS machine on the used market after years of double-shift work. The bedways were still in great shape and we received about 30% of the machine’s original price.” This feature was adapted from application information provided by MAG. For information about MAG products visit www.mag-ias.com. Comments? E-mail JTerrett@plant.ca.
Canadian PLANT WEST 7
11-10-07 3:24 PM
Technology
>> Plant Intel Putting the OnSight system to work in a processing environment. PHOTO: LIBRESTREAM
and designers interacted remotely from very distant parts of the globe. The Winnipeg company, which produces about 8 million denim products annually, collaborated with production teams in Bangladesh and China to solve detail issues as minute as missed stitches and denure count. Librestream currently employs about 50 people at its 1,022-square-metre Winnipeg facility, most of them devoted to R&D and engineering, says Marieke Wijtkamp, vice-president of marketing and client services.
Ramping up for exports
Face
TimE
VIdeo streaMIng Boosts Plant oPeratIons
librestream’s onsight helps solve plant issues remotely, collaborating on and off-site with experts via video. By Matt Powell
W
hen Bill Gallanders and seven other engineers formed Librestream in 2003, streaming media was still isolated voice-over IP systems. Within three years, the Winnipeg-based company introduced the world’s first remote video-collaboration system, which is making plants more tech-savvy, cutting downtime and increasing production. Mind you, it took some time and a lot of coding – 1.2 million lines – to introduce Librestream’s OnSight, which tackles complex manufacturing and supply chain problems remotely using a real-time video, voice and telestration collaboration system. “Getting investment money to build the system was the main reason it took so long,” says Gallanders. “We had to freelance engineering consultations for a year just to pay the bills.” Their remote video-collaboration is certainly paying off now that Fortune 500 and Fortune 1000 clients around the world use it. “Say you have an injection moulding machine reporting that a batch of parts you need has failed,” he says. “Someone
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must decide whether those parts have to be redone or you’re going to use them as is – this is something on which you can collaborate remotely with off-site quality assurance personnel using the OnSight system.” The technology is a beefed-up version of video conference calling, with voice and telestration capabilities that run through a remote network of broadband and cellular networks.
Off site with OnSight An onsite worker uses a hand-held device that videos or takes still images of a troublesome piece of machinery. Session initiation protocol (SIP) controls multimedia communication sessions such as video and voice calls through unique IP addresses, allowing interaction with offsite experts. “The entire video conferencing industry is standardized on SIP,” says Gallanders. “We made the process wireless by integrating those capabilities into OnSight.” Librestream preps its clients to ensure there are no broadband issues. “We spend a lot of time making sure companies measure their available bandwidth,” says Gallanders. “The clients
need to understand their network environments. But typologies and network firewalls also need to be worked around to ensure the system works properly. We make sure our product is as robust as possible so bandwidth is not a barrier to use.” In a manufacturing setting, the system manages supply chains and conducts design reviews for industries such as aerospace, automotive and packaging, reducing unplanned downtime while improving production by increasing response time to machinery issues on the shop floor. OnSight uses three models of IP64-rated (completely dust and water-proof) handheld devices that cover industrial settings (OnSight 1000), extreme and potentially hazardous (OnSight 2000R) and outdoor settings (2000EX). All models provide real-time video streaming, two-way VOIP audio with speakerphone and handset capabilities, and outstanding optical zoom for video and still images (1 cm to 10x). Users can draw or make annotations onscreen; bi-directional image sharing modes help out when network connection strength may be a concern; and there are advanced security, encryption and authentication features. A testimonial on the company’s website describes how the device streamlined Western Glove Works’ supply chain operations by moving production to a lower cost region, while plant managers
Customers are mostly North Americanbased Fortune 500 and Fortune 1000 businesses in manufacturing and oil and gas, but more companies are consolidating manufacturing operations off-shore, so Librestream is ramping up in areas such as Asia and South America. Engineers and developers spend much of their time hashing out requirements in the software code, but Gallanders says the company’s in-house assembly process is fairly simple, using components sourced from around the world. “When it comes to the product itself, we spend about 99% of our time upgrading the software and code, and about 1% of our time actually putting the cameras together.” The company’s facility includes an optical lab with controlled lighting to test and optimize OnSight’s camera functions. A faraday cage assists with the radio frequency testing and a clean airflow booth protects against dust for LCD display disassembly and re-assembly. The main circuit board is sourced from California-based Sanmina SCI, a global contract manufacturer of OEM electronic components. “We’ve got stuff coming from everywhere,” says Gallanders. “The camera module is sourced from Japan and our radios are from Taiwan, but all final assembly and testing is done in-house.” The team’s main job is to spot industry trends and deal with client requests for upgrades to the video-collaboration system. “We thought the idea was pretty simple at first,” he says. “But when it came down to actually building it, it wasn’t so easy.” The company has some exciting new upgrades in the works, locked away in the company’s lab. As manufacturing continues to evolve with the emergence of new equipment technologies, Librestream is ready to address the next level of industry concerns, even if it takes another 1.2 million lines of code. Matt Powell is an online reporter with CanadianManufacturing.com. E-mail MPowell@canadianmanufacturing. com. Comments? E-mail JTerrett@plant.ca.
September/October 2011
11-10-07 1:01 PM
SUPERGLASS
New Materials << Innovation
PULP CHEMICAL YIELDS FUTURE ENERGY SAVER UBC and FPInnovations R&D create tuneable glass using nanocrystalline cellulose. BY ERIKA BEAUCHESNE
I
magine a car that changes colour when sunlight hits it at different angles, or windows that control how much light enters a room. These may seem like futuristic applications, but a new discovery out of the Uni(L) Kevin Shopsowitz and Mark MacLachlan have developed a method to condense silica glass around NCC versity of British Columbia (UBC) has rods while they are in a structure with unique optical qualities. PHOTO: JOANNA DEWITT brought them a step closer to realization. UBC associate chemistry professor Mark MacLachlan and PhD student Kevin Shopsowitz have been working with a material called nanocrystalline cellulose (NCC) developed by scientists at FPInnovations, a Canadian forestry research organization that initiated and funded the project. NCC is produced from the acid hydrolysis of chemical pulp. It’s made up of individual rod-shaped crystals about five nanometers (nm) wide and 100 nm long. When these rods are dried from a water suspension, they organize into a structure that has unique optical properThree different porous glass films on a dark surface ties. They point in different directions with in each layer of made of pure silica (colourless glass). Their colours the dry film, so light is reflected in different directions and come from the helical organization of pores within the film appears iridescent – like a butterfly. their structure that diffract light. MacLachlan and Shopsowitz developed a method to Graphic representation of the chiral PHOTO: KEVIN SHOPSOWITZ condense silica glass around the NCC rods while they nematic organization of nanocrystalwith the structure. Even MacLachlan were in this structure. line cellulose. In each layer, the NCC was surprised when they succeeded. “When we burned the glass away, we were left with rods are oriented, but every layer is “I didn’t expect it to keep the strucholes that had the same structure as the NCC template, twisted relative to the layer above and ture. I thought the glass would collapse,” below. allowing the glass to reflect light of different wavehe admits. lengths,” MacLachlan explains. “We can easily tune the GRAPHIC CREDIT: MARK MACLACHLAN glass to reflect any wavelength from infrared to visible to ultraviolet.” MacLachlan says the structure is similar to beetle shells, which have different colours, not because of the pigment, but because of the nanostructure and the way it reflects light. FPInnovations had been researching and developing NCC for about 20 years and recently developed a commercially viable process to produce it. But up until now, it wasn’t possible to make iridescent glass
Shopsowitz says it took about three months of trial and error. “To get iridescence, it requires very delicate conditions,” he says. “We played around and found the crucial aspect was the pH we were working with, that is the acidity of the solution.” When they finally struck the perfect pH levels, Shopsowitz says it was thrilling.
Many potential uses “This was something that had never been done before and that was interesting, whether commercial applications come from it or not,” he says. Chances are, they will. “Colour is just one of the applications,” says Wadood Hamad, principal scientist at FPInnovations. The glass could be used to create special coatings for windows so buildings absorb less light during different times of the day, saving energy. It also has potential uses across sectors such as automotive, pharmaceuticals and chemicals, where it could separate molecules or detect contaminants in water. But manufacturing plans are likely a few years off. “Like any new discovery, we still need to work on the scale-up and commercialization steps, although the proof of concept has been validated,” Hamad says. “We do know there’s potential for different kinds of applications and what we can do is limited only by our imaginations.” Erika Beauchesne was recently an online writer and section editor with Canadian Manufacturing.com, and is currently seeking adventure in Alberta. Comments? E-mail JTerrett@plant.ca.
A scanning electron micrograph of a thin film of the glass shows the fine structure that makes the films iridescent. The features that are several hundred nanometers in size are similar to the wavelength of visible light and this fine structure in the glass gives the materials its photonic properties. IMAGE: KEVIN SHOPSOWITZ
www.plant.ca
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Departments
>> Products >> Vibration testing
>> safety KEEP your goggLES hANDy Workers on the plant floor or in other processing environments will always know where their goggles are with the uvex stealth Goggle retainer from Honeywell safety Products. the retainer attaches to most hard hats ensuring Uvex goggle retainer for workers’ eyes are protected by creating a proper, hard hats. gap-free seal around the eyes. they’re highly adjustable, enabling workers in oil, gas and chemical manufacturing to achieve a comfortable, secure fit whenever uvex stealth goggles and hard hats are a required combo. When goggles are not needed, they’re secured to the hard hat. Honeywell safety Products, based in morris township, NJ, is a global manufacturer protective equipment. www.uvex.us
ProTECT your SAfETy gEAr sensitive safety equipment such as respirators need to be protected. allegro industries’ Hi-Viz Heavy Duty scba wall cases shield gear from dust, moisture and damaging plant environments. the single and dual unit models are rugged but light for easy installation, and the heavy duty emergency respirator case (yellow or green) holds up to two five or 10-min ebas. the Deluxe and standard wall cases, made from corrosion-resistant abs with ultraviolet inhibitors, protect respirators against damaging plant and window environments. Nonmetallic hinges and latches prevent rust, while a rubber door seal protects equipment from dust and moisture. allegro industries, based in Garden Grove, calif., is a supplier of safety equipment and ergonomic products for the workplace. Heavy-duty emergency www.allegrosafety.com respirator case.
Bad vibrations
Fluke 810 sPots trouble beFore it becomes a Problem
W
hen a mechanical issue arises and maintenance pros are called upon to troubleshoot, tight budgets and time constraints can get in the way of a prompt diagnosis. Now there’s an instrument that will help them get to the bottom of problems fast, and they don’t have to be experts in vibration analysis to use it. The 810 Vibration Tester from Fluke Electronics Canada in Mississauga, Ont. diagnoses common mechanical problems in motors, fans, blowers, belts and chain drives, gearboxes, couplings, pumps, compressors, closed coupled machines and spindles.
Fluke's 810 looking for trouble.
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The $9,357 hand-held tester is simple enough to use. Fluke has included onboard help menus with tips to get first-time measurements without a previous history and figure out the root cause of most problems. The instrument has an “expert system” typically found in much higher-priced equipment, says product manager Colin Plastow. “You tell it what you’re looking at, the size of the motor, what it’s
connected to, and from that information, it can figure out a baseline for what the equipment under test would look like new. Under test, it compares the results to the baseline and can figure out what, if anything, is wrong.” Evaluating machine condition typically requires readings taken over time that are compared to a baseline to estimate remaining operating life. The 810 compares vibration data to an extensive set of rules that have been developed over years of field experience. You place the TEDS accelerometer on the machine using the magnetic mount or adhesive pad and connect it by cable to the tester. The accelerometer detects machine vibration along three planes of movement and the 810 applies a set of advanced algorithms, then delivers its diagnosis rating it on a scale of one to four and offering a recommended repair. Vibration can come from any number of things that cause problems in, for example, a bearing, breaking down into four parameters: looseness, unbalance, misalignment and bearing failures. “It will tell you whether the problem is acceptable, moderate, serious or extreme, what to do and how quickly,” says Plastow. The message is in plain text (“moderate wear on bearing”) but a techie keen for more detail can dig down to see the actual “spectra.” The 810’s key advantage? It gives non-experts an inexpensive way to spot vibration trouble long before it becomes and issue and fixing the problem at a time when production will be least affected. Software includes Viewer PC, compatible with Windows XP and Vista, that allows you to create machine setups on a computer and transfer them to the device, generate PDF reports, view vibration spectra in greater detail, and import and store jpegs and thermal images. Visit www.fluke.com, and search “Fluke 810” for specs and additional information.
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a-t controls’ m-series metal seat ball valves with their specially coated matched balls and seats stand up to the high temperatures, pressures and abrasive materials encountered in the oil and gas, chemical, power generation, pulp and paper, food M-Series metal seat ball valve. processing and mining industries. temperature range is -28 to 350 degrees c with a pressure rating of up to aNsi class 600. made with stainless steel, stellite welded, and hard chrome-plated steel, a-t controls, a cincinnati, ohio manufacturer of acutation systems, recommends they be used in applications involving abrasive fluids and steam. two optional coatings are also available: a tungsten carbide for heavy slurry environments, and chrome carbide for higher temperatures. an oversized stem prevents deformation at higher pressures and temperatures, a larger ball design provides a tight seal that prevents leakage, and an inconel seat spring maintains positive contact between the ball and seat during operation. connection options include flanged, threaded, socket weld and butt weld – and body material options include Wcb, cF8 and cF8m. Nominal pipe size range is 0.5 to 8 in. a uni-directional shutoff is standard, with a bi-directional shutoff available for back flow applications. www.a-tcontrols.com
September/October 2011
11-10-07 1:03 PM
Postscript << Departments
Diversifying trade: It's not short term By Todd HirscH
I
t wasn’t a good summer for the US. July was consumed by political bickering over the deficit, August saw a credit downgrade and markets convulsed. Jobs in America are still hard to come by, and GDP growth is slowing at an alarming rate. So where does this leave the Canadian economy, which is so heavily dependant on exports to the US? There have been plenty of suggestions that Canada must diversify its global trade. Increasing exporting to China, India and the other emerging economies seems like an obvious solution. Their economies continue to grow, and a combined market of 2.5 billion people offers huge potential as a market for Canadian oil, lumber food and other natural resources. As well, the federal government has just concluded a high-profile tour and trade mission in South America. Prime Minister Stephen Harper was busy through much of August signing trade agreements and shaking hands with political leaders in places such as Brazil, Argentina and Honduras. These sorts of initiatives are long overdue. The more Canada reduces its heavy reliance on the US, the better (and more stable) Canada’s export-oriented economy will be.
sales to china are growing, the chance of tripling trade “inWhile one year is essentially zero… ” While sales to China are growing, the odds of tripling trade in one year are essentially zero. Our best chance of expanding exports to that country – or any of the emerging Asian economies – is by pumping a lot of Alberta’s bitumen through a pipeline to the west coast and shipping it by oil tanker. Of course, plans for such a pipeline are well underway (even though the obstacles are enormous). But even if construction on a
pipeline started now, it would take years to complete. The point in all of this is that trade diversification is desperately needed now, but because of geography and existing trade linkages, the US will always remain our No. 1 export market. We can (and should) work hard to expand trade with Asia and South America, yet even doubling or tripling sales to these markets over the next decade would not make up
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Comments? E-mail JTerrett@plant.ca.
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Where the puck stops The problem is math. Imagine the ice surface of a standard hockey rink covered by some 317,000 pucks laid sideby-side. Now imagine all of these pucks represent total exports from Canada to the global economy last year. Of these, about 75% (237,000 pucks) would be sent to the US with just 13,000 going to the UK, Canada’s second-largest trading partner in 2010. Just over 10,000 pucks would go to China, the world’s largest country by population and the one economy in the world that seems to be propping up global growth. Brazil would receive fewer than 2,000 pucks, or only 0.6% of the total and tiny Honduras, a recently signed free trade partner, would get only 32 pucks. That’s about 0.01% of the total. Belarus would get only one puck and European lightweight Andorra would get a shaving the size of a small french fry. Now imagine that the US shipment of pucks fell by 10% – an amount perfectly within the range of possibilities if America slips into another recession. That would represent a loss of nearly 24,000 pucks. To make up for this loss, Canada’s shipments of pucks to the UK (another country mired in its own economic woes) would have to double. Pucks to China would have to nearly triple. And pucks to Brazil – another one of the “emerging economies” still growing – would have to increase more than ten-fold.
for a 10% drop in trade with the US. Canada should be concerned about the US economy, but worrying won’t do a lick of good. This is America’s problem and no policy action by Ottawa or the Bank of Canada would be of much use. The best we can do is hunker down, keep our fiscal house in order and focus on diversifying trade for the future.
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