Energize Alberta May/June 2011

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Student writing winners talk energy

PC leadership candidates Q&A

Keith MacPhail donates to SAIT

May/June 2011

where energy, the economy, and the environment intersect

Waste not, want not Photo: Inside Education

An alliance of southern Alberta communities looks to push waste-to-energy plan forward Diane L.M. Cook Energize Alberta

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ot only are many Albertans calling on industry and government to rely less on fossil fuels for energy and more on renewable energy sources, but they’re also demanding that our waste be managed more efficiently.

A case in point is the Southern Alberta Energy-from-Waste Alliance (SAEWA), a coalition of waste management jurisdictions representing about 60 communities made up of 225,000 residents that is in the incubation stage of building a waste-to-energy facility (WTEF).

In building the WTEF, SAEWA says it will add a fourth R— “recover”—to the standard three Rs of reduce, reuse and recycle. “The fourth R is as important as the other three Rs, and it’s SAEWA’s goal that the fourth R becomes the standard,” says Kim Craig, SAEWA chairman.

The alliance has retained the consulting services of HDR and AECOM Canada to conduct a four-phase study to prove the merits of a WTEF. Phase one was comprised of two tasks: determining waste generation rates and facility sizing; and researching potential combustion technologies. Both tasks are now complete.

“The data collected in task one indicates that there are large quantities of feedstock with adequate heating value, which are suitable for and available to a future waste-toenergy facility in southern Alberta. In task two, there was a number of technologies identified that would be capable of processing the waste identified in task one,” says Craig.

SAEWA is now moving forward with phase two, which will look at material handling and transportation. “In this phase, we will identify waste collection, transportation and handling implications with associated siting opportunities, as well as heat recovery and cogeneration options including potential market/siting opportunities, environmental implications, and the facility permitting and siting requirements,” Craig explains.

Canada lags Waste-to-energy is an environmentally safe and proven technology for providing electricity that has been used successfully in Canada, the United States and Europe ❯❯ continued on page 3

Marshall (L) and Tanner from the Kainai High School team at the Generate 2011 youth summit build a solar lantern with the help of Inside Education’s Milena McWatt.

Generating Alberta’s leaders of tomorrow Unique youth summit focuses on energy literacy Jacqueline Louie Energize Alberta earning about energy in all its forms is something that should be a priority for all Albertans, and Inside Education is doing its part to educate the masses.

That’s why the Albertabased charitable education society organized Generate 2011: An Energy Literacy Youth Summit, which took place in Kananaskis this past March.

The three-day gathering was the first event of its kind and drew participants from urban and rural

schools, from as far north as Fort McMurray and as far south as Pincher Creek.

The event was an intensive learning experience for the 80 high school students and 40 teachers who took part. Topics discussed at Generate 2011 included everything from the oilsands and energy innovations, to nuclear energy, alternative energies, the future of energy use, conservation and climate change—and what this all means for young people, now and into the future.

Speakers represented the petroleum and power generation sectors, as well as academia, government and environmental groups.

Partnered up Inside Education, which partners with government, industry and the conservation sector to provide learning experiences for teachers and students alike, has been offering environmental and natural resources education in Alberta schools for more than 25 years. It provides a variety of programs for teachers and students of all ages, but never together in one program—until now.

“We wanted to focus on high school students, who not too long from now are going to be energy leaders. These young people are a part of Alberta’s energy story,” explains Steve

McIsaac, executive director of Inside Education, which developed and organized Generate 2011.

At the same time, he says the summit was intended to help educate teachers, who will be able to share their knowledge with many other students going forward.

In addition to the presentations, participants had an opportunity for practical hands-on activity. Under the guidance of environmental notfor-profit organization STAR EcoWorks, students assembled solar-powered lanterns that will be sent to communities in Haiti, ❯❯ continued on page 6

www.energizealberta.com

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May/June 2011 • Energize Alberta

They’ve got the write stuff A few months back, Energize Alberta invited Alberta youth to submit their thoughts in written form on energy, the future and how it pertains to them. The most important thing? They engaged in the energy, economy and environmental dialogue this publication is striving to create. While all submissions received were well done, we had to pick one winner from each category—elementary, junior high and high school. A tough chore, indeed, but congratulations Jayden, McKaya and Braden! Job well done.

Alberta’s energy and my future Jayden Metcalfe Grade 1 to 6 student essay contest winner

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lberta and Albertans are very fortunate because the province has significant reserves of oil, natural gas, coal and other natural resources.

It makes Alberta the province with the strongest economy in Canada.

I am 10 years old and I live in Okotoks, Alberta. I have a sister who is four-and-a-half and a brother who is three-and-a-half. Because of the wealth these resources produce, we have a chance for a very good life in our province. But when these resources are produced it can have a negative impact on the air we breathe, the water we drink and the land we live on.

That’s why it’s important for the oil and gas industry to protect our environment as much as possible when we produce the resources. It will also help Alberta’s environment if we all use more renewable energy, such as wind power, solar electricity and other cleaner energy options.

An easy way to both clean up our environment and boost our economy would be to use more natural gas to produce electricity instead of coal. I believe we can have both a good economy and a cleaner environment, but we need to place people over money.

I think our governments should work with companies to make sure our environment is protected as much as possible. That way we will have the best of both worlds— both a good economy and a clean environment. That will ensure a better future for myself, my sister and brother, and all Albertans.

twitter.com/energizealberta

Coal energy McKaya Baril Grade 7 to 9 student essay contest winner

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here are several different types of energy in Alberta. One very important one is coal. Alberta is the largest producer of coal in Canada, and the home of 70 per cent of Canada’s coal reserves.

Coal is a complex combination of materials, and the combination can greatly differ from one formation or deposit to another. These differences result from the varying types of vegetation from which the coal originated, the depths of burial and the temperatures and pressures at those depths, as well as the length of time the coal has been forming in the deposit. The varying amount of minerals in a coal deposit may also have a significant effect on its properties and classification. In addition to carbon, coals contain hydrogen, oxygen, nitrogen and varying amounts of sulphur.

Coal is used to generate electricity in the production of primary iron and steel, and is an important source of energy for industrial processes such as cement manufacturing. Coal is one of the most abundant fossil fuels in the world. Most of Alberta’s coal is extracted using surface mining techniques. With open-pit mines, as mining progresses, the pits are widened and deepened. Typically, a number of different pits are developed one after another.

Coal is a fossil fuel that can be burned, and this is what creates coal energy. Coal energy is a form of energy that is known to be non-renewable. We need to be careful how much coal energy we use, because we have a limited supply of it. Coal energy is also used for powering or heating industrial plants or manufacturing plants, and it is also used to create steel.

Coal is known as a hydrocarbon, and it is classified according to the quantity of heat or energy that it provides.

How it is ranked or classified depends on the amount of carbon that it contains. Ranks of coal are known as brown coal (lignite), very soft coal (sub-bituminous coal), soft coal (bituminous coal) and hard coal (anthracite). The most commonly used coal, and also the most abundant type, to create energy is soft coal, or bituminous coal.

There are both advantages and disadvantages to using coal energy to produce electricity. The largest advantage today is that coal energy is an affordable energy source as its price has maintained stability over the years in relation to competing fuel sources. It also is available in great abundance, despite the fact that it is non-renewable.

Unfortunately, however, its greatest disadvantage is that it is not a clean fuel, and coal energy produces an enormous amount of pollutants and gases. In fact, coal energy is known to produce twice as many carbon dioxide gases as natural gas. Because of these pollutants, coal energy is not the most environmentally friendly energy despite its affordability. Coal can be a very useful resource, if you use it right! So don’t waste it!

The winners were given an Apple iPad 2 for their efforts.

From left to right: Jayden, McKaya and Braden.

Sustainable energy: a problem, a solution… is it possible?

Braden Thorvaldson Grade 10 to 12 student essay contest winner

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believe that Alberta can build a sustainable electricity future by investing more money into local renewable sources of energy, such as solar and wind power.

Alberta has one of the largest reserves of natural gas, oil and oilsands in the entire world, as well as an estimated 37 billion tons of coal, according to the latest estimate by the government of Alberta. These assets would make Alberta more energy sufficient than most countries on their own, much less provinces in those countries.

However, these supplies are non-renewable resources, and investment will eventually have to be made into research and development of other renewable sources of energy.

Some people in the province object to these new alternatives, reasoning that the increase in electricity rates would be too great if Alberta were to focus on solar power or wind turbines rather than continue with the burning of coal and fossil fuel to provide electricity. Another argument for maintaining the status quo would be that coal and oil companies employ tens of thousands of Albertans, and provide some of the most sought-after careers in the entire province. If the focus changed to renewable energy sources, these resource firms may begin to lose money and start cutting back workers to maintain margins, creating widespread unemployment.

I believe that if Alberta continues down this road, then we are headed for a very uncertain future. Our oil reserves may last us 30, possibly 40 years, with our coal supplies giving out a few decades after that, leaving us with very little. However, countries without the benefit of our natural resources will have exhausted their supplies years earlier, and will have had to develop new sources of electrical generation, possibly through renewable resources.

Alberta, with its research into new sources of energy put on the back burner, would be entirely dependent on energy imported from elsewhere to supply our everincreasing needs. My suggestion isn’t to stop using these resources entirely in hopes that this future would be avoided, quite the contrary. Continue using the oil- and coal-powered plants as we have for years, but begin to develop newer, cleaner, more renewable sources of energy as alternatives to our natural assets as well. It may be more costly to generate electricity at first, while the infrastructure is built, but the advantages of having a near-infinite supply of power to draw on will become evident very soon.

Energize Alberta • May/June 2011 Continued from page 1

Energy from waste

for decades. However, Craig says Europe is much more advanced than Canada is in the waste-to-energy industry.

“A major reason for this is the high numbers of population that European countries have,” he says. “For example, in Germany, there are about 81.7 million citizens and the country is roughly half the size of Alberta. In Canada, there are about 34.5 million citizens and the country is [many] times the size of Germany. Germany is now banning landfills and that decision would most likely be based on that country’s lack of available land for landfills and its high numbers of population.”

The biggest benefit of a WTEF is that it can divert significant amounts of waste currently being landfilled. As Craig points out, landfills are becoming more difficult to get approval for and more expensive to operate, in addition to facing more stringent regulations.

“People also want landfills to be closed because of the amount of methane and greenhouse gas emissions that they emit. We need to find alternatives to landfilling our waste and WTEFs are definitely one viable option,” he says.

In Alberta, Edmonton will be the first to have a WTEF in this province, with a commercial waste-to-biofuels facility scheduled to open in 2012.

At a capital cost of $80 million, the biofuels facility will produce and sell next-generation biofuels, including methanol and cellulosic ethanol, from municipal solid waste.

The feedstock for conversion to biofuels will come from Edmonton’s composting, recycling and processing facilities—waste that would otherwise be landfilled. It is anticipated that 100,000 tonnes of feedstock will be processed per year, allowing the city to divert up to 90 per cent of waste from its landfills—a considerable improvement over the 60 per cent currently diverted through recycling and composting.

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This rendering shows Edmonton’s planned WTEF, which will be the first in Alberta. The waste‑to‑biofuels facility is scheduled to open in 2012.

Illustration: City of Edmonton

Countering the critics Converting waste into energy and diverting garbage from landfills while earning revenue in the process sounds almost too good to be true.

Detractors of WTEF say the emissions from the facilities such as dioxins and furans, sulphur dioxide, nitrogen oxide, bottom and f ly ash, mercury and other metals are harmful to humans and the environment.

But Glenn Bohn, a communications specialist with Metro Vancouver, which operates a WTEF in south Burnaby, isn’t buying the criticism. “Typically, critics have used information from old, highly polluting incinerators that are no longer allowed in Canada so that information is no longer relevant to today’s modern WTEFs.” His company’s WTEF is a modern facility equipped with proper pollution control systems such as activated charcoal beds, spray dry scrubbing, and carbon and ammonia injection systems.

“Metro Vancouver’s pollution control systems greatly reduce the levels of emissions thereby resulting in very low amounts or no emissions being emitted from the facility, which means the facility poses little to no health or environmental risks,” Bohn says.

Craig says the next step in SAEWA’s plan is completing the four-phase study. The third phase will explore facility capital and operating costs and should be completed by the end of 2011. The final phase will include a technology review, tests, visits to other WTEF sites and stakeholder meetings.

Once the entire study is complete, Craig says SAEWA will review all of the factors to determine if a WTEF would be a viable solution for southern Alberta’s waste.

“First we have to make sure that the economic, financial and socio-economic factors are there. If they are, then we will move forward with the project. If they aren’t, we will have to work to ensure those factors are present in order to bring WTE to southern Alberta.”

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May/June 2011 • Energize Alberta

No change for the meter Smart meters not likely coming to Alberta any time soon Jim Bentein Energize Alberta

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lbertans shouldn’t expect their power meters to become too smart any time soon, even though it’s a trend that has spread throughout the United States and Ontario.

Those in charge of meter infrastructure for some of Alberta’s largest utility providers say they’re unlikely to implement so-called “smart meter” technology unless ordered by the provincial government.

“There’s no real benefit to deploying smart meters to our customer base,” says Rob Harris, director, smart grid technologies

communicating with their distribution company on a regular basis. For instance, consumers can run their dishwashers or clothes dryers during non-peak hours, when electricity costs less.

But Harris says unlike states like California, where smart meters have been installed at virtually all homes and businesses, and in Ontario, where they have also been rolled out province-wide, there’s no significant benefit to using the meters in Alberta.

Power consumption simply doesn’t vary as much in Alberta as it does in Ontario or most U.S. states, where electricity use in the summer is a huge factor, he says.

FortisAlberta construction foreman Kelly Zimmer discusses a new automated meter with customer Linda Nahajowich.

Photo: FortisAlberta

for Calgary-based ENMAX, which provides electricity to 650,000 customers in the Calgary area. “In Ontario, time-of-use technologies might make sense, but in Alberta we have flat rates.”

What that means is that rates for consumers under Alberta’s deregulated electrical power system basically stay the same night and day, during peak and lower load times.

That’s the way the system is designed.

As a result, Harris says there would be little advantage for ENMAX to spend the approximately $260 million or more it would take to install the more sophisticated meters throughout the company’s service area.

Smart meters are being promoted in many parts of the world because they are said to aid in reducing electricity consumption.

Utilities use them to better manage intermittent renewable power, while consumers use them to manage their own consumption by

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“Our heaviest load in Alberta occurs on December 24, when lighting is more heavily used than at any other time,” he says. “In fact, lighting use is our single largest source of power consumption.”

That isn’t to say that Harris doesn’t see a time when some customers may want to have smart meters installed. That demand will likely come from early adopters who are “green energy savvy,” he says.

For instance, those who have solar panels or small wind systems installed (ENMAX now offers those systems province-wide) might want to better manage the integration of renewables with power from the grid.

Harris, who has installed a solar panel system himself at his Calgary home, says it can sometimes provide 20 to 30 per cent of his home’s power consumption. A smart meter might allow such sophisticated consumers the ability to ramp down their consumption

from the grid.

However, he adds that for the most part, there’s no advantage to what is termed “time-of-use pricing.”

“We don’t know the price of the electricity until after it’s used,” Harris explains.

Also, since virtually all of the company’s customers live in an urban area, it’s simply not very complicated having meters read manually by existing ENMAX employees. However, he says utilities that service large rural areas may have a different philosophy.

In fact, that is just the case with a large rural utility provider in the province.

FortisAlberta, which oversees 112,000 kilometres of distribution power lines and provides electricity to 500,000 Albertans, mostly in rural and small-town areas, has already replaced 491,000 meters with ones that have automated meter technology (AMT) capability. The company spent $125 million doing so, according to spokesman Kevin Haslbeck.

While the AMT devices Fortis has installed don’t allow for time-of-use consumption information or other two-way communication, they could be adapted to allow such details to be gathered.

“The technology we chose has the capability for that functionality, but the benefits in Alberta aren’t the same as they would be in other provinces,” Haslbeck says. However, he adds that it was still worthwhile for the company to spend the money to deploy the meters.

In doing so, Fortis was able to end a contract with a company that provided manual meter reads. (Haslbeck wouldn’t say how much Fortis is saving annually by doing so.) The company can now also remotely obtain up-to-date consumption information monthly, and there are environmental benefits, as well.

“By changing from manual to automated meter reads, FortisAlberta will eliminate more than 1,000 tonnes of vehicle carbon dioxide emissions

annually,” he says. “Also, all old meters will be recycled, ensuring zero landfill waste.”

Like its Calgary counterpart ENMAX, EPCOR Utilities, the company that distributes power to customers in Edmonton, isn’t planning to install smart meters any time soon.

However, Rob Reimer, director of metering and wholesale energy for EPCOR, says the company has installed radio frequency meters for about 10 per cent of its 340,000 power customers in the capital city. Those meters can be read from a street location.

He says EPCOR applied several years ago to the Alberta Utilities Commission (AUC) to install AMT meters for all of its customers, seeking a rate increase to reflect the extra cost. That request was denied.

However, last year after taking part in a smart grid inquiry conducted by the AUC (ENMAX, Fortis and ATCO Electric, the province’s other distribution utilities, also participated), the company was asked to resubmit its application. Depending on how sophisticated the meters are, it could cost from $300 to $500 each, which would involve a multi-million-dollar investment, Reimer says, adding that EPCOR supports a shift to some form of AMT or smart meters.

“We certainly see value in it, even if there are not time-of-use opportunities for customers,” he says. “As we as an industry move to a smarter grid, it is a fundamental piece [of technology] because it would allow for visibility across the grid.”

Reimer notes that numerous studies have indicated that some kind of smart meter approach leads to a drop in consumption of anywhere from five to 15 per cent. EPCOR and other utility providers are conducting a study now, in co-operation with Alberta Innovates, to determine what advantages there would be if smart meters were adopted in Alberta, he adds.

New look, new energy at www.energizealberta.com Check out the upgraded energizealberta.com website for additional stories, polls, a link to the Energy IQ quiz and a searchable archive of past editions.

You can also comment on our stories and forward them to friends. In addition, the site houses a directory of key players on the energy literacy stage.

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

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Energize Alberta • May/June 2011

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image: enmax

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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.

Signs of life

Price shock Alberta power bills expected to stay high for near future

Calgary’s FirstEnergy Capital is predicting significant increases in power prices for Albertans in the near future.

The wholesale electricity price in the province is expected to average $66.77 per megawatt hour this year—nearly 50 per cent above FirstEnergy’s previous estimate of $45.11 per megawatt hour. The analysis firm attributes the jump to the unexpected closure of TransAlta’s aging Sundance 1 and 2 coal-fired generators earlier this year.

Why it matters? FirstEnergy expects the higher prices will encourage construction of new power generation plants, but new facilities can take years to build. Natural gasfired generation, as well as electricity purchased from British Columbia and Saskatchewan, will take up the slack left by decreasing supplies of low-cost coal power. Until the province stabilizes its electrical supply, consumers can expect to face continued volatility in the power market.

Photo: © istockphoto.com/blackred

Alberta conventional oil production comes alive after years of declines

Following years of declining production, Alberta’s conventional oilfields are starting to show signs of renewed activity. According to the Canadian Association of Petroleum Producers, conventional oil production in the province averaged 459,000 barrels per day last year. The Alberta government’s latest budget predicts a three per cent increase, with production for the current year rising to 484,000 barrels per day. “For the first time in several years, output is projected to increase and we will now see the industry getting into a growth period,” says Alberta Energy Minister Ron Liepert.

Why it matters? With high commodity prices driving interest in oil drilling, resources once thought depleted are now becoming viable prospects thanks to technological innovations such as horizontal drilling and multistage fracturing. There are currently 1.44 billion barrels of conventional crude reserves in the province, according to the Energy Resources Conservation Board.

New technologies may push that number higher as more reserves become accessible, resulting in greater royalty revenues for the province.

The $1-billion Shepard natural gas power plant set for completion by 2015.

Shepard stays close to flock Power plant could supply half of Calgary’s power needs ENMAX has announced plans to move forward with the construction of its Shepard natural gas power plant in southeast Calgary. The $1-billion facility will feature two 240-megawatt natural gas-fired generators, as well as a 320-megawatt steam‑powered turbine. Construction is expected to commence in summer this year, with completion by 2015.

Why it matters? ENMAX says Shepard could provide for as much as half of Calgary’s energy needs, while also cutting CO2 emissions in half when compared to conventional coal-powered plants. Company chief executive Charles Ruigrok also notes that the new plant will be “located close to where the electricity will be consumed, reducing the transmission infrastructure required to deliver power to our customers.”

Top 10 continued online...

For the rest of the Top 10, visit energizealberta.com.

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like a big team, with everyone wanting to do a good job.

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Employees work like a well oiled machine, and we have fun doing it.

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Volunteerism and charity are very important here.

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Devon is highly involved Ask employees why Devon is a great place to work and you’ll get lots in the communities where of reasons. But the biggest reason of all? It’s each and every one of our it operates. It gives time employees and contractors. off for employees to volunteer.

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May/June 2011 • Energize Alberta

Continued from page 1

Generating leaders Uganda and South Africa that don’t have ready access to electricity.

Generate 2011 garnered rave reviews from participants, who appreciated the opportunity to learn about the many facets of energy in Alberta.

“It was an amazing experience for our students,” says Fairview High School teacher Jeanne Lawrence.

Amy de Jong, a Grade 9 student at Fairview, says she found the summit “really informative—I learned a lot.”

“The speakers were really well balanced. The way it was organized was really well done, and I liked meeting the sponsors and interacting with all the other students.

It’s a lot more interesting to me now that I’m more educated about it.”

“Energy literacy is so important. No energy source is perfect—all have pros and cons, costs and benefits.”

— Patricia Etris, President and Board Chair, Inside Education Industry impressed For their part, industry members—including sponsors and speakers—were very impressed by the students, and felt “an incredible amount of confidence in the next generation,” McIsaac says.

A total of 13 sponsors provided funds for the schools, so they could attend the summit. “We couldn’t have done it without the support of the sponsors,” McIsaac says.

“Our supporters in the energy sector wanted to invest not only in Inside Education, which is always very welcome, but also to invest in these young people’s learning, and provide an opportunity for them to have their questions answered.”

Encana was one of the sponsors, sponsoring two schools to attend Generate 2011. The company also provided a speaker for the event. Patricia Etris, community involvement team lead at Encana, thinks that Generate 2011 provided participants with an excellent opportunity to broaden their horizons.

“Energy literacy is so important. No energy source is perfect—all have pros and cons, costs and benefits,” says Etris, who is Inside Education’s president and chair of the board.

“It’s important for young people to understand the issues in order to make informed choices in their lives. They need the facts to make the right choices. Giving them programs like this is a great opportunity for them to ask questions and get real facts from people who know.”

Although Generate 2011 lasted only three days, the learning doesn’t stop there. Inside Education is challenging students to think critically about what they learned,

and to put their ideas into action in a project to share their knowledge with others. Inside Education has challenged the teams to think about how they could share this information with the other students in their respective schools, and assume a role as energy literacy ambassadors.

“The challenge extended to the school teams is to develop a plan of action to help the other students in their school become more energy literate, based on what they learned,” McIsaac explains. “The challenge is to share the learning and the motivation toward learning about energy.”

Projects planned Each team of four students and two teachers created an action plan for a project in their school or community to promote energy literacy and stewardship. Each school is developing its own plan, submitted to Inside Education in April, and they must carry out their project before the end of June.

For their follow-up project, the four Fairview students who attended Generate 2011 will do a photography show on the different aspects of energy in the Peace Country, with assistance from supervising teachers Jeanne Lawrence and Earl Verbicky.

Four students from Kainai High School in Stand Off, south of Lethbridge, are planning two energy projects after attending the youth summit. Under the guidance of principal Annette Bruised Head and teacher Darcie Thomas, the students will organize an energy day in June, with speakers who will discuss topics ranging from solar power to wind power and more.

A second, larger project will involve getting a solarpowered greenhouse up and running. The Kainai group would like to use the school’s greenhouse (currently nonoperational) to grow native plants and vegetables for use in the school cafeteria, and for sale at a mini farmer’s market, to sell to people on the Kainai First Nation. The group plans to use any money they earn to purchase more solar panels for the school greenhouse.

Kainai Grade 12 student Tanner Singer appreciates the wide range of knowledge he gained at Generate 2011—everything from new technologies to increasing energy consumption and the important role that energy companies play in the economy.

“I got to see different points of view, and really understand

Photo: Inside Education

Photo: Inside Education

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Above: Bryan Lentz of Fairview High School races a solarpowered car. Below: Larissa of the Kainai High School team with components for building the solar lantern. the differences between natural gas, coal, wind and stuff like that. It was a good experience,” Singer says.

“We were made more aware of all the different uses of energy, and the environmental issues that go along with energy sustainability,” explains teacher Darcie Thomas, who attended the summit along with Kainai High School’s principal. “[Generate 2011] really presented both sides of the issue. It was an amazing opportunity for our students, and it was a lot of fun. I would like to thank all the sponsors who sponsored our school and the rest of the schools to make this happen.”

According to McIsaac, there is an ever-growing need for energy education in the classroom, and that’s why events such as Generate 2011—which organizers hope will be an annual event—are so important.

“Even if you don’t agree 100 per cent with the way things are going, at least now there’s a better understanding of the issues—that’s our ultimate goal for all of our programs,” McIsaac says.

“Inside Education helps this generation become critical thinkers, versus just being critics.”

For more information, visit www.gener8.ca and www.insideeducation.ca.

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Energize Alberta • May/June 2011

Remembering his roots

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Jacqueline Louie Energize Alberta

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rom the time he was a petroleum technology student at SAIT back in the early 1980s, Keith MacPhail had a vision of running an energy company.

Decades later, that vision came to pass. As chief executive officer of Bonavista Energy, a Calgary-based oil and gas company with a market capitalization of nearly $5 billion, MacPhail has not only achieved his dream, but is also keen to help young people achieve their goals and realize their full

and with the combination of those things the sky is the limit.”

In recognition of MacPhail’s record-setting donation and how he has inspired others to contribute, SAIT has named its energy school the MacPhail School of Energy. It will be housed in the JohnsonCobbe Energy Centre, one of three buildings making up the Trades and Technology Complex.

The Aldred Centre, another building forming part of the complex, will be the predominant home for the School of Construction and the School of Manufacturing and Automation.

Born and raised in Medicine Hat, MacPhail

“Ever since I was at SAIT, I had visions of running a company one day as the president and CEO.” — Keith MacPhail, Chief Executive Officer, Bonavista Energy potential. That’s why he made a $10-million donation to SAIT Polytechnic in 2005, helping kick-start the institution’s planned Trades and Technology Complex, which will benefit both students and industry.

MacPhail also chairs the Promising Futures fundraising campaign for the complex, which is currently under construction and scheduled to open in the fall of 2012.

“The bottom line is that you have to love what you do—you have to be passionate about it,” MacPhail says. “In my case, I love the oil and gas business, and I love the people that work in this business. I’m competitive and I work hard,

attended his hometown college before enrolling in SAIT’s two-year petroleum engineering program, graduating in 1981. He worked for a year so he could make enough money to return to post-secondary studies, earning a bachelor of science degree (honours) in petroleum engineering at Montana College of Mineral Science and Technology in 1984.

After graduating, he spent five years at Poco Petroleum, where he worked his way up from production engineer to production manager. In 1989, he moved to Canadian Natural Resources, and by the time he left the company in 1997 to get things

going at Bonavista, he was Canadian Natural’s executive vice-president and chief operating officer.

“Ever since I was at SAIT, I had visions of running a company one day as the president and CEO,” he says. “I guess I could have eventually done that at Canadian Natural, which was and still is an excellent company, but I chose to go to something a little bit smaller.” Fourteen years ago, Bonavista was producing approximately 2,500 barrels of oil equivalent per day and had a market capitalization of $20 million. Today, Bonavista has a market capitalization of nearly $5 billion and production of 68,000 barrels of oil equivalent per day.

“The experience at SAIT was extremely valuable for me, in particular because I didn’t have a great deal of confidence academically coming out of high school and college, probably because I didn’t apply myself,” MacPhail recalls.

“When I was in Medicine Hat, I had the opportunity to work in the oilpatch and acquired a keen interest in the business. But I was nervous about my own abilities to further my education, so SAIT was an excellent place for me. It was a very practical learning experience and I really excelled there. SAIT, in a way, started me on my career—so I hold a soft spot in my heart for SAIT because of that.”

When MacPhail was approached in 2005 to make a donation to SAIT, he was concerned to hear about the bottlenecks within the system. At the time, the institution was turning away 3,000 to 4,000 qualified applicants each year. “That concerned me, because I kept relating it to myself. If I was graduating today with the marks I had back then, I probably wouldn’t get into the school,” he says. “It’s pretty

illustration: sait

SAIT helped Keith MacPhail realize his dreams and now the oil company executive’s $10-million donation will help the next generation realize theirs

SAIT’s MacPhail School of Energy will be housed in the Johnson-Cobbe Energy Centre. disappointing to know there are kids out there that want to further their education but can’t because there isn’t enough space, teachers or teaching tools to allow them to enter.

That really resonated with me. And having a passion for education right from the get-go—education is very important to our family, and my father was a teacher—I just thought this was the right thing to do.”

There is also a side benefit to his donation that will be good for his own business, he adds. “There is a shortage of skilled workers in the oil and gas industry, with the oilsands gaining momentum and drilling activity picking up again. We are in desperate need of qualified trades and technology workers—

the type of worker that SAIT produces.”

The $400-million Trades and Technology project will create approximately 740,000 square feet of additional learning space at SAIT. Once it’s fully up and running, SAIT will be able to accommodate in the order of 8,100 additional full-time equivalent students.

“It’s gratifying to know that not only will SAIT be able to allow more students into the school, but the learning environment, with the new space and new equipment, will provide an education second to none when it comes to not only the trades, but also all of the different programs that SAIT offers,” MacPhail says.

In 2008, SAIT received $300 million from the

provincial government to be put toward the total project cost, and is now in the process of raising $75 million from the private sector through its Promising Futures campaign. To date, the campaign has reached nearly $70 million, and MacPhail is hopeful that within the next six months Promising Futures will have fully realized its goal.

Looking forward, he hopes to be with Bonavista “for as long as the company needs me—not necessarily in the same capacity. I would still like to remain part of a successful, growing company.” In addition, he has enjoyed his role in not-forprofit initiatives such as SAIT’s Promising Futures, “so I can see dedicating a little more time to similar projects down the road.”

Alumnus serves as role model for next generatioN SAIT alumnus Keith MacPhail is a role model who can exert a significant influence on young people, says MacPhail School of Energy dean Mary MacDonald. What MacPhail has accomplished throughout his career, MacDonald believes, can inspire students to work harder and really go after their dreams.

Named for Keith MacPhail, SAIT Polytechnic’s MacPhail School of Energy will be housed in the new Trades and Technology Complex, now under construction. The complex has been designed to be a world-class facility that will provide multi-disciplinary programming and enhance

the quality of SAIT’s trades and technology education. It’s expected to play a critical role in addressing Alberta’s future skilled labour shortage by delivering thousands of new apprentices and graduates in energy, construction, manufacturing and automation.

“It’s really a lifetime opportunity to be building such a large project, and it will house almost all of the MacPhail School of Energy faculties,” MacDonald says. “It allows us to increase our capacity and our programs. It allows us to have a facility that is second to none, and train people who will be better equipped for the energy sector.” www.energizealberta.com

8

May/June 2011 • Energize Alberta

Q&A with the PC

leadership candidates

Three out of the five hopefuls offer their thoughts on some pertinent energy-related issues With Premier Ed Stelmach having announced his intention to step down effective this fall, the Alberta Progressive Conservative Party’s leadership race is beginning to heat up. As of press time, five candidates had formally announced their intention to seek the top job: Gary Mar, Ted Morton, Doug Griffiths, Alison Redford and Doug Horner. Energize Alberta asked each candidate to respond to five energy-related questions. While all five candidates and their respective campaigns initially said they would accept the invite, at the last minute both Horner and Redford backed out. What follows are the answers from Mar, Morton and Griffiths.

Q:

Where do you see the balance between environment and the economy in the oilsands?

Has the province done enough to encourage growth while protecting the environment?

Gary Mar: There are no trade-offs between environmental policy and building a strong economy.

If Alberta wants to continue to develop a robust oilsands industry, government must respond to the environmental challenges that accompany this type of development. Albertans expect government to balance the importance of the environment with the need to grow their province’s economy.

Recent scientific panels have shown that Alberta can—and should—do a better job of water monitoring in the oilsands. One step towards doing this is ensuring government has the information it needs to assess and mitigate the environmental impacts. I think the province must consider the establishment of an independent environmental monitoring entity. The more data government has in regards to what the impacts are, the better it will be able to address them.

Ted Morton: My views on environmental stewardship are grounded in the same principle as my views on public finance: just as it is morally wrong to leave unpaid government debts to our children, so is it wrong to leave them an environmental mess.

Striking the right

twitter.com/energizealberta

balance between economic development and environmental stewardship in the Alberta oilsands will continue to be a work in progress. Industry and government have come a long way in the past four years, but continuous improvement must be the standard—I will work to sustain this good work.

The challenge of the oilsands is more than just the environment‑development balance. Environmental outcomes must be good enough to prevent boycotts of Alberta oil driven

by ENGOs (environmental non-governmental organizations) from succeeding and to prevent federal intrusion into provincial jurisdiction.

The key to achieving these positive outcomes— to secure Alberta’s continued economic growth—is to implement the Lower Athabasca Regional Plan (LARP), the regional land-use plan developed under the Alberta Land Stewardship Act (ALSA). Partnering with industry and environmentalists, the Alberta government has identified significant conservation areas, while still allowing bitumen production to triple over the next two decades.

Doug Griffiths: The premise of the question is that the environment and the economy are opposing issues and they must be “balanced.” This is a misleading assumption. If environmental and economic policies are well founded and implemented responsibly, they can complement one another. In

developing Alberta’s policies for environmental stewardship and economic growth, we must look for opportunities to maximize the benefit to both.

Has the province done enough? No. We need to continually improve through innovation and new technology. The moment we say we have “done enough” is the day we start falling behind.

My goal is to foster conditions that brand Alberta and Canada as a global leader in both energy development and environmental stewardship.

Q:

What plans do you have to add more renewable energy to the provincial electrical grid?

Mar: It is important for Alberta to have a diverse mix of energy. Many folks may be surprised to learn that our province has some of the largest renewable energy potential in the country. I believe Alberta has already shown great leadership in the development of non-renewable resources and, as Alberta’s leader, I would support this same leadership in the development of renewable resources, expertise and technology from Alberta entrepreneurs in the private sector.

Morton: I would continue to encourage new hydro development in the north and wind and solar innovation in the south. Alberta is already the national leader in wind power, and we should build on this. I will explore the feasibility of tax incentives for forest

companies and oilsands upgraders that invest in new cogeneration. As prices for renewable energy become more competitive, I will ensure Alberta is ready. While natural gas and in situ coal gasification are not renewable, I will also encourage their use as a cost-effective way to reduce Alberta’s cumulative carbon footprint.

Griffiths: Supporting the development of transmission infrastructure connects renewable energy sources to Alberta’s interconnected electrical grid. Ensuring an electricity market is in place to assist in drawing in renewable energy sources— that may have previously been cost prohibitive—is critical. As well, ensuring the electric system itself is prepared to integrate new forms of energy production safeguards against

Saskatchewan, should be developed in a manner that balances the economic, social and environmental goals that all Canadians share. But provinces hold the responsibility for developing these resources, which will continue to be important economic drivers for Canada. Through constructive relationships like the New West Partnership, western provinces have the opportunity to work together and lead the national agenda on energy. The development of a national energy plan must be a provincially driven collaboration. Such a strategy must ensure that Alberta, western Canada and the country receives maximum benefit from their energy resources now and into the future. I will watch with great interest as Alberta hosts the Energy

into the political arena, the object becomes not wealth and job creation but vote creation, and the old game of regional division and wealth transfers immediately takes over.

Unfortunately, the way energy issues—specifically oilsands—were handled in the recent federal election point to the risk of this dialogue becoming politicized. The opposition parties all advocated energy policies that penalized Alberta and purported (wrongly) to benefit Central Canada. We cannot allow a national energy strategy to degenerate into another political raid

by Ottawa on Albertans’ resources—which is what the last “National Energy Policy” was.

Griffiths: There is potential value in a national energy strategy, if Alberta, as a

According to the PC Association of Alberta website, the leadership vote is expected, but “certainly not confirmed,” to take place on Sept. 17, 2011.

Doug Griffiths

Gary Mar

Ted Morton

They’ve spoken, you’ve read! Now visit www.energizealberta.com for more Q&A responses from the candidates, as well as the chance to rate their responses in our online poll. future access issues. These are all significant parts of any long-term plan to add more renewable energy into Alberta’s electrical grid. While I understand the government does not directly influence the supply of energy, it does, and under my leadership, would continue to, support policy enabling long-term planning of renewable energy industry development.

Q:

How important is the creation of a national energy strategy? What role will the Alberta government play in developing such a strategy?

Mar: I believe all Canadians would benefit from a national energy strategy. Canada’s natural resources, whether they are in Alberta’s oilsands, British Columbia’s shale gas or potash from

and Mines Ministers’ Conference this summer and I would encourage the western provinces to take the lead role in developing a national energy strategy.

Morton: Be careful what we wish for! Is the recently discussed national energy strategy a dialogue or a plan? Many policy decisions that Alberta needs to optimize our oil and gas resources require cooperation from other provinces or the federal government: pipelines to the West Coast to achieve market diversification to Asia; increased capacity for bitumen exports to the United States; and the viability of pipelines to Eastern Canada. As an exercise in “energy literacy” and policy dialogue, a national energy strategy makes sense.

But this assumes a discussion based on economic and business fundamentals. The risk is when this discussion shifts

national leader in energy production and supply, is included as a strong participant in its development. Our influence in this process will be best leveraged by working with our partners (British Columbia and Saskatchewan) in the Western Economic Partnership to align our common energy interests. A strong western voice is needed to ensure any future national energy strategy does not negatively impact western Canada’s energy development. Through the Western Economic Partnership (the strongest economies in the nation), I believe we will not only affect the development of a sound energy strategy for the nation, but that we will write it. Our economic strength in the nation and the globe depends on the West setting a sound strategy that serves our long-term interests.

Energize Alberta • May/June 2011

Seeking alternatives Alberta oilsands producers and government hope to gain access to new markets

T

he quest to create access to new markets for oilsands crude is at a fever pitch these days as industry and the Alberta government continue to grapple with two interrelated and equally significant issues.

The first is the public relations battle brewing as some politicians and environmental groups south of the border have taken to calling oilsands production ”dirty” oil while demanding the United States government significantly reduce or even halt imports from Canada. The next is the resulting need to open up alternate markets as work gets underway on significantly increasing bitumen/synthetic crude oil (SCO) production.

Over the past year or so, certain U.S.-based pressure groups have increasingly advocated a boycott of Alberta’s oilsands‑generated crude oil, citing environmental reasons. They even have gone to the extent of putting up billboards in some states calling for Americans to boycott Alberta as a travel destination.

Also, a final decision is awaited on a memorandum submitted by 50 U.S. Congress members pleading that the Obama administration not approve the 550,000-barrel-per-day Keystone XL oil pipeline that would ship bitumen from northern Alberta to refineries in the U.S. Gulf Coast.

“In our long history, we have sold into a growth market [the United States], but now there is a

growing threat of that market shrinking,” says Peter Tertzakian, chief energy economist and managing director of Arc Financial. “With major global investments now coming into the province, we are now at a size and significance of becoming a global player, and it is time we emerge as one.”

Money on the table A major benefit of exporting to an international market such as Asia would be a higher price that the province could fetch per barrel—the industry is leaving money on the table by essentially selling its product into only one market.

“In 2011, there could be lost revenues of $10 billion to $15 billion for the province,” Tertzakin says.

Ralph Glass, vicepresident of operations with AJM Petroleum Consultants, also believes that accessing new markets is vital for the long-term financial health of both the oilsands industry, as well as the province.

“In the longer term, reaching out to a new market would mean more royalties for the province and this could eventually translate into more jobs for rural Albertans,” he says, cautioning that if lobbyists are “able to convince Washington not to take Alberta oil, it will have a detrimental impact for the province.”

The economic benefits of opening a new market are too obvious to ignore.

Last April, the trio of Alberta, Saskatchewan and British Columbia formally announced the establishment of the “New West Partnership.” The stated purpose was to do away with barriers to trade, investment and labour mobility within the three

will be addressed with the Northern Gateway pipeline.”

Opening the Gateway Gateway—which will run from Bruderheim near Edmonton to Kitimat in British Columbia to transport 525,000 barrels per day of bitumen for export—is one of three high-profile ventures being proposed, says Canadian Association of Petroleum Producers spokesman Travis Davies.

The other two are the Keystone XL pipeline to

The East wants in The statements were preceded by recent mega investments in Alberta.

In the aftermath of the global economic downturn, the province witnessed some $16 billion to $18 billion worth of investments from Chinese, Korean and Thai oil and gas companies buying stakes in existing or proposed oilsands and shale gas developments.

Final word is still awaited from regulators and the government on both the Keystone XL and Northern Gateway projects,

The route of the proposed Northern Gateway pipeline.

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provinces. But laying the foundation of an energy corridor between the three provinces and Asia was also on the agenda.

The move was strategic. After all, Alberta is home to about 170 billion barrels of proven crude oil reserves—the third largest globally after Saudi Arabia and Venezuela— and with over 90 per cent of its bitumen/SCO being exported to the United States, there is a need from an energy security viewpoint to diversify the potential market.

Aside from the public relations battle currently being waged, oilsands producers face other challenges that impact the economics of their business.

“The capacity of U.S. refineries to handle our oilsands output is at times limited and there are occasions when Alberta producers lose out on price,” explains Andrew Leach, assistant professor at the Alberta School of Business, University of Alberta. “Crude oil is a global commodity and

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Ashok Dutta Energize Alberta

an alternate market will help us in doing away with some of these issues.”

High prospects are also emerging for unconventional natural gas, thanks to cutting-edge technology.

According to several industry estimates, the Montney and Horn River basins in the Western Canadian Sedimentary Basin potentially hold at least 100 trillion cubic feet of tight gas.

“For natural gas, and unlike crude oil, the market is regional. Shale

9

gas developments in the U.S. have resulted in lower prices for Canadian gas in the continent compared with Asia. Long-term, growth opportunities are in Asia and it makes sense to target that market,” Leach says.

Alberta Energy Minister Ron Liepert is all in favour of opening new markets.

“For decades, we have sold beef and agricultural and forestry products to Japan, Korea and other Asian states. As a commodity, I do not see oil and gas as any different. If that is where the market is, then we need to be there.”

Stating that it is not “good business” to be reliant on a single market and customer, he adds: “There will be serious competition and it will not be simple to find a footing in China and India for our crude, but we would like to be part of that competition sooner than later. One hindrance for our province is we are land-locked, but that issue

Grande Cache

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Northern Gateway Pipeline Kilometre Point City Town Northern Gateway Pipeline Route

the U.S. Gulf Coast and the Kitimat LNG (liquefied natural gas) export facility on the west coast of British Columbia.

“We need to improve access to markets both inside and outside North America to strengthen and build Canada’s position as a safe, secure and reliable provider in a world of rising demand for all kinds of energy,” he says.

According to Davies, prime reasons for Alberta’s quest for new markets would be declining heavy oil supplies coming in to refineries on the U.S. Gulf Coast from Mexico and Venezuela, thus opening a new market for Alberta crude.

“China is the largest consumer of oil after the U.S. and economic growth rates are expected to be relatively strong compared to other countries.

Besides, the International Energy Agency has forecast continued growth, led by China and India, between now and 2035,” Davies notes.

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but in the world of energy time is of the essence.

With demand growing in Asia, beginning on January 1 of this year Russian crude oil was being pumped to China via a 300,000-barrelper-day pipeline, on top of the 100,000 barrels per day that is transported on rail.

For its part, for the past six months Saudi Arabia has maintained its position as the single-largest oil supplier to Beijing with exports of 1.04 million barrels per day, according to figures released by the Chinese General Administration of Customs.

It will still be a few more years before substantial volumes of Alberta extraheavy oil are sold to Asian buyers, but AJM’s Glass believes it will be worth that wait.

“We are a country that has taken risks to expand our economic horizons and it is now time to push forward with the delivery of crude oil and natural gas to the Asian markets,” he says.

read more Is the Northern Gateway a nation-building project? Enbridge’s chief executive thinks so.

Find out more at www.energizealberta.com. www.energizealberta.com

10

May/June 2011 • Energize Alberta

SAIT’s got energy Jim Bentein Energize Alberta

Y

ou might say the upcoming seventh annual Getenergy for the World conference is confirmation that Calgary’s SAIT Polytechnic has come of age as a world-renowned oil and gas industry training institution.

You might say that, except SAIT, which has 70,000 full-time, part-time and distance education students, is already well known as a training hub in the energy sector.

“Shell, Chevron, Exxon and other international oil and gas companies do their own internal training, but they look to institutions like SAIT to do a lot of the training,” says John Carlson, associate vice-president of energy at the Calgary-based institution.

London-based Getenergy, an independent facilitator of global knowledge and services related to education and training for the oil and gas industry, appreciated SAIT’s track record in training for the industry enough to hold its annual forum at the Calgary campus this year.

The event, to be held June 7-8, is focused on education, training and human development in the energy industry.

Getenergy for the World will bring together representatives from Canadian and international oil companies and oil and gas industry training providers, as well as energy ministers and their representatives from around the globe.

Participation from over 40 countries is expected, ranging from those in the early stages of exploring and

developing their petroleum resources to those with mature energy industries.

Getenergy’s first meeting was in Houston in 2005. It has since been held in London and Kuala Lumpur, with regional meetings in Basra (the first of its kind held in Iraq), Ghana, Nigeria, Kazakhstan, Libya and other locations. Calgary was selected because of its growing recognition as an international oil and gas industry activity centre, according to Getenergy co-founder and chief executive officer Phil Andrews.

“When the objective of your event is to unite 300 to 400 people from the education and oil sectors, you need to come to a place where both industries feel at home,” he says. “Canada is a vital location for the developing

Photo: Getenergy

Polytechnic institute to host prestigious energy conference

The Getenergy for the World conference was recently held in London, England, and the prestigious event will take place this year on the SAIT campus in Calgary.

oilsands which, in a geopolitical environment in which uncertainty reigns across the Middle East and the nuclear industry is reeling from the Japanese earthquake and tsunami, are a vital and stable resource.

“From the education perspective, organizations like SAIT and NAIT [the Northern Alberta Institute of Technology in Edmonton] have a global reach, and between them have trained more than 100,000 technicians and operators from all over the world.”

SAIT’s Carlson says the event will likely get some spillover attendance from the 2011 Gas and Oil Expo and Conference being held June 7-9 at Calgary’s Stampede Park, which can attract as many as 20,000 registrants and 500 exhibitors.

This year’s Getenergy conference will focus on the requirements and opportunities in the industry in various countries, with the aim of finding collaborative solutions that can meet the education and training demands of the world.

The gathering will feature a series of interactive exchanges and case study workshops, as well as showcase the leading suppliers of education and training from across the world, along with their industry partners.

Carlson says SAIT will be featured front and centre as an institution giving such education, since it offers extensive training to the sector internationally.

For instance, SAIT has offered three different rounds of instruction for students from Angola on how to operate liquefied natural gas (LNG) plants.

“The students come here from Angola for three months and learn how to be an LNG plant operator,” he explains.

“Ninety-two students just left in March and another 40 are coming [this summer].”

Another group of 18 oil and gas industry workers from Venezuela, most of them engineers, geophysicists and other professionals, recently were at the SAIT campus to study Canadian oil industry culture and professional development.

For more information on the Getenergy for the World conference, visit www.getenergyevent.com.

The Central Alberta Rural Electrification Association (CAREA) is a consumer-owned, rural utility, spanning 11 counties and servicing over 8,300 rural Albertans – including farmers, oil and gas companies, commercial and industrial businesses and much more.

When the big Investor Owned Utilities wouldn’t bring power to the rural areas back in the 1940s, farmers stepped up and got the job done – and the REAs were born.

Today, being a CAREA member is more than just a time-honoured tradition. It’s a way of life. Members are involved in the association and have access to CAREA’s financial statements each year. Any savings CAREA collects are distributed right back into the hands of the members, rather than filling the pockets of corporate stockholders.

ATCO Pipelines provides reliable and efficient delivery of natural gas and is committed to operational excellence and superior customer service while ensuring the safety of our employees and the public.

It is CAREA’s mission to deliver efficient energy services, and the association’s vision is to be rural Alberta’s leading energy service provider.

For more information, you can visit carea.ca.

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Energize Alberta • May/June 2011

11

Framework needed to deal with labour crunch Jim Bentein Energize Alberta

I

t was a good idea at the time—and still is. But then the 2009 recession hit and federal government funding for a program aimed at making educators across Canada aware of the hundreds of thousands of jobs that will be available in the oil and gas industry over the next 20 to 30 years—and the correspon-

information sharing between the oil and gas production industry and educators throughout Canada.

However, Cheryl Knight, chief executive officer and executive director of the Calgary-based Petroleum Human Resources Council of Canada (PHRCC), which exists to forecast labour demand and supply in the industry, didn’t get the government funding she expected to launch it.

“We set up a communications framework, but we’re having funding problems.”

— Cheryl Knight, Chief Executive Officer and Executive Director, Petroleum Human Resources Council of Canada ding need for a properly educated student base— didn’t materialize.

The Educational Partnership Framework (EPF) was to be a program established for ongoing

“We set up a communications framework, but we’re having funding problems,” says Knight.

The idea was to get the message out beyond Western Canada that there are

numerous employment opportunities in the oil and gas sector and there will only be more as times goes on.

For instance, the council has forecast the need for as many as 130,000 new workers in the next decade, if both the oil and gas industries pick up activity.

The Calgary-based Canadian Energy Research Institute (CERI), a think tank that produces regular studies on the industry, says almost 500,000 workers are needed as a result of oilsands development over the next 20 to 25 years.

Knight says she’s convinced the message hasn’t gotten out to most educators and prospective workers in the rest of Canada, which is why the council has been working on building the framework since 2009.

“We don’t have strong connections with the colleges and universities in Eastern Canada,” she says.

“We have 12 contacts at

A lack of qualified workers could compromise Alberta’s oil and gas industry going forward.

The Petroleum Human Resources Council of Canada says an Educational Partnership Framework could help the situation.

Keyano College [located in Fort McMurray], but we have only one at the University of Western Ontario [in London, Ont.].”

Knight’s organization sends out regular updates to the educators it has relationships with and she and others try to maintain regular contact. Because the council has already established a strong relationship

with the likes of Keyano, SAIT Polytechnic and the Northern Alberta Institute of Technology, educators at those institutions know about the shortages and are attempting to address them.

“We just don’t have that kind of a relationship with colleges and universities in Ontario, for example,” Knight says.

The funding she sought—

Knight wouldn’t reveal how much it would have been—would have paid for her and other PHRCC officials to fly to various parts of Canada and meet with educators.

She hasn’t given up on getting that funding.

“The structure is in place and in the future I’m optimistic that we’ll be able to move forward,” she says.

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Science & Innovation: Exploring New Frontiers Filling the Pipeline

This is the first in a series of eight articles that will explore themes of innovation and creativity from a unique perspective: how do we grow these skills in our children, our organizations, and ourselves? This series of articles will appear in Oilweek, Oilsands Review and Energize Alberta over the coming months.

We hope that we give you some ideas to consider, some things to try and some stories to inspire you.

When did you decide what you wanted to be when you grew up? Think past the point of fireman or figure skating champion, NHL player or rock star… Was there a moment when the world opened up for you?

A mentor, a respected teacher, an older friend, or a parent who showed you an opportunity you hadn’t considered? Was there someone who encouraged you to pursue a dream – even one that seemed impossible? Was there a moment when you realized that the stuff you liked to do could actually lead to a career?

And now, do you wonder what your children or grandchildren might do? Do you dream of a time where you can retire knowing that the next generation to enter the work force are prepared for whatever comes their way?

2011 is a big year…the start of the largest retirement trend in history – as 3.8 million Canadian baby boomers become eligible for more golf or more time to enjoy the grandchildren, or more time to start up those projects that have languished.

This also means that as the boomers slowly and gracefully leave the workforce over the course of the next 5 to 10 years, the demand for skilled workers to replace them will increase.

This could be a challenge.

In Alberta, a large percentage of those skilled jobs require engineers, technologists, IT specialists and scientists.

17% of all undergraduate university degrees awarded in Canada in 2006 were in Natural Sciences,

Math and Engineering. We’re below the average of OECD (Organization for Economic Co-operation and Development) countries. And, we’re even further behind countries like China (50%) and South Korea (40%). Most of the degrees awarded in Canada are in Social Sciences, Business and Law. Even more worrisome, Calgary’s young people are less likely to go to university than their peers in Ottawa and Montreal (35% vs 54% & 48%).

All is not lost.

2011 is also the year that the new TELUS World of Science – Calgary (TWS) opens its doors. A new science centre for a new world – filled with exhibits, activities and programs designed to encourage more young people to pursue careers in science, technology and engineering. Did you know that visits to science centres have been identified by people in those careers as one of the pivotal moments that inspired them? There is also some compelling evidence compiled over years of studies to suggest that even if you didn’t do well in science in school, informal learning environments (jargon for science centres and museums) have a significant role to play in the science you choose to learn – from how to help your kids build that crazy robot that keeps running into walls, to that passion for star gazing, or the experiments with drink mixing.

Isn’t it amazing to think that one of the most innovative new science centres to open its doors in decades will be in Calgary, just waiting for you, your family and friends to visit?

Watch for the next article, where we will explore some ways that you can stretch those innovation muscles and encourage your kids to do so as well.

“Science is a way of thinking, much more than it is a body of knowledge.” ~ Carl Sagan

First purpose built science centre in Canada in decades LEED (Leadership in Energy and Environmental Design) Gold Certification Designed by local architects from Dialog (formerly Cohos Evamy) Located on St. Georges Drive, at Memorial Drive and the Deerfoot Two-and-a-half times larger than the 11th street location (153,000 sq. ft.)

50,000 square feet of public space 5 exhibit halls + a Learning & Leadership Centre A Feature Gallery for travelling exhibitions A Dome Theatre with 240 seats A Presentation Theatre with 150 seats Further information can be found at www.imagineaction.ca

Energize Alberta • May/June 2011

After 15 years rising through the ranks of the oil and gas industry, Deborah Close returns to Calgary to perhaps her most demanding role yet

R.P. Stastny Energize Alberta

I

n the dog days of summer, in a slower, calmer Alberta in the mid1960s, Deborah Close’s father, a travelling salesman for the Robin Hood flour company, would pack up his station wagon, round up the family and head off on vacation. For his wife, two daughters and son, it was rest and relaxation, but he would also visit clients all along the way through his territory in southern Alberta and part of British Columbia.

Those were happy times for Deb Close. Rolling through rural communities, she saw a remnant of the Alberta her mother and grandparents had known while homesteading 50 miles northeast of Calgary in Acme. In the evenings, the family camped in river valleys and on the edge of small towns, enjoying one another’s company.

In a way, those vacations were also a time of learning, a way of being in this world that Close would emulate in her own life and career, albeit on a grander scale. Her own work stretched summers on the road into years.

Her work would take her to Texas for 14 years, to London, U.K., for two years, and in 2010 return her full circle to her home in Calgary to take on perhaps her most demanding role yet. As president of Concord Well Servicing, she is the first woman to

Photo: Shaun Robinson

Long way home

lead a Canadian well servicing company in Alberta.

Early days Deb Close’s career started out innocently enough. Fresh out of high school, she had little desire to go to university, despite the advice of her teachers and school guidance counsellors.

Instead, she took a year to think about things and worked in retail. That dose of real-world experience opened her eyes to the value of higher education and, the next year, she enrolled at the University of Calgary with the intention of becoming a teacher.

But the idea of becoming a teacher didn’t fire her imagination for long. She still didn’t know what she wanted to be, but decided to study languages and ended up with a Bachelor of Arts in French.

Paying her way through university, Close alternately worked full time and studied full time. It was during one of those cycles she got into the oil and gas business over 35 years ago as a receptionist for Alberta’s Energy Resources Conservation Board.

“That was in 1974. It was boom time in the industry.

If you could do the work, you got the job,” she says.

Stepping up Career coaches say that while there are people who methodically and analytically plan their careers and rise through the corporate ranks according to that plan, it’s also very common for people with no career

plan to rise to senior executive positions. Their careers just seem to “happen to them,” according to one Calgary career coach, and this group, which includes Close, shares certain characteristics: a high level of self-awareness, an open attitude and a tolerance for risk, especially in their willingness to take on roles they might not be sure they can do at the outset.

A case in point happened for Close in 1979. She was working for Amoco Canada and the oil and gas industry was begging for engineers. Showing technical aptitude, Close was sent to Tulsa, Okla., to Amoco’s in-house engineering school, to be trained as an engineering technologist. Was she sure she could do it? No, but she would try.

“That’s when it clicked,” she recalls. “I thought, ‘Wow, this is really interesting stuff.’ Up till then, I would say it was still very much a job, but that’s when I got a passion for it. It really started me off on my path.”

After almost 10 years with Amoco in a technical role, Close began her transition to sales and

with a Dallas-based company called Garrett Computing. That merged company was eventually acquired by Landmark Graphics, which was then acquired by Halliburton.

In 1995, Halliburton transferred Close to Dallas to manage Landmark’s U.S. sales and support operations. “Once I got to Dallas I eventually made my way to Houston, then to London and then back to Houston with Landmark/ Halliburton,” she says.

Over the course of those seven years, she held executive positions in sales, marketing and general management, including vice-president of operations for North America, Europe and the former Soviet Union.

In 2002, Close was approached by another software startup in Calgary, which by then had become a bit of a Silicon Valley for energy software. She worked as executive vice-president of D02 Technologies, an electronic invoicing software company, until it was sold in 2010 to payroll outsourcing giant Automated Data Processing.

“Could I cite one or two occasions when I was probably treated differently because I was a woman? Yes, I could.”

— Deborah Close, President, Concord Well Servicing management in 1988. She was offered and accepted a sales role with a Calgarybased engineering software company. Within a few months, she was promoted to a manager.

She hit her stride in this new trajectory of sales, marketing and general management. In 1990, she switched companies for another small Canadian software designer, Munro Engineering. Munro merged

Then in July 2010, John Gibson, who is the current president and chief executive officer of CCS Corporation, the parent company of Concord Well Servicing, phoned Close. They had worked together at Halliburton.

He said to Close, “Would you like to take on something different?”

For Close, heading up Concord represented the kind of challenge and

At a glance: Deb Close Formal education: BA, French major, University of Calgary, 1980.

Family: Married to Roger Close, adult son, Jason.

Greatest strength: Coaching people. “When you see the raw characteristics that are there in a person and can help them grow and move on to something that they honestly wondered whether it was something that they could do.“ Best advice: Keep your eye on the ball. “How I apply that is in every part of my life I step back each morning and say, what’s important to me today, what’s important to me next month, in the next year and in five years. That applies each day in the office as well.”

Passions: Spending time with family and friends, community involvement through church, painting.

stretch she had always embraced in her career. It also offered an opportunity to return to the city she grew up in, which was still home to her family, including her son, a petroleum engineer educated in the United States who was now working in Calgary and recently married. So after 14 years of working abroad, Close and her husband returned to Calgary.

Man’s world What was it like for a woman working in the oil and gas business in the 1980s and 1990s?

“For the first 15 years of my career, I was almost always the only woman in the room,” Close says.

She recalls a few exceptions: a senior engineering manager at Amoco, a female geologist. But it wasn’t until more recently that more women started choosing to enter the oil and gas industry.

“Could I cite one or two occasions when I was probably treated differently because I was a woman?

Yes, I could,” she says.

“There were a couple of negative experiences, but for every negative experience there was a half-dozen good experiences.”

There actually is an upside to being a woman working in a male-dominated field. One example is from her days in drilling software customer support.

When she got a call in the middle of the night from a rig manager or tool push driven to the edge of frustration by a computer, unable to get his daily drilling report in, she knew for a fact she wasn’t getting the kind of language her male counterpart would have gotten.

“I think there were also times when I got the benefit of the doubt,” she says. “Especially as I progressed through management, there were times when people thought, ‘In order to be in this role, you must be competent.’”

An unencumbered, productive attitude ferried Close through the gender politics of the day.

She came to work, did her job, didn’t worry about other people’s attitudes and didn’t look for them.

This approach helped her become one of the first women in an operational role with Landmark at a time when women were typically found in staff roles of less influence.

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Even wage disparity didn’t seem to faze her.

She knew without a doubt she wasn’t paid as well as her male colleagues doing the same work. Thankfully that has changed. Today, her position affords Close a view of the salaries paid across organizations and, for the most part, she says, there is wage parity between genders.

Much has been written about the challenge women face in balancing family demands with career demands. To this, Close says, “You really have to remind yourself constantly what your priorities are. Family comes first. No question.”

A supportive spouse helps in striking the right balance. While bringing up their son, Close and her husband, Roger Close, who also had a very active career as an engineering technologist and later in real estate, had to negotiate who would do what. But now, with their child-rearing days behind them and Roger having retired, Close is free to pursue her career in full and strike a new balance with her other passions, including spending time with her family and friends, and making a difference in the community.

For Close, there seems to be a right time for everything and sacrifices needn’t be irretrievable.

“You also have to realize that you can’t do it all,” she says. “You may not be able to do certain things while raising children, but that doesn’t mean you’ll never be able to do them again.

It just means you won’t be able to do them now. So if you keep that at the back of your mind, it works out.”

Concord The transition to president of Concord Well Servicing has been an exciting learning curve for Close, made easier by the great team surrounding her. She cites the generous help of former Concorda president and co-founder, Gordon Vivian, and her current boss, John Gibson, who has never doubted her abilities.

Gibson has also set a new direction and breathed new life into both companies.

“The people here are excited to see an opportunity where we can grow again after having made it through the recession,” Close says.

www.energizealberta.com

May/June 2011 • Energize Alberta

Renewable reality?

Report suggests high cost of clean energy technology may delay transition away from fossil fuels Jim Bentein Energize Alberta

J

ohn Mawdsley has nothing against the environmental movement and the push to supplant fossil fuels with renewables and other greener alternatives—he even thinks that it’s a “tragedy” that it won’t happen as soon as some might hope.

And in the pragmatic world in which the analyst with Calgary-based AltaCorp Capital lives, economic reality trumps the fast-paced realization of green dreams.

In April, the firm released the 84-page report entitled, Renewables vs. Hydrocarbons: The Energy Reality. And it’s blunt in its assessment.

“This is a factual piece, not an opinion piece,” says Mawdsley, who recently joined AltaCorp, headed by Calgary financier George Gosbee, who built his former firm, Tristone Capital, into one of the energy industry’s largest investment banks. “If [advocates of renewables] don’t like what the report says, don’t shoot the messenger.”

In fact, Mawdsley is quick to point out that AltaCorp, which is partnered with ATB Financial, Alberta’s largest financial institution with $26.5 billion in assets, was established to invest in environmental and other technologies, as well as agribusiness.

“We want to finance clean technology, where it makes economic sense,” he says.

But therein lies the rub.

“While it is true that mankind needs to reduce its dependence on hydrocarbons because of their non‑renewable nature, there are many economic and practical realities about renewable forms of energy that are often not considered or simply ignored,” the report says. “We believe these realities will cause the transition to renewables to take much longer and cost significantly more than might be realized.”

Carbon cost considered In the report, Mawdsley places a cost on carbon dioxide emissions that is more than triple what the Alberta government has set in its climate change plan, under

AltaCorp’s John Mawdsley says a new report released by the firm indicates that “renewable energy needs to be subsidized to be viable.” which it established a price of $15 per tonne of greenhouse gas (GHG) emissions from large industries in the province (they can either pay into a climate fund or pledge to reduce those emissions). But even at $50 a tonne, a level that many environmentalists say is more realistic than the Alberta price, the report concludes renewables can’t compete with fossil fuels.

“From this analysis, we believe that unless there are significant breakthroughs in renewable technologies, hydrocarbons will continue to dominate our energy needs well into the next century,” Mawdsley writes in the executive summary of the report.

Calling it the “tragedy of hydrocarbons,” he concludes fossil fuels are so relatively cheap and efficient renewable energy forms simply can’t compete.

“Renewables are often considered sustainable sources due to the fact that their energy comes from infinitely renewable wind, sun, waves or crops,” Mawdsley says. “Ironically, many of these renewables are only sustainable if continually subsidized by governments—governments that are often not in the financial position to fund economically unviable projects.”

Using an energy-equivalent economic analysis, including the $50 a tonne CO2 cost, the study concludes that solar photovoltaic power—the kind used by individual residential or commercial consumers—is the most uneconomic, requiring an unsubsidized price equivalent to $450 a barrel of oil.

Total cost of energy including CO2 — conventional and renewables $500 $80 CO2 Cost Net Operating Costs (including Fuel and Feedstock) $60

$350 Capital Costs

$300

Total costs for various energy projects, plus CO2 costs at $50/tonne (using a corporate cost of capital of 10%) Note: Oilsands is an average of mining and steam assisted gravity drainage

twitter.com/energizealberta

Electricity Generation - Solar Photovoltaic

Electricity Generation - Offshore Wind

Biodiesel (Soya)

Ethanol (Corn)

$0

Electricity Generation - Coal

$50

Electricity Generation - Nuclear

$100

Electricity Generation - Natural Gas

$150

Oilsands

$200

Conventional Oil

$250

Electricity Generation - Onshore Wind

$50 $40 $30 $20 $10 $0

$ per million British Thermal Units

$70

$400

Non-Conventional Natural Gas

$ per Barrel of Oil Equivalent - Energy

$450

Offshore and onshore wind forms of power are not much better, costing an unsubsidized $350 and $150 a barrel respectively, while ethanol and biodiesel would cost $130 to $160 a barrel.

Reflecting on the environmental impact of coal-fired power generation, the report concludes that coal power actually costs almost $200 a barrel in real terms.

Nuclear, which costs about $150 a barrel under the analysis, now provides only 5.5 per cent of global energy, and Mawdsley concludes it will continue to play a small role, especially in light of recent events in Japan with that country’s nuclear power plants.

The AltaCorp analyst concludes that conventional oil, the oilsands and natural gas will continue to have significant economic advantages.

The cost of producing and deploying conventional oil is equivalent to about $50 a barrel, while the cost of oilsands crude is about $70 a barrel.

“Due to the practical and economic realities, we believe high oil prices are here to stay, which will continue to make Canada’s conventional oil and oilsands companies attractive investments,” the study says.

But the big winner in the analysis is natural gas, which AltaCorp says will become the world’s most used fuel.

Natural gas upside Under his analysis, Mawdsley says natural gas is by far the most economical of the alternatives, with a price of less than $5 a barrel on an energy-equivalent basis.

It’s also a good source of power generation, coming in at about $100 a barrel equivalent.

Global energy consumption by source

Natural Gas 22.6% Petroleum 35.0% Coal 26.7% Solar, Tide & Wave 0.01% Biodiesel 0.1% Geothermal 0.1% Ethanol 0.2% Wind 0.3%

Nuclear 5.5% Hydro 6.1% Non-Electricity Renewables* 2.8% Biomass/Waste 0.5%

* Non-Electricity Renewables are those used for heat generation

Graphs: EIA, AltaCorp Capital Inc.

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There are ethical considerations with energy sources such as corn-based or canola- and soy-based ethanol, he points out, noting the land used for fuel cultivation in the United States is enough to feed 150 million people.

In addition, he says that electrically powered cars aren’t a panacea, since much of that power, particularly in the United States and China, would come from environmentally suspect coal-fired generation.

Mawdsley notes that the “tragedy of hydrocarbons” is that the world will continue to rely on them even though “it is not in the best long-term interest of the individual society, mankind or the planet.”

But there are some hopeful signs, according to Mawdsley.

He tells Energize Alberta the view that natural gas could be a transitional fuel as new technologies evolve is likely valid, since it is a cheap and relatively clean source of energy.

Technologies that aid energy efficiency will also play an important role, as will efforts to conserve.

The report shows how reliant the world is on fossil fuels.

Oil now accounts for 35 per cent of global energy consumption, natural gas for 22.6 per cent and coal for 26.7 per cent. Renewables make up 10.1 per cent, with 6.1 per cent of that coming from hydroelectric power.

About 65 per cent of Canada’s total power generation comes from hydro.

Mawdsley says the report will play a pragmatic role in helping AltaCorp assess the financial viability of energy investments, but it will also take into account that “renewable energy needs to be subsidized to be viable.”

Energize Alberta • May/June 2011

CEAM-less

Graduates will hit the job market with energy asset management skills in hand Graham Chandler Energize Alberta

H

ow do you know all this stuff? was the question asked of a young CEAMS student interning last summer at a major oil firm. The answer was that she learned it in her first year of a groundbreaking new program designed to teach the fundamentals of energy asset management. CEAMS— the Centre for Energy Asset Management Studies— will graduate its charter class this year from SAIT Polytechnic in Calgary.

In addition to possessing a broad technical understanding, graduates will hit the job market running with a clear knowledge of each of the core energy

asset business disciplines: land (mineral, surface and contract), joint ventures, operations and production accounting, and well/facility asset management.

Added to that is the integrated role each plays throughout the entire life cycle of a well or energy facility—from planning to site abandonment. And on top of that, they’ll be armed with an awareness of the associated regulatory and compliance needs.

Until now, no one-stop academic package could offer it all; most learning happened on the job.

Getting the first set of students to the graduating podium has been a long, tough slog since the program was created five years ago, but industry foresaw the need. “Several visionaries saw two issues facing the industry in the very near

future,” says current CEAMS board member Melinda Scherger, who was involved from the start as the first board chair. “First is the silver tsunami—the looming retirement of literally thousands of baby boomers is a significant problem within the five disciplines that make up the energy asset management field.”

Second, according to Scherger, is the very real shortage of adequately trained people coming into the industry. She says the two challenges increase the already significant strain on human and financial resources required to train people coming into the industry. “Even those with degrees know very little about the industry or how it operates,” she says, noting that the concept behind CEAMS was to create a new program that would graduate “industry-ready” people.

Prior to the creation of CEAMS, how were people cross-trained in so many disciplines? “The quick answer is, they weren’t,” says Scherger. “The more complete answer is training within our industry has usually involved moving a

person through a variety of different departments over a period of time, often up to five years.”

She imagines the cost of that process: hours of time from the trainers, not to mention lost productivity until the individual becomes fully functional. That’s not the case anymore.

“What they learnt during this training, more often than not, was what role each department fulfilled, but virtually nothing about how the departments were in fact interdependent,” continues Scherger. “The greatest single benefit of the energy asset management program is the ‘integrated learning’ model.”

So, starting with Canadian Association of Petroleum Land Administration’s guidance and assistance in 2005, there was work to do: defining what a typical graduate must know and setting up a curriculum, for starters. Nearly 100 industry volunteers contributed, in collaboration with SAIT Polytechnic and backed financially by industry leaders Canadian Natural Resources, Cenovus, ConocoPhillips Canada,

Devon Canada, Encana, Enerplus Resources and Suncor.

“Our volunteers, in partnership with the SAIT curriculum professionals, worked to develop the required learning outcomes for the overall program and the individual courses,” explains Scherger. “From there we went to industry to recruit the necessary subject matter experts to develop the individual course content, and the SAIT experts built it all into the curriculum.”

Students have been heaping praise on the program. With no previous exposure to the industry, Cory Owens says she reaped numerous benefits from her summer internship at Penn West Exploration. “I’ve been able to actually work on substantive issues like road use, third-party and proximity agreements, and really understand how they impact the overall business of the company.”

Digney Eisner, after a summer with Enerplus Resources, says, “The energy asset management program gives us the skills that energy companies

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really need so they can manage their business and their issues as a whole rather than a bunch of separate components.”

Stephanie Baird, who spent the summer in Devon’s land and joint venture department, sums it up: “We’re going to be the people around the table who can bring all the pieces of the puzzle together.”

They’re all pretty excited. “The graduates of this program are able to ‘take a chair’ in virtually any or all of the five disciplines and be functional from day one,” enthuses Scherger. “Now that is industry-ready!”

For his CEAMS internship, Scott Neiman worked at BP Canada and has nothing but enthusiasm as he faces graduation this year.

“I think the biggest complement that I get in my work is the fact that our supervisors didn’t have to explain every detail of the work and the issues that I was going to be dealing with before I could get started on the project,” he says. “I think that really shows just how relevant the energy asset management program is.”

…to all of us. We take pride in our reputation and for being good neighbours in your community because our families live here too.

Stronger communities are built by the strength of their members and by our ability to communicate with one another.

That’s why we established our “Community Matters” program which encourages people to come together to exchange ideas and information about the things we all care about—the safety and well being of our friends and family, stewardship of the land, and having respect for our neighbours.

If you have questions or concerns about operations in your community, or would like more information about Penn West, we invite you to contact us at 1-877-454-8844. To learn more about us, please visit our website at www.pennwest.com.

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www.energizealberta.com

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