Energize Alberta May - June 2010

Power

Oil & Gas

Renewables

Anatomy of a transmission build-out

Something to talk about page 4

Winds of change page 23

page 12

May/June 2010

where energy, the economy, and the environment intersect

Welcome to Energize Alberta

Canadian Publications Mail Agreement #40069240

Bill Whitelaw Energize Alberta lexandra Siedman has never met Mike Gross. Nor has Judy Winter made the acquaintance of Ben Luft. The same can be said of Iris English and Karin Gashus.

Two facts, however, bind them together: they’re Albertans—and they’re passionate about energy. In particular, they share a passion for energy literacy. That means they’ve taken on the task of understanding how energy intersects and impacts their lives beyond the light switch, gas tank, and stovetop.

You’ll learn more about Alexandra Siedman’s interest in ultrasonic separation of oil from sand and water, and Mike Gross’s relationship to wind in the pages of Energize Alberta.

Inside, you’ll also find out why Iris English believes clear, accurate, and trustworthy sources of energy information are critical and how Karin Gashus advocates for Albertans on power issues. You’ll connect to Ben Luft’s views on the balance of energy economics and Judy Winter’s take on the importance of landowner relations.

Energize Alberta—and its website energizealberta.com— was created to facilitate new horizons of energy literacy.

It’s intended to be part of the growing momentum that focuses on how increased energy knowledge and awareness can bring balance and understanding to the often complex world of energy: how it’s produced, how we consume it, and how it pervades virtually every aspect of our lives.

In one sense, energy literacy is nothing new. Many organizations have been involved with literacy initiatives for many years; yet it’s fair to say there’s a fresh understanding that a higher baseline of energy knowledge is critical to how Albertans will approach future energy dialogue and the decisions that result.

To do its part, Energize Alberta links rural Alberta, agricultural Alberta, and “business” Alberta in a unique energy bond. It’s a result of a unique partnership between three key members of the Glacier Media family: JuneWarrenNickle’s Energy Group, Farm Business Communications, and Great West Newspapers. Some 200,000 copies of Energize Alberta will be distributed bi-monthly to an estimated readership of 500,000 Albertans. The publication will reach into farm households, into downtown Calgary and Edmonton, and into rural communities like Okotoks, Red Deer, and Bonnyville. Its website will reach around the world.

Energize Alberta is all about people and energy; it explores how many facets of our lives are tied closely to energy.

Energize Alberta also moves readers beyond petroleum. Its three energy cornerstones—oil and gas, power, and renewables—form the foundation of the people-driven content that will be featured in each issue. ❯❯ continued on page 2

Ben Luft

Why does energy literacy matter?

Energize Alberta asked a cross-section of Albertans—including students, farmers, landowners, educators, and government representatives—to tell us why being literate on energy matters is important. In their own words, here’s what they told us.

Ben Luft is a 14-year-old who lives on a farm near Cochrane. His father works for an oil and gas company. Ben enjoys playing hockey, golfing, and working with a pair of 4-H steers he owns. Below is his essay outlining his thoughts on energy.

If we didn’t have energy, life would be very different from what it is now. There would be no running water, no travelling in cars, and yes, no TV. People use energy almost constantly, and this will continue in the future. Energy development will also provide countless jobs and strengthen our economy. Energy literacy will be an important skill to have in the future because energy impacts nearly every aspect of our lives.

Even if flying cars, spaceships, and other futuristic devices are common in the future, they will all need some kind of energy. Electricity will still be around

(even if it is environmentally friendly) and likely there will be some sort of polluting gas being used. The fact that we use so much energy can also add up to a large heating or electricity bill, so it is good to know as much as you can about energy to save money.

Fossil fuels and nuclear energy are two of the most controversial topics in the world. The by-products of these forms of energy are slowly destroying our planet. It is a very good idea to use as many “green” sources of energy as you can, but these forms of energy are currently not economical. If there were forms of green energy that

were feasible to produce, they would be a great idea, but until that happens we will need to use some polluting sources.

Many places (including Alberta) use the energy industry as their main income. The energy sector provides countless jobs from oil rig workers to electricians to geologists. It also helps the global economy with a large trade industry and investing in all other areas of our economy, whether it is the local car dealership, the local restaurant, or the

local convenience store.

How many people do you know that have jobs or stocks in energy companies?

The important thing about energy literacy is that energy affects us in so many ways. Energy isn’t just about turning on a light switch, it’s also about how much that energy costs, how energyefficient the light bulb is, and how many people it took to turn that switch on.

Energy is always going to be a big part of all our lives, so it is important to know as much as you can about it.

Read more: There are more “Energy Essays,” written by a number of Albertans, in The Centrespread starting on page 14. www.energizealberta.com

Ab o u t u s

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-amillion Albertans, in rural and urban settings.

President & CEO Bill Whitelaw Editorial

Publisher & Editor Stephen Marsters Associate Editors Deborah Jaremko Paul Wells

Penn West’s Nicole Collard is a member of Energize Alberta’s advisory board.

Energy advisory group central to ‘partnership of perspectives’

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nergize Alberta is unique in many ways. It links rural, agricultural, and urban Albertans by illustrating how energyrelated matters connect them, and it will do so in a way that isn’t typical to most media: by engaging a “partnership of perspectives” to help guide the publication’s content mission and mandate.

More than three dozen Albertans from many energy “walks of life” have agreed to put their time and talents into helping shape Energize Alberta’s focus on the province’s energy future.

This diverse and talented group collectively agrees on one thing: there is a critical need for all Albertans to be engaged in important energy conversations— and the success of those conversations will be in large part the result of an increased level of energy knowledge. Drawn from key elements of the energy world, they represent important voices from critical corners of Alberta’s energy landscape: petroleum, power, and renewables.

www.energizealberta.com

The advisory group provided critical input during the planning stages of Energize Alberta’s development, and as the publication is rolled out to its readers, they will play a critical guidance role in helping Energize Alberta’s team of editors and writers develop content underpinned by a strong “literacy” feel. This will be achieved through stories about Albertans and their energy lives, told in a way that is lively and compelling—and inspirational.

What’s also critical to Energize Alberta’s success is that readers understand that while it is a voice for energy, it is not the voice of the energy sector. It is an advocate for balanced dialogue and informed opinion; it is a content tool kit for anyone interested in energy issues and information. This means that the publication will contain multiple voices and its credibility will flow from how well it connects context to content.

For a complete list of Energize Alberta advisors, please see page 8.

Energize Alberta Vision and Mission Vision: • To engage all Albertans in critical discussions and debates related to opportunities and challenges central to Alberta’s sustainable energy future.

• To break down barriers that create “energy solitudes” among key stakeholder groups by innovating new forms and dimensions of energy literacy.

• To advocate for new standards of energy literacy that help Albertans communicate and compete with confidence in a global energy economy.

• To contribute to new literacy standards within the “sweet spot” of energy, environment, and the economy.

• To help energy players develop within their companies and organizations new energy literacy horizons.

Mission: • To develop relevant and measurable concepts of energy literacy as a means to provide common knowledge foundations for more effective dialogue between industry and stakeholders.

• To be a catalyst for the coming together of diverse stakeholder perspectives.

• To develop new knowledge-based communications linkages between key stakeholder groups via print and digital media and face-to-face gatherings.

• To use the best communication tools appropriate to each stakeholder group.

• To showcase the best-of-breed energy people, processes, policies, and best practices.

• To help Albertans understand the complexities of global energy dynamics with local implications.

Editorial Assistance Joseph Caouette Samantha Kapler Marisa Kurlovich Creative

Designers Ken Bessie Andrew Brien Cristian Ureta

Production, Pre-Press and Print Manager Michael Gaffney Staff Photographer Aaron Parker Sales and Administration

Sales Brian Doell Rhonda Helmeczi 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.

Continued from page 1

Welcome to Energize Alberta Energize Alberta is not an energy industry public relations vehicle. It’s a neutral forum created to put energy into public awareness and debate. It neither apologizes for industry, nor advocates for it. Its mission is to provide straightforward, balanced, and contextual information about people and their energy lives.

Alberta is at a critical conversational crossroad of energy talk. Many aspects of that “talk” occur at the intersection of energy, the environment and the economy.

The notion of sustainability figures prominently in energy discussions and will be an important element.

For its small population relative to a large geography, Alberta is a place of surprising energy solitudes. Many of the province’s three million–plus residents have never seen the wind industry build-out of southwestern Alberta. It’s a good bet that more than 90 per cent of Albertans will never lay eyes on the province’s vast oilsands reserves—but the resource will profoundly impact many aspects of their lives for decades to come. And as the province enters a new era of power generation and transmission, Albertans must broaden and deepen their understanding of how the electrical industry works.

Of course, energy literacy means different things to different people. That’s why we’ve invited some very interesting folks to tell readers why energy literacy is important to them. They’re students and landowners, government employees, and industry workers. We start with Ben Luft’s contribution on the cover, with the remainder found on the centre pages. They’re invested in energy in ways that provide terrific role models for personal goal setting.

Of course, we also want to know what you think.

Throughout Energize Alberta’s print edition, as well as its website, you’ll find many opportunities to provide your perspectives on the material we publish and guide us to future content opportunities.

Alberta has a bright, exciting, and vibrant energy future. It unfolds daily, in front of our eyes. How individual Albertans navigate that future and find their place in it will in a very real way turn on how successfully they achieve their personal energy literacy goals.

Synergy meeting to connect members to topical issues, local initiatives

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he word “synergy” came under fire in the 1990s after being so over-used by management consultants and business types—to the point it has fallen out of favour.

But the essence of synergy—two or more things working in concert to produce results greater than the sum of individual efforts—is still a valid concept, with the proof found in diverse corners of Alberta.

That’s where Synergy Alberta, the umbrella organization overseeing and coordinating the activities of two dozen synergy groups, is making its mark. These groups are the means

by which diverse community interests coalesce around energy matters.

Each fall, Synergy Alberta stages a conference that gathers members of the various synergy groups dotting Alberta’s landscape, as well as a wide variety of other stakeholders, ranging from government staff to corporate executives, with a connection to, and an interest in, resource development.

(For a detailed look at Synergy Alberta please see pages 4–5.)

The fifth anniversary of the conference, held Oct. 26–27 in Red Deer, will focus on the theme of “Building our Future,” notes executive director Gary Redmond.

That means a discussion

Synergy Alberta’s success as an umbrella organization now means its members are dealing with a far broader range of issues of topical issues, including the province’s new comprehensive Land-use Framework, which will be examined in the context of the policy’s future implications and opportunities, taking policy from the macro to the micro, he says.

“The synergy movement plays an important role in connecting those policy

initiatives to local levels….

We’re connecting the different pieces to the local communities…and connecting different parts of the province to each other.”

One key conference feature is a “case study” approach to presenting how various synergy groups have successfully worked their way through

an issue, with a focus on best-practice suggestions to help other groups gain from others’ experiences.

While synergy groups were more typically “born of” a need to bring together stakeholders with vested oil and gas–related interests, Synergy Alberta’s success as an umbrella organization now means

its members are dealing with a far broader range of issues, from air quality to electricity transmission.

In fact, Synergy Alberta has been asked to become involved with other industries and has been working recently to incorporate aggregate players within its scope. This fall’s conference will also include a mutual aid element, a rurally based movement by which stakeholders collaborate on emergency planning initiatives.

There are still sponsorship and trade show opportunities available for the fall conference. Interested companies or organizations can contact Gary Redmond at 1-877-461-1323 or visit www.synergyalberta.ca.

Committed to the

people and communities where we work and live. www.conocophillips.ca www.energizealberta.com

Something to talk about

and the Alberta Land-use Framework.

All of these initiatives involve public consultation and grew out of the synergy movement.

Alberta’s growing synergy network reduces friction between residents and the patch Mike byfield Energize Alberta

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etroleum producers require prompt, affordable entry to their oil and gas leases.

No factor, not even natural gas prices, is more important than reliable access to land. In a province that’s getting more crowded, however, oil and gas operators often find themselves at loggerheads with their neighbours. Synergy Alberta, originally a grass-roots movement born in this province, is dedicated to helping neighbours remain neighbourly. Its primary tool is straightforward: get all stakeholders together so differences can be discussed and hopefully settled.

The alternative to peacemaking is not pretty. When neighbourhood harmony

Gary Redmond shatters badly, industry and landholders often find themselves bogged down in time-consuming regulatory disputes.

“Synergy began as a way for the oil and gas sector to connect with rural residents,” says Gary Redmond, executive director of Synergy Alberta.

“There are now 24 local synergy groups across Alberta and other initiatives are underway. For instance, there’s a synergy group in Calgary, and some promising early-stage developments are occurring in Edmonton.”

A regional synergy group typically includes landowners, other residents, petroleum producers, municipal government representatives, and any other interested stakeholders in a specific district. The group acts as a forum where mutual education and negotiation can

occur, minimizing potential conflicts in resource development.

Synergy Alberta, a provincial umbrella group, organizes annual conferences and workshops aimed at guiding and strengthening local synergy groups.

The not-for-profit organization also provides some basic online resources.

Its own board of directors is drawn from agricultural operators and other landowners, towns, petroleum producers, regulators, and government departments.

Alberta’s economy, like its population, is expected to continue growing. To coordinate the planning needs of all industries, social groups, and the environment, an array of provincial initiatives is underway. Among the most important are the Clean Air Strategic Alliance, the Alberta Water Council,

Reducing friction Krista Waters works with local synergy groups as an accredited facilitator.

“The value [of the synergy process] comes from bringing all of the right people face to face at the same table.

After people compare their needs, we often see new solutions emerge on questions like where a wellsite should be located,” Waters says. “People tend to be more flexible when they sense that the other party is really trying to cooperate. They also need a sense of being well-informed about the situation.

A landowner who wonders if ‘spudding a well’ might involve potatoes lacks the knowledge and confidence to negotiate a sound agreement.”

Waters, who lives northeast of Caroline, is one of several facilitators recommended by Synergy Alberta.

The consultant works with the Central Mountainview Action Group (originally sparked by coalbed methane development around Olds), West Central Stakeholders (in the Rocky Mountain House-Caroline area), and the Wetaskiwin Synergy Initiative. She’s also handled specific contracts for the Sundre Petroleum Operators Group (go to energizealberta.com to read exclusive web content about SPOG) and the Calumet Synergy Group (a district east of Ponoka).

A synergy meeting may review a

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www.energizealberta.com

Krista Waters

“People tend to be more flexible when they sense that the other party is really trying to cooperate.”

general subject like drilling and water tables, with producers providing specialists who speak to that issue.

Although industry pays the bills for most synergy groups, government officials or an environmental lobby group like the Pembina Institute may be invited to help inform a general session.

Alternatively, a synergy meeting may focus on a specific situation. For instance, several landowners may be concerned about excessive pipeline densities. A quarter-section can become so riddled with pipeline setbacks that constructing a new home or even selling the property becomes problematic.

Besides water impacts and well location, Waters says that typical landowner concerns include compensation payments, heavy traffic, drilling noise and dust, emissions and odours, access road placement, scenic values, ultimate abandonments, and other details. The synergy process scales up and down efficiently, she notes, from the widespread concerns of acreage owners around a recreation lake to a parent concerned about rig hauls during school hours.

Waters grew up on a farm near Caroline and later worked as a newswoman in Red Deer. The mother of three, who’s never worked in the oilpatch herself, says residents’ expectations of producers have evolved a great deal over the last few decades.

“In general, I’d say industry has learned to do a really good job at the local level when it comes to informing the public about their operations and cooperating with their concerns. Directional drilling has added a lot of flexibility for

producers in terms of well location. It also helps that multiple wells can be drilled from one pad, which reduces the footprint,” she comments.

Reaching a common position David Pryce is vice-president of operations for the Canadian Association of Petroleum Producers, which whole-heartedly supports the synergy movement. “When an oil and gas company arrives at a landowner’s door, that family may have a sense of: ‘Whoa! What’s up here? This is new!’ That’s understandable—it’s a new situation for them. But that family will soon discover that resources are available.

More than most Albertans realize our industry has made a huge effort in learning to live with all stakeholders.”

Pryce handled the environmental and community aspects of the Wolf Lake thermal bitumen project in the early 1980s, then went on to head BP’s environmental group in Calgary.

“Synergy amounts to working through disparate issues until a common position can be reached. It’s a continuous process that adapts to new factors as they bubble up,” says Pryce.

In his view, the Clean Air Strategic Alliance (CASA) was a pivotal development in Alberta’s homegrown synergy movement. The non-profit association was established in 1994 as a new way to manage air-quality issues, notably flaring of sulphur dioxide. CASA is a multi-stakeholder partnership, composed of representatives selected by industry, government, and nongovernment organizations.

CASA’s key decision-making tool is the Comprehensive Air Quality Management

System, which integrates matters relating to health, environment, energy, and the economy into decisions that affect air quality. The board of directors, which represents all stakeholders, determines what issues need to be addressed. As needed, organizing committees and projects teams are created to deal with specific problems.

As CASA worked on a province-wide basis, synergy groups began appearing at the district level through the 1990s, eventually extending from Taber to Peace River. In 2002, CAPP and the Alberta Energy Resources Conservation Board (the ERCB was called the Energy and Utilities Board at the time) sponsored the first provincial synergy conference. For two days, 248 participants were coached in the art of mediating solutions within a disparate group.

Since that time, Krista Waters thinks the synergy approach has proved itself.

Take sour gas, for instance. Methane laced with poisonous hydrogen sulphide continues to generate controversy when deep, high-volume wells are

drilled in the foothills. “However, we’ve also had lots of sour gas production in the Rocky Mountain House-Caroline region,” Waters says. “I find that most residents have confidence in the safety systems and operating precautions that are standard procedures for all good producers. If I’m calling around about a proposed sour gas well, most people won’t even come out to a meeting.”

Given good communication, residents come to understand that an operating company stands to lose a great deal of money if there’s a destructive mishap. That knowledge reinforces their respect for the energy sector’s accident-preventing technologies. In Waters’ view, the result of that confidence is improved social relations. “Each year, we see very few cases go to the ERCB’s ADR [alternative dispute resolution] or hearing processes,” the facilitator says.

“Each hearing is very expensive and takes a lot of time. It’s in everyone’s interest to reach sensible compromises wherever possible.”

Key points to ponder 1. Land use is a province-wide issue.

Players on the stage 1. Synergy Alberta

2. To coordinate the needs of all industries, social groups, and landowners, an array of provincial planning initiatives are underway, including the Clean Air Strategic Alliance, the Alberta Water Council, and the Alberta Land-use Framework, and dozens of local stakeholder groups.

2. Alberta Energy Resources Conservation Board

3. Alberta’s growing synergy network originated in central Alberta. That’s not a coincidence— the heartland between Calgary and Edmonton is a focal point for intense development.

your feedback Email yourenergy@energizealberta.com and let us know what you think about the synergy movement.

Going broader, deeper 1. Synergy Alberta: www.synergyalberta.ca

2. Alberta Energy Resources Conservation Board: www.ercb.ca

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www.energizealberta.com

Energize Alberta • May/June 2010 • 7

Stephanie Baird (left) and Jordan Voss (right), with Dave Rudd, Devon Canada’s manager of land administration.

Head of the class New diploma program at SAIT prepares students for the complex and changing nature of the oil and gas industry David Klug Energize Alberta

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his ain’t the land of the Beverly Hillbillies and their “bubblin’ crude.”

The process of finding, developing, and producing Alberta’s energy resources is a highly complex and costly business—striking it rich by accidentally shooting the ground or having oil bubbling up in the backyard is simply not going to happen.

More and more, the petroleum resources developed today in Alberta are “unconventional.” Technology breakthroughs have allowed companies to extract oil and gas from geological reservoirs once thought impossible to tap economically. Developing these unconventional resources—oil and gas from shale rock or from northern Alberta’s oilsands, for instance—often incurs costs well above those associated with producing more conventional oil and gas deposits.

The growing shift towards unconventional resources, along with myriad other concerns such as royalties and the cost of doing business, is forcing companies to re-evaluate the way they do business.

Companies must take a more complete view of their overall operations to boost efficiencies across departments, minimize costs, and maximize revenues. Traditional organizational structures often create a “silo effect” within companies and even within particular departments.

Oil and gas companies are recognizing that there can be significant benefits to taking a more comprehensive approach to their own internal operations.

This comprehensive approach to disciplines such as production and operations accounting, mineral and surface land, well asset management, and joint venture is increasingly being referred to as energy asset management. And the new approach requires employees with an educational background that combines all of these disciplines and an understanding of how they work together in the context of exploration, development, and production.

Key points to ponder • CEAMS was established in 2005.

• EAM diploma program was introduced at SAIT in 2009.

• First class of 62 students have completed their first year of study.

• EAM is a comprehensive approach to five key disciplines on the “business side” of the oil and gas industry: joint venture, production accounting, operations accounting, surface land, and mineral land.

Going broader, deeper Centre for Energy Asset Management Studies: www.ceams.org

SAIT Polytechnic’s EAM program: www.sait.ca/pages/cometosait/ academic/diplomas/aeam.shtml

Centre for Energy Asset Management Studies About five years ago, a group of industry partners came together to form CEAMS, the Centre for Energy Asset Management Studies.

One of CEAMS’s goals was to develop an innovative education program that would combine the variety of disciplines that make up energy asset management.

After years of work, the diploma program in Energy Asset Management (EAM) was launched last fall at SAIT Polytechnic.

According to SAIT, the EAM program focuses on: • Establishing joint venture agreements and partnerships; • Acquiring and preserving below-ground rights and aboveground land activity; • Managing well and facility activities from start to finish; and • Operations and production accounting.

“It just makes sense to manage your assets as a whole rather than from an individual perspective of surface or mineral land, production accounting, or joint ventures,” says Dave Rudd, manager of land administration for Devon Canada. “This has been a key driver for us to not only support the EAM program, but also to hire EAM students as we move to make energy asset management standard practice.”

Devon is one of the CEAMS producing partners, along with Canadian Natural Resources, ConocoPhillips Canada, Encana, Cenovus Energy, Enerplus Resources, and PetroCanada (now Suncor Energy). The group is also supported

by Alberta Energy, the Canadian Association of Petroleum Landmen, Canadian Association of Petroleum Producers, and the Petroleum Human Resources Council of Canada.

Rudd, who has been involved with the development of the EAM program, says that the integrated approach not only makes staff more effective, it can also save money.

Devon recently completed a comprehensive review of one of its asset areas, a report that confirmed the synergies and efficiencies that could be realized by working in a more collaborative and interdisciplinary way. By applying this approach across many asset areas, Devon has so far recognized over $70 million in recoveries, efficiencies, and missing payments. Graduates of the EAM program—the first which will be ready for the workplace in spring 2011—will be familiar with these tactics.

“The students enrolled in the Energy Asset Management program have a leg up on the competition,” says Joanne Reardon, vice-chair of CEAMS and manager of land negotiations at BP Canada, which is a sponsor of the nonprofit group.

“When we hire them, they come to us industry-ready, and that saves huge amounts of time and financial resources that would previously have been allocated to training and familiarizing them with the essentials of the oil and gas industry. They become much more productive employees much more quickly than other new hires that come to us before they’ve been exposed to the energy business.”

What the students say Students at the midpoint of North America’s first EAM diploma program Jordan Voss and Stephanie Baird are part of the inaugural class of 64 EAM students that have just completed their first year of study. Many have been hired as summer students by oil and gas companies.

Voss, who will be working in Devon’s joint-venture accounting group, says he is more confident going into his summer job because the EAM program has not only taught him the fundamentals of energy asset management, it has actually given him an understanding of the oil and gas industry as a whole.

Baird will be working in Devon’s land and jointventure department. “The EAM program is unique because the students learn how each individual component of energy asset management is critical to the business, but we also learn how these components need to work together,” she says. “With our background, we’re going to be the people around the table who can bring all the pieces of the puzzle together.”

EAM student Digney Eisner grew up in a family that worked in the energy sector. While he thought he was “pretty aware of a lot of what was going on” in the industry, he says he didn’t realize how complex the energy sector is.

“To be good at your job, you really have to have a working knowledge across a wide range of departments from drilling to land and accounting,” says Eisner, who is working for Enerplus this summer. “The EAM program gives us the skills that energy companies really need so they can manage their business and their issues as a whole rather than a bunch of separate components.”

Paul Poscente, another EAM student, will be working with Cenovus Energy this summer.

“I have a strong business background, and it’s not hard to see that the oil and gas sector is having to adapt to the changing realities of

industry,” he says. “It’s no longer enough to simply be aware of what’s going on in different areas of your business, or of the issues that are affecting another part of your company.

You have to have a decent understanding of those issues as well because in the end, they are going to affect you and your job.

That’s a central component of the EAM program, and it’s a process that companies should really adopt in order to have a clear picture of what’s really going on right across their whole business.”

Stringent regulations and a growing public interest in such factors as environmental and socioeconomic impacts play critical roles in whether or not a particular field or resource play is worth developing, let alone whether that development would actually be approved by the provincial regulator.

The regulatory system in place ensures that energy resources are developed responsibly. This safeguard, however, comes with the price of an often bewildering array of legislation and regulations applied by a host of local, provincial, and federal agencies. Finding a way through this maze can be a daunting challenge.

“The full life cycle of an oil and gas project is highly regulated and our program sets the stage for us to learn what the regulations are and how the system works to make sure that projects such as drilling a new well are compliant and can actually proceed,” says Emily Glatthor, who will also be working at Cenovus this summer.

“And it’s not only about using that knowledge within a company,” she adds. “Landowners are key stakeholders in the oil and gas business, and I think that I’ll be in a better position to work with them and help them understand the processes and the work that would be going on if we were going to be working on their land.”

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Talking energy talk

Advisory Board

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 Bill Whitelaw President & CEO JuneWarren-Nickle’s Energy Group Bobbi Beauchamp Community Affairs Analyst Cenovus Bonni Clark Corporate Relations Alberta Innovates – Technology Futures Brenda McIntosh-Doell Regional Marketing Director, Canada MI Swaco Brian Doell Executive Sales Energize Alberta PHOTO: Jeffery borchert

In situ oilsands development Talking energy talk puts context and meaning to important words and phrases, allowing readers to move beyond jargon to participate in important energy discussions Deborah Jaremko Energize Alberta

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hen one thinks of Alberta’s oilsands industry, it can be easy to picture what once was boreal forest disrupted by giant open-pit mines and vast ponds of toxic waste. In reality, oilsands mining—which is environmentally regulated both provincially and federally— represents access to only a fraction of the resource, which is second in the world only to Saudi Arabia.

Of the 172 billion barrels of oilsands reserves in Alberta, less than 20 per cent is shallow enough to be recoverable using surface mining. Once the target reservoir is deeper than about 75 metres underground, economics and technology dictate that operators must drill to produce from it.

“Eighty per cent of the oilsands will developed in situ [Latin for “in place”], which accounts for 97.5 per cent of the total oilsands surface region of Alberta,” says the Canadian Association of Petroleum Producers (CAPP).

While the majority of current production comes from mining—about 64 per cent of 1.25 million barrels per day in 2009—that is certain to change in the future as in situ projects proliferate.

In its natural state, bitumen will not flow to a wellbore.

So the major challenge of recovering bitumen from depth is to overcome its high viscosity to allow it to flow to the wellbore. The most common production method for in situ projects in the Athabasca region of northern Alberta is a technique known as steam assisted gravity drainage (SAGD). Horizontal well pairs are drilled parallel to each other in a bitumen-bearing reservoir, with one located near the top and the other near the bottom. Steam is continuously injected into the top well, creating a steam

www.energizealberta.com

chamber between the wells where the bitumen is heated, becoming less viscous. The bitumen has the consistency of molasses when heated.

Gravity causes the oil to flow to the bottom well, where it is pumped to the surface.

SAGD is a popular method today, but it has been commercial for less than a decade. Since the 1980s, two major companies have been producing oilsands in situ using a different method, known as cyclic steam stimulation—Imperial Oil at Cold Lake, and Shell Canada at Peace River. Steam is injected down a single wellbore, followed by a soak time, and then the same wellbore is used to pump up fluids. Producing about 140,000 barrels per day, Imperial’s Cold Lake facility remains Alberta’s largest in situ oilsands installation.

While groups such as CAPP indicate that the environmental footprint of in situ operations is smaller than that of surface mining, others disagree.

“Preliminary indicators show greenhouse gas and sulphur emissions are higher for in situ than for mining. Some in situ projects also have higher total water use intensities than the average for mining. And the land use impacts… are serious, too,” says Simon Dyer, oilsands program director with the Pembina Institute. However, he adds that the solutions could come from within the industry itself.

“There are ways to improve,” says Dyer. “Were industry to employ its own best practices, they could not only improve their environmental performance, but their reputation as well.” your feedback What do you think about in situ oilsands development?

Send your comments to yourenergy@energizealberta.com.

Bruce Edgelow VP Energy Group ATB Financial Services Carol Howes Media Relations Advisor, Corporate Communications Encana Caroline Grover Executive Director Economic Dev. Alliance of Southeast Alberta David Huggill Western Canada Policy Manager Canadian Wind Energy Association (CanWEA) Evelyn Ferchuk Manager, Oilsands Communications Canadian Association of Petroleum Producers (CAPP) Gary Redmond Executive Director Synergy Alberta Greg Gilbertson Operations Leader Energy Resources Conservation Board (ERCB) Jeff Angel VP, External Relations Canadian Energy Pipeline Association (CEPA) Kym Fawcett Manager, HSE, Regulatory & Stakeholder Relations Enerplus Resources Lynzey MacRae Public Relations Specialist Direct Energy Matthew Burns Associate Director (Calgary) University of Alberta Michelle Chidley Event & Communications Director Small Explorers and Producers Assoc. of Canada (SEPAC)

Mike Dawson President Canadian Society for Unconventional Gas (CSUG) Mike Doyle President Canadian Association of Geophysical Contractors (CAGC) Mike Finn VP, Exploration Trident Exploration Corp.

Nancy Malone Manager, Economic Analysis Canadian Association of Oilwell Drilling Contractors (CAODC) Nicole Collard Public Affairs Specialist Penn West Energy Patricia Poulton Community & Aboriginal Relations Advisor TransCanada Sandy Flaherty Administrator, Special Projects JuneWarren-Nickle’s Energy Group Scott Schreiner Director, Consultation & Communications AltaLink Sean McCarry President Sage Planning Group Stacey Ballash Executive Assistant to the President & CEO Trident Exploration 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, School of Agriculture, Land & Environment Olds College- School of Business Ulrike Kucera Media Relations Officer Canadian Wind Energy Association (CanWEA)

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How it works

Land sales

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richard macedo Energize Alberta

he Alberta government has collected billions off its public land sales process, which gives producers the right to drill for valuable oil and gas resources.

In 2009, despite being hit hard by a recession, the province still generated over $741 million in sales, which goes to general revenue, after averaging well over $1 billion during the past six years.

How does it work? The process is fairly straightforward: Crown-owned petroleum and natural gas rights are issued in the form of licences or leases through a competitive bid auction system. Bids are submitted electronically.

The term of a lease is five years in all regions. The term of a licence is two years in the plains region, four in the northern region, and five in the foothills region. At the end of the lease term, a company must prove the land productive for continuation.

Before the end of the licence term, a well must be drilled. The depth of the well

determines how many sections of land will be continued for an intermediate term of five years.

A piece of land can be sold more than once through the years, depending on the circumstances. In some instances, no work or insufficient work is done to warrant continuation, so the entire agreement may revert to the government. In other cases, only a portion of the rights in an agreement are continued and the non-continued portion reverts to the Crown.

Public offerings or sales of petroleum and natural gas rights are held every two weeks. Notice of the parcels being offered is published on the Department of Energy’s website about eight weeks before the sale.

The top price paid for a single parcel of land so far this year was $21.4 million for a licence parcel. The most money paid for one parcel of petroleum and natural gas rights was $46 million on Jan. 25, 2006.

Companies request land they would like posted and at some point it goes up through the competitive auction system.

Producers often use land brokerage firms to submit bids so competitors don’t know where they’re posting and acquiring land.

This provides them with anonymity as they assemble a land position in an area they’d like to drill.

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The government owns 81 per cent of the province’s mineral rights. The remaining 19 per cent is freehold mineral rights owned by the federal government on behalf of First Nations or in national parks and by individuals and companies. Owners of

freehold mineral rights, except the federal government, pay a tax to the Crown based on the production of oil or gas from their holdings. The tax ensures the owners contribute to Alberta’s infrastructure and regulatory costs.

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Energize Alberta • May/June 2010 • 11

Canadian Centre for Energy Information Alberta

By the Numbers – Alberta Click below to view CRUDE OIL

NATURAL GAS

Fort McMurray

Grande Cache

Highvale

Whitewood Wabumun

1 2 8 10 12 20 37 60 67 514 689 2,304 2,440 12,375 170,000

Keephills Imperial Oil Shell Canada Genesee Suncor Energy Inc. Lloydminster Edmonton Coal Valley Husky Paintearth

Alberta

Sheerness

Click below to view CRUDE OIL NATURAL GAS

Fort McMurray

Calgary

NATURAL GAS PIPELINE CRUDE OIL PIPELINE

Taber

HYDRO ELECTRIC PLANT COAL MINE WIND FARM

mperial Oil Shell Canada Suncor Energy Inc. Lloydminster

ntearth

THERMAL ELECTRIC FACILITY NUCLEAR

Husky

Sheerness

The BIG energy picture CANADA

Taber

Alberta’s energy industry creates jobs, builds communities, fosters research and new technologies, and pays taxes and royalties. About half a million Canadians are directly or indirectly employed by the energy industry. All of us are connected to it. By the Numbers explains our complex energy story through key energy facts and regional energy maps to help you see Canada’s energy system at a glance. www.centreforenergy.com

Alberta ranks first in crude oil reserves and production in Canada

NATURAL GAS PIPELINE CRUDE OIL PIPELINE

Alberta ranks second in natural gas consumption in Canada

REFINERY

HYDRO ELECTRIC PLANT

Alberta ranks eighth in hydroelectricity generation in Canada

COAL MINE

WIND FARM

Per cent of Canada’s electricity generated in Alberta

THERMAL ELECTRIC FACILITY

Billion dollars paid to the Alberta Government by the NUCLEAR petroleum industry in 2008

Per cent of Alberta’s oilsands that can be mined

CANADA

OILSANDS

REFINERY

OILSANDS

Per cent of Canada’s conventional crude oil produced in Alberta

Terawatt-hours of electricity consumed in Alberta in 2008

Terawatt-hours of electricity generated in Alberta in 2008

Number of wind turbines in Alberta

Barrels per day of Alberta’s wheat ethanol production capacity

Thousand barrels of crude oil Alberta produced per day

Million cubic feet per day of natural gas consumption in Alberta Million cubic feet per day of marketed natural gas production in Alberta Number of people directly employed in energy and utilities in Alberta

www.energizealberta.com

12 • May/June 2010 • Energize Alberta

Anatomy of a transmission build-out

Alberta balances the energy needs of its growing population with impacts on lands and people. We look at AltaLink’s Southern Alberta Transmission Reinforcement project to see how it’s done.

GRAHAM CHANDLER Energize Alberta

“It’s

the biggest issue facing us for the foreseeable future.”

That’s the initial response on the telephone from Rob Steel, mayor of the southern Alberta town of Claresholm, when asked about the effects of AltaLink’s Southern Alberta Transmission Reinforcement (SATR) project on his town. “It could have a devastating impact.”

It’s not unexpected feedback, nor is it unusual—no one wants power lines running through his backyard. Large energy projects will always and unavoidably impact people, nature, and the environment. It points to the critical need for a fair public engagement process to balance needs against impacts.

Picturesque Claresholm and the surrounding rolling countryside are well-known for the constant and powerful winds howling off the foothills. Glider pilots use the mountain waves of the nearby Cowley area for setting national soaring records. But gliders don’t affect the look of this landscape the way electrical transmission lines and towers do. Those famous winds pack a lot of power that can be converted to clean electricity, which needs to be transmitted.

It’s that need that drives the SATR project. “SATR is one of two [Alberta] projects which support promotion of renewable resources,” says Shan Bhattacharya, vicepresident of Transmission for the Alberta Electric System

www.energizealberta.com

Operator (AESO), the independent not-for-profit entity charged with all planning and operations of electrical power in the province. “SATR will be able to interconnect as much as 7,400 megawatts of wind resources, mostly from the south.” The AESO estimates that there are 11,000 megawatts of wind-generated power seeking connection to the electricity grid. “Without a robust transmission system, we cannot harness that resource,” he says. “Alberta’s provincial energy strategy clearly spells out the need to promote and accommodate more renewable energy.”

The AESO conducted technical, economic, and landimpact studies on alternatives to determine a preferred option to address transmission challenges in southern Alberta. “Our role then is to facilitate the interconnection with the transmission grid,” says Bhattacharya. The AESO also gathered feedback from a broad range of stakeholders, including local landowners, as part of its investigation. “We don’t get involved in specific routing decisions, but we do want to make sure a feasible routing exists between the two points,” he explains.

AESO then filed a formal application called a Needs Identification Document with the Alberta Utilities Commission (AUC) in late 2008. The AUC completed public hearings in Lethbridge in June 2009 and it was approved last September.

Public involvement After the AUC green light, AltaLink, which owns the majority of the transmission system in central and southern Alberta, stepped up its involvement. “The first

step is we talk to municipalities and government agencies,” says Steve Hodgkinson, AltaLink’s vice-president of Corporate Development & Business Partnerships. “We go through an internal exercise to evaluate potential routes, and based on a lot of technical research and an environmental study, we identify some preliminary routes.”

The company’s SATR project is actually a series of several developments to be carried out in three phases.

Hodgkinson says the first phase includes three new lines: “One from Brooks to Medicine Hat, one from Medicine Hat to the area around Foremost, then another one from the Okotoks-High River area to Fort Macleod.”

With the preliminary routes identified, AltaLink then went to the public in various ways. “We mail information packages, run radio and newspaper ads, [conduct] open houses, and send out individual letters to everyone on the proposed routes,” he says, “so that everyone who is potentially affected has an opportunity to provide input and have their questions answered.”

In late November 2009, AltaLink held several open houses, including ones in High River, Nanton, and Claresholm. “We meet people who come out or who phone us or write letters to try and get as much input about those routes as we can,” says Hodgkinson. “The input is used to help us identify which two or three would be the best alternatives.”

Once that’s done, AltaLink goes through the consultation process again—the second time around searching land titles and finding the names of every landowner who’s potentially within 800 metres of the routes. That’s followed by knocking on doors “to make sure all of our stakeholders

Energize Alberta • May/June 2010 • 13

are aware of the proposed project and have the opportunity for input,” he says.

Long sessions of deliberation follow, until the company decides where to make routing changes, or where people have suggested better alternatives.

Claresholm Mayor Steel is one of those people. He says the town has made its choice known. Though in no way against the need for SATR and respectful of the public engagement process, Steel is adamant that the best of three options is chosen.

“Of the three alternatives we’ve been shown, one is west of the town and the other two pass to the east,” he says.

Planning the route The western route would be smack dab in the stunning views of the Eastern Slopes and foothills, and it would directly contravene the town’s municipal development plan.

“That council-approved plan endorses residential growth to the west and industrial growth to the east,” says Steel.

Moreover, he mentions the Alberta government completed a study three years ago on the relocation of Highway 2, which goes straight through town, in accordance with the Canamex highway corridor. (Canamex, a corridor linking Canada to Mexico through the United States, is proposed for use by upgraded highways, railroads, pipelines, and fibreoptic telecommunications infrastructure.)

“So it makes sense to us to create major utilities corridors in one place with major transport corridors,” he says. “We hope the route chosen would be consistent with the province’s land-use planning. If the [eastern option] is

not chosen, our next step would be to intervene as part of the AUC process,” he says.

The process to which Steel refers comes after AltaLink has compiled its landowner consultation program on the potential route options and has applied to the AUC with its recommendation. “It goes to the AUC, then a public hearing,” says Hodgkinson. “The AUC decides.”

Hodgkinson admits it’s a big challenge.

“The reality of it is nobody really wants a transmission line near their property, so we have to try and find the place that will achieve a balance on impacts,” he says.

“We find there are certain people who don’t want the line because of the impact on agriculture, on irrigation, or people just don’t like the look of them and think that might have an impact on property values—everybody has a different concern. You try to balance all of those; you’re building infrastructure that we all need.”

Hodgkinson says compensation is paid to affected landowners. “What we do is take an easement,” he explains. “Although we have the right to build a transmission line on a strip of land, we don’t take ownership of the land; that stays with the farmer. But he would get paid for that easement generally at market value and could still farm it.” AltaLink also pays for damage to the land, and an annual payment for each tower in a field.

Finally, for the recalcitrant there is a Surface Rights Board, which holds hearings and determines appropriate compensation. “We try to minimize these,” says Hodgkinson. “They are delays, they are conflict, they are confrontation, and nobody really wins in the end.”

Overall, Hodgkinson feels Alberta’s consultation process is more landowner-friendly than most other jurisdictions.

“I think our system works very effectively,” he says. Some people, like the citizens of Claresholm, may want to reserve judgment on that until the final routing decision is handed down.

Key points to ponder 1. The need to balance Alberta’s growing energy needs with minimizing impacts on land and people.

2. In the end, it’s a progressive and fair process.

3. The Southern Alberta Transmission Reinforcement project will serve to distribute clean wind-generated electricity, which will help reduce Alberta’s carbon footprint.

Players on the stage 1. Alberta Electrical Systems Operator

2. Alberta Utilities Commission 3. AltaLink 4. Alberta landowners and municipalities Going broader, deeper Southern Alberta Transmission Reinforcement project; description www.albertaelectricityfuture.com/alberta

Alberta Electrical Systems Operator; how province’s needs are determined www.aeso.ca Alberta Utilities Commission; its role and responsibilities www.auc.ab.ca/about-the-auc/who-we-are

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14 • May/June 2010 • Energize Alberta

{ centrespread the

Why does energy literacy matter?

Energize Alberta asked a cross-section of Albertans— including students, farmers, landowners, educators, and government representatives—to tell us why being literate on energy matters is important. In their own words, here’s what they told us.

Alice Murray works for oil and gas company Shell Canada as a community affairs coordinator in central Alberta. was very interested when I first became involved with energy literacy to hear the statistics regarding how limited the understanding of the energy industry is. The remarkable thing was it isn’t just the public, but also the industry employees who have a generally low understanding of the intricacies of how our energy sources, which are used every day by every one of us, are found, produced, processed, refined, transported, distributed, and consumed. For most of us, media sound bites such as “dead ducks” and “dirty oil” form the basis of our general understanding.

The danger in this, of course, is that we, as a society, lack the depth of understanding needed to really engage in constructive dialogue that promotes understanding, creates better outcomes, and secures our economic and environmental future. It makes it difficult for us to see how our individual and collective choices affect the overall picture. This can lead to feelings of victimization or apathy based on simply being overwhelmed.

I salute the Canadian Association of Petroleum Producers for launching its new communication campaign, “Alberta is Energy.” It appears to be a combination of traditional and social media and interactive opportunities to help raise the energy literacy of Albertans.

I also salute Energize Alberta for seeing the need and creating a publication for rural Albertans to get more information on what is going on in their backyard. These two initiatives can start to fill the information gap.

One of the best methods I’ve seen for creating energy understanding is the growing use of synergy groups in the province. Many energy issues are very technical and complex and don’t lend themselves well to one-way communication such as advertising. True understanding can only be accomplished by interested and affected people sitting down around the table and discussing the details. These community/industry grassroots groups are springing up in communities across the province to deal with issues constructively. I have seen some amazing creative outcomes emerge from these discussions.

As Albertans, we are profoundly blessed to live in such an amazing, beautiful, prolific piece of the planet. The eyes of the world are upon us and we need to be vigorous in our demonstration of our desire to be good stewards. A good basic understanding of the technology and issues is our first step.

Alice Murray

www.energizealberta.com

Alexandra Seidman

Alexandra Seidman is a Grade 7 student at the Calgary Jewish Academy. Her energy research projects have won awards at the Calgary Youth Science Fair. oon the people of my generation are going to be the ones running businesses and working in the government. The responsibilities are going to be handed off to us. One of the very important things that we have to learn about is energy. We use energy for everything. If we do not know enough about it to be able to manage it, then we are going to be in big trouble.

Energy literacy means that we need to be more educated about energy and need to be able to understand it. This is a big deal, so that in the future we will make the right decisions when working with and managing energy.

This is important to me. Over the last two years, I have done research on energy for my award-winning projects at the Calgary Youth Science Fair. In Alberta, there is a big oilsands industry. Because we have so much of the resource and we are manufacturing it every day, I decided I wanted to investigate a process that might be more economical, environmentally friendly, and that uses less energy.

The most common process that is currently used is called the hydro transport method, which uses hot water and agitation (stirring) to break the bonds in the oilsands so we can extract the oil. Energy is used to boil the water and also to agitate the slurries.

The alternative process method I investigated is called the ultrasonic separation process.

This process uses ultrasonic energy, which is like sound waves and vibration, to break the bonds in the oilsands.

My first project found that ultrasonic energy did break the bonds in oilsands. This process did not produce more oil than the current process, the hydro transport process.

Even though the ultrasonic separation process did not produce more oil than the current process it was more energy efficient. This means it used less energy to produce the same quantity of oil. I also observed that the oil produced by the ultrasonic separation process was light and shiny, whereas the oil produced by the hydro transport process was thick and black.

This observation led me to my next project. I tested to investigate whether the viscosity (thickness and ability to flow) of the oil produced by the ultrasonic separation process was lower than with the hydro transport process. If the ultrasonic separation process did produce oil with a lower viscosity, then the oil would be of a better quality.

There would be no need to use diluents and there would be less of a need to upgrade the oil. The ultrasonic separation process does produce oil with a lower viscosity.

I believe that my research shows that the ultrasonic separation process is a better process than the hydro transport method.

In conclusion, the ultrasonic separation process is better because it uses less energy, is more environmentally friendly, and produces better quality oil. I was using small samples for my trials, so I am not sure if the process works on a bigger scale. If it did, then the ultrasonic separation process should replace the hydro transport method. This would be better for our environment, Alberta’s economy, and future generations!

Energize Alberta • May/June 2010 • 15

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

Iris English

Gary Redmond is executive director of Synergy Alberta, a provincial not-for-profit society that supports synergy groups. Synergy groups provide the opportunity for communities to have more meaningful, ongoing participation in decisions that directly affect them. hat is energy literacy and why is it important? If energy is what we harness or exploit to provide power, heat, and electricity, and literacy is a state of understanding, then energy literacy speaks to our level of understanding of energy resources we extract and use. Given the energy foundation of our economy and the impacts we all feel and enjoy, it should not be difficult to see the importance of energy for Albertans, especially if all stakeholders are to be meaningfully engaged.

We’re not starting from scratch. Many government, industry, and non-governmental organizations have been educating their publics for years. However, while there are success stories, Albertans, on average, lack a reasonable literacy of energy. Benchmarking current energy literacy is a complicated task; what information is necessary for stakeholders to understand? With such a broad subject matter, experts in one area may have little understanding of other areas, such as alternative energy. The trick will be to focus on wide-ranging, yet reasonably accessible energy information that empowers stakeholders to understand energy matters affecting them.

Direct impact is a catalyst for most of us, whether that’s us as consumers, residents, or wearing any other hat. Raising the bar of energy awareness will help, but so will targeted information for certain stakeholders. In today’s ever-increasing bombardment of messages, the argument that “they need to know more about this” is as true for a host of other topics—personal health, crime prevention, emergency preparedness, etc.—as it is for energy literacy, and there is a limit to what we can take in.

A challenge of energy literacy has been stakeholders agreeing to what are credible sources of information. Campaigns can result in skepticism. Energy literacy needs a credible foundation of information and to me, credibility is achieved through engagement and buy-in. For example, a company and an environmental organization that agree on a list of facts for a specific development and share it with affected populations are likely to be perceived as more credible than if either did it alone.

So there is a need, and we should act collectively so that Albertans better understand energy and the choices they and others are making. Working together on a sustained, well-designed, and realistic initiative can, and will, achieve results.

Iris English owns lands near Cold Lake and also near St. Paul, Alberta. She is a Synergy Alberta board director (community), cochair; as well as Lakeland Industry and Community Association board director and chair of the Governance Committee. ur understanding of energy is often fragmented, onesided, or just plain wrong. We use it freely or frugally, according to our natures, but rarely understand intricacies of production, transport, or storage. We argue for or against processes that may have profound effects—often without clearly understanding those effects or what alternatives are available, practical, or desirable.

If we can believe—as some do—that electricity can be transported by train or that underground oilsands production annually lowers lake levels by many feet, how can we expect to make informed energy decisions? Until everyone achieves a reasonable level of understanding of methods, units, types, processes, and alternatives, we can’t even have effective discussions.

Recent history has proven that individuals’ opinions and actions can be significantly influenced (ParticipACTION; reduce, re-use, recycle; water conservation; saving energy; pesticide reduction). Energy literacy can be supported by government, corporations, and media while it concurrently happens at synergy groups, kitchen tables, and coffee shops. If clear, accurate, trustworthy sources of information that create a common language of energy are freely and easily available, how much more likely is it that we can begin to move collectively in the directions of environmental awareness and protection that we need to?

I’ve had easy access to energy, without much thought about where or how it was produced, or its consequences. Then, owning a chunk of boreal forest with a gas well in northeastern Alberta brought me into contact with a giant oil and gas corporation, and I found information on processes, projects, and landowner rights hard to find. A series of community meetings leading to the formation of a synergy group—Lakeland Industry and Community Association—provided a welcome avenue of information.

It’s perhaps naive to suppose that corporations and individuals are or ever will be entirely transparent. But creating a clear common energy terminology (with the expectation that communication can be positive and productive, not just expedient or confrontational) is the best way to ensure optimum decisions on our own and this planet’s behalf.

Is everything perfect now that there is a mature synergy group active in our area, sharing information, building knowledge, bringing people together? Of course not! But the respect, courtesy, and clarity that are expected and modelled are creating openness and understanding. Because of our exposure and interaction, we are developing our own energy literacy—better understanding of what is and what isn’t possible.

www.energizealberta.com

16 • May/June 2010 • Energize Alberta

{ centrespread} the

continued

Why does energy literacy matter?

From previous page

Jim Kiss, who owns and operates (on a limited basis) a small farm, has been Alberta’s member of the Farmers’ Advocate since 2005. He was a Conservative political advisor/assistant from 1989–2004 and is a Synergy Alberta board member. hen I consider why I believe energy literacy is important, I suppose I can look at it with two different hats on. In my current role as Farmers’ Advocate, I coach individual landowners to be proactive about engaging with the energy industry as they need to access your land. I encourage folks to find ways to make resource development work for them, whether it is by negotiating hard to minimize disturbance or impact on their operations, or negotiating hard to maximize the financial return a development can bring to their operation. The message is one of engagement, respect, relationship building, and as much rational input as possible to make the development a positive part of your operation.

When I put my other hat on as an Albertan, a consumer, and a part of society, I believe we truly need to understand the real importance of how development of our raw resources drives practically everything we may value. We have good environmental protection because of the energy industry, not in spite of it. We have hospitals, schools, universities, and highways because of the energy industry, not in spite of it. And we have a standard of living second to none and the ability to enjoy the finer things in life because of our resource wealth, not in spite of it.

I say this because I am a firm believer that the creation of wealth comes through the ingenuity and hard work of the private sector and as that wealth flows through our society, it provides us with the ability to make choices and advance our standard of living. I want

Jim Kiss industry to be very successful so they can invest in research and development of more efficient methods of extraction. I want them to be successful because they may employ me, my kids, and my grandkids in the future so we can pursue our individual dreams and aspirations. I want them to be successful because they deliver billions of dollars to my government that I trust can make wise decisions in putting that money to work to make Alberta an even better place in the future.

I don’t think our society wants to lower our standard of living. I certainly don’t, and I want the next generation to have as good a lifestyle or better than I have. We won’t be able to have that without development of our resources and the ability that wealth creation provides us with to make choices and invest in greater efficiencies, better environmental protection, and other investments that contribute to our society.

Being a Good Neighbour.

In late 2007, Devon’s Marc LaBerge saw an opportunity to reduce the impact of pipelining on the land and build our relationship with landowners. By working in partnership with provincial regulators, Marc helped Devon introduce low-impact pipelining to the company and the industry.

This innovative process involves less topsoil disturbance, smaller rights of way, narrower trenches, reduced clean-up costs, less deforestation and reduced downtime for both industry and landowners. As a result, this technique has become standard practice across Devon’s Canadian operations.

Thanks to the creativity and resourcefulness of people like Marc, Devon is continually enhancing our ability to be a good neighbour.

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www.energizealberta.com

Energize Alberta • May/June 2010 • 17

Ellen Frombach is manager of Energy Education for the Alberta Department of Energy.

I

f the words “spud” and “THAI” make you hungry and you think “TAN” is something you get at the beach, Alberta Department of Energy’s online Oil Sands Glossary can help you expand your knowledge of energy.

The Oil Sands Glossary is one of many tools the Alberta Department of Energy provides to support Albertans’ understanding of energy and the energy industry. Enhancing energy literacy by bolstering knowledge and awareness of the energy industry is part of Alberta’s Provincial Energy Strategy, a comprehensive plan that is guiding our approach to energy in the future.

So what is energy literacy and why is it important for Albertans?

Energy literacy is an understanding of the province’s energy resources and an awareness of the economic, social and environmental benefits, and impacts of energy’s development, distribution, and use. It provides an understanding of the various approaches that can be taken to address those impacts. And it supports a better understanding of potential future directions for energy development and distribution, as well as its use and conservation.

Providing access to balanced and factual information about energy is important, not only for the people who enjoy the benefits of living in a province where energy development has driven our economy for decades, but also for the province—and its future. Better access to information about energy may encourage more people to join in the discussion when it comes to making important policy decisions regarding the future of energy in Alberta.

On a day-to-day basis, having more information about energy use enables everyone to take a more active role in how they use energy in all aspects of their lives. An awareness of more efficient ways to use energy is good for the pocketbook and great for the environment, and supports everyone in making well-informed choices every day when it comes to heating homes, fuelling cars, and powering electronics.

The Alberta government is committed to raising awareness and understanding of energy and energy issues among Albertans. A great starting point to boost your own knowledge is on the Alberta Department of Energy website, where you can find the definition of any term on the website by highlighting the word and pressing the control key (at the bottom left-hand corner of your keyboard) and the letter “Y.” Doing so activates the Oil Sands Glossary, where you can learn that “spud” is how you begin drilling a well, “THAI” means toe to heel air injection, a method for recovering bitumen, and “TAN” stands for total acid number—how acidic the bitumen is and how that is measured. For more information on energy in Alberta, visit www.energy.alberta.ca.

Leona Rousseau is sustainability coordinator at Lethbridge College and development chair, community development, for the Alberta Association of Colleges and Technical Institutes.

Braum Barber is an instructor in the School of Engineering Technologies at Lethbridge College and a professional engineer with extensive experience in petroleum processing. The authors were also faculty designers for The Living Home, an environmentally responsible home in Lethbridge. Go to www.thelivinghome.ca for more information.

S

o much of what you do every “Man is a force; so is the sun…” day requires energy—and a lot of it. Now multiply that — Henry Adams, 1904 by over 3.5 million Albertans.

It has been estimated that a typical household in Alberta consumes 26 per cent more energy compared to the average Canadian household. To put this in perspective, your family could drive around the earth twice each year on the equivalent energy consumed by a typical Albertan home. Energy literacy begins with an awareness of where your energy comes from, how you use it, and the amount you use.

Not all energy sources are created equal. Each has consequences and some are cleaner than others. It is important that every Albertan understands the impact of their energy choices—and you do have choices. Collectively, those choices will change the energy future of our province—they already have.

Imagine a city transformed by an energy-literate community. Our homes would be heated and cooled by renewable resources like the sun and wind, fostering the creation of green jobs as a result. Our energy-efficient refrigerators would be stocked with local produce grown using natural fertilizers and biological controls. Our daily work commute would be a short trip via foot, bike, bus, or e-car. And our businesses would profit and flourish through acts of social, economic, and environmental responsibility. It is a city where individuals are empowered through education to affect public policy and decision making.

Literacy means knowing, knowing means learning, and learning leads to informed judgment and decision making. Energy literacy means knowing and doing what is right. A sustainable energy future for Alberta depends on you. What will you do to make it right?

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18 • May/June 2010 • Energize Alberta

From the field

Trust and the truth make for strong, healthy relationships Judy Winter has been a landowner and agricultural producer for 35 years. A grandmother of eight, Judy is a retired substitute teacher. Her involvement with the synergy movement began in 2000 and she is member of the Butte Action Committee and the West Central Stakeholders, synergy groups based in the Rocky/Caroline area. Judy is also a director on the Synergy Alberta board of directors and brings a rural community viewpoint.

by Judy Winter

I

n the late 1990s, most of the landowners I knew had a very negative impression about oil and gas companies. We felt we had been bullied, disrespected, and run over. The negotiations were minimal, the communication was just adequate, and the response to concerns was often nothing or rude.

Companies would promise anything just to get a landowner’s signature on the contract.

The promises rarely were kept, the agreements were often broken, and the distrust and disrespect grew in the minds of the landowners and industry folk alike. Threats and violence began to raise their ugly heads.

Very tentatively it was suggested that what we were doing was obviously not working, so maybe, instead of always fighting each other, we should try talking to each other. It seemed a crazy notion to some, but really we had to try something.

So groups were formed; some with just community members, some with only industry. I’m quite sure in several of those early meetings, the company representatives invited to the table by the community groups probably were afraid they were invited to the table to be eaten, but they came. Once we started talking to each

other—instead of at or about each other— something started to happen. Soon the discussions revealed the people behind the company façade and the farmer’s ballcap.

Bit by bit, by learning about each other’s needs and concerns, the respect started to grow…just a little, mind you. This was the beginning of the synergy movement in Alberta. Very simply, synergy means working together.

I remember the first meeting with one company, and one of the oilmen said, “Wow, I never thought about it that way before,” after we had explained our position on water use. It was a breakthrough moment for all of us. It showed that communication would work. As a landowner, I felt validated and a little euphoric.

In any discussion, I believe respect must be shown for the person, their opinions, their occupation and lifestyle, and their property. I am not saying that we must agree with each other, because that may never happen, but we must basically put ourselves in the other’s shoes to try to understand where the avenues of communication could be opened.

To me, if we show respect, there is a chance to grow respect. Someone said that is why we have two ears and one mouth.

We don’t generally annoy anyone when we are listening.

We all have the right to our own opinions and, this is important to remember, we are emotionally attached to these opinions.

When someone thrashes our point of view, they thrash us emotionally. No one thinks clearly when they are smarting from a thrashing. To earn respect, handle all points of view with respect. Agreement is not necessary, just acknowledge and respect their position and open up the communication.

I was at a recent meeting—held in a true synergistic manner—which involved community people, lots of industry people, a couple of forestry representatives, First Nations, an Energy Resources Conservation Board (ERCB) rep, municipal rep, two high school students, and a very capable facilitator.

We actually like each other, and enjoy the teasing and banter that comes with a good relationship. We look forward to our meetings. We work together to raise the awareness of landowner rights, pipelines, road-use agreements, and agricultural interaction with industry. We commiserate about the down turns in agriculture and the oilpatch, comment on new ERCB directives and municipal programs, and enjoy hearing what the students are up to. We trust each other’s information and know that everyone can ask a question that may sound stupid and still get a respectful answer. It

is a wonderful learning environment. We eat together and visit about our lives. When we see each other on the street, we make a point to acknowledge each other. I now have friends who work for the oil and gas industry. This is where the respect in synergy has taken us.

But if someone says, “Trust me” and they haven’t earned my respect, they may as well say, “Ignore me,” because without my respect for you or your point of view, there is no effective communication. I know this sounds brutal, but I really believe it. To accomplish the mission of promoting awareness, building capacity, and engaging stakeholders in the advancement of energy literacy in Alberta, the first baby step is to show respect for all the stakeholders and work to earn respect from all the stakeholders.

We must be respectful of what people know, what they don’t know and—most importantly—what they think they know.

This respect will allow trust to grow.

Trust opens the communication channels, dialogue becomes comfortable, and new information can be discussed in a nonconfrontational atmosphere. All opinions and points of view can be openly discussed with no fear of criticism or disrespect. We may not agree, but we can keep talking.

This is synergy at work.

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Energize Alberta • May/June 2010 • 19

Q&A with energy players David Butler is the Calgary-based executive director of the Canadian Clean Power Coalition (CCPC).

Energize Alberta asked him to take readers inside the world of coal-fired power generation.

Q

Briefly describe the focus of the CCPC.

A The CCPC’s mandate is to research, develop, and advance commercially viable technologies that lower power plant emissions. Our objective is to find ways to generate electricity from coal that effectively and economically address environmental issues— including CO 2 emissions—and move us forward to a cleaner energy future. The CCPC believes that a diverse portfolio of energy supply options, including fossil fuels and renewables, will ensure a stable and economical source of electricity for Canada.

Q Given the abundance of North American coal resources, what is the CCPC’s take on the challenge coal-fired power generation faces as a central part of our future energy mix?

A The cleaner coal technology exists, but the costs to implement them are not economically feasible. That’s where public policy will have to play a role. With regulatory certainty, companies can make decisions regarding whether to build new coal plants or whether existing plants should be retired or retrofitted with technologies to lower emissions.

Q Given the extent of coal-fired power generation worldwide, can Canada be a global leader in terms of best practices relative to setting standards for the responsible use of coal resources?

A Canada is a global leader in this regard. The CCPC and its members have spent more than $50 million to find ways to generate electricity from coal that effectively and economically address environmental issues. The Alberta and federal governments have sponsored four large carbon capture and storage projects, that when built will store more CO 2 from industrial applications than

TransAlta’s coal-fired Genesee 3 power plant any other country in the world. The knowledge gained from these initiatives is helping leaders set reasonable standards for the use of coal resources.

Q Where will the first CPCC demonstration plants be built?

When will they be operational?

A CCPC members are advancing several commercial-scale projects. TransAlta and Capital Power are planning to build Project Pioneer to capture one megatonne per year of CO2 from the Keephills 3 facility by 2015. Basin Electric is completing a $6-million study to consider capturing one megatonne per year of CO2 from the Antelope Coal facility in the next several years. SaskPower, the principal supplier of electricity in Saskatchewan, is progressing with its $1.4-billion Boundary Dam project to capture one megatonne per year of CO2.

Q

Will these plants prove up the case for “clean coal” technology?

A Most power projects that include CCS are designed to reduce CO2 emissions by 90 per cent. This makes the emissions from clean coal plants much cleaner than any power plant operating on natural gas. However, most carbon capture technologies are very expensive, and until new advances are commercialized, will require significant government subsidization before they can proceed.

Q Do you think Canadians need to be more “literate” in terms of understanding the role of coal in their energy mix?

A It is important to not only understand the role coal plays in our energy mix—for example, about two-thirds of Alberta’s electricity is generated from coal—it’s important to understand what

is being done to ensure that, through technology, those vast resources can be used to provide cleaner power. What is also important is an awareness that new technologies for cleaner power production, whether from coal or renewables, come with a price. Canadians need to be aware of what these new technologies cost and the impact it will have on them as consumers.

Q How can they best move forward on that literacy path?

A We would encourage people to find out more about the costs and nature of carbon capture technologies and the implications of proposed greenhouse gas regulations. The CCPC aims to be a credible, fact-based source of information to help people learn more these subjects. Please visit us at www.canadiancleanpowercoalition.com.

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Energize Alberta • May/June 2010 • 21

Helping hand UCA helps to resolve consumer concerns about electricity and natural gas services Paul Wells Energize Alberta

W

hen it comes to understanding the concerns and issues that are top of mind for Alberta’s electricity and natural gas consumers, consider Karin Gashus well-versed.

And she wouldn’t have it any other way. Simply put, it’s her job.

Since being appointed as Alberta’s Utilities Consumer Advocate (UCA) in July of last year, Gashus has headed up the group that serves as the consumer’s liaison between industry and regulators— at times a mediator, always an educator, and often a regulatory representative that advocates for consumers during hearings on setting rates and the like.

“I view the mandate of the office as being very important. Informing consumers about electricity and natural gas issues is certainly paramount and continues to be a big topic of discussion, particularly in the deregulated electricity market these days,” Gashus says.

“I think we provide a very valuable service. We get about 4,500 calls a month from consumers and they call in for all sorts of different reasons.”

Gashus brings to her post a comprehensive knowledge of the utilities industry.

Prior to her appointment, she was a management consultant and partner at Agility Factor, after five years as vice-president of customer service with FortisAlberta.

Her past career also included senior positions at Imperial Oil. The UCA was created in October 2003 to represent the interests of electricity and natural gas small consumers (residential, small business, and agriculture) in Alberta, origins Gashus says stem from consumer unrest and confusion after the provincial government opted to deregulate the electricity industry in 2001.

“Specifically at the time it was in response to billing concerns. After deregulation, there was a lot of billing system convergence, which didn’t make for the easiest bills,” Gashus says. “So the result of that the UCA, in its first couple of years, focused on ensuring the bills were pretty much error-free.”

While it’s an arm’s-length entity, the UCA, which reports to the Ministry of Service Alberta, is funded 100 per cent by industry—electricity providers account for 80 per cent, natural gas 20 per cent.

“The reason for that split is we tend to spend about 80 per cent of our time providing support to the electricity consumer and in and around 20 per cent to gas,” Gashus says.

She believes the reason for the disparity is rather simple—natural gas was deregulated well before the government did so with electricity in 2001.

In 1985, Alberta, British Columbia, Saskatchewan, and the federal government signed the Agreement on Natural Gas Markets and Prices, which began the process of natural gas price deregulation in Canada. In 1986, the price of natural gas was deregulated by a federal-provincial agreement, the provincial government allowed the Natural Gas Protection Plan to expire, in light of the decline in natural gas prices that occurred after deregulation.

“Interestingly, the thought with the deregulation of electricity is that the price would decline as well. In fact, prices have overall not declined, which has in turn prevented more retail competition within the province,” Gashus says.

Assisting small consumers Although the UCA is still somewhat of unknown entity to many Albertans, the office nonetheless is—and continues to be—a highly sought-after service. In fiscal 2009–10, the UCA said it assisted more than 50,000 Albertans by providing information/advice and helping to resolve concerns about electricity and natural gas service.

This amounts to an average of just under 200 contacts every day and represents an increase of 27 per cent in the number of Albertans contacting the UCA over the prior fiscal year. Out of the total number of contacts, just under 3,000, or about six per cent, were complaints and problems that required the UCA’s mediation services. Just over 41 per cent of these concerns were related to problems with energy contracts and 23 per cent were related to various billing issues.

When disputes between customers and utility providers have reached a dead end with no resolution in sight, and when consumers have exhausted known avenues of issue resolution, Gashus says the UCA will investigate and “attempt to resolve their concerns through mediation with utility companies.”

Since its inception, the office’s mediation services arm has assisted more than 11,100 Albertans and the top three issues requiring mediation services are billing, retail contracts, and customer service complaints. “We’ve had a great deal of success in helping resolve these types of issues,” she says.

Mediation services aside, Gashus notes that most consumers contacting the office were simply calling to ask for the name of their regulated retailer, followed by requests for a listing of competitive retailers, and then advice and information about the deregulated energy market.

“They call in to get some guidance on picking a utility provider; they call in with billing concerns and issues; they want to talk about the prices of either natural gas

Alberta’s Utilities Consumer Advocate, Karin Gashus

“We get about 4,500 calls a month from consumers, and they call for all sorts of different reasons.” or electricity and get some help from us on managing their expectations of their billing,” she says.

“We also do a lot of interpretation of the billing, because they are not the easiest to read or understand.”

On that front, Gashus notes that the UCA is considering an internal mandate to work with service providers to ensure that bills are more consumer-friendly and more easily understood: “That’s a good example of things we might do for consumers that I think they’ll find valuable.”

Although still in the discussion phase at this moment, Gashus says the initiative could follow the blueprint of the plain language contract, which was written about five years ago in an effort to help consumers interpret and better understand door-to-door contracts, which became commonplace after deregulation.

“In the same way, we think we could do some work around actual electrical bills and help utilities write those bills in plain language so that there is a common language on the bills that everybody understands,” she says. “There’s a lot in those bills and maybe we can help make them easier to comprehend.”

Representing Albertans Gashus says the advocate also represents the interests of small consumers in regulatory hearings, providing a voice for Albertans. “That is a big piece of our business. We intervene in about 100 regulatory proceedings a year, on both natural gas and electricity,” she says.

A standard example would be that of a utilities provider that applies to the Alberta Utilities Commission for a rate hike. During that process—in layman’s terms—the company builds its case for the increase including what its initiatives

are, how much revenue they feel they need to meet their goals and objectives, and how the increase would help to provide good customer support and service.

“So, we would intervene in front of the Alberta Utilities Commission with that utility to ask the questions about those costs. We would read the application and determine what issues we think the consumer will be concerned about,” Gashus says. “We’ve had good luck with it. We run a pretty tight ship on the regulatory side and we’re beginning to see some good wins for the consumer.”

Going forward, Gashus says that one of her top priorities is to build awareness of UCA throughout the province. Recently, the advocate’s office completed a research initiative with Ispos-Reid that was designed to determine the level of understanding and awareness Alberta residents have of the service, and the results showed that that residents in central and northern Alberta are calling the office in fewer numbers than those in southern Alberta.

“We found that awareness tends to be in different pockets of the province, so we’ll be focused on increasing awareness in areas that don’t know about us as much,” she notes.

To that end, Gashus says the UCA will be building a consumer awareness program “around that research to try and get our name out there” and make consumers better aware of the services the office provides.

“I want to strengthen our efforts to educate consumers about their rights and choices, and build awareness that the UCA is there to help them,” she says.

For more information Visit www.ucahelps.gov.ab.ca

www.energizealberta.com

22 • May/June 2010 • Energize Alberta

Recommended energy reads

Green Oil: Clean Energy for the 21st Century?

Author: Satya Das Book review by Deborah Jaremko

T

he oilsands is a great asset that, if managed properly, could not only serve as a bridge to a lower carbon future, but also significantly advance the common good. That is the assertion of author Satya Das in his book, Green Oil: Clean Energy for the 21st Century? The goal of the book is to turn the question mark into an exclamation mark.

“Albertans and Canadians must learn to

lead, for one compelling reason: geology has thrust leadership upon us, and this is a responsibility we cannot evade,” writes Das, a former journalist and co-founder of policy consultancy Cambridge Strategies “Beyond an accident of geology, we have a strong moral obligation to lead the sustainable development of the oilsands.”

Das admits that the book is clearly biased towards responsible development and stewardship of the incredible wealth the oilsands industry represents, continuing that,

“the option of abandoning the oilsands, leaving them shut in, would be an act of profound negligence….

We can use the enormous wealth the oilsands can confer to build the common good. We can use it to pay for the transition to alternative energy, built on a platform of much greener hydrocarbon production.”

A key message of Green Oil is that Alberta should not be afraid to ask for more in its own pocket from oilsands producers in order to fund its own success, asserting that the province has

significant room to manoeuvre in pursuing a higher return for its resource ownership.

“When oil companies tell Alberta politicians they need $75-a-barrel oil to make the oilsands profitable, the government takes the figure at face value. They should be exploring the evidence behind the assertion…. Alberta’s oilsands are the single largest hydrocarbon deposit on the planet.

Those threatening to pull out are welcome to pursue opportunities elsewhere. But if they

want to be in the oilsands business, well, this is where they exist…. We have a global obligation to show that investing in the potential of one’s people—mass access to education, health, and a clean environment—is a better application of the enormous energy wealth that fuels war elsewhere.”

Writing that Alberta must move to a “green future,” Das offers a six-

component leadership strategy for the province.

His “practical and achievable” plan of action includes carbon-neutral oilsands development, accelerating the bioeconomy, clean and renewable electricity generation, a high-speed rail network, developing the nano-economy, and the world-leading standard on societal development.

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Energize Alberta • May/June 2010 • 23

Winds of change Alberta now trails Ontario and Quebec in installed wind power capacity

PHOTO: Transalta

by Jim Bentein lberta, the pioneer in wind energy development in Canada, now ranks third in production and is in danger of sinking further, despite having “enormous wind potential,” according to the head of a company that plans to become the largest renewable electricity producer in Canada.

“We were the leaders and now we’re the laggards,” says Dan Balaban, president and chief executive officer of Calgary-based Greengate Power, which will start construction this year on the province’s largest wind project and has plans to spend $4 billion to develop nine wind power projects in total, which would produce 1,550 megawatts (MW) of electricity. That’s equivalent to about 10 per cent of Alberta’s existing generation.

David Huggill, the western Canada policy manager for the Canadian Wind Energy Association (CanWEA), echoes Balaban’s comments, bemoaning the fact that Alberta’s rich tradition of wind development and its potential are not being capitalized on.

“The Cowley Ridge wind farm [near Pincher Creek] started operating in 1993 as Canada’s first commercial wind project [it is now owned by Calgary-based TransAlta], so the province has a deep history of wind production.”

But Ontario, because of its Green Energy Act, has pulled ahead of Alberta and has 1,208 MW of installed capacity. Quebec now has 659 MW, compared to 656 MW of installed capacity in Alberta.

Ontario, which had virtually no wind power three years ago, is expecting to add as much as 4,000 MW in the next few years. In Quebec, power generator Hydro-Quebec has contracted for as much as 3,000 MW of wind power. In both cases, that would represent 15 to 20 per cent of their total electricity production.

In Ontario, renewable energy is replacing coal-fired power plants once responsible for 25 per cent of the province’s electricity and most of its greenhouse gas (GHG) emissions and air pollution.

In total, Canada now has close to 3,500 MW of wind, about four per cent of its total power production, with CanWEA projecting that can grow to 20 per cent by 2025.

Incentives For Wind Development Critics say Alberta could lead the way in new wind development, but lacks the proper incentives for wind developers. Tim Weis, director of renewable energy and efficiency policy for environmental group the Pembina Institute, says Ottawa’s decision not to renew its EcoEnergy for Renewable Power program means provincial governments must step up to the plate. ❯❯ continued on next page

energizealberta.com Where energy, the economy, and the environment intersect

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www.energizealberta.com

24 • May/June 2010 • Energize Alberta Continued from page 23 ❯❯ “It helped small- and medium-sized companies develop wind and other renewables because it acted as a financial backstop and helped them get [bank] financing,” he says.

Ottawa allocated $1.48 billion under the program, which led to projects that will generate 10,000 MW in total being approved. Those funds are now all allocated.

The program offers a subsidy of one cent per kilowatt-hour to eligible low-impact renewable power projects.

Weis says the Alberta government “has no serious program” to encourage the development of wind and other renewables.

“Their argument is to let the market decide,” he says.

Wind developers are being enticed to develop projects in Ontario with subsidies of 13.5 cents per kilowatt-hour for up to 20 years for a land-based project and 19 cents for ones offshore.

In other provinces, including Quebec, B.C., Nova Scotia, and Manitoba, utilities guarantee per-kilowatt prices similar to those in Ontario.

Weis says that companies such as TransAlta and Enbridge, which started their wind power businesses in Alberta, have both developed wind farms in Ontario as a result of the incentives there. Enbridge has its largest wind farm there (190 MW). TransAlta, which bought Alberta wind pioneer Vision Quest Windelectric in 1996 and Calgary-based renewable power developer Canadian Hydro Developers last year, still has more wind power in Alberta than elsewhere in Canada (446 MW, with a new 69 MW plant under development), but it now has 400 MW of wind power in Ontario, with plans for more.

“TransAlta and Epcor have had to venture outside of Alberta because there are no incentives,” says Weis.

Alberta’s wind project queue Although CanWEA’s Huggill would like to see subsidies to encourage wind development, he acknowledges that wind developers are still lining up to build projects in the province.

“The developers are waiting in the queue,” he notes. “There are 52 unique projects—representing 7,000 MW—being proposed. That doesn’t mean they’ll all happen though.”

Some of those have already been approved for federal funding and others are being developed by larger utilities with deep pockets and therefore are likely to be built, he adds.

Despite the lack of provincial subsidies, Huggill says Alberta’s unique deregulated electricity market—the only one in Canada—is attractive to those building projects.

Under that system, the Alberta Electric System Operator (AESO), an independent agency responsible for planning and operating the system, ensures there is competitive access to the power grid.

“AESO announces they need a certain amount of power and electricity providers to reply,” he says. “It’s a more entrepreneurial environment than Ontario, Quebec, [or other provinces].”

He says CanWEA isn’t suggesting that Alberta is “hostile” to wind development.

“Its approach is to not pick winners and losers,” he says.

Even without the federal subsidy, he says wind projects will happen in the province because southern Alberta, in particular, has one of the best wind energy resources in the world.

In addition, the prospect of Ottawa imposing a future “price for carbon emissions” (Alberta already imposes a charge of $15 a megatonne on large emitters of GHGs, such as coal-fired plants) has motivated utilities such as TransAlta, the largest coal power producer in Canada, to diversify into more renewables.

Economic benefits Wind energy development brings with it significant economic spinoffs, Huggill says.

For rural communities, where all large-scale wind farms are developed, it represents “a new cash crop,” since landowners get paid royalties for the use of their land for projects.

And it can be a windfall for rural municipalities.

For instance, the Municipal District of Pincher Creek took in $1.54 million in taxes from wind projects in 2008.

And new wind projects create construction jobs, with each 100 MW project needing 100,000 hours of labour to build it.

However, that “cash crop” won’t be delivered without new transmission, Huggill says, since most of the proposed new plants are in southern Alberta, which lacks adequate transmission to deliver it to markets.

That problem will be dealt with over the next few years, according to AltaLink, the company that owns and operates the transmission system in southern and central Alberta.

The company’s biggest initiative is the Southern Alberta Transmission Reinforcement project, which will connect 2,700 MW of wind to the system. It will soon apply to the Alberta Utilities Commission for the first of what will be a handful of new transmission lines to be built this decade.

Greengate Power’s Balaban says his company’s strategy was to “follow the transmission,” and so six of the wind projects his company proposes will be built in central Alberta, where lines exist.

Construction will start this summer on the first, the $350-million Halkirk 1 wind project, being built in the County of Painter, about 260 kilometres northeast of Calgary. The company has already secured EcoEnergy funding for it and it has received final government approval.

Remaining projects would be built over this decade.

Is a clean energy standard needed?

While Balaban accepts the demise of the EcoEnergy program, he would like to see Alberta adopt the same approach as 30 U.S. states.

Called the clean electricity standard, it would see the province require that a certain percentage of its power comes from wind and other renewables. That wouldn’t require subsidies, but would send a clear message that markets will exist for the power, he says.

However, Rob Falconer, director of distributed generation for Enmax, the City of Calgary–owned utility that provides electricity, natural gas, and related services to 640,000 people in the city, believes that approach wouldn’t work in a deregulated market like Alberta’s. In fact, he says subsidies of any kind are likely unworkable.

“Alberta has a deregulated market, so we couldn’t do that,” he says. “In a regulated market, [subsidies] are spread across the rate base, so that everyone pays for them.

However, in a deregulated market like Alberta’s, the cost [of power generation] isn’t spread across the rate base.”

He says the problem with the Ontario approach—and with other provinces’ approach—is that the subsidies are hidden, so consumers aren’t aware of how much they’re supporting renewables like wind.

“Ontario is guaranteeing [payments for renewables] five times what we pay here [in Alberta] for power. There is no free ride for the consumer under the feed-in tariff system [which Ontario is using].”

In any case, he disagrees with those who advocate subsidies. He argues that the cost of turbines and other equipment to build wind projects has come down and utilities such as Enmax, which has interests in three wind projects generating 218 MW in southern Alberta, have an interest in bringing on more clean electricity to avoid paying carbon costs.

“I don’t think wind needs any incentives,” he says. “It’s getting very cost-competitive.”

New coal-fired plants need to be equipped with so much costly GHG abatement technology that it is becoming expensive to develop them.

Falconer says more renewables will be developed in Alberta over the next few years, but it will happen gradually, since legacy coal-fired plants that produce power for three

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Energize Alberta • May/June 2010 • 25 or four cents a kilowatt-hour are unlikely to be phased out any time soon.

In addition, because wind is a “variable” power source, providing electricity only when the wind blows, other baseload power sources, such as coal and gas-fired power, will continue to be needed.

Key points to ponder How much wind energy should be developed in Alberta?

Tim Weis, director of renewable energy and efficiency policy for environmental group the Pembina Institute, says Alberta has the “dirtiest grid in Canada”—due to its coal-dominated power system—and must turn to renewables such as wind. Weis says there’s the potential in Alberta for 40,000 megawatts (MW) of wind power. The province’s current installed capacity stands at 656 MW. Weis points to Germany, with half the land mass of Alberta and a poorer wind resource, where over 25,000 MW of wind power capacity exists. But Germany, like Ontario, uses a feed-in-tariff system, whereby producers of renewable power receive subsidies. Alberta offers no subsidies for renewables.

Energize Alberta readers: Do you think Alberta’s wind potential is going to be achieved? Should it?

How reliable is wind energy?

Even fans of wind energy admit it is “variable.” For instance, Dan Balaban, president and chief executive officer of Calgary-based Greengate Power, which plans to spend $4 billion on nine wind projects that would generate 1,550 megawatts of power—about 10 per cent of the province’s total generation—says Albertans can’t rely completely on non-polluting wind power. “It’s not possible to run 100 per cent of our grid on wind,” he says. But he argues that natural gas, which is a reliable, baseload source of power (like coal), is a good complementary source to wind, backing it up 75 per cent of the time that wind doesn’t blow enough to create power. Meanwhile, the two together would create a cleaner power source.

Energize Alberta readers: How important do you think it is for Alberta’s power generation to come from “cleaner” sources?

Players on the stage In the early days of the automobile manufacturing business in Canada, there were hundreds of new automakers. Maybe that’s what should be expected of an industry going through its birth pangs.

That certainly is what seems to be happening in Alberta, with 52 different planned wind power projects, which would produce 7,000 MW of power, many of them proposed by companies created for that very purpose.

Take Calgary-based WindRiver Power, for instance. The company is planning to spend $300 million on its proposed Peace Butte wind project, to be located near Medicine Hat.

Then there’s Calgary-based Greengate Power, which is proposing to develop nine wind projects in the province, on which it would spend $4 billion. In total the projects, most of which would be built in central Alberta (all existing projects in the province are in southern Alberta) would generate 1,550 MW, equivalent to about 10 per cent of Alberta’s existing power.

There are also a handful of other small, independently owned companies that are proposing other projects.

And then there’s Shell Canada—a name that doesn’t spring to mind when one thinks of wind projects. However, the company is proposing what would be the largest wind farm ever in Canada for a site near Bow Island. It has negotiated with landowners and conducted the needed meteorological studies, which it started in 2003. It awaits the development of more transmission and expects to file an application in 2012 for the 775 MW Wild Steer Butte wind project.

Shell isn’t the only oil and gas industry player investing in wind in Alberta. Suncor Energy Products, a subsidiary of Suncor Energy, is investing heavily in wind in Canada.

It has a 50 per cent ownership in the 30 MW Magrath Wind Project in southern Alberta and is a partner in the 30 MW Chin Chute project near Taber. Enbridge is involved with both projects. Suncor has proposed six wind farms in southern Alberta, which together would generate more than 530 MW. TransCanada, already a large player in wind in Canada, is another blue chip wind investor, proposing two new wind projects that would each generate 150 MW of power.

Are subsidies needed to support wind and other renewables?

Pembina’s Weis says subsidies are needed to kick-start the development of renewables, which later will be self-sufficient (since they don’t have to pay for ongoing fuel costs). But even David Huggill, the western Canada policy manager for the Canadian Wind Energy Association, which supports the extension of Ontario’s program, admits that the “entrepreneurial environment” in Alberta hasn’t exactly discouraged new wind development, pointing to a lineup of 52 planned projects, which would generate 7,000 MW, waiting to go ahead. And Rob Falconer, director of distributed generation for Calgary-based Enmax Corporation, argues that the province’s unique deregulated market makes it almost impossible to subsidize one power generator over another. “I don’t think wind needs any incentives,” he says.

Energize Alberta readers: Do you think the Alberta government should find a way to subsidize wind?

Are we betting the “wind farm” on large, centralized power plants?

Enmax’s Falconer says the future might be distributed, decentralized power. He suggests it might be a mistake for Alberta to make to big of a bet on centralized power plants—even power plants like wind. “It shouldn’t be an all-bet on wind,” he says. It also shouldn’t be about large wind (or coal or gas-fired plants), he says. He points to advancements in photovoltaic (PV) solar—the kind that can go on the roofs of people’s homes—and says it is becoming more viable to consider that as a source. Prices for solar PV have come down by 50 per cent in the last few years. Small wind turbines are also becoming more viable. In fact, he says Enmax now has 16 small wind test sites in southern Alberta. Small test sites could provide economical power for ranches and businesses first and then gravitate to homes. That’s already happening in Ontario, but the installations are heavily subsidized. He thinks small might be beautiful, without subsidies, in the future.

Energize Alberta readers: What do you think? Is small beautiful?

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Email yourenergy@energizealberta.com with your comments.

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26 • May/June 2010 • Energize Alberta

Hutterites “farm” the wind Wind development becomes a cash crop on southern Alberta colonies The world of the Hutterites, a religious sect whose members live a simple rural life on settlements where they lack access to TV, radio, or the Internet, is becoming decidedly more 21st century these days.

While modern conveniences like washing machines and dishwashers have slowly crept into the lives of Hutterite colony residents in western Canada and the western United States, for the most part, a visit to a Hutterite settlement would be like time travelling back a century.

Except for those wind turbines and solar panels.

“We’ve rented out [colony] land to TransAlta [Utilities] and they have 60 turbines there now,” says Mike Gross, secretary-manager of the 121-resident Pincher Creek Hutterite colony, about 150 kilometres southwest of Calgary. “We’ve leased out two more sections to them and they want to put up 15 or 20 more windmills.”

The first of six smaller 150-kilowatt wind turbines were erected 10 years ago, generating almost one megawatt of electricity. TransAlta more recently erected 54 larger 660-kilowatt turbines, which generated a little over 40 megawatts of power.

The 15 additional turbines, which the Calgary-based company plans to erect now that a new transmission line is being constructed by AltaLink L.P. from Lethbridge to the Pincher Creek area, would be comprised of the 1,800-kilowatt turbines that are now becoming standard.

They would generate 27 megawatts, meaning that the

Hutterite Mike Gross says TransAlta wants to erect 15-20 more turbines. Sixty have already been put up on colony land.

Hutterite colony’s land would support enough wind power in total to light up a good-sized city.

However, Gross points out that the electricity from the wind project doesn’t flow directly to the colony.

“If it did, all we’d need is one turbine,” he says.

Instead it flows to the Alberta power grid.

But that certainly doesn’t mean the colony doesn’t benefit from having the turbines on its land. TransAlta pays the colony a royalty for every kilowatt produced.

“It puts the gravy on the potatoes,” Gross jokes.

Lots of gravy.

He says the colony generates “several hundred thousand dollars” a year from its newest form of farming— harvesting the wind.

The Pincher Creek colony isn’t the only one in the province

to have discovered southern Alberta’s newest cash crop.

The Springpoint Hutterite colony, located 27 kilometres south of the Pincher Creek colony, has twenty-seven 1,800-kilowatt turbines on its land, also leased to a third party.

The 80-resident colony also is paid a significant annual royalty.

In addition, the 82-resident Livingstone Hutterite colony, about 25 kilometres northeast, has 30 of the larger 1,800-kilowatt turbines on land it leases.

Wind power isn’t the only form of renewable energy being used by the Pincher Creek colony.

It currently uses solar panels to power an electric fence and to power a pump that delivers water from a well to cattle.

Gross says the colony at Picture Butte, also in southern Alberta, uses solar energy to heat a hog barn and his colony is also considering that option.

The Hutterites have a rich history, dating back to the 1500s, when they were formed in Germany as an Anabaptist Christian sect that opposed many of the trappings of Christianity, clung to a communal lifestyle, and that also was pacifistic and anti-statist.

Most recently some Alberta Hutterite leaders have threatened to pull out of the province if the government forces them to have their photos on driving licences.

There are three different sub-groups of Hutterites, with 498 different settlements located in Alberta, Saskatchewan, Manitoba, British Columbia, the Dakotas, Minnesota, Montana, Washington State, and Oregon.

“Once a colony gets to have between 120 and 150 [residents], that’s too many and they move to another colony,” says Gross.

Formed in 1926, the Pincher Creek colony is one of the oldest in Alberta. Gross was born on the colony in 1940.

The colony owns or leases 9,400 acres of land, where it grows wheat, barley, hay, and canola and raises 600 pigs, has 450 beef cows, and also raises geese, ducks, chickens and turkeys.

“We’re a real Old MacDonald’s farm,” he says. “And now we farm the wind.”

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Energize Alberta • May/June 2010 • 27

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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 . “Land” ahoy Alberta land sales continue positive trend

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evenue from Alberta land sales continues to rise in 2010.

By the end of April, those revenues had climbed to $622.16 million on the sale of 1.08 million hectares at average price of $574.11 per hectare. In the petroleum industry, “land” refers to the oil and gas rights beneath a particular section of land. To the same point last year, the province had attracted just $73.22 million in bids, when 585,353 hectares were sold at an average price of $125.10 per hectare, during a time that weaker oil and gas prices and the recession firmly gripped the province.

Why it matters: An indication of oil and gas companies’ interest in exploring or drilling for hydrocarbons, land sales are a barometer of the industry’s health. Money received from land sales goes into public coffers.

5. Move on up Drilling activity in Alberta projected to climb

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SAC has raised its forecast for drilling activity, saying that 7,590 wells will be drilled this year in Alberta, a 31 per cent increase over final 2009 drilling levels. The association attributed its more optimistic forecast to three main factors: the increase in the price of oil, the anticipated royalty changes in Alberta, and the general boost in economic activity as the economy emerges from the global recession.

Not everyone is as bullish, though, with some believing the low price of natural gas will continue to suppress drilling activity.

Why it matters: A sustained rise in drilling activity boosts employment for rig workers.

And, if a producer’s new well strikes oil or gas, it leads to more expenditures for companies that provide services to those wells, which results in even more employment for Albertans.

8. Clean slate Encana pitches natural gas for power generation, transportation

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ncana is leading a charge to help increase markets for natural gas across North America, especially for power generation and transportation. “We have a long-term reliable supply of natural gas in North America and the end use of this fuel makes the most economic and environmental sense in any efficient production mode,” says Encana’s top executive, Randy Eresman. But the gas industry also faces a significant lobbying effort from coal-fired utilities and the railways that transport coal. That lobbying is likely more aggressive in the U.S. than in Canada, Eresman suggested.

Why it matters: Natural gas production is expected to rise when growing volumes of shale gas come on stream. It offers a cleaner energy solution—i.e. fewer greenhouse gas emissions—for the industrial, commercial, residential, generation, and transportation sectors.

source: 20th century fox

Is Fort McMurray the new Pandora?

Avatar director James Cameron pans oilsands development

anadian-born Cameron made headlines in April when he said Alberta’s oilsands development is a “black-eye” on the country’s environmental record. He suggested more emphasis be placed on boosting renewable energy use. Premier Ed Stelmach proceeded to invite Cameron to Fort McMurray to witness efforts that are underway to develop the oilsands more responsibly. Avatar takes place on Pandora, where the RDA Corporation is mining a valuable mineral called unobtainium. The planet is inhabited by the Na’vi, a 10-foot-tall blue-skinned species that lives in harmony with nature. The negative impact on Pandora’s indigenous people resonate with real First Nations people, says George Poitras, a former chief of the area’s Mikisew Cree. A month prior, environmental groups ran a full-page ad in a U.S. entertainment newspaper, under the headline “Canada’s Avatar Sands,” which also linked the movie’s plot to oilsands development. No word yet on when, or if, Cameron will visit.

Why it matters: Being cast as an environmental bad boy doesn’t sit well with federal Environment Minister Jim Prentice, who prefers a storyline featuring Canada as a clean-energy superpower. The question is what Prentice (and Prime Minister Stephen Harper) will do about it.

3 . Incentive plan

4 . End of the “battle royale?”

Alberta extends bioenergy credit program

Government releases Competitiveness Review to generally positive feedback

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he province is expanding and extending an incentive program for producers of bioenergy products. Funding under the Bioenergy Producer Credit Program is extended for five years until 2016. The program provides incentives to develop a wide variety of bioenergy products including fuels, power, and heat.

Why it matters: Alberta’s current bioenergy program treats all ethanol equally. The extended program focuses on the potential for second-generation ethanol, which uses feedstocks like forestry, agricultural, and municipal waste. Specifically, the program will encourage development of new technologies and facilities that use non-food crops, waste biomass, or wood.

6. Attention, Walmart shoppers Department store tries out solar, wind systems

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almart Canada is using renewable energy to make its stores and distribution centres more energyefficient. The retail giant’s new $115-million distribution centre just north of Calgary will include 16 solar panels and a 225-kilowatt wind turbine. The goal: to make it 60 per cent more efficient than a typical distribution centre.

The 40,000 square foot building near Balzac is scheduled to open later this year. Each solar-panel system will generate enough power for 39 households a year. The wind turbine should generate enough power for four households.

Why it matters: If the world’s largest retailer can save money using renewable energy, expect to see the technology at other locations. Using Walmart’s own formula, if each of its approximately 300 stores in Canada installs a solar-panel system it would be equivalent to saving enough power for 11,700 households a year.

9. Fast food drive-thru Duo sets world record using waste oil from french fries

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native of Edmonton, Cloe Whittaker, has officially broken the Guinness World Record for the longest journey by car using alternative fuel. Whittaker, along with Tyson Jerry, set the new mark in their “Veggie-Mobile,” a van converted to run on the waste oil from french fries and other restaurant foods. The previous record was 38,137 kilometres. The duo plans to continue their “Driven to Sustain” campaign until they hit 45,000 kilometres.

Why it matters: Biofuels are produced by converting organic matter into fuel. They are an alternative source to fossil fuels and proponents hope their increased use will reduce transportation-related greenhouse gas emissions.

Give peace a chance

Alberta oilsands could aid world peace, says researcher

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he government released its long-awaited Competitiveness Review in early March, to generally positive reviews from the oil and gas sector. Effective January 2011, the province will reduce the maximum royalty rate for conventional oil to 40 per cent (from the current 50 per cent), and cut the top natural gas rate to 36 per cent (from the current 50 per cent). “Alberta’s royalty battles are hopefully behind us now,” says Roger Soucy, president of the Petroleum Service Association of Canada (PSAC). That said, he’s taking a bit of a waitand-see approach as government continues to develop the final details of the plan. Next up? New royalty curves tied to the changes—affecting at what prices the rates will increase or decrease—will be finalized and announced by May 31.

Why it matters: Royalties are an important part of the government’s revenue stream. They help fund programs like health, education, and infrastructure. A well-designed royalty system endeavours to strike the right balance between returning a share of the profits to the province as resource owner, while encouraging risk taking by the private sector to develop the resource, which creates jobs and economic growth.

7. Coal shoulder Ottawa tells power companies to start powering down coalfired plants

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nvironment Minister Jim Prentice has told the country’s major electricity providers that they’ll have to gradually retire their coal-fired plants and replace them with cleaner sources of power. Under Ottawa’s proposal, power companies would have to close their coal-fired plants as they reach the end of their commercial life, largely over the next 10 to 15 years. The companies would not be allowed to refurbish the plants or replace them with new coal units unless they include technology to capture CO2 emissions and store it underground.

Why it matters: Alberta relies on coal for about two-thirds of its electricity generation. Billions of dollars will be required to outfit plants with carbon capture and storage technology. Cleaner-burning natural gas may the beneficiary of Ottawa’s moves cut CO2 emissions.

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Canadian researcher says the province’s oilsands could become a key ingredient for world peace. In his recently published book Canada’s Oil Sands and the Black Bonanza, The Race to Secure North America’s Energy Future, Alastair Sweeny predicts that oilsands development will be a stabilizing force in the world, offering energy security, and that North America could reduce its reliance on importing oil from political hot spots.

Why it matters: Despite gains made by renewable-power generation, we still live in a petroleum economy, Sweeny says. The oilsands will allow the world enough time to make a smooth sea change to sustainable solutions, he adds, while avoiding the risks of dealing with undemocratic and unstable petro-states such as Iran and Venezuela.

www.energizealberta.com

We are Albertans and we are energy. Recognizing the contribution of oil and gas to Alberta’s economy and communities allows us to address the important relationship between a thriving economy, a healthy environment and a high quality of life.

Alberta is Energy showcases the men and women of Alberta, their careers, challenges and accomplishments. Our goal is to build awareness of how the energy industry touches our lives.

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