Energize Alberta Nov - Dec 2010

Oil & Gas

Power

Renewables

page 14

page 18

page 26

Charging ahead with electric cars

Green hands: New oilpatch workers

Medicine Hat’s Hat Smart program

November/December 2010

where energy, the economy, and the environment intersect

Change it up!

New program for aboriginals provides career focus Lynda Harrison Energize Alberta

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yra Phillips, a young member of the Chipewyan Prairie First Nation, moved back to her community of JanvierChard, Alta., about a year ago from British Columbia, knowing she wanted to be back home but not sure what to do with her life.

An ad for a program that offered to pay her while providing some career direction caught her eye and she became one of 25 students in the program’s first session last February. Change It Up!, which prepares young aboriginal people for employment or further

education, has given her some focus, she says. She can now foresee the possibility of a career in the oil and gas industry, but she’s also interested in landscape architecture.

The 22-year-old is now helping lead a group of young mothers called Change It Up! Moms.

Another offshoot is Change It Up! Entrepreneurs, aimed at community members who want to start their own small business.

Derek Bruno, facilitator of the program now starting its second session with 27 participants, says it has a more than 90 per cent success rate of graduates either in school or working. Three or four of them are contracting for Cenovus Energy, without whose

help the program could not operate, he says.

Cenovus has contributed classroom supplies, laptop computers, accommodations, work involvement seminars, a site tour of its Christina Lake oilsands operations and financial help.

Also supported by the provincial and federal governments, Change It Up! is designed for aboriginal youth (age 15 to 30) who are out of school, unemployed or underemployed, and facing multiple barriers in finding work or participating in job-specific training. The program, set to end in March 2011, offers participants the opportunity to take part in community learning projects as well as training and

Tyra Phillips at home in Janvier-Chard, northern Alberta. workshops that help the youth understand their values and strengths. It works with participants to build the skills necessary for employment while building a plan to accomplish their life goals.

A critical worker shortage amid plans for expansion and competition for workers from nearby oilsands projects means it’s in Cenovus’s interest for local residents like Phillips to be interested in and prepared for a career

in the oilsands, says Drew Zieglgansberger, the company’s Christina Lake oilsands project vice-president.

The number of needed construction workers at the project will nearly triple from ❯❯ continued on page 14

Suncor celebrates reclamation milestone Oilsands industry’s first tailings pond is now a solid surface

Photo: Suncor Energy

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Deborah Jaremko Energize Alberta

Suncor Energy’s Pond 1 in August 2010.

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he first tailings pond in the oilsands industry is now officially the first to have a reclaimed surface.

In late September, Suncor Energy celebrated what it calls an industry milestone, being the first company to achieve this major step in the restoration of a tailings pond to a natural landscape.

Tailings Pond 1, a 220-hectare area that started operations as part

of the first commercial oilsands plant in 1967 — when Suncor was known as Great Canadian Oil Sands and mining was the only way to go about producing bitumen — will now be known as Wapisiw Lookout, a fledgling solid surface that is home to 630,000 shrubs and trees planted earlier this year. Wapisiw is a Cree word that means “swan,” and its use in this context was inspired by the Cree named Waupisoo, who brought the first samples of oilsands to European explorers in the 1700s.

“Ultimately, it will look very similar to the natural landscape of the boreal forest,” said Sean Wells, Suncor’s manager of research and engineering.

Pond 1 — one of eight tailings ponds Suncor has created that cover a combined 3,154 hectares — was decommissioned in December 2006, after nearly 40 years of operations. Wells said that closure began in earnest in 2007, and its most significant aspect is the removal of mature fine tailings (MFT).

MFT is the mixture of sand, silt, clay and residual bitumen left over from the extraction process.

“A lot of the clays settle very, very slowly, and what we end up with is a semifluid layer of what we call [MFT],” said Wells. “If we leave the types of deposits that we create to their own devices, how long this stuff would take to actually finally settle out to the bottom of the pond, those timeframes are on the order of potentially centuries. No one would really like us to wait that long.” ❯❯ continued on page 2

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November/December 2010 • Energize Alberta

Suncor celebrates reclamation milestone The biggest challenge facing Suncor and other oilsands mining operators in restoring tailings areas to natural landscapes is creating a solid surface from what is essentially sludge, or what Wells compared to a “giant pool of Jello.”

To help remove the MFT at Pond 1, Suncor backfilled the site with 30 million tonnes of reclaimed tailings sand, pushing the volumes towards an area where a pump out could be enabled. Much of the MFT from Pond 1 has been moved to another tailings pond that Wells said is “better suited for long-term storage and treatment.”

Over the next two decades, Suncor reports it will maintain and closely monitor progress on the site.

Photo: Suncor Energy

Continued from page 1

Pond 1 surface construction involved covering it with about 65,000 truckloads of soil. Then 630,000 shrubs and trees were planted in that 50-centimetre-deep soil.

“Ongoing soil, water and vegetation assessments will help ensure the site is on course for return to a sustainable landscape and self-sustaining ecosystem,” the company reported in a celebratory news release.

Suncor and the government of Alberta co-hosted a commemoration event at the site yesterday morning.

“We invested a great deal of time and resources to complete the surface reclamation of Wapisiw

Lookout and we’ve also learned a great deal,” said Rick George, Suncor’s president and chief executive officer. “We’ll use this knowledge along with new and developing innovations to manage our tailings and speed up the reclamation of existing tailings ponds. It’s an ongoing journey, but this is an important step and we’re well on our way.”

One of these technology innovations is

called tailings reduction operations (TRO), which Suncor received regulatory approval to put into action earlier this year and plans to spend more than $1 billion on its implementation over the next two years.

The company says TRO has the potential to reduce tailings reclamation time by decades, speeding the return to a natural habitat.

Suncor says because of TRO it won’t be building any new tailings ponds. The process involves converting MFT to a dry material over a period of weeks, at which point it can be reclaimed in place or transported to a different location for final reclamation.

The next tailings pond on Suncor’s target for reclamation is Pond 5, a 440-hectare area that started operations in 1997 and was decommissioned in 2009, where TRO is currently underway.

Suncor has committed to the Energy Resources Conservation Board that Ponds 5 and 6 will be trafficable by 2019.

About us

Energize Alberta is published six times a year by an alliance consisting of JuneWarren-Nickle’s Energy Group, Great West Newspaper Group and Farm Business Communications, all members of Glacier Media Inc., in association with an advisory board consisting of industry professionals. Energize Alberta is circulated to approximately half-a-million Albertans, in rural and urban settings.

President & CEO Bill Whitelaw Editorial

Publisher & Editor Stephen Marsters Associate Editors Deborah Jaremko Paul Wells Editorial Assistance Joseph Caouette marketing

Marketing Manager Sonia Taylor Crichton Creative

Art Director Ken Bessie Production, Pre-Press and Print Manager Michael Gaffney

Designers Andrew Brien Rachel Dash Williams Cathlene Ozubko Birdeen Selzer Staff Photographer Aaron Parker Sales and Administration

Sales Manager – Advertising Maurya Sokolon Account Executive Rhonda Helmeczi Sales Nick Drinkwater Diana Signorile Administration Sandy Flaherty Website

Web Manager Chris Fleming

Find out more about us online at energizealberta.com, and send your feedback to yourenergy@energizealberta.com.

Reader forum I wouldn’t wish this on anybody September/October edition

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ur story on Lyme disease and how it affected a worker in the oil and gas industry, as well as his family, generated lots of feedback from readers.

This note came to us from oilpatch worker Don Ratcliff: “I would like to thank you for publishing the article on Lyme disease in the Sept./Oct. edition of Energize Alberta.

My wife has suffered with Lyme disease for the past 10 years or so and has experienced first hand the numerous issues with the inability to properly diagnose and reluctance to treat Lyme disease here in Canada.

As the article states, this disease is without question under-diagnosed in Canada. Anything that can be done to increase prevention awareness and apply pressure to the medical establishment to better understand and treat this disease will be invaluable.

I am aware of some oil/gas producers and particularly pipeline companies like Terasen and TransCanada (in B.C. and Ontario primarily), posting safety bulletin information with regard to Lyme disease prevention and treatment at various locations throughout their organizations.

Perhaps as follow-up, some of this information could be further shared throughout the industry (via CAPP [Canadian Association of Petroleum Producers], SEPAC [Small Explorers and Producers Association of Canada], etc.), and people educated to the fact that Lyme disease is prevalent in Canada….

www.energizealberta.com

People need to be educated and aware so they can take the appropriate precautions.”

In addition, several readers have posted comments about the article at energizealberta.com, where the article can be read online. Other online readers have shared the article through Facebook.

Niki Bone wrote this: “It is sad that the government isn’t on this yet. They need to open their eyes and see the people of Canada suffering, and going broke to get treatment in the U.S. The more stories out there, the more awareness! Good story.”

Another online reader posted this comment: “This story is all too familiar, thank you for writing [it]…. Hopefully some day soon someone will make the necessary changes to help all of us Lyme victims. I too would not wish this on anyone!”

Should Alberta build its next coal plants underground?

September/October edition

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e also received many comments from readers about our story describing an initiative to gasify coal underground in Alberta. The process would be applied to deep unmined coal seams, using injection and production wells drilled from the surface, which enables the coal to be converted in situ into product gas. Deep coal gasification, combined with carbon capture and storage, is touted as a cleaner way to use the province’s abundant coal resources. But some of our readers thought otherwise.

Steve Zelych had this to say: “I have read the article several times and the more I read it the more upset I get. The first thing that I don’t understand is when the coal is ignited and there is a decrease in space, what stops the soil from caving in? I know they keep pushing this carbon capture. To me this is as phony as [the] now-defunct Canadian dollar…. They claim that that this will not contaminate groundwater or aquifers. I am not a scientist or Ph.D., but common sense has to prevail. Any fracturing or disruption of the lands’ makeup will cause a problem; maybe not now, but in the future.”

Another reader, Mark Loberg, wrote us this note: “Might be a good project where it makes sense. Not in the Swan Hills area due to the many existing wellbores that are there and that penetrate through this potential burn zone. Any downhole burn in this area may cause these casings to breach and a blowout would be soon to follow. It will be a significant safety and environmental issue when this occurs.

As well, older wellbores have little or no cement behind casing on upper zones. It will also prevent the safe drilling and operating of new wells in the burn areas from occurring through this interval.

Hopefully this has been addressed and thought out before the government committed the $285 million.”

Please send your comments and suggestions to yourenergy@ energizealberta.com (note that printed comments may be edited for length or correctness). You can also reach us on Twitter by following @energizealberta.

Discover more online at energizealberta.com

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heck out energizealberta.com for additional stories, polls, a link to the Energy IQ quiz and a searchable archive of past editions. You can also comment on our stories and forward them to friends.

In addition, the site houses a directory of key players on the energy literacy stage.

Energize Alberta • November/December 2010

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Rural respect Calling all

students!

New oilpatch initiative urges service workers to show courtesy in the field

Teachers, take note — this makes an excellent class project!

writing contest for students Energize Alberta invites school-aged kids to write an essay on any topic related to energy production or use in Alberta.

Why is it important to know about where energy comes from and how it’s used?

What do you think about Alberta’s oil and gas sector? Should Alberta use more renewable energy?

Essays should be no less than 250 words and not exceed 800 words: 400–600 words would be ideal. Deadline for submission is March 1, 2011. The winning entries will be published online and in the May/June 2011 edition of Energize Alberta.

There are three competition categories: Grades 3–5, Grades 6–8 and Grades 9–12.

Winning entries in each category will receive an Apple iPad. Please mail entries by March 1, 2011, to: Energize Alberta, 2nd Floor, 816 - 55 Avenue NE, Calgary, AB, T2E 6Y4.

You can also email entries to yourenergy@energizealberta.com.

Lynda Harrison Energize Alberta

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ilpatch service workers are being encouraged to communicate with and be respectful of the rural residents whose property they operate on, in a new initiative endorsed by Canada’s major oil and gas industry trade associations.

Community Partners, an industrywide, in-the-field courtesy program, is designed to strengthen relationships between the upstream oil and gas industry and community members one person at a time, said Roger Soucy, president of the Petroleum Services Association of Canada (PSAC), at the program’s launch in late October.

The program focuses workers’ attention on the most common local concerns related to the industry’s activity. “That includes dust, closing gates, garbage, noise, traffic and driving more safely,” said Soucy. “The program also reminds employees and contractors to communicate openly with residents and to treat everyone and their property with respect.”

Community Partners is asking companies to participate by signing an interactive version of the program’s guiding principles and sending confirmation to their appropriate association.

Also at the launch were Ron Liepert, Alberta’s minister of energy, who offered the provincial government’s support, as well as representatives of the oil and gas industry trade associations and some companies.

The visible face of the industry is usually the service sector, said David Pryce, vice-president of operations for the Canadian Association of Petroleum Producers (CAPP). Service companies help oil and gas producers to explore, drill and produce their plays.

The new program is a strong commitment to working effectively with landowners, Pryce said. “It’s recognizing that we’ve got a social licence that we have to acquire and this kind of a program helps lean towards that.”

The “good-neighbour policy” is good business for Alberta, added Gary Leach, executive director of the Small Explorers and Producers Association of Canada (SEPAC). Average Albertans have to deal with the impact of this huge industry, and that impact isn’t always as easy to live with as its members would like to think. “I think it’s important for the health of this industry that Albertans are [shown] … respect by industry, and it’s important for Alberta, as a major source of North America’s energy supply, that this kind of program tries to moderate the impact [of the oilpatch] on the

lives of Albertans as they go about their business,” said Leach.

The initiative is in response to a survey PSAC commissioned a year ago asking residents of communities within the Western Canadian Sedimentary Basin their opinion of the industry.

The 1,152 surveys conducted produced the following data highlights: • The top three overall issues for respondents were employment, health care and the economy; • 58 per cent of respondents viewed the industry favourably; • 59 per cent of respondents viewed the companies working in their communities favourably; • 79 per cent of respondents agreed the industry is believable; and, • 63 per cent of respondents said they were interested in learning more about the oil and gas industry.

In addition to PSAC, SEPAC and CAPP, the other major oil and gas industry trade associations that have agreed to the Community Partners Guiding Principles on behalf of their member companies are: Canadian Association of Geophysical Contractors, Canadian Association of Oilwell Drilling Contractors, Canadian Energy Pipeline Association and Energy Services BC.

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November/December 2010 • Energize Alberta

Energy and honesty ‘Honest conversations’ required about Alberta’s role in meeting future energy needs as global demand grows in developing countries Paul Wells Energize Alberta

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s energy leaders gathered in Montreal for the World Energy Congress this past September, the many and varied challenges facing the energy sector in a world of growing demand and increased environmental scrutiny became abundantly clear.

But the need to balance the “humanitarian imperative” of expanding vital energy supplies for increased demand in emerging countries with the equally important need to do so in a safe, secure and environmentally responsible way was perhaps the most important and pressing issue heard by the 5,000-plus delegates attending the event.

And while the task at hand is enormous as the world juggles the conflicting realities of soaring global energy demand and growing climate change concerns, Canada, with its vast resource base led by Alberta’s oilsands and its ability to be a net exporter of energy, will be a central player as sustainable and environmentally sound energy development becomes paramount.

Daniel Yergin, chairman of IHS Cambridge Energy Research Associates, told the congress that despite the controversy surrounding the development of the

oilsands, they will be vital to world energy security in the coming decades.

He said that world energy use is currently about 80 per cent hydrocarbons, and he doesn’t see it getting much below 70 per cent by 2030.

“We see oil demand in absolute numbers growing in both conventional and unconventional [sources]. Of course, one of the big sources of growth here in Canada — the Canadian oilsands — are such a big contribution, both to North American energy security and the stability of global markets,” he said.

Yergin, a highly respected authority on energy, international politics and economics — and a Pulitzer Prize–winner for his book The Prize: The Epic Quest for Oil, Money and Power — said that while oil demand will decline in North America and Europe, the same can’t be said in emerging markets such as China and India, where “this great, tremendous growth will come from as incomes rise.”

“Indeed, we are seeing what we call ‘peak demand,’ at least in terms of oil, in North America and Europe. Oil demand will not increase in those regions and is more likely to decrease,” he said.

“But it’s a very different picture in emerging markets. Rising incomes and

large populations in those countries will be the growth engine for world energy demand in the years ahead.”

But it will be no easy feat for energy producers to meet the projected spike in global demand. “It’s very sobering to realize that much of the world’s energy infrastructure that will be needed to meet demand in the year 2030 has not yet been built,” he said. (He based his forecast on an expansion of the global economy to $120 trillion by 2030 from about $62 trillion this year.)

“It tells you what a very big job is ahead, and building … is itself an energy-intensive activity. So you have to realize what a big job, what a big responsibility it is, and what a big opportunity it is [for industry].”

Industry’s dual challenges Andrew Swiger, senior vice-president of Exxon Mobil Corporation, said the issue has two vital elements that reflect the “dual challenge” faced by all sectors of the energy industry, as well as policy-makers: boost supplies for developing countries, but do so in an environmentally responsible manner.

However, Swiger believes that far too often the dialogue is slanted toward environmental concerns while the energy

Graphics courtesy of Canadian Centre Information

F

2009 CANADA’S EXPORTS

for Energy

G H

ENERGY

F

B E

C D

A B C D E F G H

Energy Agriculture and Fishing Forestry Industrial Goods Machinery and Equipment Automotive Products Other Consumer Goods Unallocated Adjustments

Total

$ billions 79.9 37.3 19.5 79.3 80.5 43.8 17.9 11.5

D

2008 CANADIAN PRIMARY ENERGY PRODUCTION

E

C A

B

needs of a massively growing developing world are overlooked. This could lead to the stifling of economic growth and quality of life in those countries, he said.

“These two elements are of equal importance but frequently do not receive equal weighting in public debates on energy policy. Often, the first element spanning energy supplies is taken for granted,” he said.

“The starting point for informed discussion of energy policy must begin with the recognition that energy and economic growth are linked. Expanding economies need energy that is affordable; [they need] reliable energy that fuels economic development and progress.”

While climate change often dominates the headlines, the needs of a vast and growing — yet energy impoverished — population are often secondary in the debate. He noted that by the year 2030, overall global energy demand is expected to increase by approximately 35 per cent, with most of that coming from nations with emerging economies.

“In developing nations, where citizens aspire to a better quality of life for themselves and their children, we project energy demand will rise by about 65 per cent by 2030,” he said.

In lockstep with that increase in energy consumption will be a rise in greenhouse gas (GHG) emissions in those countries.

Swiger said that while energy-related emissions in developed nations will decline somewhat through the year 2030, economic growth and associated energy needs in the developing world “will drive global emissions about 25 per cent higher” by that same year.

“To enable expanding prosperity and to manage the impact of energy use, we will

A B C D E F

Natural Gas Crude Oil Coal Hydro Nuclear Other Renewables

Total

% 42.6 39.9 8.5 7.1 1.7 0.2 100.0

369.7 Source: Energy Information Administration Source: StatsCan

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Energize Alberta • November/December 2010 need to develop a set of integrated solutions — solutions that rely on innovative technologies and techniques to increase efficiency, expand supplies and mitigate emissions,” he said.

As an example, Swiger said Exxon has invested heavily in new technologies and processes at its new Kearl mine and Cold Lake oilsands operations in Alberta.

“We are expanding energy supplies while ensuring that Canada’s energy resources are being developed in a manner that minimizes environmental impacts,” he said.

“In fact, a study by the Alberta Energy Research Institute estimates a project designed like our Kearl operation, which has advanced mining technologies, energy saving cogeneration and produces diluted bitumen without an upgrader, will have the same life-cycle GHG emissions as the average conventional oils that supply North America.”

Honest conversations David Collyer, president of the Canadian Association of Petroleum Producers, said that industry and government are at a “very important juncture with respect to energy policy.”

“Any meaningful discussions about energy policy has to start with some discussion about the hard realities as we look forward at both energy demand and energy supply globally,” he said.

“I think the debate and dialogue would be a lot more constructive if we focus on what makes sense for energy policy and then let climate follow, rather than leading with climate policy, which has proven to not be very effective over the last few years,” Collyer added.

“Finally, I think we need honest conversations about public policy as it pertains

to energy and the environment. In fact, I think this may be the most significant impediment to good public policy.”

Collyer said that with the environmental dialogue currently dominating the discourse, the general public is often unaware of potential costs associated with the environmental agenda.

“We need to demonstrate leadership in having dialogue [about] real costs, real benefits and real options. [We need to know] the implications of those options for the consumer, who at the end of the day, in many cases, will bear the costs associated with the implementation of those solutions,” he said.

“Lifestyles and behaviours may well have to change to realize the kinds of objective that we’re seeking. I think that all too often we shy away from those types of conversations for reasons I think we’re all aware of.”

While the Canadian oil and gas industry faces many challenges if it’s to reach its full potential, Collyer noted that swaying public perception is near the top of the list.

“It’s clear that we need to address the public perception of our industry to maintain the social licence to operate — that’s a function of both how we perform and how we communicate about that performance,” he said.

“And I think the industry needs to engage constructively in public policy development and be seen as part of the solution as we move forward.”

Triple bottom line Rick George, president and chief executive officer of Suncor Energy, said ensuring energy availability in a world that needs to sustain economic growth while respecting the environment is a huge challenge, but one that can be overcome.

“We need to demonstrate leadership in having dialogue [about] real costs, real benefits and real options.”

— David Collyer, President, Canadian Association of Petroleum Producers

Collyer acknowledged that the evolution of policy and seeking solutions to issues currently faced will require both industry and government to buy in.

“I don’t think this is all about government. The industry does have to lead, and I think we’ve got an important role to play as we go forward,” he said.

“We’ve got a very large resource base that provides the platform and opportunity for Canada to be a significant part of the solution to the growing energy demand globally.”

“We should move forward aggressively along two parallel tracks,” he said in a keynote speech to the conference’s delegates. “First, we need to get increasingly creative about finding and developing conventional energy sources, whether it’s oil, gas, coal or nuclear — and do so in ways that are environmentally and socially responsible. Second, we should use these conventional sources to help drive research and development of alternative energy and new environmental technologies.”

F D

E

C A B

A B C D E

% Crude Oil 52.9 Natural Gas 19.3 Petroleum and Coal Products 18.6 Coal and Bituminous Substances 6.3 Electricity 3.0

Total

100.0

Source: StatsCan

D C

E

A

B

Suncor follows a policy of sustainable development, George said. “We are focused on a ‘triple bottom line’ that says energy resources should be produced and used in a way that generates economic growth, promotes social well being and minimizes the impact on the environment.”

Alternative energy sources such as solar, wind, geothermal and biofuels need to constitute an increasing part of the energy mix, he added. But developing these alternatives is a slow process, which means hydrocarbons will continue to play a dominant and crucial role in the coming decades.

Oilsands production is a growth industry in a world that is struggling to increase supply, George said. What’s more, this resource is located in a country dedicated to democratic principles, regulatory oversight and an open economy — in contrast to many other countries which have plentiful resources but suffer from political and economic instability.

Production from the oilsands is forecast to more than double to close to 3 million barrels per day by 2020 from 1.2 million barrels in 2007. That said, the environmental impact of oilsands production is exaggerated, George said, as independent studies show oilsands crude is only marginally more carbon-intensive than many other crude sources.

“Canada is currently responsible for two per cent of global GHG emissions,” he said. “Our industry, in turn, is responsible for five per cent of Canada’s emissions. Put those numbers together and you get about one-tenth of one per cent of global emissions — a small fraction of what is produced by the transportation sector and [coal-fired] generating plants, among others.”

2008 CANADIAN PRIMARY ENERGY CONSUMPTION

2008 CANADA’S ENERGY EXPORTS

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A B C D E F

Crude Oil Natural Gas Coal Hydro Nuclear Other Renewables

Total

% 45.0 28.3 11.7 11.8 2.9 0.4 100.0

Source: Energy Information Administration

www.energizealberta.com

TWO COUPLES, ONE GOAL: INSPIRING OTHERS.

SAIT Polytechnic thanks Connie and Murray Cobbe and Barbara and David Johnson for their leadership and generosity. Both couples have donated $5 million each to education, through the Promising Futures™ Campaign in support of SAIT’s Trades and Technology Complex. In recognition of their gifts, the new home of the MacPhail School of Energy will be named the Johnson–Cobbe Energy Centre. Both Mr. Cobbe and Mr. Johnson are graduates of SAIT’s Petroleum Engineering Technology Program, and their combined contribution of $10 million will help create a centre of inspiration and transform the lives of many future students.

SAIT’s new Trades and Technology Complex will engage up to 8,100 more full and part-time students each year in hands-on, career-oriented training. It will also turn Calgary into a hub of learning and contribute significantly to our economy — thanks to the generosity of the Johnsons and Cobbes.

sait-promising-futures.ca

Energize Alberta • November/December 2010

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A solution for ‘dirty oil’ in which everyone wins Peter Silverstone

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nvironmental concerns about the oilsands affect every Albertan, regardless of their personal beliefs.

This is because Alberta is under increasing attack from individuals and groups who wish to shut down the oilsands. If this occurs, it will cause problems for every Albertan since royalties from the oilsands increasingly fund the schools, hospitals and roads we all depend on.

It sometimes feels like Alberta is under siege for its “dirty oil.” Rather like somebody sheltering under a metal roof, Albertans hear the constant sound of stones being thrown. Stores in the U.S. don’t want to use our oil. Clink. Adverts in the U.S. tell people not to visit. Clink. More than 50 congressmen in the U.S. want to stop an oilsands pipeline. Clink. The U.S. Environmental Protection Agency (EPA) suggests that the U.S. consider alternatives to our oil. Clink.

It is uncertain at this time whether these sounds will grow into a torrent that will sweep away any future developments in the oilsands, or if they will fade into an irritating background noise that has no meaningful impact. However, I believe that it is no longer possible for Albertans to ignore these issues, or to state that it is “none of their business what we do.” Ultimately, if the U.S. doesn’t buy oil from the oilsands, we have no realistic options. We can’t export to China as there are no pipelines built, and even if some get built eventually, we don’t know how much oil we will be able to actually export.

Given the importance of these issues to every Albertan, including myself, I decided to spend several months during 2010 doing independent research on all of the key issues. I then wrote a book about what I found, which includes a solution that I believe benefits everyone.

What did I find? Most importantly, I found that more than 80 per cent of the bitumen in Alberta is located so deeply that it cannot be mined. Instead, it will have to be extracted by a technique that involves heating the bitumen to melt it.

In its natural state, bitumen has a consistency a bit thicker than peanut butter.

To melt it, bitumen is heated using steam generated by burning natural gas, with the steam being piped underground into the bitumen. When the bitumen starts

to melt it becomes liquid, and is then drained off. This process is called steamassisted gravity drainage (SAGD).

Once the bitumen has been recovered it then needs to be upgraded to a form of synthetic oil, and this process uses additional natural gas. Because so much natural gas is used throughout extraction and upgrading, higher greenhouse gas emissions occur than from other sources of oil.

Two large studies carried out in Alberta in 2009 suggested that total greenhouse gas emissions from SAGD were two to three times greater than those emitted from oil produced in Saudi Arabia. The EPA recently said that the oilsands would produce 80 per cent more greenhouse gas emissions for every barrel of oil compared to other sources of U.S. oil. As the oilsands increasingly extract oil using SAGD techniques, so will there be a corresponding increase in greenhouse gas emissions.

This key fact is one that every Albertan should know. It means that over time the oilsands will become progressively “dirtier,” at least in terms of greenhouse gas emissions. It is this fact that underlies worldwide opposition to the oilsands.

For these reasons I believe that, if nothing changes, future oilsands developments are in serious jeopardy. This will impact all of us. Indeed, it

to reduce oilsands activity. The oilsands have been the target of several regulatory efforts in both the U.S. and Europe.

While none of these have been implemented to date, in both jurisdictions the possibility for significant regulatory changes continues, and organizations such as the EPA are already suggesting that the U.S. government should block pipelines carrying oil from the oilsands and that the government should actively look for alternatives.

From all of this I concluded that Alberta must take action as greenhouse gas emissions continue to increase.

Otherwise we run the risk of having something to sell, but nobody wanting to buy it. While many consider this highly unlikely, similar statements were made before the oil spill in the Gulf of Mexico and before the recent economic meltdown.

Nonetheless, in my research I didn’t just want to examine the risks, I also wanted to see if there were any solutions.

Specifically, I wanted to find out if there is a solution that could reduce greenhouse gas emissions without having any negative economic impacts on Alberta.

Proposed solution: I believe that I found a simple solution that works for everyone. What I propose

It sometimes feels like Alberta is under siege for its “dirty oil.”

Rather like somebody sheltering under a metal roof, Albertans hear the constant sound of stones being thrown. already has.

There is increasing pressure on oil companies and finance companies not to invest in the oilsands.

Shareholder resolutions asking companies to stop new projects occurred at the 2010 annual general meetings of BP, Shell, Total SA and Statoil. This also occurred at Exxon where more than 25 per cent of the shareholders (a very large number for a shareholder initiative such as this) asked the company to produce a report detailing the financial risks associated with its oilsands projects. Additionally, many banks are under increasing pressure not to lend money for oilsands initiatives.

This fact also significantly increases the risk of regulatory actions designed

is that the current oilsands royalty rates should be changed so that it also reflects greenhouse gas emissions. Thus, companies that produce the most greenhouse gas emissions would pay higher royalty rates, while those with the least greenhouse gas emissions would pay lower royalty rates. This will give a very clear economic incentive for companies to reduce their greenhouse gas emissions, while compensating them for the additional costs such an approach would require. I have no doubt that companies have the capability to significantly reduce their emissions, but previously the economics made it very difficult for them to do so. The solution I propose changes this.

Importantly, when I examined the likely overall economic impact I found that the Alberta government would also benefit very significantly. The analysis

Peter Silverstone suggested that Alberta would collect an additional $20 billion in taxes and royalties from companies over a 10-year period.

Additionally, the environment would also benefit significantly, with a potential annual saving of up to 90 million tonnes of greenhouse gas emissions, which is equivalent to seven per cent of Canada’s total emissions.

This solution therefore produces multiple winners. Albertans benefit by removing major regulatory and reputational risks to Alberta. Companies win by paying lower royalties if they reduce their emissions.

The Alberta government wins as the total tax revenue is significantly greater. The environment wins with a considerable reduction in greenhouse gas emissions.

Surely, this sounds better to Albertans than the current clink, clink, clink?

About the book: In September 2010, Peter Silverstone published a book entitled World’s Greenest Oil, following his independent research of all the issues around greenhouse gases and “dirty oil.” Following this, he believes that every Albertan needs to act to ensure that continued development of the oilsands occurs, but that it does so in an environmentally sustainable manner. If you feel the same way, or if you want to investigate or comment on any of the issues discussed in this article, please visit www.greenestoil.com. There you will also have the opportunity to complete a petition asking the Alberta government to consider the change to the royalty rate that he suggests.

About the author: Peter Silverstone is a practicing physician and professor at the University of Alberta, and is currently also vice-chair of Edmonton Economic Development Corporation. He has founded small businesses, and been a senior vice-president at a billion-dollar company. He is completely independent and has no relationships with the oil industry, environmental groups or any political party.

www.energizealberta.com

8

November/December 2010 • Energize Alberta

From the field

advisory board

PSAC study reveals $65-billion industry employing 800,000

David Yager David Yager PSAC Chair 2009/2010

M

ost folks who live in Alberta know that the oil and gas industry creates a lot of jobs. Whether it’s seismic, construction, drilling, completion, tie-in, facilities or pipelines, the oilpatch is characterized by people and equipment in motion.

The agricultural community is a regular participant through activities on their land, jobs during the winter, direct equipment ownership or operating an oil service company.

The problem is that governments often take these jobs and investment for granted. From time to time, they look at the profits of the biggest oil and gas companies and decide they are making too much money.

The politicians rectify this perceived inequity by increasing taxes, royalties or both. It is only after the fact that the impact on jobs and investment on the folks at the bottom of the food chain becomes apparent.

It was bad public policy that resulted in the creation of the Petroleum Services Association of Canada (PSAC) in 1981.

A year earlier, Ottawa’s National Energy Program had capped oil and gas prices and increased wellhead taxes, thus throwing the industry into turmoil.

Projects were cancelled and capital fled the country. Jobs were lost by the thousands and hundreds of small suppliers went broke. The oil and gas services industry — the hundreds of companies that do everything from concept to processing

www.energizealberta.com

on behalf of oil and gas developers — was virtually unknown. PSAC was formed to create public awareness of this important economic sector.

Fast-forward to 2007.

The Alberta government decided that the province’s royalty share was “unfair” based upon high oil company profits and higher royalties rates in other jurisdictions. Prior to the policy changes, PSAC warned of “unintended consequences” in the services sector if royalties were increased.

Edmonton proceeded anyway. Alberta’s New Royalty Framework, combined with the global economic crisis and commodity price collapses, devastated jobs and investment in small-town Alberta. The framework has all been changed since, but could it not have been avoided?

That’s the unfinished business behind PSAC’s decision to seek more information on the size and importance of the oil and gas services (OGS) sector across Canada and

model based on gross domestic product (GDP) data compiled by Statistics Canada for the latest year available, 2006. This involved sorting through 238 industries and 750 input commodities and picking the ones that applied to oil and gas development. The intention was not only track economic activity in the obvious direct supply chain (drilling rigs, service rigs, wireline trucks, frac units, etc.), but the indirect inputs as well.

This includes steel, tires, food, shelter, cable, pipe, trucks, trucking, instruments and the myriad of industrial inputs required to keep this large and dynamic industry going.

For 2006, CERI discovered a $65-billion industry (as measured by GDP) that employed nearly 800,000 people across Canada.

These companies and their employees paid $9.1 billion in federal and provincial taxes that year. By comparison, oil and gas producers paid only $12 billion in royalties.

It was bad public policy that resulted in the creation of the Petroleum Services Association of Canada (PSAC) in 1981. PSAC was formed to create public awareness of the oil and gas services sector. international markets.

What we wanted was a benchmark study that would look exclusively at OGS as a stand-alone industry, not just a support industry for oil and gas developers.

The intention was to develop a solid set of facts about OGS so that when energy policy debates take place in the future, OGS can have a seat at the table before again becoming collateral damage.

PSAC contracted Calgary’s Canadian Energy Research Institute (CERI) to build an input-output

For perspective, PSAC had CERI examine other better-known industries.

For comparison purposes and using the same methodology, the automotive sector was $25 billion, agriculture $26 billion, mining $18 billion, forestry $29 billion, residential construction $34 billion and non-residential construction $15 billion.

What is remarkable about OGS compared to these other industries is that their contribution to the Canadian economy is well known and even considered essential. Incredibly,

OGS is nearly twice as big as the next largest sector.

A concurrent study looked at 36 Canadian OGS companies with international operations. In 2009, these companies had revenues outside Canada of $12.9 billion. This study was done for two reasons.

First, it demonstrated that OGS in Canada was much larger than the needs of the domestic producers.

Second, it showed that Canadians have developed world-class equipment, technologies and processes that are highly valued in oil and gas producing jurisdictions around the world.

PSAC is adamant that all OGS needs to succeed is a profitable client base actively developing oil and gas in Canada. When governments decide that our clients are overly profitable and change the fiscal regime accordingly, they in turn clobber the services sector, by accident or design.

Either way, going forward PSAC is confident these major studies will ensure steady and rewarding activity and employment for all stakeholders.

About the author: David Yager has been involved in the oil and gas industry since 1970. He began his career working on the drilling rigs, rose to the position of derrickman, serviced oilfield equipment and downhole tools, trained as a fishing tool operator, and worked in Calgary sales for a company that is now part of Weatherford. Beginning with JCP Forewest Industries Ltd. in 1987, David helped create Tesco through the merger of three public companies and an equity financing in 1993. In 1994, he incorporated a predecessor company of Integrated Production Services Ltd. (IPS) that was merged into IPS in 2000.

David is currently the chairman and chief executive officer of HSE Integrated Ltd., a public integrated industrial safety services company.

He has been an editorial columnist for the Calgary Herald and Calgary Sun newspapers and is currently an editorial columnist for Oilweek.

Members of Energize Alberta’s advisory board come from many energy “walks of life.” This group, with its collective insight and expertise, works closely with the editorial team to suggest areas of coverage that will engage and educate all Albertans about our energy future.

Alice Murray Stakeholder/Community Affairs Coordinator Stakeholder/Shell Bruce Edgelow VP, Energy Group Alberta Treasury Branch Carol Howes Media Relations, Corporate Communications Encana Caroline Grover Executive Director Economic Development Alliance of Southeast Alberta David Huggill Western Canada Policy Manager Canadian Wind Energy Association (CanWEA) Evelyn Ferchuk Manager, Oil Sands Communications Canadian Association of Petroleum Producers (CAPP) Gail Poon Senior Manager, Corporate Communications Epcor

Michelle Chidley Event & Communications Director Small Explorers & Producer Assoc. of Canada (SEPAC) Mike Dawson President Canadian Society for Unconventional Gas (CSUG) Mike Doyle President Canadian Assoc. of Geophysical Contractors (CAGC) Mike Finn VP, Exploration Trident Exploration Corporation Nancy Malone Manager, Economic Analysis Canadian Assoc. of Oilwell Drilling Contractors (CAODC) Natika Sunstrum Manager, Corporate Communications Enmax Corporation Nicole Collard Public Affairs Specialist Penn West Energy

Gary Redmond Executive Director Synergy Alberta

Patricia Poulton Community & Aboriginal Relations Advisor TransCanada

Greg Gilbertson Operations Leader Energy Resources Conservation Board (ERCB)

Scott Schreiner Director, Consultation & Communications AltaLink

Ian Todd VP, Government & Media Relations Enmax Corporation

Sean McCarry President Sage Planning Group Ltd

Jessica Wilkinson Public & Government Affairs Apache Canada Limited Karin Gashus Utilities Consumer Advocate Government of Alberta Kris Hodgson Senior Manager, Business Development Economic Development Lethbridge Kristie Schneider Business Development Manager, Investment & Trade Development Calgary Economic Development Kym Fawcett Manager, HSE, Regulatory & Stakeholder Relations Enerplus Resources Lynzey MacRae Public Relations Specialist Direct Energy Matthew Burns Associate Director (Calgary) University of Alberta

Stacey Ballash Executive Assistant to the President & CEO Trident Exploration Corporation Tracy Grills President Canadian Heavy Oil Association (CHOA) Tracy Heebner Business Development Officer Economic Development Alliance of Southeast Alberta Travis Davies Public Affairs Advisor, Media Relations Canadian Association of Petroleum Producers (CAPP) Trevor Williams Chair, Energy & Utilities Sector Relations Olds College - School of Business Ulrike Kucera Media Relations Officer Canadian Wind Energy Association (CanWEA)

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November/December 2010 • Energize Alberta

Industry partners with educators Teacher uses grant money to take students to the oilsands

A

re you a teacher with a brilliant idea for an energy project, but you don’t have the resources to bring it to life? Or maybe you know someone who is. Either way, BP Canada and A+ for Energy can help. A+ for Energy is BP Canada’s f lagship community investment program that awards grants of up to $10,000 to teachers for funding projects related to energy or energy conservation. Since 2007, BP has invested over $2 million in Alberta schools and impacted close to 40,000 students.

Alberta K­–12 teachers from all classroom disciplines are encouraged to apply for a grant. From social studies to art and science to drama, winning teachers have found innovative ways to teach about energy. Some teachers even win grants multiple times, including Francesca McIvor, a teacher from Centennial High School in Calgary.

McIvor, who also has her B.Sc. from the University of Victoria, has been

teaching at Centennial High School for five years. She has a passion for taking care of the environment and for ecological sustainability. She brings that passion to work with the Green Earth program she runs at Centennial. This unique program is the only one like it in the Calgary Board of Education. The Green Earth program includes about 20 Grade 11 students and runs for a full semester every year. It is an integrated focus program looking at sustainability both locally and globally.

Here, McIvor shares her experience with A+ for Energy: Alberta’s economic base is the oil and gas industry. My students are the future of this industry. I want to show them a more sustainable way to look at things — a more ecological view. If I can teach them about the responsible use of resources now, then they can make positive changes for the industry later.

The grants that I won in 2009 and 2010 opened the door for my students to learn about energy and energy conservation through creative field trips and in-class activities.

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Last year’s focus was on alternative energy sources. My class and I went to the Cowley Ridge wind farm, the Alberta sustainable home, the Easter Seals Camp Horizon ( for an overnight mini–energy conference) and to Waiparous, Alta., to learn about seismic geology field careers. In the classroom, students made mini–wind turbines, gingerbread sustainable homes and received a visit from the University of Calgary’s solar car team.

This year’s projects put a spotlight on Alberta’s energy sources, particularly northern Alberta’s oilsands. When I first introduced the oilsands as a topic of study, the reaction from some students was one of uncertainty.

Some students said they wanted to go to the

oilsands and protest, but when I asked them if they felt like they knew enough about the oilsands to do that, they soon realized they didn’t know very much about them. They only knew what they had heard in the media.

Along with the projects I did last year, I used the grant money to take my Grade 11 students to Fort McMurray, Alta., on Sept. 25 to tour Suncor’s oilsands operations and to get a first-hand learning experience. To prepare for the trip, I first divided the class into five groups to research different aspects of the oilsands and give presentations on their findings to the class.

Fort McMurray Tourism provided a tour guide to lead the class in a full day

Students participate in a mini–energy conference at Easter Seals Camp Horizon.

Energize Alberta • November/December 2010 of discovery. They visited “pipe city” and Suncor’s first reclaimed tailings pond. They drove past steam assisted gravity drainage (SAGD) sites, but were unable to tour an open-pit mine for safety reasons. The class also visited the Oil Sands Discovery Centre.

They got to experience an oil extraction demonstration and get up-close with the giant machinery and equipment used in actual oilsands operations. The students also had a chance to teach themselves with the interactive displays and exhibits.

I received very encouraging feedback from my eager students. They were surprised with what they saw for themselves versus what they heard about the oilsands in the media prior to the trip. The sheer land size of the oilsands developments was unbelievable.

The students were impressed by the reclaimed land where they saw buffalo, trees and plants. I could see the change in the students’ mindset. Many students said they were impressed by the number of good things coming from the oilsands, but were also taken aback by the large footprint it leaves behind. I was thrilled when my students approached me about having a class debate on the pros and cons of the oilsands. It is so encouraging to see them getting creative with the curriculum and opening their minds to new ideas.

The students from McIvor’s 2009 Green Earth program started an environmental club with students from all grades. They are educating other students and teachers about the simple things they can do to be more environmentally responsible, like double-sided printing and turning off and unplugging electronics when they’re not in use. They

11

are also organizing a cell phone drive that will benefit the Calgary Zoo. All of the learning and action by the students would not have been possible without the two $10,000 grants provided by A+ for Energy. Another benefit of the grant for McIvor was the chance to attend a three-day energy conference that occurs every summer for all of the winning teachers. “I have made so many networking connections at the conferences. It brings together many teachers from all areas of curriculum so we can learn and discuss ideas and give the best experiences to our students.”

McIvor is applying for a 2011 A+ for Energ y grant and encourages all Alberta teachers to do the same. “The grant allowed me to educate myself so I could make personal changes to become more environmentally friendly — and then pass these along to my students,” says McIvor. “Thank you BP and A+ for Energ y!”

You can visit www.aplusforenergy.com to apply for a grant and to learn more about the program. BP Canada also offers grant writing tips, workshops and mentorship programs to help you with your application or implementation of your project once you’ve won.

Besides the oilsands, grant money was used for creative field trips, including the Cowley Ridge wind farm.

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November/December 2010 • Energize Alberta

Take action, get results GreenLearning inspires youngsters to take action on energy and climate change issues Jacqueline Louie Energize Alberta

G

reenLearning Canada wants to inspire young Canadians to create a more sustainable and just world. Its mission is to create innovative teaching resources and educational experiences that will give Canadian youth the tools to help them make social and environmental changes in their own lives, schools and communities.

“The most important thing about GreenLearning

is that we focus not only on energy issues, but also on energy solutions,” says GreenLearning executive director Gordon Harrison.

“The whole idea is not to scare kids with climate change. At the end of the day, we not only want to give students a deeper understanding of the issues, but also hope for the future. What we want to encourage is critical thinking about the issues and what needs to be done about them.”

Established in Alberta in 2002 as part of the Pembina Institute, GreenLearning expanded

to Ontario and British Columbia in 2005, and in 2007 received the Alberta Emerald Foundation Award for Education.

Recently, GreenLearning became an independent, not-for-profit organization. What has stayed the same since Day 1, however, is GreenLearning’s dedication to ensuring all of its content is balanced and objective. “It’s very important to us, and very important in terms of our credibility with teachers, that we are not out there pushing a particular point of view,” Harrison says.

Because of this, GreenLearning will often write content in partnership with other organizations. For example, it consulted with the Canadian Centre for Energy Information, an industry organization based in Calgary, to develop a module on oil and gas for its eCards online learning program.

As part of eCards, students do online research on an energy-related topic and then create an electronic message and image that they deliver to a family

Photo: GreenLearning Canada

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Students eagerly wait to eat the food cooking in their solar oven as part of the annual Solar Oven Challenge. member, friend or politician to read. “Not only are they learning, but they have an opportunity to express their opinion, and it’s an informed opinion.”

Educating both teachers and students is what GreenLearning is all about.

One of the organization’s main goals is to build the capacity of teachers

to delivery sustainability education by providing professional development, curriculum-aligned resources and in-school support. “That enables teachers to provide what we refer to as rich and authentic learning experiences that build students’ literacy, knowledge and critical-thinking skills around energy issues and

solutions,” says Harrison, a former teacher.

Another major goal is to provide young people with learning experiences that motivate them to take a leadership role when it comes to both social and environmental issues.

Most of GreenLearning’s programs are aimed at students in Grades 4–12, and are designed to develop a deeper understanding in young people about energy and environmental issues, as well as potential solutions.

To this end, GreenLearning’s programs come with built-in opportunities for students to take action.

For example, its EnerAction program teaches students in Grades 4–7 about everything from where energy comes from to energy impacts and future choices that people will need to make on energy use. EnerAction’s online energy carbon calculator allows students to look at electricity use in the classroom. They can calculate their baseline energy usage and carbon footprint, take action to conserve energy, and see the results.

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November/December 2010 • Energize Alberta

{ centres the

Continued from page 1

Change it up! the current 450 to almost 1,200 if plans materialize to increase production 14-fold, to 258,000 barrels per day in the next 8 to 10 years.

There are now about 120 people operating the facility in shifts. That will grow to more than 600 workers who will run the place for the next 35 to 40 years. Getting enough workers will be one of the project’s biggest challenges over the next few years, says Zieglgansberger.

Oilsands impact Just a few kilometres from the Cenovus project are several more with plans to expand.

Vern Janvier, the Chipewyan Prairie First Nation band’s chief of four years, says that while the oilsands industry offers employment to members of his band, its effect on their lifestyle has just begun.

“We’ve only been at [in-situ oilsands operations, which uses wells to produce the resource] for 9 or 10 years, whereas up north the open-pit mines have been operating for 40 to 50 years. Any damage we see will happen in the future,” says Janvier. “It’s not going to happen tomorrow. It’s going to happen when we’re moving a couple of hundred million barrels of oil out of here a day and the amount of water that’s being moved out of here is in huge numbers. Then I think we’ll see some damage.”

There are about 400 members living on the reserve while roughly 250 are nearby. He estimates Cenovus provides about 30 per cent of the band’s funding through

“It’s not the damage to the environment that’s killing our people.

It’s overdosing on drugs and alcohol.

Car accidents.

That’s the shit that’s killing us.

It’s not the environment.”

— Vern Janvier, Chief, Chipewyan Prairie First Nation Band

contract work such as earth moving, drilling, cutting seismic lines and, until eight months ago, food provision.

The 42-year-old Janvier says that when he was a child it was easy for band members to feed their families by hunting game such as moose, but wildlife are now scarce due to development and the people it has brought to the area.

“Since [Highway] 881’s been built I couldn’t tell you how many moose and bear and deer have been run over. Lots.

Lots and lots and lots.”

But today’s children are more interested in Nintendo than hunting, he says.

Janvier says his people have had to adapt to a different lifestyle, and not always in a good way. “It’s not the damage to the environment that’s killing our people. It’s overdosing on drugs and alcohol. Car accidents. That’s the shit that’s killing us. It’s not the environment.”

www.energizealberta.com

Green The crew of Patterson Rig 17 (from left): Kyle Myers (driller), Sheldon Crowdis (Tourmaline consultant), Zack Dupuis (lease hand), Greg Hanson (rig manager), Marshall Gray (derrickman), and Justin Hockley (motorman).

How the oilpatch recruits and trains a very different generation of young workers

Mike Byfield Energize Alberta

P

hysical labour, lots of mud and grease, shift work frequently away from home, long drives to and from some worksites, the potential for serious injury, an industry whose activity levels cycle up and down with unusual vigour — it’s easy to see why recruiting and retaining high-calibre field staff is an ongoing

struggle in the oil and gas service sector. “Finding the right individuals has been crucial to our company’s success, but it seems to be harder than ever these days,” says Mike Kallal, chief executive officer of Mustang Well Services. “When it comes to green hands, only 1 in 10 will last more than a month or two.”

Mustang operates a fleet of six free-standing service rigs from Camrose, Alta.,

southeast of Edmonton. Its fabrication shop enables the four-year-old firm to maintain and manufacture its own rigs. Despite grim business conditions in the industry overall, Mustang added three new rigs during 2009. Today the busy company has had to turn down some jobs for lack of capacity. Its teams are well trained in working with the large-diameter, long-reach casing strings required for horizontal wells in

the Cardium, Viking and Bakken formations.

Kallal, who graduated from NAIT’s petroleum engineering technology program in 2002, isn’t particularly surprised at the low success rate among new hires. “The type of people who fill new entry positions in our industry has changed. We can no longer rely on farm-raised youngsters who are accustomed to working with machinery,” the Mustang chief

Energize Alberta • November/December 2010

spread

An in-depth look at issues and people on the energy landscape, connecting you to new ideas and interesting Albertans.

Good advice for entry-level oilfield workers As a young man, Marv Clifton switched from teaching at a public school to roughnecking, mainly so he could earn enough money to support his family. Clifton is now president and chief executive officer of Technicoil Corporation, which operates specialized coiled tubing units for fracturing and drilling operations.

This former teacher offers the following counsel to young people just getting started in the energy services sector: • Focus more on individuals than organizations. For good reason, rig hands are usually more loyal to their toolpush and/or driller than to a company. If you’re working for men with the technical and managerial expertise to run an efficient, clean operation, stick with them. Always work hard yourself.

• Expect to be yelled at if you’re on a rig. The noise level requires loud voices, and shouting gets to be a habit. However, the yelling (and swearing) should aim at instructing you and keeping you safe, not just inflicting abuse. Effective teaching indicates your supervisors are professionals and will help your career move forward.

• A hard-drinking young man — as long as he does his own job properly — can generally work well with a crew that doesn’t drink heavily. (Often, these are older men with families.)

However, a hard-drinking crew frequently rejects a newcomer who doesn’t constantly join them in the bar. If you’re a light drinker or abstainer, tell your personnel manager and get on a compatible team as soon as possible.

• The pride of the oilpatch is getting the job done right despite all difficulties. A good field crew takes a “can-do” approach whether it’s 40 degrees below or above zero. Get on a high-quality team, which sometimes means looking for a transfer. Then absorb that “can-do” attitude into your own bloodstream.

hands executive says. In large part, that’s because the number of farms in western Canada has shrunk drastically over the past generation.

Now most green hands are city kids or townies; for most of them, the oilpatch represents a completely unfamiliar experience.

Some newcomers are deeply shocked at the pain inflicted by manual labour on their arms, shoulders and legs. “When they feel those muscles really aching,

some of them become convinced that they’re actually injured,” Kallal says. “That’s understandable — it does hurt pretty bad. Of course, it’s just normal strain, and the rig manager will tell the new hand that the pain will clear up pretty quick as he gets stronger. But if the employee insists on seeing a doctor, we’ll take him, if only to prevent him from getting into a panic.

Working on a rig is not always an easy adjustment

for someone who’s never done anything more strenuous in his life than play video games.”

The petroleum industry is not alone in its difficulties with green hands, particularly with respect to turnover. A major airline operating out of Edmonton retained just 2 of 20 applicants for handling baggage, a job that’s less physically taxing than roughnecking.

According to one member of that group intake

(who asked that his name remain confidential), six failed the initial drug test.

Eight more employees did not survive their probationary period due to tardiness or physical competence, and an additional four quit within the first year of employment.

Zachary Dupuis personifies the type of green hand who does succeed in the oilpatch. His father Darcy roughnecked before specializing in tank farm

15

}

rentals. The 19-year-old son grew up and graduated from high school in Devon, Alta. He also played minor hockey (Leduc Oil Kings), gaining experience with teamwork and physical stress. At 16, Zack Dupuis had a summer job putting together food pallets for a camp catering outfit. He’s now working as a lease hand for Patterson-UTI Drilling Company.

His opportunity came when a Patterson lease hand decided to go back to school. “Randy Therris, my girlfriend’s dad, is a derrickman and he asked me if I’d like to take a shot at the job,” says Dupuis. On Feb. 9, the brawny teen began his first shift at Patterson 17, a triple operating in the foothills near Hinton. “I’d never been on a rig before, although I drove to one once with my dad.

I couldn’t believe the size of a triple; it was scary at first,” he recalls.

For his first shift, the new hire was toured round the rig and shown what he’d be doing as a lease hand.

“My job includes keeping the shacks clean, including the sub, boiler and pump rooms,” Dupuis says. “I learned basic rules, like not running down stairs unless it’s an emergency. They also had me stand by the driller for a few hours so I could learn how the rig operates.”

More orientation followed on the second day, such as learning how to mop properly. On day three, the green hand put in his first regular shift.

The new employee got his share of teasing by the five other members of his shift. When handling the power tongs for the first time, Dupuis used two hands and proceeded cautiously. “There’s a real learning curve to throwing the tongs,” he says. The rest of the crew, prodding him to move more aggressively, called him a big pussy and asked if he was a girl. A skilled rig hand can slap the sturdy 400-pound steel tool onto the drill pipe with one hand.

While handling the tongs, when Dupuis bent over to pick up the slips, another roughneck quietly dipped a Styrofoam cup in sticky thread sealant and surreptitiously glued it onto his victim’s helmet.

Unaware, the greenhorn kept working while foam earplugs were stuck on, one by one, around the cup. “I didn’t realize what they were up to until the cup finally fell off. By then, they had about 20 earplugs on my helmet,” he admits.

Looking like a dork didn’t bother him much, though.

“It wasn’t mean, just guys having fun like we did at hockey. Actually, I was more uncomfortable when a replacement toolpush asked me if I’d had any exciting sexual experiences. I was standing by Randy [his girlfriend’s father] at the time,” Dupuis recalls with a smile.

The teasing never became physically intimidating; Patterson absolutely prohibits any form of violence on its rigs.

Within a few days, the greenhorn felt comfortable moving around the triple rig. “I was more nervous about bears and cougars than the equipment,” he says. One night he switched on a pickup truck’s headlights and instantly saw the light reflecting off the eyes of a cougar, a predator that attacks humans on rare occasions. Hinton is also grizzly territory, and taking out garbage on a pitchblack night can stimulate the imagination. “I asked if we had any bear mace, and the guys just laughed,” Dupuis says.

When cleaning the shacks alone during a 12-hour night shift, the novice occasionally found himself getting lonely. “I’d never been away from home for so long,” Dupuis comments. Fortunately, the physical labour hasn’t been a big issue for him. “We have a front-end loader for lifting heavy loads onto the rig instead of carrying it up the stairs. The hardest thing I’ve done so far is move casing. ❯❯ continued on page 16

www.energizealberta.com

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November/December 2010 • Energize Alberta

Continued from page 15

Green hands We’d just finished a hole and I spent four hours rolling heavy pipe to the V-door with my feet. That night, it was snowing and slippery. I definitely earned my $23.50 an hour on that shift.”

Drawing strong applicants like Zack Dupuis used to be fairly straightforward. “Once upon a time, they came to us quite readily. Now we have to actively recruit,” says April Williams, the Nisku-based personnel manager for Trinidad Drilling. When she joined the company seven years ago, its Canadian fleet was 12 rigs. The present fleet stands at well over 100 drilling rigs, including 53 in Canada. “At the beginning, we were just hiring every day to keep up with the growth,” Williams says.

“Over time, though, we’ve created an application and training process which significantly improves our retention rate.”

Trinidad advertises information sessions in

communities across western Canada, primarily targeting males 18 to 30 years old. Individuals in their 30s are not uncommon. Most will have a high school education, and possibly more. “Some applicants have started a trade apprenticeship but find that they want to try another line of work,” Williams says.

“We’re competing with construction, the oilsands and other industries for this type of worker. The parents of these young people are attracted by the idea that rig technician is now a provincially administered trade.”

At Trinidad’s information sessions, potential applicants learn about the company, what drilling rig workers do, the petroleum industry generally and career opportunities that are open to experienced oil and gas hands. Veteran rig hands often move into specialized technologies like wireline or directional drilling, into sales and

marketing, or they can be promoted within the drilling contracting world itself.

Trinidad’s president and chief executive officer Lyle Whitmarsh got his own start as a rig hand.

Interested applicants are put through a lengthy interview process that educates them further about rig work— locations, rotations, personal protective equipment and more. “We want them to understand as much as possible what the job entails before we hire them,” Williams says.

“Some of these kids have never been outside the city except on vacation. They can barely imagine working where their personal cellphone may not function.”

Interviews may occur at the Trinidad office or in the applicants’ hometowns.

The next step is preemployment medical and physical examinations plus an eight-section classroom orientation about Trinidad’s own practices.

Brand new workers get instructions about safety practices and personal protective equipment, drug and alcohol policies, violence and more. Applicants

are tested to make sure they understood the class material. Meanwhile, a physiotherapist conducts a full rundown of tests that includes push, pull and carry exercises. Trinidad is looking for physical and mechanical aptitude.

Finally comes a fourday orientation program at a rig, normally led by a driller or senior hand.

“We like to see one-onone mentoring get started at this stage,” Williams

components, a thorough outline of the employee’s duties, a look at the specific rig’s rules (for example, some rig managers absolutely ban dirty boots in the doghouse while others permit them) and a review on the final day by the rig manager.

Once in harness, the new hire is expected to complete an On The Job Training and Competency program that discusses important procedures like

“When it comes to green hands, only 1 in 10 will last more than a month or two.”

— Mike Kallal, Chief Executive Officer, Mustang Well Services says. Once at the rig, the new worker begins to get paid. He (or occasionally she) must have his own boots and gloves; the company supplies coveralls, hard hat, safety glasses and hearing protection.

This on-site instruction includes a detailed tour of the rig and all of its

hazard identification, how to use a grinder and so on. There’s a heavy safety emphasis, responding to the fact that green hands are far more prone to accidents than veterans. A senior employee signs that the training material has been taught and the novice receives a certificate.

“There’s a definite failure rate at every stage,” Williams says. “Typically, 60 per cent of new employees who get through the application process will be still be working for us after 90 days. Where a personality conflict clearly occurs, we may arrange a transfer between rigs. When anyone leaves, we require a report from his supervisor as to what happened, and we try to get input from the employee as well.”

John Brown, executive vice-president of PattersonUTI, started drilling at the same entry level as Zack Dupuis. “As a boy growing up in a farming community, I loaded hay bales, I bicycled everywhere — once I stuck a pitchfork in my foot,” Brown comments.

“Nowadays, our new hires have plenty of natural talent but the majority have not had much opportunity to develop their mechanical and manual skills. As a company, we provide the necessary instruction and training, especially with respect to safety, and it works out fine. Today’s rig crews are just as capable as they’ve ever been.”

We see the possibilities.

As an Operations Manager at Suncor Energy, Stephen Young is one of more than 12,000 employees who have seen how innovation can turn possibilities into reality.

Like turning tailings ponds into solid ground. Suncor has developed a game-changing technology that reclaims former oil sands mines into natural habitat decades faster than before. We’re also marking a significant milestone with the return of our first tailings pond to a solid surface in 2010. Developing these kinds of solutions begins with seeing the possibilities. And we’re just getting started.

1.2

$

billion

1,182 3.5

million

actual and planned investments

hectares

trees planted on Suncor’s site

in new tailings technology

of land reclaimed to date

since 1967

Find out more about Suncor’s track record and how we are planning to responsibly develop North America’s energy supply. www.suncor.com/sustainability

energy innovation commitment

www.energizealberta.com

Energize Alberta • November/December 2010

17

advertorial

Rogers offers expert solutions for consumers and businesses

Rogers Communications Inc. (TSX:RCI) is a diversified telecommunications company that provides consumers and businesses with wireless, telephone, Internet and TV services and solutions. Most people know Rogers for its consumer offerings, especially within the wireless industry with its leadership in smartphones, mobile Internet and high-speed networks.

However, Rogers is making a great deal of headway in the business arena, especially on the wireless side, and in no other place is this as evident as it is in Alberta.

BUSINESS IN ALBERTA Rogers is dedicated to serving the Alberta marketplace. Network upgrades and expansion projects, especially over the last two years, are part of this commitment.

“Our network investment in Alberta over the last few years has been significant. We invested $106.5 million in 2009, and are set to invest another $109 million for 2010,” says Kevin Jackson, Manager, Network Continuous Improvement Program — Alberta & Midwest Network. “A large part of this investment is within rural Alberta, and we are working closely with our business customers to ensure they have reliable access to our network in the key areas in which they conduct their business.”

In addition to business investment, Rogers is also involved in community investment initiatives across the province. One such

support program specifically for business customers, designed to ensure immediate, real-time assistance with specially trained service representatives. Live Agent™ is currently available to all business customers. More information can be found at www.rogers.com/liveagent.

When it comes to Alberta, Rogers encourages entrepreneurial spirit and innovation in its business practices to match the qualities that make this province so successful. If a customer requires a solution that isn’t on the market, Rogers will team up with one of its local Alberta partners to deliver a solution that is appropriate.

“Rogers also offers business customers advantages by partnering with some of Alberta’s leading technology firms to offer homegrown solutions to help local businesses operate in our regulatory environment. Our first-in-class solutions to meet the legislation around lone-worker safety is just one example,” says Todd Fitzpatrick, Alberta Business Partners Consultant.

EXPERT SERVICE FOR BUSINESS CUSTOMERS An example of Rogers’ support for small business was the introduction of Live Agent™, a dedicated

COMMUNITY PARTNERSHIPS — GREEN HECTARES Rogers supports the community in a variety of ways, partnering with a wide range of organizations to bring telecommunications solutions to Albertans. One of its newest community partnerships is with Green Hectares, a not-for-profit organization whose vision is to keep rural youth in rural Alberta, and to grow agricultural

“

community investment is Rogers’ annual Chomp & Stomp fundraiser event, which has donated more than $300,000 in the last five years to the Kid’s Cancer Care Foundation of Alberta.

With strong business teams in both Calgary and Edmonton supporting the medium and large business sector — along with a network of dealers throughout Alberta offering highly trained small business specialists — Rogers is fully equipped to provide customers with the experience, solutions and services that businesses in Alberta require.

us they need the solutions that enable them to take advantage of even small blocks of time and the support that lets them get back to their business,” says Gordon Stein, Vice President, Business Segment, Rogers Communications. “At Rogers, we understand that seamless, reliable and fast connectivity, combined with the best devices and personal, dedicated support, is imperative for all small businesses to stay competitive, productive and ultimately to help them succeed.

the organization with various Rocket™ mobile Internet solutions that will power their educational classes. Thanks to this partnership, rural Albertans are gaining important knowledge that will serve them today, and well into the future. Green Hectares is holding workshops at community learning centres throughout the province, teaching rural Albertans how they can run their businesses more effectively by using wireless technology. As just one example, farmers who need advice on farm machinery or crop management can learn about digital photo-graphy, and how to apply it to their business. “The time and money it saves is huge,” Schneider says.

“For example, the Green Hectares digital photography course has helped farmers get important on crop management or machinery issues in more timely and cost-effective manner than before. Tools such as the

Now, more than ever, business transactions are taking place outside of the office; workplaces and work spaces are now anywhere and everywhere.

On the road, within airport terminals and in coffee shops, employees are simply connecting to their company’s VPN [virtual private network] via

”

wireless networks and conducting business.

— Gordon Nelson, VP, Rogers Business, B.C. & Alberta

SMALL BUSINESS OWNERS ARE GOING WIRELESS Results from a recent benchmark study conducted by Angus Reid Public Opinion on behalf of Rogers Communications, released in October, have found that while the majority of small business owners (56 per cent) maintain a combination of wired and wireless connectivity, those between the ages of 18–34 (20 per cent) have cut the cord completely. They operate in wireless workplaces through the deployment of solutions including Rocket™ sticks, wireless hubs, smartphones, laptops and WiFi networks.

Another 11 per cent say they plan to completely cut the cord over the next 6 to 12 months.

“In business, every second counts. Our customers have told

knowledge by providing educational opportunities for all to learn.

Green Hectares developed its new Rural Road Show program in order to share with rural Albertans how to use and access technology for business purposes.

Until now, “we have been at a disadvantage in the rural areas for connectivity and the use of technology. We don’t have the same access to the Internet that you are accustomed to in an urban centre,” says Green Hectares Executive Director Wendy Schneider. “The sponsorship we received from Rogers is helping us make a difference in connectivity and the use of technology to help businesses across Alberta — it has been a tremendous help.”

Rogers has aligned itself with Green Hectares by providing

Rocket™ hubs allow for these advantages to a much greater degree than dial-up, because they have more capacity for images and have the ability to work remotely in the field.”

So what does the future hold for Alberta businesses when it comes to wireless options to improve productivity and performance?

“Great things are happening in the Alberta business community,” says Loraleigh Kovacik, Director, Alberta Business. “Our customers are embracing mobile technologies and beginning to understand the benefits associated with enabling their workforce.

The three advantages a business gains in mobilizing their workforce are increased employee productivity, higher employee satisfaction and cost savings.” www.energizealberta.com

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November/December 2010 • Energize Alberta

Paving the way

Group creates roadmap for large-scale

deployment of electric vehicles

Illustration: Dave Whamond

Jim Bentein Energize Alberta

A

n electric vehicle (EV) technology roadmap that was released in February will help pave the way for the large-scale introduction of the vehicles in Canada, says the head of a Toronto-based organization that produced the report.

“The goal that was set under the roadmap was to have 500,000 or more EVs in Canada by 2018, and that is still our goal,” says Al Cormier, executive director of Electric Mobility Canada (EMC), which has 112 members, ranging from Canadian vehicle manufacturing giant Magna International and Japanese automaker Nissan Canada to utilities such as Manitoba Hydro, BC Hydro, Hydro-Quebec and Calgary-based Enmax.

The EV technology roadmap focuses on two types of personal and commercial vehicles that rely exclusively or primarily on electrical power: • Battery-electric vehicles (BEVs) that are all electric, as all power needs are supplied by the battery, and which are almost always charged from the electricity grid; and,

• EVs that have an internal combustion engine in addition to an electric traction motor. The internal combustion engine can charge the vehicle’s battery by powering a generator while the vehicle is in motion, and may also provide traction. Plug-in hybrid electric vehicles (PHEVs) are an early example of this technology.

Other EVs that are not considered in the roadmap include fuel cell-based vehicles, vehicles with two or three wheels, low-speed and off-road vehicles, military vehicles, and vehicles such as trolley buses that are powered from the grid while in motion.

The goal of the initiative, funded by the federal government as well as industry partners, is to promote the acceleration of commercial deployment of BEVs, PHEVs and other hybrid electric vehicles.

Cormier believes that the EV roadmap will promote the creation of government initiatives that will be required to eventually see hundreds of thousands of EVs being driven on Canadian roads.

“We identified 21 initiatives in the roadmap that will help us reach our goal, and we’re now working with government on what needs to be done,” he said.

To Do...    

Build a fence Plant new tree Ploughing Call contractor about driveway excavation

www.alliancepipeline.com

www.energizealberta.com

l Cal o . et t org u Dig f t o ’ Y Don efore s bor B h g i ne eline. r u yo e Pip m o Fr Allianc at

Formed four years ago, EMC is now working with eight different federal government departments — as well as provincial governments — to identify the roadblocks in the way of widespread adoption of EVs in Canada.

Canada’s potential role EMC wants Canada to be a leader in the development of the EV industry. In fact, one of the roadmap goals is to see a “made-in-Canada” project evolve that would aim at producing an all-Canadian EV. That led to the development of Project Eve, which involves a consortium of Canadian companies to produce an all-electric vehicle. The lead company is Calgary-based Motive Industries (see related story on page 21).

One of the most important reasons EMC and governments support a shift to electrics and plug-ins is because of the environmental impact of transportation in Canada.

Transportation accounts for one-quarter of Canada’s total greenhouse gas (GHG) emissions, with light trucks and passenger cars accounting for about 12 per cent. There are 18.7 million passenger cars and light trucks in Canada.

In some provinces, such as Quebec, Manitoba and British Columbia, where hydropower accounts for a vast

Please call Alberta One-Call (1-800-242-3477) at least 72 hours in advance of any digging or excavation activity.

Energize Alberta • November/December 2010 majority of the power produced (meaning the original source of power for EVs and plug-ins is free of GHGs), the environmental benefits of shifting to electrically powered vehicles is greater than it would be in Alberta, where most of the power is produced by coal-fired and gas-fired plants.

Also, electrics are likely to have more attraction for city dwellers, since all-electrics or plug-in electrics have the range for most daily commutes.

Cormier argues that Canada, along with Norway, which also derives most of its power from hydro and renewables, have the most to gain from a shift to electrics and plugins (which, unlike existing hybrids, would still derive most of their power from electricity, switching to conventional fuels for longer trips).

“We have a great opportunity in Canada to tap environmentally-acceptable sources of electricity,” he says.

But even in Alberta, where power plants fuelled by coal or natural gas account for about 90 per cent of the province’s electricity, there would be environmental benefits from a shift to more EVs. About 15 per cent of the 240 megatonnes of GHGs generated annually in the province come from the transportation sector (about 10 per cent of that from passenger vehicles and light trucks).

In a study released a year ago by the University of Calgary’s Schulich School of Engineering, researchers concluded that emissions from that sector could be cut from between 40 per cent to 90 per cent if there was also a shift to a “smart” charging system, which would see EVs

Three Key points to ponder

1.

EVs have a number of benefits compared to conventional vehicles, including lower operating and maintenance costs, less susceptibility to volatile fuel prices and reduced oil dependency. They also offer a quieter ride and reduced vehicle noise.

2. EVs offer an opportunity for consumers to make a “green

choice.” They offer reduced emissions of harmful air pollutants and greenhouse gases, as well as increased energy efficiency.

3. Challenges to large-scale deployment of EVs remain. To

achieve the timely and effective commercialization of EVs, governments and industry must work together on ensuring that the necessary steps are taken, including the development of advanced batteries, a charging infrastructure, electricity storage devices, codes and standards, and policies, as well as public education and consumer acceptance.

charged at night, mostly from wind power sources.

Cormier says EMC is seeking $1 million in government and industry funding to finance a study of all building codes and transportation laws in Canada that throw roadblocks in the way of electric vehicles. That review would take about one year.

“The objective would be to see what must be done to make electrics welcome in Canada,” he explains.

Cormier says the United States is much further advanced than Canada in pursuing government action to promote electrics.

For instance, there are federal government incentives as high as $7,500 for consumers who buy electrics or hybrid

electrics, and some states, such as California, offer additional incentives of $3,500 per vehicle. His group wants the federal government and provinces to consider similar incentives.

The Obama administration in the United States has set aside US$25 billion for the promotion of electrics and plugin electrics.

“If the Americans are going 100 miles an hour, we’re not even past the starting line,” says Cormier.

“We’re not asking for permanent incentives, just a program to speed the adoption of electrics in Canada.”

Some provinces do offer tax incentives to promote the adoption of electrics. For instance, Ontario offers an incentive worth as much as $8,500 (towards the purchase of 10,000 EVs or plug-ins), and Quebec and British Columbia offer incentives worth between $3,000 to $5,000.

The next wave Right now in Canada and the United States there are virtually no highway-ready EVs or plug-in EVs available, but that will soon change, as some manufacturers ramp up their production of all-electrics and plug-in electrics.

For instance, Toyota, which pioneered the hybrid vehicle with its Prius, plans to add six conventional hybrid vehicles in North America by 2012, as well as introduce two all-electric cars. Most of these models will be available in Canada.

Toyota also has announced it will be selling a plug-in, rechargeable version of its Prius in 2012, which would have a range of about 20 kilometres on battery power only, and would be priced at less than US$30,000.

The existing hybrids essentially derive their power from design modifications to conventional vehicles, which sees an electric motor applying resistance to the drive train, causing the wheels to slow down. The energy from the wheels turns the motor, which functions as a generator, converting energy normally wasted during coasting and braking into electricity, which is stored in the battery until needed by an electric motor.

Plug-in hybrids would derive most of their power from the grid, much like pure electrics, but would also have the backup capacity to run on gasoline or another fuel source.

General Motors plans to introduce its Chevy Volt next year.

It would have a battery-powered range of about 50 kilometres and would sell for about C$44,000. It would be a plug-in electric, with a gasoline-powered engine for longer trips.

The Nissan all-electric Leaf, which claims a batterypowered range of over 100 kilometres, will be introduced next year in Canada and will sell for about $34,000. It will have plug-in capacity.

“About 80 per cent of the [vehicle manufacturers] will be offering all-electric and plug-in electrics within the next 12 to 18 months,” says Cormier.

Cormier said the key to the more rapid adoption of BEVs and PHEVs is battery technology, a sentiment echoed recently at a conference in Toronto by an executive with Magna International’s E-Car Systems division.

Price matters Dave Pascoe, vice-president of that division, which recently announced it is setting up a new hybrid and EV system

19

development centre and a battery development facility in Auburn Hills, Mich., believes EVs will remain a niche market until better and cheaper batteries are developed or until gasoline prices soar.

“When electric vehicles have similar range performance and costs to an internal combustion engine ... then there will be a tipping point where we can get to the mainstream consumer, and people will switch in high volume to hybrids and electric vehicles,” he said during a panel discussion on electric vehicles.

Pascoe said gasoline prices would need to be about US$5 a gallon — about equal to C$1.36 per litre — for electrics and hybrids to appeal to the average driver.

He says at today’s prices of an average of $1 per litre in Canada, it would take six years for consumers to offset the higher cost of the vehicles with savings on gasoline.

“At today’s prices electric vehicles won’t go big, but costs are coming down so there’s hope for the future,” he says.

Bridging the gap Cormier says he believes plug-in electrics such as PHEVs, which would see battery power providing the vast majority of an average urban resident’s daily driving, will act as a “bridge” to electricity-only powered BEVs. They require less battery power and so will sell for less than the allelectric vehicles, which will likely be as much as double the price of gas-powered vehicles.

Arne Elias, now a Victoria-based transportation consultant who formerly headed the Winnipeg-based Centre for Sustainable Transportation (CST), also believes PHEVs are the bridge to an all-electric future.

Three years ago, CST sponsored the first-ever international conference on PHEVs. At that time, there were no commercial models available, meaning enthusiasts had to use kits to convert conventional hybrids to PHEVs. The converted vehicles could run up to 55 kilometres on a single charge. Manufacturer-developed PHEVs should be able to achieve the same kind of range.

Elias, who has been working with some utilities studying the impact of a wholesale shift to BEVs and PHEVs, says the impact on the power grid can be managed, through consumers charging their vehicles during off-peak hours (in the early morning, for example).

“The impact on the power grid should be no more than if someone buys a new plasma TV,” he notes.

He says utilities need to develop “resilient grids” that will easily accommodate electrics.

Elias says over time consumers may have two vehicles — one gasoline or natural-gas powered for long-distance driving and another PHEV or all-electric for city driving.

Player on the stage 1. Electric Mobility Canada (www.emc-mec.ca) Going broader, deeper 1. EV Canada (www.evcanada.org) Feedback What would it take to get you behind the wheel of an EV? Let us know at yourenergy@energizealberta.com.

www.energizealberta.com

YOU ASKED FOR MORE COVERAGE IN ALBERTA We delivered.

Since 2009, Rogers has invested over $212 million to expand and upgrade our network across Alberta.

Current GSM/GPRS/EDGE/HSPA/HSPA+ Current GSM/GPRS/EDGE/HSPA Current GSM/GPRS/EDGE

CANADA’S RELIABLE NETWORK Email aberta.business@rci.rogers.com Call 1 877 336 1333

This map is a general representation of wireless coverage, where indicated. The areas shown are approximate. Actual coverage may vary from map graphics. TM Rogers & Mobius design are trademarks of Rogers Communications inc. used under license or an affiliate. All other brand names are trademarks of their respective owners. ©2010 Rogers Communications.

Energize Alberta • November/December 2010

Charging ahead Calgary duo trying to develop the next generation of electric vehicles Jim Bentein Energize Alberta

N

athan Armstrong wants to reinvent the automobile — and he wants to do it from Calgary, a city not normally thought of as a centre of automotive design and development.

Armstrong, president of Motive Industries, and his design team are looking for a new approach beyond the existing car design being adopted by auto giants such as General Motors of Canada, Nissan Canada, Magna International and others planning to introduce all-electric and plug-in hybrid electric vehicles (PHEVs) to North America and worldwide.

“We’re looking at designing second-generation EVs [electric vehicles] that can communicate with the power grid,” he says.

“The [major vehicle manufacturers] are developing what I call dumb electrics.”

Those “dumb electrics” are essentially modifications of existing vehicles, he says.

Motive, which has seven full-time employees and others on contract, was established four years ago by Armstrong, an automotive engineer, and his partner, auto designer Darren McKeage.

Both moved to Calgary (McKeage is a Calgary native) from California.

Armstrong’s argument is that a true electric vehicle needs to be designed from the ground up, something he says has not been the case before now.

To do so, Motive needs to look at using lightweight materials, new battery technologies and other design aspects that he believes haven’t been fully taken into account by mainstream firms, largely because they are aiming at larger markets.

Motive’s approach is to look to niche markets, such as fleet operators.

The company is also working closely with Calgary-based utility Enmax, Hydro-Quebec, BC

exchange that is a key to its technology.

Currently, Motive has potential orders for 20 vehicles, including from utilities and Transport Canada. Armstrong also says the company is working on five or six different vehicle designs.

One possibility he envisions is that electrics will be designed to last for many years, with the bodies of the vehicles being changed every few years to make the appearance more contemporary.

It is costing the partners $1.2 million to develop the vehicle.

Armstrong’s partner at Motive, McKeage, who has a master’s degree in automotive design from England’s Coventry University, says his design background is playing a key role in Project Eve’s overall plan to develop three vehicles, including the compact Kestrel and planned fleet vehicles, such as a delivery van.

He says the partners chose the name Kestrel for

Motive Industries auto designer Darren McKeage.

Hydro and other utilities, as well as with post-secondary technical colleges, such as Calgary’s SAIT Polytechnic and Vancouver’s British Columbia Institute of Technology.

The key — and the major reason Motive is working with utilities — is to design electrics that communicate with the power grid, that emphasize the “two-way flow” of power, Armstrong says.

“We think the technology [Motive is developing] will help to load-balance the grid,” he says. For example, the electric car might actually return power to home appliances when it is not being driven.

“The vehicles become an extension of their [vehicle owners’] own power system,” he explains.

Motive is developing electric vehicles that will be delivered as “beta” models to utilities, which will test them.

“It’s a holistic approach that changes the way we use electricity,” says Armstrong.

To achieve that, though, he says “the battery is a key,” and Motive

is working with various firms that are developing battery technologies, such as Hydro-Quebec, which has been working on battery technology for many years.

Armstrong says it is necessary to develop various battery technologies since conventional lead acid batteries don’t have enough power for electrics.

Most of the new technologies rely on lithium, which is used in consumer electronics.

Motive also wants to work with the Wind Walk development, a project led by TV home renovation star Mike Holmes, which is planning to build an ecologically advanced 400-unit housing project in the Municipal District of Foothills, on the edge of the town of Okotoks. The town is opposing the project because it would add 1,100 people to the area’s population, which it claims its infrastructure can’t support.

Motive still hopes it can work with the developer to create a local grid system that would allow its vehicles to establish the kind of two-way power

The Kestrel’s body panels, including the doors, will be made from mats of hemp. The hemp, made available to Motive

by Crown-owned Alberta Innovates - Technology Futures, is being grown in Alberta.

Project Eve Motive’s most widely publicized venture involves its partnership with a Canadian collaborative project founded by it and Toronto Electric, a material handling and electric motor company. That initiative is called Project Eve. The two are developing the Kestrel, a compact car that holds a driver and up to three passengers. It will achieve a top speed of 135 kilometres an hour and has a range of 40 to 160 kilometres before needing a recharge.

The vehicle first attracted publicity because of what was being used in the car’s body composite: mats of hemp, a plant from the cannabis family.

The hemp, made available to Motive by Crown-owned Alberta Innovates - Technology Futures, is being grown in Alberta.

the first compact car with the bird of the same name in mind.

“It’s a small, powerful, little falcon-like bird,” McKeage explains. “The look is influenced by cheetahs and sharks, with a small waist but a big chest.”

Collaborations Aside from being involved in Project Eve, Motive has designed some prototypes for various vehicle manufacturers and has been retained to do design work for Winnipeg-based Westward Industries, which manufactures a number of niche market vehicles, including delivery vans and parking patrol vehicles.

It also has discussed the natural gas vehicle market with Calgary-based Encana, Canada’s largest natural gas producer and an advocate of more natural gas

21

use in power production and transportation.

Steve Dallas, president of Toronto Electric, one of Canada’s oldest privately owned businesses (it was founded in 1885, 20 years before Alberta became a province), admits the idea of helping to develop electric vehicles has become a bit of an obsession with him.

“I started to design an electric vehicle about six years ago,” he says. “My company engineers and designs cranes, hoists and other highly specialized equipment, all of which are electric. I kept thinking we could design an electric car, given that background.”

So, the company, which has 10 employees, did just that.

He developed a twopassenger car called the A2B, a vehicle he had on display recently in Calgary.

It goes up to 99 kilometres an hour and can travel up to 210 kilometres on a single charge.

It comes with programmable dashboard instructions in French and English and is designed mostly for urban applications or fleets.

His company is working with Motive Industries, Electric Mobility Canada and nine other partners on Project Eve, aimed at developing all-Canadian electrics (see related story on page 18).

Dallas says the A2B and the vehicles that will be developed by Project Eve will need to be priced higher than conventional vehicles of the same size — or even more than mainstream plug-in electrics.

“Everyone thinks it [the A2B] should sell for $15,000, but they have to look at the car in a different way.”

For one thing, because electrics have so few moving parts, they can be driven for 20 years or more, meaning it is more of an investment than a normal vehicle purchase.

Dallas says the first Kestrel should be introduced by the middle of next year, with other Project Eve vehicles to follow.

Meanwhile, he says the partners are hoping for some government financial help in the development, pointing out that American, Chinese and other electric vehicle manufacturers have received billions in government assistance.

“But this is Canada,” he says.

www.energizealberta.com

22

November/December 2010 • Energize Alberta

Getting plugged in

Advocate’s Corner

Enmax employees to pilot use of electric vehicles in Calgary Jim Bentein Energize Alberta

R

ob Harris is a fan of all-electric and hybrid electric cars, believing Canadians will gradually see more and more of them on their roads — but he’s also a realist who has experienced Alberta’s winters and thinks auto manufacturers have underrated what temperature extremes will do to electrics.

“Our climate will be a key,” says Harris, director of the smart grid program for Calgary-based utility Enmax, which recently launched

one reason the vehicles should prove increasingly popular with consumers.

“With electric cars being seven or eight cents equivalent in operating costs, we think that a lot of Alberta consumers will be choosing electric cars for that reason alone,” he says.

But, at the risk of contradicting his boss, Harris says — in so many words — not so fast!

He says he has talked to the manufacturers of EVs that will be coming on the market in the next two to three years (nearly every auto manufacturer has plans to develop EVs), and the models they are bringing to the market aren’t designed to cope with -30 C temperatures.

Gary Holden, president and CEO of Enmax, and former Calgary mayor Dave Bronconnier try the Toronto Electric A2B.

Alberta’s most ambitious pilot project to test the impact of electric vehicles on the power grid and the performance of the vehicles in the province.

Enmax, which is owned by the City of Calgary and provides electricity, natural gas and other services to customers in the Calgary area, launched the program this past July.

The initiative, which will last three years, will see the utility replace 10 of its fleet vehicles with electric vehicles (EVs) that tap power from the grid.

The City of Calgary will also participate in the program and will add 10 electrics to its fleet.

In addition, another 80 EVs will be made available to Enmax employees at a subsidized price (subsidies have not yet been revealed by the company).

The company plans to test the Nissan Leaf; Mitsubishi i-MiEV; Toronto Electric A2B (Project Eve); Motive Industries Kestrel (Project Eve); and the Ford Escape and F-150 Conversion.

Enmax chief executive Gary Holden is an EV booster, saying their environmental attributes are just

Nissan Leaf

www.energizealberta.com

“When we talked to electric vehicle manufacturers about our cold weather, they were thinking about -10 C,” he says. “When we told them it got to -30 often in Alberta, they gave us a deer-in-the-headlights stare.

They aren’t thinking about how they will operate in our conditions.”

It’s much more difficult for a vehicle to hold up to cold temperatures than to the heat.

“That’s why southern California is a perfect climate for electrics,” he says.

“It requires less battery power to bring a temperature down from 30 C outside to 20 to 24 C than to provide enough heat to make it 15 to 20 C inside a vehicle when it’s 30 below outside.”

Add a blizzard to that and it’s unknown how well electrics will cope.

“Nevertheless, our view is we can do this [operate electrics] in our climate,” he says. “But one key aspect of this test is to measure the driver’s experience in cold weather.”

Power-grid pressure?

Another key part of the pilot is to test how electrics interact with the

Toronto Electric A2B

power grid. For instance, more affluent areas of the city might see what he called “clusters” if electrics are more prevalent there, which has implications for transformers and other electricity infrastructure in those areas.

The advantage of having Enmax and City of Calgary fleets testing electrics is that their impact on the grid can be tracked by the utility.

In addition, employees who buy the vehicles will have to agree to have the impact of their vehicles on the grid measured by the utility.

At this point, the penetration of EVs in the province is very small. As of March 31, 2010, there were 84 EVs registered in Alberta, with about 21 of those being in Calgary.

There are about 3.03 million vehicles registered in Alberta (about 80 per cent of those being cars and light trucks), with almost half of those registered in the cities of Calgary and Edmonton.

Harris says most experts think it will be years until EVs constitute a meaningful proportion of total vehicle sales in North America — particularly in large cold-weather provinces like Alberta. For instance, an electric couldn’t drive the distance between Calgary and Edmonton without a charge.

One advantage the province does have is that the plug-in infrastructure is already in place — and that is also attributable to its climate.

Harris pointed out that virtually every vehicle in Alberta has a block heater and, as a result, there are electrical sockets in many locations where vehicles can be plugged in. That isn’t the case in many parts of Canada, such as the Lower Mainland of British Columbia or southern Ontario.

“One figure I was quoted is the adoption rate in North America [over the next 10 years or so] might reach 2.5 per cent,” he says.

Given this slow rate of penetration, he says western Canadian oil producers don’t have to worry about the demand for petroleum dropping too precipitously any time soon.

“The impact on the grid and petroleum consumption will be insignificant for many years,” he says.

The shift of heavy-duty vehicles to electric power will also be very slow, starting with vehicles that don’t need to drive large distances, such as delivery vans.

Mitsubishi i-MiEV

karin gashus

W

ith cooler weather reminding us that winter is just around the corner, we find that calls to our office begin to increase. Many consumers are seeing that the bottom line on their bills has begun to creep up. Just this month, a consumer called us about a problem he’d been trying to resolve for some time.

He moved a year ago, and the next month received a bill for $10,000, far greater than he had ever paid before. When he called his energy retailer, he was assured they would investigate. However, over time he still had no response.

Then the next bill came in at an additional $6,400. The distribution company would not provide him with any information and the debt of $18,400, which included other charges over time, was billed to his current account.

Our mediation officer worked with the retailer and the distribution company to get the facts, resulting in a correct bill amounting to $88.65.

It pays for consumers to read their bills carefully and be aware of any significant increases or decreases in charges or consumption. This could be the result of weather changes, billing errors or an incorrect meter reading.

For more information on how to read your bill, call us at 310-4UCA (4822) or visit our website at www.ucahelps.alberta.ca.

Regulated Rate Option Talking energy talk puts context and meaning to important words and phrases, allowing readers to move beyond jargon to participate in important energy discussions.

I

f you have chosen not to enter into a contract with an electricity retail supplier, you are on the Regulated Rate Option (RRO).

The RRO is available to small electricity consumers: residential, farm, irrigation and commercial customers that consume less than 250,000 kilowatt-hours per year.

Beginning July 1, 2010, the RRO was adjusted to reflect current market conditions, and the portion of the regulated rate set by short-term pricing increased to 100 per cent from 80 per cent.

Before July 1, the RRO was calculated using a mixture of both short- and long-term market prices for electricity. Now, the regulated rate is based entirely on the next month’s projected market price.

This adjustment is the last of a five-year transition announced by the government in 2005. Over this time, the long-term portion of the regulated rate has been phased out.

This will bring electricity billing more in line with natural gas billing practices, the government says, with the regulated rate changing month-to-month just like the fluctuating rate for gas. As the economic recovery continues, electricity prices could rise due to higher energy demands.

Price fluctuations sometime spell trouble for more-vulnerable Alberta citizens with low or fixed incomes. However, there are alternatives to the RRO. While Alberta consumers continue to have the option of receiving the regulated rate, they may also seek longer term price stability or security through a contract with a licensed retailer. There are no deadlines for making this choice.

A list of licensed retailers is available from the Utilities Consumer Advocate at www.ucahelps.alberta.ca or by calling toll-free 310-4UCA (4822).

Energize Alberta • November/December 2010

Hot stuff

23

Geothermal proponents say tapping natural subsurface heat can replace environmentally suspect power sources Jim Bentein Energize Alberta

G

eothermal may be the Rodney Dangerfield of the energy industry.

Naturally occurring geothermal taps either natural hot water or steam, known as a geothermal reservoir, through deep wells drilled into the earth that are as much as two kilometres below surface.

But like the American comedian, who was famed for claiming that he “don’t get no respect,” Canada’s considerable geothermal energy potential remains largely untapped and unrecognized.

However, a Calgarybased organization called the Canadian Geothermal Energy Association (CanGEA) hopes to change that, as it believes the potential of geothermal is so significant that its mandate is to promote the development of the underutilized energy source.

As a national group with 50 members, including Suncor Energy, Nexen and Chevron, three of North America’s largest oil and gas producers, as well as Enbridge, one of its largest pipeline companies, CanGEA has managed to attract a number of devoted followers, many with an oil and gas industry background.

The group has set an ambitious goal of seeing 5,000 megawatts (MW) of geothermal energy in Canada by 2015, slightly more than the current wind energy capacity in the country and enough to meet the electricity needs of about 1.5 million homes.

Starting from ground zero But with essentially no geothermal energy currently being tapped in the country, Canada has a long way to go — something acknowledged by CanGEA chairperson and cofounder Alison Thompson.

“There’s 11,000 MW of geothermal power installed worldwide,” says Thompson, who held senior management positions with Suncor and Nexen before joining Vancouverbased start-up Magma Energy in 2008, where she is vice-president of corporate relations. “The U.S. has 3,500 MW and Mexico has 1,000 MW.”

injected into the Earth and heated, then used to produce power.

The best example of direct use of geothermal is in Reykjavik, Iceland, where geothermal powers the entire city and a distribution system is used to circulate 60 million cubic metres of hot water from geothermal sources to heat buildings in the city.

Thompson, who has master’s degrees in engineering and business administration, has been a geothermal energy advocate since she worked for Suncor in the late 1990s.

“I led Suncor’s geothermal energy assessment team,” she says.

The Canadian Geothermal Association would like to see 5,000 MW of geothermal energy by 2015, enough to meet the electricity needs of about 1.5 million homes.

And Canada has nothing.

“But we think we have 5,000 MW of potential — and that’s a conservative estimate,” she says.

Earth heat For the most part, the majority of the world’s naturally occurring geothermal power sources use escaping heat from the Earth’s core as a means to heat water and produce electricity. It’s also possible to extract hot water from the depths of the Earth to produce electricity. Alternatively, water is

THREE Key points to ponder

1. C urrent U.S. geothermal electric power generation

totals over 3,000 MW, equivalent to approximately four large nuclear power plants.

2. T here is currently no (0 MW) electrical power generation from geothermal resources in Canada.

3. Canada is the only country on the Pacific Rim that has yet to exploit its geothermal resources for electricity production.

She conducted similar work for Nexen, where she was the company’s technology transfer manager until joining Magma in January 2008. “It’s a growth company,” she says.

However, with revenues of $5 million a year, Magma is a long way from reaching the billions of dollars a year in sales that Suncor and Nexen attain.

But because of her passion for geothermal energy and its potential, Thompson made the move to Magma.

It was that same en­t husiasm that led to her and others, most of whom were and are involved in the oil and gas industry, to found CanGEA in 2007.

Members are mostly smaller firms involved in the geothermal sector outside of Canada.

Aside from the potential of geothermal energy to provide power, there is potential, particularly in Alberta, for geothermal

Geothermal power plants can be found in Iceland, New Zealand and the U.S., but Canada has none so far.

sources to be used for enhanced oil recovery of conventional oilfields and steam injection in the oilsands.

The University of Alberta, funded by the Helmoltz Alberta Initiative, is conducting research into this potential, and Calgarybased Borealis GeoPower is planning to develop geopower projects in the Alberta Rockies and the Northwest Territories.

However, despite the potential Thompson and CanGEA see for geothermal energy development in

Canada, the company she works for, Magma, has no projects in Canada.

Instead, the Vancouverbased firm owns an operating geothermal plant in Nevada, which generates 13.5 MW and can be expanded to 23 MW, and has majority interests in two operating plants in Iceland that generate 175 MW and can be expanded to 230 MW. It also has two advanced-stage projects and 21 exploration projects, all outside of Canada.

It recently moved into Latin

America, where it owns nine project sites.

The most common form of geothermal power comes from geysers, which produce water at 150 C or higher. That’s why most of the geothermal power in the United States is produced in states like Nevada and California, where such energy sources are common. She says the same potential sources exist in Canada, but have been largely left untapped. ❯❯ continued on page 24

www.energizealberta.com

24

November/December 2010 • Energize Alberta

Continued from page 23

Hot stuff Enhanced geothermal systems In addition, Canadian researchers are looking into the potential of enhanced geothermal systems (EGS), which are different than the naturally occurring hydro geothermal systems, such as Old Faithful in Yellowstone National Park or geysers in California.

to develop the technologies necessary to produce Alberta’s oilsands.

A tough sell However, CanGEA hasn’t won that argument yet in its lobbying efforts with the federal and provincial governments.

It failed to convince Natural Resources Canada to include geothermal as

Players on the stage 1. Canadian Geothermal Energy Association (www.cangea.ca) Going broader, deeper 1. Geothermal Energy Association (www.geo-energy.org) EGS are much deeper than hydro geothermal systems and are engineered by drilling into typically dry, compact formations of hot rock. These zones must be fractured or opened up using hydraulic methods and then flooded by pumping or injecting water or some other fluid into them. The fluid is then extracted from the hot rock through a production well, and this heat can be used at the surface to spin a turbine or produce hot water or steam.

A commercial EGS is operating at Soultz, France, and one has started operating in Australia. However, there are no commercial systems in North America.

Two years ago, Michael Moore, a University of Calgary geophysicist, published a report on the potential for EGS in Alberta in which he concluded there was a potential for thousands of megawatts of power development in the province.

However, the study also concluded that the barriers to such development are significant, including the need to drill as deeply as 10 kilometres in some areas and drilling costs in the many millions of dollars.

Such development would also be costly because of the need for hydraulic fracturing and deep injection of fluids, and the difficulty in targeting suitable rock formations.

Thompson argues that the potential prize of geothermal energy is worth the risks, pointing to the huge investments made by the oil and gas industry

www.energizealberta.com

part of its roadmap process, by which the federal government funds plans to develop different forms of energy and other technologies. For instance, that department has funded roadmaps for hydrogen, solar, wind, electric vehicles, and carbon capture and storage technologies over the years. It refused to fund a geothermal roadmap.

In British Columbia, where experts believe the potential of geothermal near the Pacific Coast is vast, the provincial government has granted only one geothermal energy exploration permit since 2004.

investing in a geothermal project in Oregon.

Enbridge said it would invest US$23.8 million for a 20 per cent interest in a 35 MW geothermal project in Oregon that is being developed by Idaho-based U.S. Geothermal.

“Here you have another Canadian company who believes in geothermal, knows it works and is patient,” she said, adding that Enbridge joins a long list of Canadian-based companies developing geothermal projects outside of Canada.

The U.S. federal government provides grants equal to 30 per cent of the capital cost of geothermal (and other green energy) projects, but no such assistance exists in Canada.

Adding to Thompson’s frustration is the fact that Canada’s energy industry is among the world leaders in unconventional oil and gas development, which uses most of the same skills sets required to develop geothermal power.

“The skills are similar,” she notes. “The oilsands area of Alberta isn’t a natural geothermal area, but if you go deep enough you can find enough rock to produce steam.”

She says she proved the approach would work when she led a team that produced a report while she was at Suncor titled “GeoPowering the Oil Sands.”

“The oilsands area of Alberta isn’t a natural geothermal area, but if you go deep enough you can find enough rock to produce steam.”

— Alison Thompson, Chairperson and Co-Founder, CanGEA

“Yet tens or hundreds of pieces of land have been nominated or requested [of the government],” Thompson says, adding that British Columbia has “world-class geothermal potential.”

A provincial government spokesperson recently said British Columbia is working to make additional geothermal permit licenses available.

CanGEA’s frustration with the slow pace of development in Canada grew in late September, after Calgary-based pipeline and green-power giant Enbridge announced it would be

While the study found that steam from geosources wouldn’t totally supplant the use of natural gas or coke to produce steam, it would significantly reduce the need to use those sources, she says. But Suncor chose not to proceed with a test of the technology.

Borealis plans However, Calgary-based Borealis GeoPower wants to prove that it is possible to develop geothermal

sources in Canada, says Tim Thompson, the company’s chief financial officer.

“We want to be the first company to develop geothermal projects in Canada,” says Thompson, an oil and gas industry consultant who helped form Borealis.

The company believes that geothermal energy for electrical power is currently an untapped power source in the Canadian energy market and specifically in Canadian oilfield operations. At present, this hot-water resource is readily available through the existence of numerous deep, end-of-life oil and gas wells in the Canadian Foothills, and using it to produce electricity has the potential to increase energy efficiency and offer carbon offsets for the oil and gas companies.

Borealis GeoPower is currently working with Free Energy Power on a pilot project to develop the Swan Hills power production plant to produce electricity from geothermal waste heat. The project recently received a grant of $2.6 million from the Alberta Energy Research Institute to assist in funding the power production plant at the Swan Hills oil and gas production facility in Alberta.

According to Borealis’ website, the power production plant will use geothermal waste heat from the facility to generate electricity to be used as an alternative or supplementary source of electricity at the facility.

The main part of the Swan Hills field produces oil, gas and water from a depth of about 2,700 metres. These fluids are pumped to the surface at approximately 72–77 C in very high volumes. The oil and gas are separated from the water, and the water is then pumped back into the formation. The project will use heat exchange technology to remove sufficient heat from the water before it is re-circulated to produce electricity.

If successful, the company believes there may be the potential to develop similar projects that would produce a total of 50–100 MW of green geothermal power in Alberta.

Feedback Should Canada start developing its geothermal resources?

Send your comments to yourenergy@energizealberta.com.

Pump it up Geothermal energy technique gaining some ground Jim Bentein Energize Alberta

I

t’s the other kind of geothermal energy — the kind Canada has plenty of. And Montreal-based Canadian GeoExchange Coalition (CGC) believes this country has just scratched the surface in developing heatpump-sourced, ground-based heat.

Unlike its cousin, naturally occurring geothermal energy that sees deep wells drilled to tap hot water or steam for power production or direct heating (see previous story), geothermal heat-pump energy is in widespread use.

In fact, Ted Kantrowitz, vice-president in charge of business development for the CGC, says there are about 85,000 of the systems in Canada.

“It has been growing by 40 per cent a year,” says Kantrowitz, adding that it costs $30,000 for most of the residential systems in Canada.

“You can spend less than that, but you get what you pay for,” he notes.

An Earth energy system uses a series of buried pipes to transfer heat from the ground into a building during winter. In the summer, the system can be reversed to transfer heat out of a building.

Savings to be had Geothermal systems lead to an average savings of about 60 per cent on a building’s heating and cooling needs, representing about half of a building’s energy expenditures. Most systems are installed at depths of between 50 and 250 metres.

Geothermal exchange systems work on the principle that the temperature at these levels remains fairly constant, getting warmer at greater depths.

A single system can be used for both heating and cooling. That eliminates the need for separate furnace and air conditioning systems, while geoexchange systems can also be used to heat water at no additional cost. Radiant heating systems disperse the heat from the systems.

An Earth energy system uses a series of buried pipes to transfer heat from the ground into a building during winter and distribute it through ducts. In the summer, the system can be reversed to transfer heat out of a building.

The system can be configured as either a closed or open loop, and the loop itself can be either horizontal or vertical. Loops circulate a glycol-type liquid.

Grant concerns Kantrowitz says one big concern CGC and its 290 members have revolves around the expiration of the federal government’s EcoEnergy grant next April. It has been lobbying for a replacement, but so far the government hasn’t indicated one is forthcoming.

The organization is trying to convince the government to allow a 50 per cent tax credit to be applied to large geoexchange installations. A similar credit exists now for solar and wind installations.

Energize Alberta • November/December 2010 The CGC, formed in 2003, has worked with the Association of Canadian Community Colleges to establish training programs for installers across the country, with hundreds trained so far. They are accredited by the organization after they are trained.

The organization also maintains a national quality control program whereby inspectors audit about 15 per cent of the installations made each year across the country to ensure standards are being kept up.

These programs were established because in the past there were no national standards and many installations were done improperly across the country.

The organization is so respected worldwide, it has been selected by the government of India to establish a similar national organization in that country. The CGC is also working with the governments of South Korea, Japan, Australia and Israel to help establish national organizations.

Alberta lags Ontario is Canada’s largest geoexchange market, with Saskatchewan, Quebec and Manitoba also experiencing significant growth.

“Alberta is one of the laggards because there is no program at the provincial level and because natural gas prices are so low,” notes Kantrowitz.

Actually, low natural gas prices are an issue for the industry across the country, he says, although installations are growing significantly in Saskatchewan, a natural gas– producing province. He says that might have something to do with the nature of the landscape, with flat, easy-todrill areas common.

Ironically, one of the few projects in Alberta touted by some as a prime example of geoexchange technology at work, Drake Landing, a 52-home green energy residential development just south of Calgary in Okotoks, isn’t actually using a heat-pump system.

“They didn’t use heat pumps directly,” he says. “It’s really a solar and thermal project that uses an underground storage system.”

gener

Geothermal Utilities installed a new heat-pump technology in the North Edmonton Operations Centre for ATCO Gas. In fact, an analysis by the CGC showed the project would have been 16 per cent more energy efficient had it used heat pumps.

Alex Lewoniuk, founder of Edmonton-based Geothermal Utilities, which is one of the few firms in Alberta involved in the geoexchange sector, says there are actually 13,000 heat-pump systems installed in Alberta, but most of those are commercial systems installed in large buildings or complexes.

However, he quickly adds that most of those systems aren’t the ground-based technologies the CGC promotes.

“Most of them are HVAC [heating, ventilating and air conditioning] systems that take their energy from a circulating loop,” he says.

Ground-based systems are few and far between, with maybe 200 or so total installations in the province.

In the past, Geothermal Utilities installed so-called vapour compression systems, the most commonly used in the business. In essence, they use technology similar to that used

25

by refrigeration systems. However, low natural gas prices have presented a formidable challenge for the company.

“In Alberta, because of low natural gas prices, the economics of vapour compression–based systems is questionable,” Lewoniuk says.

So his company has moved to a new heat-pump technology, fired by natural gas and called gas-absorption heat pumps.

It has installed 20 of the systems in the province, most notably for the new North Edmonton Operations Centre for Atco Gas, which had its official opening last March. The $21.2-million, 55,000-square-foot building is the largest commercial building in Canada using such a geothermal system.

The system is expected to cut Atco’s energy use by 40 per cent. Geothermal Utilities installed 12 systems at the Atco site. However, the system, for which the company had 110 wells drilled up to depths of 43 metres, cost double what a conventional HVAC system would.

Lewoniuk says the gas-based system improves the efficiency of gas up to 126 per cent, from less than 80 per cent that can be achieved with the best gas-based heating systems.

Size matters But the systems rely on economies of scale, with the minimum viable size being 120,000 British thermal units, about twice the size of an average house.

Conventional vapour-based heat-pump systems heat water, which doesn’t provide the same energy advantages as natural gas–sourced pumps, Lewoniuk explains.

“For instance, you have endless hot water [because of the use of gas in the systems],” he says.

He believes the biggest potential market for the systems is on farms, where grain drying can be a costly proposition, even with Alberta’s low natural gas prices.

While the Alberta government doesn’t provide direct grants for geoexchange systems, he says the government has helped the industry by developing geothermal maps of the entire province. In addition, through government-funded Climate Change Central, those installing the systems can receive a rebate of up to $10,000.

Inside Education presents

2011

today’s students, tomorrow’s energy

An Energy Literacy Youth Summit March 17 - 20, 2011

Kananaskis, Alberta

Inside Education’s first ever summit for educators and their students to learn together in the beautiful Kananaskis Country Explore Alberta’s energy story through interactive sessions and workshops Be one of 20 energy literacy teams from high schools across Alberta to generate ideas, discussion and action All expenses paid for teams of 4 high school students + 2 educators

www.gener8.ca Apply before December 31, 2010

www.energizealberta.com

26

November/December 2010 • Energize Alberta

A hat full of good ideas Ashok Dutta Energize Alberta

T

alk to anyone in Medicine Hat about the recent efforts being made to conserve energy and invariably the conversation tips towards the Hat Smart program.

Conservation is not a dire necessity for Medicine Hat, sometimes called “Gas City” — primarily due to the abundance of natural gas that exists within its municipal limits and the surrounding area.

More by chance than design, in 1883 the Canadian Pacific Railway discovered natural gas in southern Alberta while looking for water to run its steam engines. From then onwards, Medicine Hat was capitalizing on its supply of natural gas to run its power station.

Yet the city’s policyplanners still decided to think outside of the box.

Enter the Hat Smart program, which was rolled out some three-and-a-half years ago.

Under the project, the city council offers up to 50 per cent financial assistance to residents who take the initiative to set up solar panels or wind power. There are also other incentives ranging from $1,000 to $10,000 for new homes that meet or exceed the EnerGuide energy efficiency standards, for replacement of furnaces — a major consumer of energy — and for several related programs.

“Our story is one of a fully integrated energy utility,” says Russ Smith, environment manager with the City of Medicine Hat. “We have about 3,000 natural gas wells and generate power using gas as feedstock. But we felt the need to be more responsible in terms of energy use and thus wanted to change the behaviour and manner in which our customers viewed energy consumption.”

The task was not too daunting, as there was growing willingness from the residents of Medicine Hat to make Hat Smart a success. Of the 25,000-odd residential and 2,000– 2,500 commercial users, less than 10 had complaints, Smith says.

www.energizealberta.com 101469_UCA_Energize-AD_AUG18outlined.indd 1

8/18/10 2:53:25 PM

“I have always been thinking of starting a renewable [energy] program. But when they [city council] paid 50 per cent I lost little time in forging ahead,” says Keith King, a beneficiary, who currently has put up a 30-kilowatt (kW) portable solar panel on a mounted rack on the roof of his business.

Today, he shares the facility with two others, and it helps to reduce his electricity bill.

“When we are out of Medicine Hat, power generated from my facility goes to the grid and I get a rebate in my bill,” King says.

This enthusiasm is echoed by another beneficiary, Steve Moores, who runs a retail outlet and has installed solar panels with 10 kW and 5 kW of capacity for commercial and residential purposes, respectively.

the city council has started due diligence on a fourtower wind farm with a total nameplate capacity of 8–10 megawatts (MW).

The project is estimated to cost $15 million to $20 million and final word on a regulatory application filed with the Alberta Utilities Commission (AUC) is expected by early December.

According to Smith, depending on the outcome of the AUC ruling, the city council will make a final call on moving ahead with the proposed project.

While Moores says, “Wind [power] is the most incredible thing that’s happened since ice cream,” King is willing to take a step forward and even consider the options of becoming an investor in the project.

Meanwhile, city council is also looking for funding to move forward with

Medicine Hat is making it easier for its residents to install renewable energy sources such as solar.

“Hat Smart is an incredible initiative, as a one-time rebate of about $6,000 is given to those who install solar power in their homes,” he says, adding, “We were one of the first few proponents of such a program and lobbied with the city council for the rebate.”

According to Smith, the basic economic model for the Hat Smart program is based on an energy conservation charge of $1 per gigajoule (GJ) levied on homeowners who use more than 22 GJ of natural gas per month.

Wind farm, solar steam While an increasing number of solar panels are being mounted on roofs in Medicine Hat — including a 30 kW installation that’s the biggest in Western Canada — looking ahead

a $9-million solar steam project.

“The aim will be to use steam from solar energy for power generation. We have already received a $3million grant from CCEMC [Climate Change and Emissions Management Corporation, an Edmontonbased non-profit organization], while the city council has matched with another $3 million,” Smith says.

The Hat Smart program has carved a niche for itself in the province and few will deny that it has catapulted Medicine Hat into the position of truly becoming an eco-hero. The expectation will now be for other towns in Alberta to follow suit.

“In the past two years, I have saved 31,000 pounds of carbon dioxide emissions,” says Moores.

Energize Alberta • November/December 2010

1

27

Getting busy PSAC forecasts 12,250 wells for 2011

Each edition of Energize Alberta contains a listing of 10 topical energy stories — key trends, events and initiatives — that are shaping the province’s energy future.

2

Wind powerhouse TransAlta adds to its renewable power portfolio

By the end of 2010, Calgary-based power generator TransAlta will become the first company in Canada to own and operate more than 1,000 megawatts of installed wind capacity — 30 per cent of the country’s total. The company has 18 commercial wind facilities across the country in Alberta, Ontario, Quebec and New Brunswick. TransAlta’s future wind development plans include new facilities in New Brunswick, Quebec and Saskatchewan.

Why it matters? TransAlta has 12 wind facilities in southern Alberta. Along with providing renewable energy, the projects help rural municipalities through job creation, contributions to the tax base and providing monetary benefits to landowners.

5

Passing a land-mark Alberta vaults over $2-billion mark in 2010 land-sale revenue

The Petroleum Services Association of Canada predicts 12,250 wells will be drilled across Canada next year, which is higher than the expected final tally of 11,350 for 2010. PSAC estimates 7,915 wells will be drilled in Alberta in 2011, a five per cent increase from this year’s expected count.

3

Why it matters? Year-to-date, $2.07 billion has rolled into provincial coffers through the sale of petroleum and natural gas rights.

To the same point last year, Alberta had attracted $279.93 million.

The higher level of spending signifies that oil and gas producers are encouraged by opportunities in the province, as well as the high price of crude oil, which has remained buoyant all year.

Oil-directed drilling continues to be story for 2010

Oil drilling’s big comeback amid strong crude prices and the collapse of natural gas prices continues to be one of 2010’s dominant storylines in the oilpatch. To the end of September, about 58 per cent of wells with a reported status are listed as oil wells, which would make 2010 the oiliest year for Canadian drilling over the past decade.

Why it matters? While producers who can target oil plays on their lands are doing well financially, those companies that have traditionally focused on gas plays are suffering due to low gas prices. Many companies that once had more of a gas focus are now trying to turn to more oil drilling.

Calgary-based Enbridge starts huge solar-powered PV plant

Pipeline giant Enbridge and its partner First Solar have started operations at an 80-megawatt photovoltaic plant in Sarnia, Ont. It’s the largest such solar facility in the world. Solar panels are spread across almost 400 hectares and power is sold to the Ontario Power Authority. Enbridge expects the facility to generate enough power to meet the needs of about 12,800 homes.

Why it matters? Some larger oil and gas companies continue to diversify their production mix, adding renewable energy assets to their portfolios.

Alberta Tories push for more Alberta-based bitumen upgrading

The Alberta government is being urged by its supporters to take a more active role in ensuring bitumen upgrading and refining in the province keeps pace with the growth in oilsands development. Delegates to the provincial Conservative party convention in late October approved a motion asking the government to proceed on an “urgent basis” to put policies, programs, incentives and, if necessary, legislation in place to ensure that 65 per cent of bitumen produced in Alberta is upgraded in the province. Many oilsands producers ship their raw bitumen to the United States for processing and more plan to do the same.

Why it matters? Some provincial Tories believe various levels of government (federal, provincial and municipal) could lose hundreds of billions of dollars of revenue over the next decade if raw bitumen is shipped to the United States instead of being upgraded locally.

Gas fired-up Enmax gets conditional approval for Calgary-area natural gas plant

The Alberta Utilities Commission approved in late October Enmax’s Shepard Energy Centre, an 800-megawatt natural gas–fired power generation facility. The $1-billon project still needs approval from Alberta Environment on water use and Enmax must submit a final risk assessment.

Why it matters? Proponents of the increased use of natural gas say using the cleaner burning fuel will reduce greenhouse gas emissions. Enmax says the facility will use advanced combustion technology that will produce half the carbon dioxide per megawatt than a conventional coal-fired power plant.

9 8 Sunny days ahead

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Comeback story Here or there?

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Alberta has passed the $2-billion mark in land-sale revenue as the 2010 rebound continues, bolstered by late October’s auction that produced $151.6 million in sales.

Why it matters? The overall health of the oil and gas sector can be measured by the level of drilling activity. Last year’s downturn in drilling activity due to the poor economy had a direct impact on employment and capital flowing into local economies.

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Fine time Syncrude fined $3 million for the deaths of 1,600 ducks

Syncrude will pay a $3-million penalty for negligence in the deaths of 1,600 ducks in April 2008. A judge had earlier found the company guilty in the deaths, ruling that Syncrude failed to take the necessary steps to keep waterfowl away from one of its tailings ponds. Most of the money will be contributed to wildlife and habitat conservation programs in northern Alberta. A few days after the sentencing proposal, more birds landed at tailing ponds operated by Syncrude, Suncor and Shell. In this case, the waterfowl may have landed due to fatigue after facing freezing rain in the area, despite deterrents being in place.

Why it matters? The Syncrude case fuelled international concern about the environmental impact of developing Alberta’s oilsands.

In the spotlight

Bill me

Director James Cameron visits the oilsands

Bill 24 to make Alberta liable for long-term CO2 storage Nearly two years after pledging $2 billion of public funds to carbon capture and storage (CCS), the Alberta government has tabled a law to regulate largescale CCS projects in the province. When it passes, Bill 24 will make Alberta the first jurisdiction in Canada to enact what provincial bureaucrats are calling “comprehensive” legislation to regulate CCS. Although not yet law and still subject to change, the bill would make the Alberta government liable for the long-term storage of carbon dioxide injected into underground reservoirs, subject to rules requiring that the project operator establish that the gas is “contained.”

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In early October, Hollywood director James Cameron came to Alberta for a tour of an oilsands mine as well as meetings with Premier Ed Stelmach and aboriginal leaders in Fort Chipewyan, who have raised concerns about toxins flowing downstream into their community. Since the success of the movie Avatar, Cameron has spoken out about how resource development can affect local communities.

Why it matters? Cameron is perhaps the most famous of a long list of people visiting the oilsands to see how development affects the environment. From members of the U.S. congress to members of the European Union, the oilsands are in the spotlight. The province and industry hope the tours and face-to-face meetings will allow them to impart factual information about oilsands development.

Why it matters? The draft law would put ownership of the subsurface pore-spaces where CCS proponents plan to store carbon dioxide in the hands of the Alberta government. In the past, critics of CCS theory have questioned who should accept responsibility for long-term CO2 storage, especially if the gas escapes its intended storage zones. Also under Bill 24, the province would create a special fund financed by CCS operators that would pay for future monitoring of underground CO2 storage sites and any necessary remediation.

www.energizealberta.com

building our future

The world is watching Alberta.

We are the kind of place that can attract and hold investment – whether it be time, money or human capital. To realize our potential, we need to remain competitive.

Being competitive means jobs for Albertans – not only in oil and gas production and construction, but also hotels, restaurants, accounting firms, transportation companies, and more.

Every dollar invested in the province’s oil and gas industry creates three dollars of value for Alberta’s economy.

Alberta is Energy is supported by several Alberta business associations, many of which are focused on the oil and gas sector.

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