Profiler April 2012

April 2012

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Health, Safety & Environment Issue

in the sands Industry launching effort to measure and improve health, safety and environmental performance in the oilsands

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Government and industry working to manage public worries over fracking

Pipeline safety improving

Oilsands reclamation efforts build momentum

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FEATURES

Publisher Maurya Sokolon | msokolon@junewarren-nickles.com editorial Editor Darrell Stonehouse | dstonehouse@junewarren-nickles.com Contributing Writers Lynda Harrison, Jacqueline Louie, Elsie Ross

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Under the microscope Worries over public safety, along with health and environmental degradation concerns, driving regulatory push for new fracturing rules

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10 Footprint in the sands Industry launching effort to measure and improve health, safety and environmental performance in the oilsands

Director of Content Chaz Osburn | cosburn@junewarren-nickles.com

18 15 Pipeline safety improving Latest National Energy Board stats show injuries declining, but pipeline rupture still a concern for Board 18 Fixing the future Researchers say oilsands reclamation shows promise

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Under the Worries over public safety, along with health and environmental degradation concerns, driving regulatory push for new fracturing rules By Darrell Stonehouse, with reporting by Elsie Ross and Lynda Harrison

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he arrival of extended-reach horizontal wells and multistage fracturing has revolutionized the North American natural gas industry, opening up hundreds of trillion cubic feet of gas for development, but the process is now facing major backlash from a public worried fracturing fluids could seep into groundwater supplies, polluting them permanently. Public angst is furthest along in eastern parts of North America, where unfamiliarity with the petroleum industry has led to moratoriums on fracturing in places like Quebec and New York. In Canada, industry is now working with governments to answer health and environmental concerns about high-volume fracking in the hopes of turning public perception around. Mark Boling, vice-president and general counsel for Southwestern Energy Company, says public opposition to fracturing is caused by fear and distrust of the industry. “There is understandable public fear of the unknown, and it creates a lot of angst,” Boling told a recent shale gas and oil conference in Calgary. He said part of the public distrust in the United States is unrelated to fracturing and can be blamed on the disastrous Macondo blowout in

Transparency is also an issue. Despite a good safety record, the science behind fracturing, and how effectively the industry has handled it, there is a lack of understanding and transparency about the process, creating “very fertile ground for disinformation and fear-based campaigns,” he said. A lawyer by profession, Boling recommended gas producers on both sides of the Canada-U.S. border collaborate with those who are seen to be protectors of the environment in order to find workable solutions. Here in Canada, both governments and industry are trying to get ahead of the public by answering issues surrounding the health, safety and environmental impacts of fracturing before they become a problem. The Canadian Association of Petroleum Producers (CAPP) announced new Canada-wide hydraulic fracturing operating practices designed to improve water management and water and fluids reporting for shale gas and tight gas development across Canada early this year. “The hydraulic fracturing operating practices demonstrate the Canadian natural gas industry’s continued efforts to ensure

microscope the Gulf of Mexico in 2010; but industry has inadvertently contributed to fears about fracturing by not being forthright about fracturing fluid ingredients, leading to worries of water well contamination. Many companies in the United States refused to disclose the formulas because they were proprietary. “I believe industry took an inordinate amount of time to resolve the frac fluid disclosure issue,” said Boling. “To me, that was not our finest hour.” In response, a few state legislatures took matters into their own hands, moving to legislate disclosure of the chemicals that go into fracturing fluids. Boling also said some of the negative public perception to industry’s failure to educate the public about fracturing. When the industry has thus failed, a void is left, and environmental activists and “some media outlets” respond by waging a war against unconventional gas development, he said. “We need to eradicate that and fill the information void with straight talk and open dialogue. We don’t have to worry about how we spin it. All we need to do is say, ‘Let’s sit down and identify the real issues’ and figure out what the solutions are,” he said.

responsible resource development and protection of Canada’s water resources,” said David Collyer, CAPP president. “Applying these new operating practices will contribute to improving our environmental performance and transparency over time, both of which contribute to stronger understanding of industry activity and better relationships with the public, stakeholders and government.” Developed by natural gas producers, the hydraulic fracturing operating practices apply to all CAPP members exploring for and producing natural gas in Canada. In September 2011, CAPP announced the industry’s Guiding Principles for Hydraulic Fracturing, which obligate CAPP members to sound wellbore construction, fresh water alternatives, recycling where feasible, voluntary water reporting, fracturing fluid disclosure, and technical advancement and collaboration. The operating practices announced in January support the guiding principles and strengthen industry’s focus on continuous performance improvement. In its hydraulic fracturing operating practices, the association said Canada’s shale and tight gas industry supports a responsible

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CAPP’s hydraulic fracturing best practices • Fracturing fluid additive disclosure: To disclose on a well-by-well basis the chemical ingredients in fracturing fluid additives that are identified on Material Safety Data Sheets for each additive, including trade names, general purpose and concentrations. This information will be made publicly available. • Fracturing fluid risk assessment and management: To better identify and manage the potential health and environmental risks associated with fracturing fluid additives and ultimately increase the market demand for more environmentally sound fracturing fluids. The process for developing well-specific risk management plans for hydraulic fracturing fluid additives will be made publicly available. • Baseline groundwater testing: To develop domestic water well sampling programs and to participate in regional groundwater monitoring programs, which establishes a process for addressing stakeholder concerns regarding water well performance, and to continue to collaborate with government and other industry operators. • Wellbore construction and quality assurance: To ensure that wellbores are designed and installed in a manner that maintains integrity before hydraulic fracturing begins, including creating a continuous cement barrier to protect groundwater and developing remedial plans in the unlikely event that a wellbore is compromised. Wellbore construction and quality assurance practices will be made publicly available as they relate to this practice. • Water sourcing, measurement and reuse: To safeguard surface water and groundwater quantity by assessing and measuring water sources, ensuring no withdrawal limits are exceeded, monitoring water sources as required to demonstrate the sustainability of the source, and collecting and reporting water-use data. Water measurement, sourcing and reuse practices will be made publicly available. • Fluid transport, handling, storage and disposal: To identify, evaluate and mitigate potential risks related to the transport, handling, storage and disposal of fluids (i.e. fracturing fluids, produced water, flowback water and fracturing fluid wastes) and ensure a quick response to accidental spills. Fluid transport, handling, storage and disposal practices will be made publicly available. Source: The Canadian Association of Petroleum Producers

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approach to water management and is committed to continuous performance improvement. Protecting the country’s water resources during sourcing, use and handling is a key priority for industry, it said. “We support and abide by all regulations governing hydraulic fracturing operations, water use and protection.” “The establishment of Canada-wide hydraulic fracturing principles and practices is part of the natural gas industry’s ongoing efforts to ensure safe development of Canada’s shale gas resources,” said Collyer. “Shale gas can and is produced responsibly every day across Canada and the United States, with almost 200,000 wells fractured in western Canada over the last 60 years. With increased focus on fracturing from coast to coast, the Canadian industry wants to be at the forefront of transparency and to establish clear and consistent practices across the country.” Following the release of the fracturing best-practices document, Collyer said he expects provincial regulators to make the disclosure of frac fluid recipes mandatory in the near future. “B.C. has already moved on legislating disclosure,” Collyer told reporters. “Alberta is giving it serious consideration, and I would expect before too long—we’re talking several months, rather than several years—they’ll move to a similar place. “For service providers, there’s a competitive issue about the exact recipe of their particular fracturing fluid and the advantage they believe it brings them in the competitive market,” he said. At the same time, he said Canada’s oilfield service companies are working their way through the issue. “I think we’ve come a long way in terms of the willingness of service providers to be more transparent about frac fluids. We’ve been very clear that we expect the ingredients, if you will, to be publicly available. I think over time we’ll move to more disclosure rather than less.” As the disclosure-requirement bug may be catching in other provinces, Collyer called for consistency among the various jurisdictions that plan to put forward legislation. “If we’re going to put regulatory requirements in place, the more consistent they are across different jurisdictions, the better,” he said. In British Columbia, public disclosure of frac fluid components became mandatory in January. FracFocus.ca—the registry that provides a transparent accounting of B.C. hydraulic fracturing operations—includes a database of the ingredients used to support natural gas extraction, and extensive content about the regulations and safety procedures governing industry activity. By law, a list of ingredients used must be uploaded to the registry within 30 days of finishing completion operations (the point in time when a well is able to produce gas). The province built FracFocus.ca to accommodate future participation by other jurisdictions so there can be one national site for disclosure information. Alberta expects to have rules in place by the end of 2012. Since 2008, oil companies have completed 3,300 horizontal wells and multistage fracs in the province. There has been less pressure for disclosure of fracturing fluids in the province because most of the new wells have targeted oil or liquids-rich gas, requiring less fluid than the giant fracs being used in tight or shale gas applications.

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in the sands Industry launching effort to measure and improve health, safety and environmental performance in the oilsands Illustration by Anthony Tremmaglia

lberta’s oilsands producers have been buried under an avalanche of bad press in recent years. First Nations communities and some in the medical field have pointed at emissions for causing health issues in remote communities surrounding oilsands developments. Those same First Nations, along with environmentalists, have also accused industry of harming the environment and poisoning wildlife in northeastern Alberta. And then there were the ducks. In 2010, Syncrude paid a penalty of $3 million for the death of about 1,600 ducks in its tailings ponds in 2008. The dead ducks dominated headlines for months, acting as a catalyst in stirring public concern about the environmental and public safety issues in the oilsands. Major efforts are now underway to answer this public concern. In February, the Alberta and federal governments announced plans to implement a major upgrade of the environmental monitoring system in the oilsands. The Joint

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Canada-Alberta Implementation Plan for Oil Sands Monitoring will provide for increased air, water, land and biodiversity monitoring beginning this year. The goal is to sample more sites for more substances more frequently. The program is designed to provide an improved understanding of the long-term cumulative effects of oilsands development. Data from the new monitoring program— and the methods on which it is based—will be transparent, supported by necessary quality assurance, and will be made publicly available to allow independent scientific assessments and evaluations, according to Alberta Environment and Water (AEW). This will encourage informed discussions and analysis on the impacts of oilsands development based on high-quality scientific information. The Canadian Association of Petroleum Producers (CAPP) says it welcomes the new three-year monitoring program for the oilsands that will be jointly managed by the federal and Alberta governments.

“A world-class environmental monitoring system will contribute to improved performance reporting, regional planning and industry performance improvement as the oilsands industry continues to grow,” said CAPP president David Collyer. CAPP said a robust and transparent monitoring system will help industry, governments and other stakeholders achieve long-term responsible oilsands development and help industry deliver continuous performance improvements. “We look forward to working with governments to ensure the oilsands environmental monitoring system is implemented effectively and efficiently, including integration with existing environmental monitoring organizations and processes in the oilsands region,” Collyer said. Although details haven’t been worked out, both governments said they will take immediate steps to start implementing the activities outlined for year one of the program, and make the fullest possible use of the

upcoming field season for monitoring. Monitoring in the oilsands is to be managed “in an adaptive manner,” with plans and activities evolving to reflect experience gained from initial work. Details in years two and three will be finalized, refined and adjusted based on this approach. By the time the three-year plan is fully implemented in 2015, the number of sampling sites will increase and include a larger area, the number and types of parameters being sampled will rise, samples will be taken more often, monitoring methodologies for both air and water will improve, and an integrated and open data management program will be created. Implementation will be co-led by Environment Canada and AEW’s assistant deputy ministers responsible for science and monitoring. The governments promised the monitoring program will undergo external expert peer review after year three, and at five-year intervals thereafter, to ensure that

scientific integrity is maintained. An annual report on the status of implementation will be made public. Data from the monitoring program, and the methodology used to produce it, will be made public on a continuous basis. Jennifer Grant, director of the Pembina Institute’s oilsands program, said that from her group’s perspective the new monitoring program shows promise. “The need to improve monitoring of the environmental impacts of oilsands production has been widely recognized, and it’s promising to see that this plan commits to transparency and accessibility and is based on technically sound information,” Grant commented.

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Photo: Joey Podlubny

“It’s very positive that more pollutants will be tracked, and that the area monitored is being expanded to include downstream and downwind regions, but better monitoring is only one piece of the puzzle.” Still, Grant believes the monitoring program is only one step in developing a comprehensive environmental and public safety program for the oilsands. “The government’s regulatory capacity and commitment to actually manage environmental impacts continues to lag behind the pace and scale of new oilsands development, and new projects continue to be approved even though we don’t have enough information to understand the impacts. That is not responsible management,” she said. “For example, the federal government has witnessed the steady decline of woodland caribou herds in the oilsands region for years, but has failed to take the necessary actions to protect the species as the population declines and risks being eliminated from the oilsands region.” In early March, oilsands producers further ramped up their efforts to combat environmental and public safety concerns by 12

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announcing a new alliance—Canada’s Oil Sands Innovation Alliance (COSIA)—focused on accelerating the pace of improving environmental performance. Chief executive officers of 12 companies have signed the alliance’s founding charter, committing to COSIA’s vision to “enable responsible and sustainable growth of Canada’s oilsands while delivering accelerated improvement in environmental performance through collaborative action and innovation.” Members of the alliance include BP Canada Energy Company, Canadian Natural Resources Limited, Cenovus Energy Inc., ConocoPhillips Canada Resources Corp., Devon Canada Corporation, Imperial Oil, Nexen Inc., Shell Canada Energy, Statoil Canada Ltd., Suncor Energy Inc., Teck Resources Limited and Total E&P Canada Ltd. The creation of COSIA as an independent alliance builds on work done over the past several years by both oilsands industry members and research and development organizations, the alliance said. COSIA will take these efforts to a much larger scale and will help the industry address environmental

challenges by breaking down barriers in the areas of funding, intellectual property enforcement and human resources that may otherwise impede progress on environmental performance. COSIA said its collaborative approach will accelerate the discovery and development of environmental technologies and reduce the time from idea to implementation. “The public’s expectation of environmental performance in the oilsands continues to evolve,” said John Abbott, executive vice-president of Shell Canada. “We want to meet those expectations and we’ll work collaboratively to do so, building on previous successes. Coming together today to sign the charter is a significant and important step for all our companies, and marks a pivotal point for our industry.” COSIA also announced Dan Wicklum as the chief executive officer of the new alliance. Wicklum has a background in environmental science and was selected following a national search. His scientific qualifications and leadership experience position him well to lead COSIA.

The new monitoring systems will track

The new oilsands monitoring plan

more pollutants at more sites throughout the oilsands region.

“I am confident COSIA will greatly accelerate innovation and environmental performance in priority areas that Canadians care most about,” Wicklum said. “Today is just the beginning, and I am excited to be part of this new alliance. We understand we have a lot of work to do, and we are looking forward to working with our stakeholders and reporting on our progress along the way.” COSIA will establish structures and processes through which oilsands producers and other stakeholders can work together for the benefit of the environment. The alliance will identify, develop and apply solutions-oriented innovation around the most pressing oilsands environmental challenges, specifically water, land, greenhouse gases and tailings, and will communicate COSIA’s efforts and successes in addressing those challenges. Jean-Michel Gires, president and chief executive officer of Total E&P Canada, says COSIA creates a new dynamic for the oilsands industry, promoting new approaches for intellectual property management of environmental technology and better working relationships with universities, research agencies, technology providers, regulators and oilsands stakeholders in the communities where industry operates. “COSIA is a reflection of how the oilsands have evolved into a global resource, with companies committing to foster continuous innovation and the development of new environmental solutions,” Gires says. “We have seen what can be achieved when we work together and multiply our ideas and efforts. For example, work done by the Oil Sands Leadership Initiative and the Oil Sands Tailings Consortium are already delivering technology that promises to reduce our environmental footprint. We want to build on these previous successes across COSIA’s environmental priority areas and accelerate the improvement of our environmental performance.” Murray Edwards, vice-chairman of Canadian

Water monitoring • Improved coordination (timing and location of sampling) for assessing related water parameters—quantity, quality, sediment, fish, benthic invertebrates, aerial deposition, acid-sensitive lakes—for cumulative effects assessment. • New sediment monitoring (loadings and quality) throughout the mainstem and key tributaries of the Athabasca River to establish baseline and downstream conditions of potential contaminants throughout the system. • New systematic sampling of snow and rainfall in order to assess the relationship between airborne processes, deposition, and surface water runoff entering tributaries and moving downstream. • New and improved monitoring techniques for measurement of contaminants ice, ice processes the impact of freeze-up and breakup, sediment processes and water measurement under ice. • New integrated and intensive scientific investigations on representative watersheds. • New intensive monitoring of sources of potential near-surface groundwater contaminants and pathways. Air monitoring • New air monitoring in upwind locations to understand the quality of the air moving into the oilsands area. • New air monitoring in downwind locations to monitor the quality of air moving out of the oilsands area. • Improved monitoring of potential sources of air contaminants to improve understanding of the levels of contaminants that are being emitted to the air from all oilsands-related sources including stacks, mine operations, tailings ponds and vehicles. • Improved monitoring to understand contaminant pathways and fate—how they move in the air and where they are deposited in the environment. • Improved monitoring methodologies that use remote imagery, mobile monitoring systems, and refined monitoring networks based on the results of special studies designed to identify locations that may experience impacts. Biodiversity (habitat) • Improved core biodiversity monitoring (species, habitats, disturbance) expanded from the current commitment in the Lower Athabasca planning region to include all current and potential oilsands producing areas to the west, including the full Athabasca deposit and Peace deposit. • New complementary cause-and-effect monitoring developed and implemented throughout the oilsands areas to better understand and manage effects of different land disturbance types. (This will be particularly helpful for migratory birds and priority species such as caribou.) • New “wall-to-wall” human disturbance map developed to cover entire oilsands region with ongoing refinement and updating. • Improved high-resolution imagery will be expanded and used to classify habitat and disturbances and to better understand and predict biodiversity patterns. Source: Alberta Environment and Water

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Natural, says COSIA’s collaborative approach is the right one. “For our industry to make strides in innovative technologies concerning environmental performance, we will have to work together to achieve continuous improvement. COSIA is the right organization at the right time and we are very pleased that it is now in place.” Companies participating in COSIA will contribute at varying levels to the alliance, based on their own areas of expertise. COSIA

wetlands), energy, waste (solid and liquid), ecosystems and biodiversity (species at risk and habitat disturbance), economics (annual operating cost and capital cost) and environmental contamination risk. Those risks will include the number of pipeline crossings and pipeline distance to water bodies. The environmental net effects evaluation is quite different and separate from the environmental impacts assessment, although some of the same data may be submitted in both instances, she said.

system, licences are granted for two years with up to five-year renewals. They will now be for five years for the initial licence and up to 10 years for renewals. Another policy under review by AEW is the Water Conservation and Allocation Policy for Oilfield Injection (2006). One of the outcomes is that the water inspection allocation guidelines will be replaced by a series of industry-specific guidelines. AEW allocates water licences under the Water Act. The act regulates the diversion of

Photo: Joey Podlubny

“ For our industry to make strides in innovative technologies concerning environmental performance, we will have to work together to achieve continuous improvement. COSIA is the right organization at the right time and we are very pleased that it is now in place.” — Murray Edwards, vice-chairman, Canadian Natural Resources Limited

will rely on the input of scientists and engineers from within the ranks of the member companies, as well as leading thinkers from government, academia and the wider public. While environmental monitoring and research are being sped up, the provincial government is already tightening water regulations in the oilsands. In March, Sarah Moody, a water process engineer for AEW, told a conference in Calgary that in situ oilsands operators can expect new guidelines for water licenses in the oilsands “fairly soon.” The new document is simply an addendum to the Water Conservation and Allocation Guideline for Oilfield Injection. The addendum specifically targets thermal in situ oilsands projects and is based on environmental net effects rather then just the availability of water. “It’s no longer just about water,” said Moody. “The intent is to conserve water and to use water with the lowest overall environmental impact.” The biggest change is under environmental net effects evaluation, she said. Environmental components under consideration will include water (total dissolved solids and water/bitumen productivity ratio), air (greenhouse gases and nitrous oxide), land (total area disturbed and area of disturbed 14

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There will also be new rules around the evaluation of alternative water sources, and that evaluation is to be submitted along with applications. “We are expecting proponents to evaluate all feasible sources for the use of surface water and non-saline groundwater sources. Those sources include transferred produced water, saline groundwater, tailings water, industrial waste water, and other non-water fluids and methods.” Another change is in search distances for water. Currently, an arbitrary search distance is required depending on the oilsands project. Search boundaries will no longer be curtailed by the oilsands lease boundary or by the relative abundance of the water. There are some circumstances under which a reduced technical evaluation will be accepted. One example is where non-saline water will only be required for start-up, and another is for renewal applications, she said. Industry has been reluctant to divulge its project economics in order to obtain a water licence; however, AEW will soon insist that if project economics are the main justification for using non-saline water, extensive economic data will be required, said Moody. The government is also going to change licence terms, which should come as good news to proponents who will have greater certainty as to their water supply and fewer renewals will be required. Under the current

water from surface and groundwater sources, with the exemption of diversions of saline groundwater (water with total dissolved solids of more than 4,000 milligrams per litre). Alberta’s Energy Resources Conservation Board regulates saline groundwater diversions while AEW has jurisdiction over non-saline groundwater diversions. Industry growth is a big factor in determining policies, said Moody. “When the government’s water conservation application guidelines were written in 2006, I don’t think the industry was expected to grow as fast as it did and the policy was written to address oilfield injection in general, rather than focusing on the oilsands industry.” Overall, Alberta’s use of water has increased, likely due to its use by oilsands operations. Alberta’s surface water for oilfield injection has declined since the 1970s while the use of saline water is increasing, she said. In 2010, there were 17 thermal in situ oilsands projects and only two operated on saline water alone. Six such projects were operating on a combination of saline and non-saline, and nine were on non-saline only. On a volume basis for thermal in situ oilsands projects, non-saline makeup water use by 2010 was about double of saline use, Moody told the conference.

Photo: Joey Podlubny

Pipeline safety improving Latest National Energy Board stats show injuries declining, but pipeline rupture still a concern for Board By Elsie Ross

hile the safety rate for workers on pipelines regulated by the National Energy Board (NEB) improved for the second year in a row in 2009, the five ruptures on natural gas pipelines are “cause for concern,” says the board in a new report. In four of these incidents, the ruptures were caused by metal loss or cracking due to corrosion; the fifth rupture occurred when a pipeline company contractor struck the line, according to the board’s annual report on safety and the environment. Three of the ruptures were on pipelines in Ontario, one was in Alberta and one in British Columbia. On average, there are 1.9 ruptures on pipelines every year. P RO F ILER M AGA Z INE . CO M

Photo: Joey Podlubny

There also were two incidents of releases of liquid hydrocarbons from pipe bodies for a total of 1,243 cubic metres (7,837 barrels). One release that involved a significant volume of product occurred on private land in Saskatchewan and did not affect any water bodies in the area. Companies reported a total of 83 pipeline incidents to the NEB in 2009, nearly double the 10-year average of 45.1 reported incidents per year. The board examines reports of these incidents to identify where improvement is needed. In 2009, there were 0.53 injuries for every 100 full-time workers, down from 0.99 injuries in 2008 and a 10-year historical average of 1.1 injuries. The reduced incidence of injury came in a busy construction year, with employees and contractors working twice as many hours as in 2008 (also a heavy construction year). The contractor injury frequency of 0.46 injuries per 200,000 hours worked on liquid pipelines in 2009 was down 34 per cent from the 2008 frequency of 1.37 and a reduction of 84 per cent compared to the 10-year average of 2.93. However, of the seven serious injuries reported to the board in 2009, five were by contractors. The most common direct cause of serious injuries suffered by pipeline workers is being hit by an object or equipment. There were no work-related fatalities on NEB-regulated pipelines in 2009, nor was any member of the general public injured as a result of a pipeline.

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However, the board said it remains concerned about the number of injuries suffered by workers in the pipeline industry, emphasizing the need for continuous improvement. “We are pleased that the number of injuries has dropped, but the level is still of concern,” Gaétan Caron, NEB chair and chief executive officer, said in a news release. “In order to reduce risk to the public and workers, proactive safety management and a culture of safety must be priorities for this industry.” As a result, NEB staff members conducted 71 safety inspections in 2009, up from 42 the previous year. The purpose of these inspections is to monitor and evaluate activities in the field and at facilities to ensure companies are complying with appropriate safety legislation, regulations, standards and NEB project conditions. The gas pipeline ruptures—defined as a “loss of containment event that immediately impairs the operation of a pipeline”— increased to five in 2009 from zero in 2008 and one in 2007. However, Brenda Kenny, president and chief executive officer of the

The number of federally regulated gas pipelines increased due to more exploration in remote areas along the B.C. and Alberta border.

Canadian Energy Pipeline Association (CEPA), does not believe they represent a new trend. While there are still occasionally some cracking or corrosion problems, the systemic problems of stress corrosion cracking in the early to mid-1990s have largely been solved, she said. “We actively pursue the management systems at a sector level and we are driving out our own integrity management system at a sector level, advancing those standards,” said Kenny. “Our number one objective is to drive towards zero [ruptures].” Pipeline integrity also will be one of CEPA’s areas of focus in 2012 because it can continue to improve through the application of more technology, said Kenny. Of the four ruptures not due to a third party, one was the result of metal loss, one cracking, a third was the result of a material manufacturing defect during construction, while a fourth is still under investigation, said Philippe Reicher, vice-president of communications and stakeholder relations for CEPA. Even though the number of gas pipe body releases on NEB-regulated pipelines increased to seven in 2009 from (six the previous year), the gas release frequency was 0.15 per 1,000 kilometres, a 63 per cent reduction from 2008, reflecting the growth in pipelines, said the NEB

“ W e are pleased that the number of injuries has dropped, but the level is still of concern.”

Photo: Joey Podlubny

— Gaétan Caron, chair and chief executive officer, National Energy Board

report. The 10-year average for gas pipeline release frequency was approximately 0.1 releases per 1,000 kilometres. (Gas releases as the result of pipe body failures include both ruptures and leaks from the body of the pipe.) On NEB-regulated liquids pipelines, there were a total of 51 operational leaks that originated from pipeline components such as flanges, valves, pumps or storage tanks. These leaks are often contained within fenced pipeline facilities, which may have a secondary containment mechanism. Of the total leak volume of 226 cubic metres, only four leaks were more than 1.5 cubic metres compared to six leaks in that category in 2008. The 10-year average for the frequency of liquid leaks from non-pipe body sources is approximately three leaks per 1,000 kilometres of pipeline. “While the number of incidents appears to have crept up, these are really minor,” said Kenny. “People will phone in just to be on the safe side, so you tend to get fairly rigorous reporting beyond what would be normal requirements of the regulations.” The number and volume of liquids spills associated with pipeline construction, operations and maintenance were lower than average in 2009, despite a large number of construction projects carried out that year. There were only 19 spills with a total spill volume of five cubic metres. For a second year in a row in 2009 there was an increase in the total number of unauthorized activities in rights-of-way for NEBregulated pipelines, to 149 from 126 in 2008. These activities, such as the movement of vehicles or equipment over a pipeline, or construction and landscaping, have the potential to damage a pipeline or may impede access to a pipeline for the purposes of maintenance or emergency response. “Increasing urban encroachment on pipeline rights-of-way is a growing concern and may result in an increased number of unauthorized activities,” said the NEB report. Also, beginning in 2008, several companies invested additional resources in landowner engagement and reinforcement of reporting criteria, which may have resulted in more accurate and complete reporting of unauthorized activities along their rights-of-way, it said. Emergency response and damage prevention is a major priority for CEPA, which has been pushing for a mandatory requirement to “call before you dig,” said Kenny. “There’s a clear trend of unauthorized activities on NEB pipelines and where people are near pipelines, damage prevention is a critical issue.” A total of 83 pipeline incidents were reported to the board in 2009, nearly double the 10-year average of 45.1 per year. The NEB examines reports of these incidents to identify where improvement is needed. In 2010, there were 106 reportable incidents, including 60 for gas release, while until September 30 of 2011, 79 incidents had been reported, including 50 for gas release (compared to a five-year average of 41 gas release incidents per year). There also were 14 fires reported in 2010 and 17 in 2011 compared to a five-year average of 14 per year. In 2010, NEB staff conducted 211 compliance activities, such as inspections, audits and emergency exercises. The board also issued a proposed regulatory change to the onshore pipeline regulations. The change is intended to clarify the board’s current requirement that regulated companies follow a management system approach with the goal of promoting a systematic approach to reducing safety and environmental incidents.

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Photos: Joey Podlubny

Fixing the future Researchers say oilsands reclamation shows promise By Lynda Harrison

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iologists researching the future of the Athabasca oilsands region’s biodiversity say they are seeing some success in their attempts to reclaim the land, avoid human-wildlife conflicts and keep birds away from toxic tailings ponds. Three University of Alberta professors shared their recent findings with a Calgary audience, agreeing they have received a warm response from industry. There is a lot of public skepticism surrounding the chances of success in reclaiming land disturbed by oilsands development, said Anne Naeth. But she pointed to similar doubts expressed a couple of decades ago about reclaiming coal mines, and said that has worked. “People always ask me, ‘Do you really think you can reclaim the oilsands?’ I always say, ‘Yes, I can,’ and I base that on the fact that even though we may be working on small areas relative to that huge disturbance, we have been relatively successful,” she said. Naeth is a professor in the faculty of agricultural, life and environmental sciences.

She is a professional biologist and agrologist and her research program focuses on land reclamation and ecological restoration. She said that she and her students had the opportunity to study an area that contained soil extracted from a mine site that had been “rough dumped” for future use but, for some reason, for several decades remained untouched. Regrowth of grasses, wildflowers, trees and fungi were found to have occurred naturally over 20–30 years. This might be used as “a bit of a road map to re-vegetate oilsands,” she said. Naith told the audience there is a scarcity of seeds, making it difficult to reclaim large-scale disturbances like oilsands. She conducted a large-scale study that found forest floor material, or LFH as the researchers call it, is three times as rich in living seeds as peat, which is traditionally used to rebuild soils in oilsands reclamation. LFH appears to produce more species diversity. Ferns, blueberries, cranberries and other species important to aboriginal cultures and wildlife showed some success, she said. However, field studies were less successful than greenhouse tests so now she is examining how to stimulate germination of those LFH seeds. Her research into at what depths LFH is most effective has found that the more stockpiling there is, the more detrimental it is to seed viability. Most of the seed was dead within a year. Mixing LFH with woody debris has some potential, she said. One of Naeth’s students is working on creating soil from various types of tailings and coke, another oilsands production by-product. Naeth said North Americans tend to want either all-native and all-natural ecosystems or a highly productive, agricultural focus while Europeans and others have embraced a combination of both. Semi-natural ecosystems can also be important, she said. “So even though you don’t have every one of the species there, those areas that we reclaim in this way can have very productive native flora and fauna, and we can preserve that biotic diversity over the long term.” People don’t always realize that it takes a long time for dramatic disturbances like oilsands projects and coal mines to be fully reclaimed, she said. Biologists can supply the building blocks such as soil, and get the vegetation started, but they take time to develop and a full-blown forest is not going to grow in just five years, said Naeth. Glynnis Hood, an associate professor in the department of science, told the audience of her 2009 research into the effects of

further industrial water withdrawals from the Athabasca River on semi-aquatic animals such as beavers, muskrats and river otters. The Peace and Athabasca rivers’ delta has been drying up for the past couple of decades, she noted, and that can’t be blamed entirely on oilsands development. “The delta itself has already experienced significant amounts of stress just from the establishment of the Bennett dam,” said the wildlife ecologist. Annual average temperatures have risen in the Fort McMurray area since the 1940s and that has also decreased water levels, through evaporation, she added. Elders she consulted spoke of decades ago needing boats to cross the area’s waterways that they can now traverse in gum boots. “Things can’t just be taken in context and we have to look at cumulative effects.”

Colleen St. Clair, who studies animal movement and human-wildlife conflict in landscapes that are altered by humans and their infrastructure, said it is common knowledge among those who have worked in the oilsands region that a lot of birds land on tailings ponds with no apparent ill effects. This is being studied, she said. This past summer, St. Clair found that long-range acoustic devices (LRADs), used as bird deterrents at oilsands tailings ponds, produce sounds measuring 156 decibels— loud enough to permanently deafen any human and presumably birds, frogs and insects. “They have their dangers,” she said. “Is there another way?” The professor of biological sciences suggested that perhaps lights can be used instead of LRADs. There is recent evidence

The potential for human-wildlife conflicts in the oilsands area is “really quite high.” — Glynnis Hood, associate professor in the department of science, University of Alberta She said 65 per cent of the area that’s been developed for oilsands used to contain wetlands, which a is critical habitat for many wildlife species. Development and reclamation within the oilsands region has to consider several things when looking at wildlife habitat: habitat connectivity (how species move through landscapes), the abundance and diversity of the habitats and their usability. The potential for human-wildlife conflicts in the oilsands area is “really quite high,” and she receives many inquiries about beaver conflicts such as flooding, tree cutting and damage. “This is something that is a real consideration when you think that you’ve got tailings ponds that have water in them that you don’t want connected with the remaining wetlands that are out there, or that you’ve got very expensive infrastructure that you don’t want altered by a little buck-toothed rodent with two little feet that just can’t stop.” Hood suggested oilsands projects can be designed to avoid conflicts and thereby cut costs. She has a research project in the Cooking Lake Blackfoot Provincial Recreation Area that is intent on mitigating some of those wildlife conflicts through water-flow devices, such as a pond leveller and various culvert fences. She said there is not a great deal of baseline data on mammals in the region and current numbers are needed to assess future effects.

that birds can see magnetism, used to navigate, in all white, human-created light. An offshore oil platform in the Netherlands participated in a test, replacing its green lights with white ones, resulting in a dramatic decrease in birds nearing it, she said. St. Clair said the Peace-Athabasca delta, 200 kilometres north of the Athabasca oilsands region, is the largest—perhaps second-largest—freshwater delta in the world and is internationally important to birds. It is the only place in North America where all four of the migratory flyways designated for waterfowl—the Pacific, Central, Mississippi and Atlantic—converge. All four groups potentially arrive in the delta during the summer migration on their way to Alaska and the Arctic to breed, and an estimated one million birds meet there again on their way south in the fall. When asked how the oilsands industry has responded to their findings, all three researchers agreed there has been good sharing of ideas. Hood said she has been amazed and delighted with the recent “sea change” in cooperation she has received from all six mining leaseholders. A workshop with industry representatives was held in January to study her data, solve problems and standardize methods. “I feel a genuine shared vision, a shared goal of wanting to achieve that, and genuine open-mindedness in trying stuff.” P RO F ILER M AGA Z INE . CO M

Calfrac Well Services Ltd. Well-trained, well-qualified people the secret to Calfrac’s success

alfrac Well Services is a leading oilfield service provider positioned in some of the world’s most exciting energy basins. Active in Canada, the United States, Russia, Mexico, Argentina, and most recently Colombia, Calgary-headquartered Calfrac is a pressure pumping firm whose primary service line is fracturing, although the company offers coiled tubing and cementing services as well. With more than 3,500 employees globally, “people are the foundation for our success.” Well-trained, well-qualified people, plus good heath, safety and environment programs, the right commodities, innovative technology, and logistics have all contributed to Calfrac’s success since its inception in 1999. “As a service organization, people will always be something that distinguishes you,” says Tom Medvedic, Calfrac Senior Vice-President, Corporate Development. “We feel we’ve got best-in-class people at every level of the organization. We have very proactively been able to add a talented group of individuals to allow us to execute on our growth plans.” Calfrac partners with its customers to provide environmentally friendly, cost-effective solutions. “Calfrac’s continual focus on green chemistry is a significant part of our business,” says Chad Leier, Canadian Division Sales & Marketing Manager. “We are taking significant steps toward becoming greener and more environmentally and socially responsible. We are concerned about the health and safety of our people, the public and the environment.” Calfrac has established strong relationships with customers, working with them jointly to provide custom-tailored solutions for

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the resource base. “A lot of these areas are heterogeneous rock, so you can’t offer off-the-shelf solutions,” Medvedic notes. “Having the ability to work together with our customer base to closely nurture strong relationships allows Calfrac to develop custom-based solutions for our customers’ specific requirements.” Safety is becoming a distinguishing feature for Calfrac as it continues to grow its customer base, particularly when working with large multinational companies with stringent safety standards. Thanks to its strong safety program, Calfrac has been able to work with some of the largest oil and gas companies in the world. “We’ve always been very committed to making sure that safety is the No. 1 priority on well sites. We continue to deploy systems where there are redundancies, to make sure there are no injuries,” Medvedic says. Execution in these resource plays relies on the latest equipment and technology, which is changing dramatically in relation to oilproducing reservoirs. “As a result, the efficiencies and breakeven levels of a lot of these oil formations continue to get better with this emerging technology,” Medvedic notes. “Some of the learnings from the shale gas revolution are transferrable and have given us a leg up in the development of unconventional oil.” Calfrac—which prides itself on its world-leading fluid systems for tight or unconventional oil development—is continuing to develop environmentally friendly fluid systems, which are becoming a

larger and larger piece of the company’s R&D budget. It has developed 12 new ‘green’ fluid systems over the last year and a half, and has been working to provide innovative solutions on the water management side, including recycling water, and using lower quality, high TDS (total dissolved solids) water in fracturing operations. In western Canada, Calfrac has been working closely with its customers to develop emerging oil and liquids-rich plays, including the Alberta Bakken, the Duvernay, Beaverhill Lake, Slave Point Oil, Viking and many others. Developing and finding the completions strategies that work best in a particular play, has allowed Calfrac to be on the leading edge of development in some of these plays. From a growth perspective, the trends Calfrac sees are largely derived off the commodity. There is a continued shift toward oil and liquids-rich gas formations, which now make up 70–75 per cent of Calfrac’s business in Canada and the United States. “This will be a growth platform for the company moving forward.” The company, which expects long-term growth in its North America operation, also sees this technology having wider applications internationally, providing another growth platform as it looks to the future. “We believe the technologies that have been developed by Calfrac in North America will have wider application internationally,” Medvedic says. “Taking this technology abroad will form another aspect of long-term growth. Having greater commodity and geographic diversification will ultimately provide much more sustainability and stability in our revenue and earnings growth.”

FAST FACTS Calfrac Well Services Ltd. Manager, Sales & Marketing Chad Leier T: (403) 218.8180 F: (403) 508.1545 E: cleier@calfrac.com

WEBSITE: www.calfrac.com

TECHNOLOGY LOOKING TOWARDS A GREENER FUTURE Calfrac is a leader in sustainable and eco-friendly technologies and practices. Our GREEN CHEMISTRIES and ﬂuid systems are tailored to unlock our customer’s valuable reserves. These chemistries are environmentally friendly and safe for our employees and the communities we operate in. We are

www.calfrac.com

compliant with all regulations and we continuously evaluate the opportunities for green technology and how it may make

“WE’RE BREAKING NEW GROUND…. EVERY DAY”

the future brighter for the environment… and ourselves.

IMV Projects Inc. IMV Projects anticipates industry change and adapts to environmental needs

MV Projects is thinking about the future and working to adapt in a changing market. As the industry continues to shift toward a more integrated approach to project execution, the Calgary-based EPCM firm is embracing a new project management and water-technology management philosophy, looking for sustainable and environmentally conscious options. By adopting a holistic approach to water and waste management, they are focusing on implementing projects that incorporate a “triple-bottom-line” of science, engineering and policy to reflect market changes. “The largest issue that is going to affect the oil sands in the next 20 to 30 years is water and waste management, not just getting the oil out of the ground,” says Stuart Torr, IMV Projects’ Director of Technology. IMV Projects is attempting to get ahead of the curve and start addressing environmental and social concerns sooner rather than later. Waste, water and environmental management are raising concerns in the industry as critical components in operations; growing scarcity and the environmental impacts of mismanagement come to the forefront. “We need to understand the connections of the total life-cycle of water,” Torr continues. “We need to recognize that you need a team of scientists, regulatory specialists and environmentalists to make the right decisions. The lowest-cost solution is not always the best one.” IMV Projects has worked hard to adjust to this growing need and offer a special blend of highly qualified and experienced professionals. The company considers this

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an important aspect of being able to deliver more for their clients (one of their core business values). To achieve this, they are also working to incorporate balanced project management into the complete evolution of a project, rather than leaving decision-making in the background of project development. Despite the growing and more integrated focus of industrial projects, as a whole the decision-making process is failing to mature within a project’s life-cycle. Some projects are progressing without decisions—and their impact—being reassessed along the way; adopting a fully comprehensive approach that includes frequent re-evaluation is still a new concept. “EPCM companies often come into projects at a stage where technologies are being selected, after the core decisionmaking has been done. But decisions need to be evaluated constantly in a project,” explains Torr. IMV Projects offers professional services relating to process design, groundwater and surface water supply and management, regulatory liaisons, and environmental and economic cost analysis. As they develop their “cradle-to-grave” project philosophy, they remain a client-focused company, working to exceed expectations. The company anticipates that the market will continue to embrace sustainable options and expects to see an expansion of this holistic concept in the future, and a diversification of industry focus, as well as more regional resource-management and integration.

“There is a market for people who understand that you care, with visions and values focused on the right things,” says Torr. “IMV Projects is reflecting on how we can make things better. We want this to be more than a philosophy; we want it to be an ingrained principle in our business.” IMV Projects company overview IMV Projects is a project management EPCM company that works with a focus in thermal heavy oil technologies, including steam assisted gravity drainage (SAGD), cyclicsteam stimulation and solvent assisted production (SAP). As a part of the Wood Group—an international energy services company employing more than 38,000 people worldwide and operating in 50 countries— IMV Projects has a local focus and an international backing. Our personnel are continually investigating new technologies, processes and practices from the perspective of Health, Safety and Environment (HSE) to help our clients identify the best course of action on their projects. IMV Projects has supported clients in numerous complex power and renewables projects, including a greenfield biomass power plant, cogeneration systems and extensive power distribution studies. IMV Projects is fully committed to best-in-class HSE performance; we recently achieved the distinction of passing the “one million supervised man-hours without a Lost Time Injury (LTI)” milestone on a grassroots, thermal heavy oil project for a major client in Alberta. Our focus is on delivering more, both to our clients and to our staff.

FAST FACTS IMV Projects Inc. Address: Suite 1400, 500 5 Ave. S.W. Calgary, Alberta T2P 3L5 T: 403.537.8811 F: 403.705.1330

WEBSITE: www.imvprojects.com

Stuart Torr Director of Technology

PROJECT MANAGEMENT ENGINEERING

PROCUREMENT CONSTRUCTION MANAGEMENT

It’s not magic. It’s a balance of science, engineering and principle. IMV Projects offers an integrated approach to water management.

A Wood Group company

msdsBinders Inc. Better Material Safety Data Sheet management just a click away

aintaining up-to-date and accessible Material Safety Data Sheets (MSDSs) for chemicals at all work locations is a difficult task and is required by Occupational Health and Safety Legislation. msdsBinders is a Calgary-based firm that helps both large and small companies with adherence to MSDS regulations. By updating and managing clients’ MSDS on the web, msdsBinders ensures that clients are compliant and that their employees can easily access MSDSs across various geographical locations. The msdsBinders system enables increased MSDS management efficiency and allows users to customize the system based on their business structure, including mobile workstations and dispersed operations. “We are very thorough. We want our clients to be able to protect their workers—not just say they are compliant,” says MSDS Binders Inc. President Mike Phibbs, a certified Industrial Hygienist who has written MSDSs for well over 20 years. msdsBinders extracts the appropriate information from an MSDS and helps clients simplify their chemical management systems, providing an easy-to-follow process to identify what chemicals clients have and what MSDSs they need. msdsBinders obtains MSDSs from the suppliers and automatically replaces the old MSDS with the updated version in clients’ accounts. Each month, clients receive e-mail notifications that detail which MSDSs have been updated. Clients are then encouraged to train their employees on the new hazard information. “This gives them an ongoing process and enables them to truly demonstrate their capabilities whenever they have their health and safety audits,” Phibbs says. Clients that want printed MSDSs in their workplaces can also print from these e-mail

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notifications. As well, entire binders can be printed with the msdsBinders system through batch printing capabilities that are complete with customized cover page, table of contents and binder spine. msdsBinders has put systems in place to accelerate the time required to retrieve information from MSDSs—giving companies the capacity to prevent incidents and retrieve information in the case of an emergency. msdsBinders also supports companies by enabling them to append safety-related documents, regulation compliant labels and training video links to the appropriate MSDS. Resources are also posted on the system for use as training material. msdsBinders also provides clients with product reference charts (PRCs) that serve as hazard-assessment summaries. PRCs can be used as a training aid, allowing employees to quickly identify a wide range of factors, such as chemical use, WHMIS class symbols and personal protective equipment (PPE) icons, and more. The msdsBinders system helps clients identify their compliance requirements for government regulations in a wide range of jurisdictions. msdsBinders has worked with clients in B.C., where there is a provincial requirement for exposure control plans (ECPs). msdsBinders simplifies the process and enables clients to assign chemicals to subgroups within the work site and identify PPE for different tasks using PRCs. msdsBinders provides similar tools to help companies meet requirements in Alberta, Saskatchewan and Manitoba, as well as the Canadian Environmental Protection Act. These tools allow clients to generate a list of chemicals in a matter of seconds. For those clients who operate in the U.S., msdsBinders has posted American legislation on its

website that companies can easily crossreference with MSDS inventories. msdsBinders continues client education with a bi-monthly newsletter that identifies occupational health issues related to chemicals in the workplace. Newsletters include an occupational health summary of the potential toxic effects of various workplace chemicals on specific organs of the human body. For example, in March, designated Kidney Month, the newsletter discusses kidney disease and its link to chemical exposure. The newsletter also provides companies with the tools they need to identify chemicals in the workplace that could affect kidney health; listing these chemicals makes the information personal to the worker. Currently, msdsBinders is working with Enform to develop a control banding application to assess health hazards in the workplace. The application identifies the level of risk and provides guidance on how to control that risk. To date, Enform has developed 50 guidance documents outlining how workers should handle hazardous chemicals and how employers can develop a plan to protect employee health. Control banding will be available to msdsBinders’ clients and at Enform.ca. Users of the Enform.ca website will be asked to manually input all of the values required to conduct the assessment (for instance, volatility, flash point, boiling point, operating temperature, quantity of use and other factors). For msdsBinders’ clients, the msdsBinders system will automatically enter the MSDS data for assessment. Mike Phibbs and Enform will present an introduction and training session on control banding at the Petroleum Safety Conference in Banff in May.

FAST FACTS msdsBinders Inc. Address: Suite 207, 5920 - 1A Street SW Calgary Alberta T2H 0G3 T: 1.855.720.MSDS (6737) F: 1.888.770.3939

WEBSITE: www.msdsBinders.com

Faster, Safer, More Compliant MSDS Management Contact us today to find out how we can improve your health and safety program. 1.855.720.MSDS

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Our robust, flexible and efficient system will assist you and your company in meeting all your chemical management needs. MSDSs are available to all workers who have internet access, in an easy-to-use and cost-effective manner. To find out how we can maximize efficiency and improve your chemical management system, contact your msdsBinders representative today.

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Our guarantee: • nO hidden charges • nO hidden fees • nO-duplicate Msds msdsBinders gives you extra value for your company’s money.

NCS Oilfield Services Multistage Unlimited™ Leave nothing behind

then back to fracturing again. The NCS Half-Straddle™ BHA allows the use of the jet cutter whenever required, then, without circulating any balls back to the surface, allows the return to fracturing in a matter of seconds. “The exciting thing is that even though we use significantly less water, the formation receives exactly the same frac treatment as before, without compromising on the job design,” Schmelzl says. “With reduced fluid volumes, there is a reduction of costly frac chemicals, and it also reduces the amount of time the frac crew is on location. The Half-Straddle™ method often allows the annulus to remain entirely free of sand, enhancing tool reliability and reducing the risk that sand lying on the casing bottom may be unintentionally mobilized and cause a screen-out. In the long run, reducing risk results in reduced costs.”

CS Oilfield Services prides itself on helping operators to realize the goal that has become the company’s mantra: “Leave nothing behind.” “When we finish with the wellbore, it’s open, unobstructed and ready for production,” says NCS Sales Manager, Eric Schmelzl, P.Eng. “Perhaps more importantly, by placing the stimulation treatments precisely where operators want them, they can be assured of recovering the full potential of the asset, and leave nothing behind when they are done.” NCS Oilfield Services began working in western Canada in 2008 with a unique downhole tool that allowed operators to perforate and fracture multiple stages in a single trip. With the evolution of horizontal wellbores, NCS successfully refined their BHA and jetting processes, so that operators could continue to apply abrasive cutting for reservoir access in the horizontal well environment. Today, although the abrasive jet-cutting method is still widely used, frac 26

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equipment shortages and rising costs mean that accelerating the speed at which operators execute their treatments is of paramount importance. This brought about the introduction of NCS frac sleeves, which have allowed operators to accelerate the speed with which they can complete their stimulation treatments. The NCS frac sleeves eliminate the need to employ abrasive cutting, saving on both time and fluid requirements, while retaining the option to jet-cut whenever desired. Industry is being tasked to lower costs by doing more work in less time, and to use fewer resources in accomplishing that goal. To that end, NCS recently introduced the Half-Straddle™ system—a marriage between frac sleeves and fracturing through coil. The technique results in a significant reduction in the amount of fluids required to execute a multistage stimulation program, in some cases by up to 50%. The challenge was to develop a method that would allow quick transition from fracturing down the inside of the coiled tubing, to jetting down the CTU,

“Our clients are very excited by the fact they require less fluid to haul, less fluid to heat, less tankage and fewer chemicals on location,” Schmelzl says, noting there is also less fluid to dispose of after the frac treatment. “We are especially pleased by impacting the amount of time required to perform the frac treatments. When we can do that, we are improving every aspect of the total well completion costs.” Cost reductions and environmental benefits aside, one of the most important factors in any completion methodology is the assurance that reserves are not bypassed. The frac stage spacing needs to be uniformly draining the reservoir, so that all portions of the reservoir are in approximately the same stage of depletion when the economic limit is reached. That flexibility of placing frac stages anywhere in the wellbore is retained by including the abrasive-jet cutter, even on wells where sleeves are installed. NCS was the first to develop a BHA that’s tolerant enough in a high-sand environment to allow this style of multistage fracturing. Since 2009, NCS’s Mongoose BHA has performed

more than 26,000 frac treatments across western Canada. NCS Oilfield Services is continually refining and modifying the BHA design and components, with the goal of enhancing the number of stages that can be achieved on a single trip, and extending the service to deeper, hotter well environments. To date, the company has completed more than 40 stages on one trip into a wellbore, and successfully placed fracs at over 4800m TMD. Its largest treatment to date has been 2.1 million pounds of proppant placed on a single trip into the wellbore, and the boundaries of the method are being extended continuously as new BHA refinements and techniques are deployed. Many operators are realizing the long-term viability of their investment is enhanced by having a cemented wellbore. “We believe the open-hole methodologies have good application in highly fractured, dendritic formations, and our sleeve methodology is applicable those reservoirs as well,” Schmelzl says. “In reservoirs that generate simple, planar fractures, we continue to see operators leaving behind the old perf-and-plug and cluster-perf methods in favor of pinpoint stimulation methods that guarantee the placement of a known number of fractures, in

specific, predetermined locations. The proof is in the production—not just initial production rates, but the total recovered reserves over the life of the well.” All NCS staff bring an extensive background in hydraulic fracturing, coiled tubing and downhole tools to the job, with more than 125 years of combined experience among senior management. “We bring to the table unique solutions to customer challenges. We have the expertise; we move quickly, and deal with our clients with a ‘small-company’ feel, which is an environment we treasure.”

FAST FACTS NCS Oilfield Services 26,000 stages pumped 298,000 tonnes of proppant placed

Sales & Engineering Manager: Eric Schmelzl T: 403.862.0870

WEBSITE: www.NCSfrac.com

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Quantum Downhole Systems Inc. Underbalanced wellbore cleanout technology

ore oil, sooner. This is what Quantum Downhole Systems is helping oil companies achieve, with a technical tool that allows a better understanding of complex well designs and how they work in a particular reservoir. Quantum’s patented JetVak system uses coiled tubing and an engineered jet pump to address the challenges producers face when developing under-pressured reservoirs. This unique technology cleans out wells and also gathers data that can help producers optimize their drilling and completions strategies. “It’s one of the tools for oil companies to go in and understand these wells and reservoirs better so they can get to that ultimate number

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faster,” says Quantum President and General Manager, Steven Winkler. The technology is essentially a vacuum cleaner (jet pump) on the end of a coil. The intellectual property aspect comprises special coiled tubing with two conduits, which allows Quantum to operate a jet pump on the bottom, creating the vacuum. The JetVak Downhole pump’s two main functions are to create simultaneous jetting and vakking. High pressure jets fluidize the sand or break through solids bridges in the liner. Wellbore fluid and solids are returned to surface via the second coil conduit in the FlatPak a patented process that allows Quantum to recover a higher volume of sand per well compared to conventional

techniques, and pinpoint zones that are producing sand into the wellbore. “It’s a clean-as-you-go approach.” Founded nearly three years ago, Quantum has clients across western Canada and in the Middle East. The Calgary-based company has been proving its technology over the past year-and-a-half, with a client list that includes many of the oilpatch majors. Quantum has completed approximately 400 operations in many of western Canada’s hot plays, including Thermo SAGD, CHOPS Lloydminster, Montney oil, Viking, Pekisko, Slave Point, and the Lower Amaranth. Compared to traditional systems, JetPak offers improved safety and logistics benefits. There are only a few depots where

Quantum’s patented JetVak system cleans out wells and gathers data that can help producers optimize their drilling and completion strategies. nitrogen—one of the most common mediums used for conventional cleanouts—is available. “So there is a lot of trucking going on to move that product all over.” In comparison, Quantum uses water that typically comes from in-field, so the logistics are simpler. Safety is a huge feature with JetPak, since no air or oxygen enters the wellbore, eliminating concerns about creating explosive mixtures downhole. “Our system typically utilizes 100 per cent water, so if there is a break in the line it becomes a leak,” Winkler says. “It is a really safe work environment on location.” Recently, Quantum has been doing production evaluations on horizontal wells. It’s now developing an isolation system that uses inflatable packers in combination with the modified jet pump. Information—including stage-by-stage oil, water, gas and sand ratios can be cross-referenced with producing bottomhole pressure and temperature information—helping create an accurate economic model for the well and potentially leading to higher productivity, improved fracture treatments and higher overall reserves. In many cases, Quantum is recovering fluids and/or solids that clients have never seen before, such as drilling mud, enzyme breakers, frac gel and sand.

Quantum is constantly refining the technology; “it’s something we are committed to.” The company is also developing all-steel ‘ArmourPak’ coiled tubing, which could replace its current vulcanized thermo plastic jacket ‘FlatPak.’ A second technology under development is a jetting system to increase jetting flexibility and reduce the number of runs required in a well when production testing is part of the program. Going forward, Quantum is seeking to gather more information on reservoirs using its technology. “Our findings are showing that in many cases the full lateral section of these horizontal wells is not being utilized,” Winkler explains. “We’re seeing that via the returns we’re getting out of the wells. What we want to do is work with the producers to see how we can use this information so they can better exploit their assets.” This is where Winkler sees the future for Quantum Downhole Systems “because the big picture is understanding the relationship between the wellbore and the reservoir. This information can give oil companies more oil, faster.” He adds: “How we choose to evaluate the data and how we get there is something we need to do together. I’m not claiming we have the answers for everything. Based on our

findings, there are some big question marks, and we need to work together as an industry. We have something here that we can use to get more data on the wellbore-reservoir relationship and what it really is. We feel it could be very valuable and should be evaluated right now. “We have interest from many places around the world, and we are looking at expanding into these places, because the needs we have here are not localized; they are in South America, the Middle East, Australia, New Zealand, you name it.”

FAST FACTS Quantum Downhole Systems President/General Manager: Steven Winkler T: (403) 450.8280 C: (403) 803.8307 E: swinkler@quantumdownhole.com

WEBSITE: www.quantumdownhole.com

P RO F ILER M AGA Z INE . CO M

P2 Energy Solutions Safety from the wellhead to the boardroom Going beyond compliance

‘H

ow do I know we’re in compliance? How do I know we’re operating safely? How do I know my employees are certified to perform their assigned work?’ To help answer these essential questions and to help companies not only meet their compliance needs, but also be proactive in going beyond compliance, P2 Energy Solutions can help. While compliance and safety have long been concerns of oil and gas companies, the industry is seeing increased enforcement and pressure from regulatory agencies, and even neighborhood communities, to ensure that companies are operating safely—and to prove that fact. Companies need to easily track, escalate, remediate, report, and audit critical and near-miss incidents in the field and the office. Additionally, companies need the confidence that their employees are trained and that they can respond to inquiries and investigations. Having the ability to prove compliance is more important than ever. The P2 Beyond Compliance solution “organizes all health, safety and regulatory compliance-related activities into one integrated database,” explains P2’s Director, Product Management - Compliance, Jeff McPherson. “It provides oversight into what the compliance requirements are and the activities they drive, organized by job function within the organization.” P2’s compliance solution also provides a methodology with clear instructions outlining what needs to be done, and a checklist of questions supporting these activities. The information is easily accessible by employees who need to complete the tasks, from a hand-held device 30

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or any web browser, to e-mail notifications that keep users updated without having to log in to check on progress. Finally, senior management receives statements on all completed activities, allowing them to look at the data and confidently answer the question, ‘Are we in compliance?’ “The P2 suite of tools offers a closed-loop workflow for all of this activity, providing a personalized perspective to each user based on their roles,” McPherson says. “It’s a very compelling value proposition to management, because if somebody gets hurt or equipment malfunctions, the cost to the company can be crippling,” observes Gerry Conroy, P2’s Vice President, Product Management for Operational Solutions. Leveraging the P2 solution provides companies with a consistent means for reporting, investigating and understanding what causes incidents to occur. With Beyond Compliance, companies can implement changes through training programs and procedures to improve their workforce’s overall competence, and measure a reduction in the types of incidents that have occurred. According to McPherson, companies have typically organized tasks, procedures and methodologies for workers to follow. In most cases, however, they have not reached the end state of having a wellorganized, consistent set of procedures covering critical and hazardous tasks. This is a key underpinning to the P2 solution— helping companies know that workers are competent to do their jobs. Providing workers with a competence dashboard

promotes ownership of their individual progression plan and keeps them up to date on changes in the critical procedures they use every day. P2 helps companies assess competence with team and company dashboards that highlight current status and progress over time. “A key value proposition that P2 brings to the market is the ability to collect data consistently across the organization, merge it with data from legacy systems and present an overall compliance dashboard to highlight gaps,” McPherson says. This allows companies to identify potential problems before they occur and quickly address any gaps with new programs or a new focus. “This is a leading indicator. It really connects senior management and their board to what workers in the field are accomplishing.” “P2 can help unify field workers and align them with the goals of the management team. This results in confidence by the management team that their values and core pillars of operating excellence are being followed by workers out in the field,” Conroy says. The most responsible oil and gas companies are thinking beyond compliance. P2 helps them get there. Headquartered in Denver, Colorado, with operational offices in Houston and San Antonio, Texas, and Calgary, Alberta, P2 Energy Solutions provides software, data and services to oil and gas companies focused on upstream exploration and production around the globe. Serving more than 1,200 customers in over 65 countries, P2 offers sound solutions including enterprise resource planning, financial and land management, well lifecycle management and health, safety and environment.

FAST FACTS P2 Energy Solutions Director, Product Management - Compliance Jeff McPherson

WEBSITE: www.p2energysolutions.com

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