Pipeline News March 2015

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Saskatchewan’s Petroleum Monthly March 2015

Canada Post Publication No. 40069240

FREE

Volume 7 Issue 10

Security:

Keeping an eye out

It could be an early breakup A3

CAODC braces for impact A5

New truck stop on Estevan bypass B1

Shawn Schneider, a product support specialist for Noralta Technologies set up this nSight mobile trailer outside the Lloydminster shop. A remotely controlled HD infrared camera provides 24/7 monitoring of yards and oilfield sites. See related story on Page A14. Photo by Geoff Lee

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PIPELINE NEWS March 2015

INSIDE SECTION A

4

CAODC braces for economic impact

14 nSight by Noralta eyes all

5

Upland Pipeline has shipper support

16 Husky cheers charity cheques

6

Editorial

22 Oilman travels well but can he curl?

7

Opinion

24 TransCanada Ďdžes eyes on the prinje

8

The man with the guts to say "NO"

26 Wainwright bonspiel

12 New drilling forecast grim

28 Wait list for Energy Centre

SECTION B 1

New truck stop on Estevan bypass

ĎŻ

CombaĆŤng fuel theĹŒ

4

Lining up students with work

17 Thru Tubing SoluĆ&#x;ons has new Estevan locaĆ&#x;on

5

Crescent Point accounts for nearly half of all Sask. drilling acĆ&#x;vity

21 Estevan vacancy soars

7

Weyburn bonspiel

8

Dayman Trucking selling oÄŤ iron

16 TS&M Supply moves to new headquarters in Estevan

22 ShiĹŒ from construcĆ&#x;on to equipment rentals 24 From bodyguard services to protests to pipeline patrols

PIPELINE NEWS Saskatchewan’s Petroleum Monthly

April 2015 Focus Contact your Sales Rep to be a part of the focus edition

EMPLOYMENT & TRAINING

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PIPELINE NEWS March 2015

TOP NEWS

It could be an early breakup, and that’s not due to weather By Brian Zinchuk Pipeline News Calgary – It may be a rough, long road ahead for the oil industry, according to Mark Sakeld, president and CEO of the Petroleum Services Association of Canada (PSAC). He spoke to Pipeline News via phone from Calgary on Jan. 24. “We’re bracing for a difficult road ahead, is a broad perspective. We’ve had some really interesting discussions around our boardroom table, interesting meetings with our members. We’ll be meeting up with the producers early next month,” he said. “At this point in time, it’s not looking good. To add to that, right now we’re in our winter activity mode, and it’s going good. Contracts are in place and wells are being drilled. The interesting comment I’ve heard with regards to this quarter is the breakup may come sooner than normal based on economics versus environment. We shut down for breakup with the thaw, but with budgets being slashed, we might be shutting down sooner. Oil was priced at under $50 a barrel WTI when Sakeld spoke about prospects for PSAC’s members the rest of the year. “Into Q2, it will be very, very interesting. Q3, I’m hearing all sorts of comments about it being quiet. As early as

yesterday I heard flat into Q4,” he said. “The main story I’m getting is it’s going to be a rough year overall. There might be a bit of a pickup toward the end. Nobody really knows. “The one thing I am impressed with in the conversations with our members is there is a lot of effort in retaining people. Before, years ago, I was laid off because of the NEP (National Energy Program). I’ve never forgotten it. The highest cost was labour, so you just got rid of it. “There’s so much invested today in skills and training and safety and technology and competency, you do anything you can to keep people.” Sakeld noted PSAC has contacted the federal government about job sharing programs to help the industry keep jobs until oil and gas prices recover “We’re bracing for the worst,” he said. With regards to strategies in dealing with the slowdown, he said No. 1 is the job sharing program, which saw use during the last slowdown. It saved some companies. “The industry won’t shut down 100 per cent. We will drill wells and we will hydraulically fracture and complete them. It’s not like every piece of iron is being pulled out of the field,” he said. “It’s not going to

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Mark Sakeld is president and CEO of the Petroleum Services ssociaƟon of Canada (PSAC). File photo

stop dead. There will be work. But how can you keep your people we asked? When I was on the rigs we would work two week shifts instead of three weeks to give another crew two weeks. It’s not as big a paycheque, but you get a paycheque. “We’re talking wage rollbacks, and obviously no bonuses – just tightening things up.” Letters from oil and gas producers demanding price cuts sent “bad ripple effects through our members,” Sakeld said. “I worked for a drilling company once upon a time. In ’08-’09 we took wage cuts. I was in management. In the downtown core week – took wage rollbacks and a week off without pay.” PSAC’s members

are trying to avoid layoffs, but there comes to a point where they have to, he noted. If employees working together to lower costs, there won’t be a company, he noted in some cases. “If these companies are forced to take 30 per cent cuts on their invoices and they have to close their doors, you’re going to go from 100 service companies to three. You know what’s going to happen to the producers when things fire up again – they’re going to be paying triple time back for that little exercise. That’s part of the message we need to take (to the producers). We need to work together – companies, employees, to manage the sector. “I’ve been there, five times. We come out

the other end better; stronger, more efficient, faster, safer, effective. It’s a correction. It’s an ugly correction. It’s not pretty in a lot of areas. But we do improve on the other end.” Sakeld offered his take on how this downturn compares to those five previous times. “It has the potential to be a bad one. The reason I say that is some of the reports and the sessions I’ve been to (say) it’s essentially a price war, with Saudi Arabia on one side and a bunch of other producers on the other,” he said. He noted they’re trying to re-assert OPEC’s position in the industry. But he acknowledges North America’s technology has unlocked millions of more barrels of produc-

tion. “It’s interesting. Yes, North America, because of our technology – and I’m proud of what we’ve done with multi-stage hydraulic fracturing and horizontal drilling. That’s what’s opened it up, and our sector has played a significant factor in developing that technology and creating what we have here today. But having said all that, we ramped up, we’ve pushed back demand, but we’re not their only customer. They’ve got Asia and India. At the end of the day, they’re the guys with the foot on the gas pedal. They increase it or decrease it. They always have been the swing. They can adjust and make their money,” Sakeld said. ɸ Page A11

PSAC revises well forecast downward (Daily Oil Bulletin) Three days after Pipeline News spoke to Petroleum Services Association of Canada president and CEO Mark Sakeld, the organization revised its drilling forecast. In its first update to the 2015 Canadian Drilling Activity Forecast, PSAC revised its forecasted number of wells drilled (rig releases) across Canada for 2015 to 7,650 wells. This is a decrease of 2,450 wells from PSAC’s original 2015 drilling forecast released in late October 2014, representing a 24 per cent decline. The Canadian Association of Oilwell Drilling Contractors (CAODC) issued Jan. 23 an updated drilling activity forecast — which shows a total of 6,612 wells completed in 2015, off from the actual total of 11,534 wells completed last year — reflecting the significant changes in commodity prices since the summer of 2014. PSAC is basing its updated 2015 forecast on average natural gas prices of C$2.50 per mcf (AECO), crude oil prices of US$57 (WTI) and

the Canada-US exchange rate averaging 84 cents. “The rapid decline of oil prices over recent weeks is taking hold,” said Salkeld. “There is enormous pressure on services companies to cut costs even in the face of slim margins. They are responding and some difficult times may lie ahead in the immediate term, but companies are focusing on what can be done now to keep key personnel, enhance efficiencies and optimize operations.” On a provincial basis for 2015, PSAC now estimates 4,187 wells to be drilled in Alberta, down from 5,740 wells in the original forecast. Approximately 25 per cent fewer wells are also expected to be drilled in British Columbia, with PSAC’s revised forecast now at 415 wells for the province, down from 555 in the original forecast. The revised forecast for Saskatchewan now sits at 2,679 wells compared to 3,365 wells in the original forecast, and Manitoba is forecasted to see 364 wells or a decline of 66 in well count for 2015.

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PIPELINE NEWS MARCH 2015

BRIEFS Carnduff Bonspiel

The Carnduff Curling Club is hosting the 2nd annual Open Oil Bonspiel. The event will take place March 6,7,8. There will be a live Calcutta Friday night. Sat night features smoked beef brisket supper and a DJ cabaret. The entry fee is $160. It have been $250, but it lowered due to the oil industry changes recently. Entries can be made by calling (306) 485-7171.

Man. kicks off 2015 land sale The Manitoba government kicked off its 2015 land sale schedule with a $637,098 February sale, which is lower than last year’s February sale, but higher on a per-hectare basis. Industry acquired 832 hectares this week at an average price of $765.74. The same sale of 2014 generated $811,729 on 3,024 hectares at an average price of $268.43. Plunkett Resources Ltd. produced the bonus bid high of $257,664 for a 64-hectare parcel. The broker paid an average of $4,026 for the northeast quarter of section nine at 13-27W1. Also at the sale, Scott Land & Lease Ltd. picked up a 256-hectare lease for $234,831. The parcel, which generated an average price of $917.31, included section 36 at 13-28W1. Briefs courtesy Nickle’s Daily Oil Bulletin

Mark Scholnj͕ president of the Canadian AssociaĆ&#x;on of Oilwell Drilling Contractors recently released the industry’s ÄŽrst revised drilling acĆ&#x;vity forecast for its service rig and drilling rig member companies in 2015 since the recession in 2009. File photo

“It’s 23,000 jobs that are threatened. This is a serious matter.�

– Mark Scholz, president of CAODC

CAODC braces for economic impact „ By Geoff Lee Pipeline News Low commodity prices have prompted the Canadian Association of Oilwell Drilling Contractors to revise its annual drilling activity forecast for 2015. CAODC expects a fleet utilization rate of just 26 per cent in 2015 for service rigs and drilling rigs based on WTI oil at US$55 a barrel. Decreased drilling activity could lead to the loss of 23,000 direct and indirect jobs. CAODC president, Mark Scholtz spoke to Pipeline News about the impact of the slowdown on his industry during a phone interview on Jan. 23 with oil hovering around $45 a barrel. Pipeline News: Is this the first time you’ve had to revise your drilling activity forecast? Scholtz: It is not. We revised it once before and that would have been in 2009. PN: How does this downturn in the industry differ from the last one in 2009? Scholtz: Well, I think there are a number of things at play here. In 2009, we had a financial market collapse so we had difficulty raising capital. We were in a recessionary position globally. This time, we’re in a situation of slow growth and we have an increase in supply of crude. Five years ago, I don’t think anybody predicted the level of production that we would see in the United States in excess of five million barrels per day. So the added supply in the market has really changed the dynamic of crude in a global sense and this is a global business. We are responding to slow growth globally and an increased supply. PN: Are there any lessons learned from 2009 that can apply this time? Scholtz: I don’t think you can compare the two. Every bust has its own scenarios and factors that are in play. You go back to the ’80s where a lot of that was related to government intervention – and the ’90s were different. Today it’s just – we deployed these technologies in North America that allowed us to go back to plays that we once thought were uneconomical.

But the introduction and the feasibility of new drilling technologies and techniques have made those plays economical at the price point that we saw eight or nine months ago. Now fast forward eight months with 65 per cent erosion in pricing – most of these plays in North America can’t even break even. PN: What are companies doing to weather the storm in 2015? Scholtz: Well, there’s a number of things. They have to seriously look at all of their operating costs, SG&A (selling, general and administrative expenses) all the way down to everything from specific things related to field operations. So it really is a matter of making sure you’re running as efficient and as a lean as possible. Even with a forecast of 26 per cent utilization similar to what we saw in 2009, the work just isn’t there. In January of last year we were at about 65 or 70 per cent utilization. Today we’re below 50 per cent. So even in January in our busiest time of the year we are just not there. PN: What are your thoughts on the potential for 23,000 job losses in 2015 from reduced drilling activity? Scholtz: That’s a pretty incredible number. That’s the reality of how important this industry is both from a direct employment perspective and indirect. There a number of people that are going to be impacted – families, workers. We just hope this doesn’t stay this way for long. PN: Is this potentially the worst downturn for job losses by your industry? Scholtz: I can’t really comment. I haven’t done an analysis back beyond 2009. All I can say is the numbers are daunting. It’s 23,000 jobs that are threatened. This is a serious matter. PN: Who gets hardest hit in your industry by this reduction in drilling activity? Scholtz: Well, initially right at the start it’s service companies because from a cash flow perspective if a service rig or a drilling rig contractor is not working they don’t have cash flow – zero cash flow. ɸ Page A10

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PIPELINE NEWS March 2015

TransCanada announces Upland Pipeline has shipper support New pipeline would ship North Dakota oil to Moosomin, and Energy East

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By Brian Zinchuk Estevan – When TransCanada first formally announced its Energy East Pipeline project, there were some open questions with regards to its planned terminal near Moosomin, Sask. This on-ramp to the 1.1 million barrel per day pipeline was very nebulous at first, as they announced no plans for a gathering system, nor rail or truck facilities. Now it appears that further plans for that on-ramp are being fleshed out, with the announcement on Feb. 13 of a successful open season for a new pipeline from North Dakota to Saskatchewan that would join Energy East at Moosomin. The new proposal is being called the Upland Pipeline. Subject to regulatory approvals, TransCanada anticipates the Upland Pipeline to be in service in 2018. The commercial contracts we have executed for Upland Pipeline are conditioned on Energy East Pipeline proceeding. The Upland project is in addition to what TransCanada had already explained would be their on-ramp, an approximately 70 kilometre lateral pipeline to Cromer, Man. This line would allow Saskatchewan and Manitoba oil to be shipped on the En-

ergy East Pipeline. Cromer is a strategic location where Enbridge has its mainline terminal. Tundra Energy Marketing also has a terminal there. It’s the collection point of Enbridge Saskatchewan’s gathering system and the former EOG, now Tundra, line, that runs from Waskada to Cromer. Tundra, in partnership with Enbridge, also has a unit-train rail loading facility a few kilometres from the main Enbridge and Tundra terminals, connected via a short pipeline. The 2014 TransCanada annual report states the Upland Pipeline would be 460 km long, transporting crude oil from and between multiple points in North Dakota and interconnect with the Energy East Pipeline at Moosomin. That pipeline is expected to cost $600 million. The pipeline would begin on the southern side of Williston, North Dakota, cross the Canada-U.S. border near Flaxton, N.D., (Northgate, Sask.) and end near the Manitoba-Saskatchewan border in Canada. The preferred pipeline corridor in Canada has not yet been finalized. TransCanada has not said if it will connect to their planned lateral from Cromer to Moosomin. ɸ Page A11

780-875-6535

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BRIEFS Mullen Group is in the hunt

Speaking on BNN on Feb. 13, Murray Mullen, chair and CEO of the Mullen Group, said, “Crude oil’s found a floor, maybe, and that’s a relief to all of us,” however, activity was going to be low. “If you don’t drill, you’re not replacing production. Eventually it gets resolved. When, I just don’t know.” The company expects their trucking and logistics side will do better than their oilfield services side. “Since 2013, we’ve been allocating all our capital away from oilfields services side and more towards trucking and logistics,” Mullen said. “I think by ’16, trucking and logistics will be the biggest part of our business. Right now its about 50/50. Last year it was two-thirds oilfield logistics, one-third trucking.” He noted they had a large acquisition in January 2015 of Gardewine Group. Mullen said, “We’re not going to leave the oilfield services side. You have to let it go through the next cycle, then we’ll position for what the next cycle is. We will look at all those things. But for the time being, I’m going to let this play out on the oilfield services side and focus more on our trucking and logistics side.” “We’re going to pursue acquisitions. We’re going to grow our business,” he said. “If the whole oilpatch falls apart, we’ll have to revisit that.”

Briefs courtesy Nickle’s Daily Oil Bulletin

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PIPELINE NEWS March 2015

PIPELINE NEWS

EDITORIAL

Mission Statement: Pipeline News’ mission is to illuminate importance of Saskatchewan oil as an integral part of the province’s sense of community and to show the general public the strength and character of the industry’s people.

Publisher: Brant Kersey - Estevan Ph: 1.306.634.2654 Editorial Contributions: SOUTHEAST Brian Zinchuk - Estevan 1.306.461.5599 SOUTHWEST Swift Current 1.306.461.5599 NORTHWEST Geoff Lee - Lloydminster 1.780.875.5865 Associate Advertising Consultants: SASKATCHEWAN & MANITOBA R5 -. 0 (5g8ifl8lij8hlkj Cindy Beaulieu Candace Wheeler Kristen O’Handley Deanna Tarnes Teresa Hrywkiw R5 ,&3& 5g8ifl8jki8hkhk Alison Dunning NORTHWEST SASK. & ALBERTA R5 &)3 '#(-. ,5g8mnf8nfn8imfl Krista Thiessen CENTRAL Al Guthro 1.306.715.5078 To submit a stories or ideas: Pipelines News is always looking for stories or ideas from our readers. To contribute please contact your local contributing reporter. Subscribing to Pipeline News: Pipeline News is a free distribution newspaper, and is now available online at www.pipelinenews.ca Advertising in Pipeline News: Advertising in Pipeline News is a newer model created to make it as easy as possible for any business or individual. Pipeline News has a group of experienced staff working throughout Saskatchewan and parts of Manitoba, so please contact the sales representative for your area to assist you with your advertising needs. Special thanks to JuneWarren-Nickle’s Energy Group for their contributions and assistance with Pipeline News.

Published monthly by the Prairie Newspaper Group, a division of Glacier Ventures International Corporation, Central Office, Estevan, Saskatchewan. Advertising rates are available upon request and are subject to change without notice. Conditions of editorial and advertising content: Pipeline News attempts to be accurate, however, no guarantee is given or implied. Pipeline News reserves the right to revise or reject any or all editorial and advertising content as the newspapers’ principles see fit. Pipeline News will not be responsible for more than one incorrect insertion of an advertisement, and is not responsible for errors in advertisements except for the space occupied by such errors. Pipeline News will not be responsible for manuscripts, photographs, negatives and other material that may be submitted for possible publication. All of Pipeline News content is protected by Canadian Copyright laws. Reviews and similar mention of material in this newspaper is granted on the provision that Pipeline News receives credit. Otherwise, any reproduction without permission of the publisher is prohibited. Advertisers purchase space and circulation only. Rights to the advertisement produced by Pipeline News, including artwork, typography, and photos, etc., remain property of this newspaper. Advertisements or parts thereof may be not reproduced or assigned without the consent of the publisher. The Glacier group of companies collects personal information from our customers in the normal course of business transactions. We use that information to provide you with our products and services you request. On occasion we may contact you for purposes of research, surveys and other such matters. To provide you with better service we may share your information with our sister companies and also outside, selected third parties who perform work for us as suppliers, agents, service providers and information gatherers.

So what happens to crude-by-rail now? With crude oil prices in the tank, it’ll be interesting to see if that crude continues ending up in the tanker, as in tanker rail car. The National Post reported on Feb. 2 that demand for rail tanker cars had, well, tanked. Fifteen complete unit trains were sitting in storage in the U.S. Midwest. Lease rates had plummeted, with one report of monthly leases dropping for $4,000 to as low as $500. If it really has hit that low, that’s less than $1 per barrel in that tanker car. Anything lower, and they’d be paying the leasee. The article went on to talk about how the spread between West Texas Intermediate and Brent crude had fallen to $5 a barrel from $28 in 2011, and that African crude was now displacing North American rail-sourced crude at eastern ports. These developments have profound implications for our industry. Just last fall we were writing about the huge increase in crude-by-rail shipments and new loading, larger facilities popping up all over the place. There’s been a substantial transition from Phase 1 crude-by-rail – trucks loading directly into rail cars on little more than slightly improved rail sidings, to Phase 2 – purpose-built loading facilities connected to substantial nearby tank storage. This could be found at Stoughton and Cromer, Man., with another planned for Kerrobert. One of the largest developments was the construction of the Ceres Northgate Commodity Hub, with its new loop track within spitting distance of the U.S. border on the BNSF railway. Their development plans saw grain loading as a first priority. One wonders if planned crude-by-rail facilities might be put on the backburner for a while? None of this is really surprising. Numerous talks over recent years at the Williston Basin Petroleum Conference in both Regina and Bismarck, N.D.

pointed out that crude-by-rail is the most flexible part of the transportation puzzle. It could dramatically add shipping capacity easily and cheaply (to set up), but would be more expensive to actually use on an ongoing basis than traditional pipelines. There’s always been an understanding that crude-by-rail, as the most expensive shipping option, would be the first to go when other alternatives became available. The assumption was always that new, additional pipelines would displace crude-by-rail. Shipping by train would be a transitional strategy at best, and when the pipelines were built to handle all that new crude from North Dakota, well, rail would start to diminish. But then something unexpected happened. Rail opened up new markets, like the east coast refineries, allowing mid-continental oil to compete with, and indeed displace, a lot of ocean-tanker-borne crude. One speaker at the 2014 WBPC noted they had saved the east coast refining business, which was on the down and out. Apparently the gratitude for being “saved� didn’t last long, with African crude now reclaiming those same refineries. The new pipelines, of which Keystone XL is one, have not yet come anywhere close to the takeaway capacity needed to contend with the North Dakota Bakken’s 1.2 million barrels a day production. Even with the precipitous decline in oil prices, North Dakota’s production is going to be over 1 million bpd for a long time to come. Rail will still have a place, even if it’s not as sexy as it once was. Without new major pipelines, crude-by-rail will still be needed, but how it can compete in a world of sub-$50 oil is another question. One last thing, just before this paper went to press, one crude-by-rail train derailed and caught fire in northern Ontario, and another did the same in West Virginia.

PIPELINE NEWS March 2015

From the Top of The Pile

A7

OPINION

By Brian Zinchuk

Not everyone is willing to take a haircut Here’s something to ponder: oil sector service companies now have a stack of letters on their desks demanding they cut the rates they charge the oil producers. Those letters suggest if they want to keep the business from those companies, this must be done. Now consider every vendor at some point has to buy fuel. Fuel is, in a roundabout way, produced and sold by the very upstream companies demanding cuts in rates. While the price of fuel has dropped (gasoline more than diesel), what would those same oil companies say when the people buying fuel send letters demanding a cut in the price of fuel, beyond the drop in the price everyone pays? What will the insurance companies who underwrite those service companies say? What about the owners of the real estate upon which long-term leases have been signed? Will they accept a cut in the monthly lease? A cut of as much

as 30 per cent, a number we have heard floating around a lot? Will the grocery store take less for a loaf of bread to make sandwiches? Most of the oilpatch is not unionized, save big-inch pipeline. Will big-inch pipeliners abandon their hard-won contracts and take pay cuts? In some cases, the answer to the broad question of “do you take a haircut?” is “yes.” Hoteliers are cutting rates. Nearly all oilfield service companies that have been asked to cut rates have done so, from the conversations we have had. Most, but not all. In one case, the iron is up for sale and the owners are going to sit this downturn out. They might even cast a fishing line or two. In another, the answer is no, they are not cutting rates. Estevan was abuzz on Feb. 12 after a letter to the editor by Svein Bryeide appeared in our sister publication, the Estevan Mercury.

Bryeide spoke of getting the same letters. He supposes he’ll be the first on the blacklist. As the oil price rout continues to take its toll, more pain will be felt. On Feb. 12, Cenovus announced it was cutting 15 per cent of its staff, mostly contractors. To save money, they’ve slashed travel and even told workers to print in black-andwhite, not colour. Each business, each business owner, is now facing tough decisions. How much can they cut? Can they cut at all? Or, as Bryeide suggested, are they going to work themselves broke? When oil prices were high, the saying was a rising tide floats all boats. But these days, it’s increasingly a case of sink or swim.

Lee Side of Lloyd By Geoff Lee

Are laid off workers gone for good?

Just a few months ago oil and gas companies of all sizes and business profiles were scrambling to hire and retain new workers. As oil prices began their steep plunge large companies that operate in Canada announced major layoffs along with a reduction in capital spending, investments and operational activities like drilling. The list of companies cutting human resources includes Suncor that announced plans to cut 1,000 jobs from its oil sands project. In addition Haliburton is axing 1,000 jobs from its global workforce of 80,000. Baker Hughes which Haliburton is acquiring this year is slicing 7,000 jobs from its global payroll of about 60,000 employees. Schlumberger also announced plans to cut 9,000 employees or about 8 per cent of its global workforce as the domino effect of cutbacks takes hold. A percentage of all these job cuts by international operators will affect Canadian workers and lessen the need for temporary foreign workers. Temporary foreign workers were being hired to fill jobs that no Canadians were available to fill. That’s no longer the case as the layoffs in the industry pile up. Let’s hope Canadians are hired now to replace temporary foreign workers that are no longer

needed as much as they were previously. The large jobs cuts by these giant companies also question how valuable skilled workers really are to the oil and gas industry if they can be let go so easily. Trying to hire them back when oil prices recover is a lot harder than some of the available options first. No company can make any money without experienced workers. Letting labour go to satisfy shareholders or balance sheets won’t do the bottom line any good in the long term when the next labour crunch looms. Oil and gas companies need to extend their horizons longer than the next quarter. They tend to rely too much on three month increments to measure their operating periods. A lesson from the previous recession is to plan to retain workers or they will find full work in some other industry that needs the same type of skilled workers. Job sharing, a shorter work week and pay cuts are all better than not having any workers when times improve for companies as they will. Similarly for workers, a job is better than no job especially when the situation may not be long term. It’s widely expected that the downturn in oil prices is not due to an economic recession as the previous slowdown was.

It seems to be all about OPEC producer Saudi Arabia seeking to regain market share lost to North American rivals. What this means is all those laid off workers can easily find jobs in other sectors across Canada as the oil industry feels the brunt of the economic pain. Small- to mid-size companies lay off workers too, but they try hard to keep everyone busy in order to be busy when prices recover. These companies can also use the opportunity to replace some of their less desirable employees with more skilled workers that have been laid off by the large companies. When the recovery takes hold they will be better positioned than some of their competitors. There must be other ways to cut costs that ridding yourself of your most valuable asset – employees. The obvious ones are, restricting travel, focusing on core activities, leasing equipment, and reaching out to international markets and asking employees to take vacations now. Less obvious ones might to catch up on planning for the next wave of expansion and even construct new buildings with available labour and lower cost materials. Before laying workers off think at how you can keep them on. Someone has to be there to turn off the lights.

LETTER TO EDITOR Dear Editor: I would just like to point out an inaccurate statement in your December 2014 Welcome to truck country editorial. You stated that Chassis Cabs were available from Chrysler and Ford but not GM. That is completely inaccurate as GM has both Chevrolet and GMC chassis cabs available in many cab, wheelbase and engine options. I have also

attached photos of units in our inventory. I would just like to say that I enjoy your publication and hope you keep up the good work. Regards Wayne Mayowski Fleets Sales Manager Tercier Motors Ltd. Bonnyville, Alberta

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A8

PIPELINE NEWS March 2015

The man with the guts to say “No” By Brian Zinchuk Estevan – A letter to the editor published in our sister publication, the Estevan Mercury, was the talk of the town on Feb. 11 and 12. That’s because Svein Bryeide was likely the first business person in the oilpatch in southeast Saskatchewan to publicly say “No” to demands from oil companies for vendors to cut their rates. Svein Bryeide Construction Ltd is a dirt-moving company based in Benson. While he was sitting with Pipeline News at The Flats restaurant on the west side of Estevan the day after the letter was published, Bryeide had a man come up to him. “Good editorial,” the man said, leaning over to pat him on the shoulder. “Who was that?” we asked Bryeide. “I don’t know,” he replied. That’s how his whole morning was. Every supply store he went to for parts, the reaction was the same. Pipeline News heard similar comments from everyone else encountered on that day. “Did you see Svein Bryeide’s letter?” was the common reaction. Finally, someone had stood up and said no, was the sentiment. While Crescent Point’s letter of Dec. 16 to its vendors requiring cuts in prices seemed to get the ball rolling, by early February it seemed many oil companies had gotten into the act. Vendors had stacks of letters on their desks, demanding cuts in prices during this time of low oil prices. There was a common implicit threat that those who did not cut prices would not see a lot of work in the future. “I guess I want to be the first on their blacklist,”

ffer: o r u o y ecline d n Ltd l o l i i t w c set u r t We s e do not n W o . s e C t a r going r is. We yeide r B rk at the hy our custome o w n i d o e o Sv ate g ow wealt ations.

oper t s on h r cost of r vice sector tha our rate u o n o s t e e s h t . a e ig r h in L r t a u set o or: er from f you in think ag ed a lett ificant The Edit r those o ates, you better our undern iv o e ig c F s e r a g ly nt tin to cut r ere in y escent We rece es Ltd., reques pants. e out th re going b tand Cr a s c l r r il e u d o w o afford s t n u e u o le R I y b . a r s m a e e a t e b a oing stre Next y ser vice r g. ou won’t g worse than g y n in o e s t s n u e d a u o c m o o e disc of g the sa wear b one thin broke. singing ears now ies are re is only orking yourself ld telling e Th n Point is ve had several y a p o com that is w ll over the wor We ha nd these tw e ser vice sector. ke, and w o o r b n e were, a l d r ran a h n w ie t a y , m s m h e t e r o lt n r p ic a a f r e c ra lp O ur oil p sy and w I have seen seve g for he ere are no signifi ve u b in y r w c o h y a e oil Th go. eh alread ever yon y long a time here. These arefully : our business w ur r c e v n e t t o is n L and o had. In that was il booms in my people and com per cent re at ts to be 0 n o 1 e u v d e o a e c k ll a le is a e d m to H so-c of that. ear if we ys seem an ms alwa bt. a good y man takes half Ltd; we will de o o re who c b e h t x t e a u n d t o P or friendly ide Constructio nities in ere is someone e r the ND s, for ly mu h y e t r ir h a e B f it b e s y in r a e e e m M es m Sv ay to bla unity for this m all custo rk for a r offer. w d u e a o t t y a e u e r o t n o cli e always is a full days’ w at way. figure t Nations comm it. We hav le th u do r in r a u m the Firs how we to re tly. O s y g e ll is n a in t o u o a s h g u and it is ed. Th that is blacklist ’ pay and full days rstand I will be r yeide nd go a I unde e m Svein B o c s ie n a Sask. mp ea Benson, fine. lot of co d here. There ar ia n e e s I have worke apprec rs I have there who still a e y 0 5 in the ies out compan il o f o t lo

Bryeide told Pipeline News. His wife Marion, who has been at his side for ever since he got into the business, was kind of upset, warning him to be careful, he noted. “I saw this coming a couple years ago,” Bryeide said. His works not only in the oilpatch, but also does municipal and farm work. “We’re doing more roadwork than oilfield, by far,” he said.

Over the years, he’s lived through all the ups and downs in the oilpatch. “This spring it will be 50 years since I started. We’ve been on our own since 1979,” he said. As for the demands to cut prices, Bryeide said, “It’s pretty ugly out there. In my opinion, they will get enough cutting to get by. They will run that as hard as they can. Some will fail. Some will survive, barely. ɸ Page A9

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PIPELINE NEWS March 2015 Svein Bryeide will not be cuĆŤng his prices as oil producing companies have demanded. Photo by Brian Zinchuk

Éş Page A8 “When oil prices recover, I think you’ll see these type of customers, their program will be over. They’ll shut down and pump.â€? Bryeide is not optimistic for a return to high oil prices anytime soon, either. “I believe this will be a lengthy thing – seven to 10 years, before we get back to the way we were. That’s the way I see it,â€? he said. “We’ve seen it before. The upside (most recently) lasted two years longer than I expected.â€? Part of the phenomenal growth in the oilpatch in recent years is due to low or no-interest loans, he surmised, making it easy for companies to pick up equipment cheaply. But when things take a turn for the worse, it can take a long time to recover. “It takes so long to recover from any loss, you’re years in recovery. We don’t have that many years. Next month I’ll be 67,â€? he said. “This is going to be a long, hard haul, this one.â€? He’s got the time in

to remember such times, too. “I remember when a barrel of oil and a bushel of wheat were the same price,� he said. Saskatchewan does not have much of an impact on the world oil production, he feels. Other countries are also producing at their peak. “I used to refer to this area as a ‘poor man’s oilfield.’ There’s not a lot of high production wells. We’re abandoning a lot of wells. It’s six months of winter and the rest is poor sledding.� He added that Bakken wells are very expensive to drill and frac. As for oil companies demanding price concessions and his reply, he said, “Sometimes you’ve got to grab the bull by the horns. “I remember when Dome (Petroleum) was going to take over the oilfield. Cadillacs showed up and four well-dressed gentlemen, representatives of Dome, got out. “I was working for Flint at the time. They told us, ‘Next year at this time if you’re not working for Dome, you likely won’t be in the

oilfield.’ “A few months later, Dome went down. The feds had a big investment. It almost took a bank with them, and that was the end of that.� He spoke highly

of the small, privatelyowned oil companies in the area. “These big ones will fail again and small ones will pick up the land. The small things will start over again. “If everyone would stick together, you could stand up. But it doesn’t happen,� he said of vendors holding the line on price reductions. “We’ve had several of these booms before, but never did it get this carried away with real estate and lodging,� Bryeide said, noting how hard it is now to afford housing in the area. “We’re going to hurt a lot of young people, forced into buying a house for more than it’s worth, with appraisals at a ridiculous price.� Part of that issue

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has been young people getting used to the good money coming in when times are good he believes “They see a little money and think there’s no end. Quite a few got into business,� he said. “Only the profit is there money. The rest is somebody else’s – your fuel man, partsman, equipment dealer. That’s someone else’s money, and you got to pay it. The only thing you put in your pocket is the profit, and that can be very little at times. It’s simple mathematics. You pay your bills.� Asked about the possible repercussions from his hardline stance on cutting rates, Bryeide replied, “Won’t bother me a bit. We’re more out of the oilfield by anyway.

A9

The timing was right for me to finally say something. It’s sickening when you have an outfit the size of these oil companies that have no record.� If oil companies had put items out to bid instead of demanding across the board cuts, Bryeide would have no problem with it. “They may ask you to bid on it, but to see anyone dictate a cut? If they had put it to bid, I wouldn’t mention a thing. I bid municipal work all the time,� he said. “I’ve never seen anything like this. Even the ‘Williston Wildcatters’ weren’t like this. “The only way they’ve survive is if this clears up before the end of this year.�

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PIPELINE NEWS March 2015

23,000 rig related jobs at risk ɺ Page A4 Producers at this stage have the benefit – although they are making 65 per cent than they were making eight months ago they still at least have cash flow that’s coming in. They’re still making $55 a barrel (forecast assumption) although it’s a reduced amount and certainly when you look at stock valuations and market cap, those have all been impacted. It’s the service rig contractors and the drilling rig contractors and the rest of other services that certainly are pivotal in a getting a well to completion. Those are the guys who get hit first. PN: What are service rig and drilling companies doing to keep laid off workers in the loop? Scholtz: That is going to be probably one of the toughest things that contractors are going to have to deal with. We’ve seen this back in 2009 where so many talented folks didn’t have work and ultimately a lot of them left the industry, and when things revived in 2010 they never came back. Contractors are going to have to try their darnedest to maintain those senior key people for as long as they possibly can because, ultimately if they don’t, there’s a possibility they may not come back in the industry

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when things turn around. PN: How tough will it be to retain key positions knowing labour has been a key issue since 2009? Scholtz: It’s huge. That’s our core asset. For a drilling and service rig contractor, our core asset is our equipment and our people. Our equipment isn’t being used and therefore second asset which is our people aren’t being deployed. It’s going to be difficult 2015 trying to hold on to as many key people as you can with depressed activity. It’s very difficult to do. PN: How does the estimated $23 billion cuts to capital spending by oil and gas companies affect your members? Scholtz: Our members would be the ones that would be investing in new rig assets. The operators when it comes to the $20 billion plus dollars that aren’t going to be spent on capital, means that they won’t be using our equipment as often and as frequently. So again that’s kind of factored into this equation. The producers in this industry really set the tempo for activity, so if the producers are pulling back on capital it means they are pulling back on new wells that are going to be drilled and fewer rigs that are going to be utilized.

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That’s kind of where this utilization forecast comes in (26 per cent for 2015). PN: Is there any signs of industry panic if there is no substantial relief in sight for commodity prices? Scholtz: I don’t know if I would describe it as panic as much as we know we’re going into a depressed year. But for me it’s ‘okay this is a cyclical business,’ we’ve seen these lulls before. We are going to get out of this at some point. If our forecast is right and it’s 26 per cent do we come back in 2016? Is it 2017? I’m not sure, but we will come back. Let’s not forget that hydrocarbons are a demanded commodity globally. We have China that will continue to grow. The United States is beginning to see some economic revival. Europeans of course, obviously they’re growing at the rate that the Chinese or what the Americans are soon to be, but I think overall this is still a long term positive industry to be in. It’s just when is this going to happen? PN: What kind of potential opportunities are out there in this particular slowdown? Scholtz: I think there’s an opportunity here as Canadians to say ‘okay we’re in a situation where we’ve

got depressed prices, we’ve got lower overall oil and gas activity, let’s take some of those folks that would typically work directly for the oil and gas industry and start building some pipelines.’ So that when we do come out we’ve got greater access to the Asian markets and we’ve got greater access to south of the border. This could be an opportunity for us to look at getting some pipe in the ground and positioning ourselves to really succeed as an industry when it comes around. PN: Are some oil and gas plays are more active due to high netbacks? Scholtz:I wouldn’t feel comfortable getting into specific companies or plays. Certainly, what I can say is the economics do change from play to play, but overall $45 (a barrel) right now– it’s pretty tough to make money on any play. PN: Do you have a crystal ball on when we can expect prices and activity to recover? Scholtz: If I did I’d be a richer man than I am today. I’m not going to speculate. All I can say is this is the forecast. If it’s executed fully, it’s 26 per cent utilization – almost as worse as what we’ve seen in 2009. Let’s hope the upturn comes sooner than later.

PIPELINE NEWS March 2015

A11

New technology has added to oil supply ɺ Page A3 Next we asked Sakeld if we are the victim of our own success, having developed technology to unlock all these reserves. “That’s an interesting point. There’s two ways to look at it. You’re right, we’re part of the problem in that we’ve increased production. But we’ve improved our position with regards to energy independence. We’ve got it in our backyard. We don’t need to import as much. We’re building pipelines east and west to make Canada energy-secure,” said Sakeld. “There’s people out there thinking of North American energy independence, Canada, the U.S. and Mexico. Yes, on one hand, we’ve added to the problem and we are a factor to some degree, adding production, but we’re also becoming energy independent. From my perspective, that’s not a bad thing. We’re going to use it to move us forward. We’re going to get better at it, but we’re not going to have to worry about supply anymore.” Sakeld also offered his take on how long is it reasonable to keep someone onboard if there is no work for six months. Sakeld believes the training will take place during breakup as usual. But some companies might want to send some of their workers overseas to places where they run year-round, and national oil companies aren’t as affected by the slowdown as they are here. Asked what does the WTI price need to be for a maintenance level of operations, and what does it need to be to pick up steam, he responded, “The last time I was asked this, my response was $85 a barrel. It seemed to be the right number to help the big companies with their conventional and unconven-

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tional oilsands, to percolate along. “We have gained efficiencies. We have increased costs. We’ll come to this more effective and efficient. I’ve heard out there we could have a new norm of $60 to $70. Yesterday I came out of a ses-

sion and oil was $52 and everyone was happy. “I’m comfortable with $85, but with the changing environment, it could be $75.” Hunkering down, he said there will be companies that can survive at that.

Williston, Northgate, Moosomin ɺ Page A5 The pipeline would begin on the southern side of Williston, North Dakota, cross the Canada-U.S. border near Flaxton, N.D., (Northgate, Sask.) and end near the Manitoba-Saskatchewan border in Canada. The preferred pipeline corridor in Canada has not yet been finalized. TransCanada has not said if it will connect to their planned lateral from Cromer to Moosomin. TransCanada has already announced plans for a lateral from Cromer to Moosomin as part of its Energy East project. That line was initially said to be a 16 inch line, whereas Upland is expected to be a 20 inch line. It is unclear if there will be two parallel lines leading to Moosomin, or whether the Upland line will be an extension of the Cromer lateral, and only one pipe will go from Cromer to Moosomin. Andy Asplund, who is part of the business development team for the Upland Pipeline, told Pipeline News the plans are for a 20-inch pipeline. Such a line would have approximately 300,000 barrels per day in capacity at full usage. With the open season having secured 70,000 barrels per day, there would be room for more North Dakota oil. North Dakota is currently producing approximately 1.2 million barrels a day, up from approximately 90,000 barrels per day approximately

seven years ago. North Dakota currently ships most of its oil by rail due to a shortage of pipeline capacity. The Cromer lateral is planned to run along the Manitoba side of the Saskatchewan/Manitoba border, crossing into Saskatchewan just before it meets the mainline, going just a few kilometres into Saskatchewan. The location of the Cromer pump station is about 10 kilometres northwest of the main gate of the Enbridge Cromer terminal. The NEB application for Energy East was filed in the last quarter of 2014. It’s underpinned by 1 million barrels per day of long-term contracts and is expected to be in service by the end of 2018. The Upland Pipeline would in some ways be the much-stalled and much-maligned Keystone XL Pipeline in reverse. While both Keystone XL and Upland would offer takeaway capacity from North Dakota’s Bakken play, Keystone would take Canadian oil south across the international boundary, where it would be joined by a proportionally small amount of American North Dakota oil. Upland would take American oil north across the border to join a much larger volume of Canadian oil heading east for consumption and export. Since it crosses an international border, it would require an American presidential permit, the same crucial approval that has flummoxed TransCanada with regards to the Keystone XL.

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A12

PIPELINE NEWS March 2015

New drilling activity forecast grim Calgary – Low commodity prices have forced the hand of the Canadian Association of Oilwell Drilling Contractors to issue a revised drilling activity forecast for 2015. The update on Jan. 22 marked the first time CAODC has revised an annual forecast since the global recession of 2009 and is based on WTI price of US$55 a barrel in 2015. CAODC projects as many as 23,000 direct and indirect jobs could be lost in 2015 by member companies as drilling rigs sit idle. The projected breakdown includes the potential loss of 3,400 direct jobs and up to 19,500 indirect jobs relative to 2014. “Times like this are tough not just on

contractors, but on their employees as well. If there are not as many drilling rigs working, there will not be as many rig workers on the job,” said Mark Scholz, president of COADC, in a statement. “This will have significant adverse effects on indirect employment throughout the economy, well beyond just rig workers.” The original forecast in November when oil was slowly falling from a high of $107 per barrel last June was based on WTI oil at US$85 a barrel in 2015. CAODC is forecasting a 41 per cent drop in rig operating days from an average of 370 per day in 2014 to 203 in 2015. Fleet utilization is also expected to drop

Impact on Employment Active Rigs

Direct Jobs

Indirect Jobs

Total Jobs

2015 Forecast (updated)

203

4,055

23,316

27,371

Change from 2014 (actual)

-167

-3,345

-19,234

-22,579

%

-45%

-45%

-45%

-45%

Change from 2015 Forecast (original)

-135

-2,705

-15,554

-18,259

%

-40%

-40%

-40%

-40%

Sources: -20 direct jobs per rig (CAODC) -135 direct and indirect jobs per rig (PSAC)

CAODC has revised its 2015 drilling acƟvity forecast to reŇect the reality of low commodity prices at the start of the year. dhe organinjaƟon and edžpects a Ňeet uƟlinjaƟon rate for drilling rigs of ũust 2ϲ per cent in 2015 and a ϰ1 per cent drop in operaƟng days from its previous forecast last Eovember. ŚĂƌƚ ƐƵďŵŝƩĞĚ

from 46 per cent in 2014 to 26 per cent in 2015. “The new reality of $55 oil means that the

entire industry will hurt for a period, and drillers and service rig contractors are not immune to that,” said Scholz.

“We have been through rough patches before and come out strong on the other end, and I’m confident that we will do that again, but right now, that’s going to involve buckling

in.” The original forecast called for 10,334 wells to be completed in 2015 but that projection has been sliced to 6,612 in the new economic reality.

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PIPELINE NEWS March 2015

A13

Plainsman manufacturing shear coupling tests its mettle Lloydminster – Evidence is mounting that Plainsman Manufacturing Inc. has developed a long lasting shear coupling for PC pump applications in horizontal wells. The WireTorq shear coupling is Plainsman’s next generation shear coupling designed to separate torque from bending stress to increase run life and reduce production downtime. So far three out of six couplings in field trials in the Lloydminster region have been continuously operating for over 300 days. “It’s still a little too early to tell but they are looking good,� said Jackie Kyriacou-Herman, a project design engineer with Plainsman in Edmonton. Kyriacou-Herman spoke about their WireTorq shear coupling at the Feb. 12 technical luncheon of the Lloydminster Society of Petroleum Engineers. Her topic was titled Novel Design of Shear Couplings to Reduce Downtime by Combating Fatigue. Her presentation began by explaining that a shear coupling provides a predictable means of separating the rod from the pump. However, combined load or multi-axial stress can lead to fatigue in shear pins or the shaft of the coupling leading to production downtime. By determining the factors that contribute to shear coupling fatigue, Kyriacou-Herman’s research team set to work to develop strong shear couplings that last longer. Plainsman’s ToughTorq shear coupling evolved the state-of -the-art with its increased flexibility in bending. “Originally it was the only one that had staggered pins, so it had a few minor improvements over a conventional shear,� said Kyriacou-Herman. “The WireTorq is the real brainchild that separates torque from bending so those shear coupling are stronger and they should last longer.�

The research that went into WireTorq aimed to identify any trends in operating conditions that affect shear coupling life. PCP and reciprocating applications with various rod sizes (1� and 1-1/8� typical) were analyzed. Shear couplings returned by customers came from a variety of locations, including Alberta, Saskatchewan, South America, and the Middle East.  Shear couplings were inspected on a case-by-case basis, comparing fatigue analysis to operating conditions. Kyriacou-Herman explained that a combination of classical hand calculations, third party metallurgical analysis, and computer modeling were applied. No conclusive trends were found between speed, torque, dogleg severity, run life, and tubing size in horizontal well applications. “We haven’t been able to find any significant trends so far between different failures and run,� said KyriacouHerman. “We know that it’s some combination, but it’s too complicated to explain with an XY graph kind of thing.� What is clear from the research is that 90 per cent of reported fractures were on the shaft of the coupling due to some combination of bending and torsion. Many cases showed asymmetric wear confirming that the shear was side loaded causing bending. Decoupling bending from torque reduces the combined stress on the shear coupling, improving the relative strength of the material and extending fatigue life. The research found that reducing dynamic effects such as pump speed, eccentricity, and mass will improve fatigue life of the shear coupling but may be to the detriment of production. Improvements made to the geometry of Plainsman shear couplings reduce the effects of dynamics, while keeping pace with economic constraints of

the industry. With WireTorq, the shear mechanism in is now typically designed to be isolated from bending and torsional loads to prevent premature fracture by fatigue. An option was developed to reduce wear in the torque transmitting key because increased clearance there leads to more bending and torsional loads going through the shaft and shear mechanism. The key transmits torque so that the torque from the drivehead can actually be transmitted through the rod string to the pump. “If you can’t transmit torque to the pump then you can’t produce oil so you need either a square key or a hex key or some sort of key way that is not round so you can transmit the torque,� explained KyriacouHerman. Plainsman’s WireTorq and ToughTorq use a hexagonal key. That increases the bearing surface areas so it more evenly distributes the torque over a square key used in their conventional shear.

Lloydminster SPE technical lunch speaker Jackie Kyriacou-Herman from Plainsman Manufacturing in Edmonton shared a laugh next to Adam Waterman from Baytex Energy and Dion Benson from Weatherford.

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PIPELINE NEWS March 2015

nSight by Noralta eyes all „ By Geoff Lee Calgary – A 24/7 video surveillance solution developed by Noralta Technologies Inc. is earning its keep with oil and gas producers and operators to secure their assets and protect the environment and personnel. The guardian called nSight is a fairly new security service for clients connected to Noralta’s Control Centre in Calgary that monitors the performance of thousands of oil and gas wells in real time. “The nSight video surveillance is kind of a bolton to the system. It’s something that we can easily add to any of the sites that we are currently monitoring,� said Wendell Young, Noralta’s vice president of corporate development. “Cameras aren’t something new, but the way that we’ve coupled the cameras with our networks and our software at our control centre just brings a tremendous amount of value to the clients.� “It really helps them minimize their risks and maximize their shareholder value especially in this time of depressed commodity prices.� The nSight system uses infrared pan, tilt or fixed cameras to view a site any time of the day or night and can be triggered by motion detected on site. “With the motion detection, you really catch the interesting events,� said Collin Heggerud, Noralta’s chief technology officer. Producers can record video footage to catch vandals, monitor the environment and eliminate extra site visits to cut operating costs. “For some it’s all about operational efficiency and for some it’s all about theft or vandalism,� said Young about customer needs. “For some it’s 100 per cent about a safety, so there’s various justifications for it for sure.

Eoralta’s control room in Calgary monitors the performance of thousands of oil and gas wells in real Ć&#x;me. Many of those sites are covered by a new video surveillance system called nSight that provides 2Ď°ÍŹĎł coverage of a locaĆ&#x;on to secure assets and protect the environment and personnel. WŚŽƚŽĆ? Ć?ĆľÄ?ĹľĹ?ƊĞĚ

“Each producer has his own reasons and certainly loss prevention is one of them. “Also with the cameras, we provide a lot of operational efficiency. With our SCADA system we are able to monitor all the real time data.� Coupled with the cameras, operators can see that their well is running fine and it gives them a visual look at a location and what is happening there. “There are also the safety issues. Guys want to make sure corporate safety standards are adhered to,� said Young. “If they are contractors on site, they are able to make sure they are complying with all safety standards. “Also, we help to reduce environmental risks. If operators can see their wells more frequently they can respond to things that might be impacting the environment a lot quicker.� Noralta has deployed a lot of nSight video surveillance systems in the field since the recent product launch with more installations in the works

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as the word spreads. “The ones that hear about it – we’ve seeing quite an uptick – so we just need to complete our marketing and make sure everybody’s aware of it,â€? said Heggerud about sales. The continued roll out of nSight takes place as Noralta celebrates its 20th year of business in 2015 from its beginning in 1995 in Lloydminster as an electrical instrumentation and automation company. The ever-growing control centre was launched about 10 years ago to help producers monitor and manage their assets remotely. The backbone of the system is a SCADA data platform with all of the data from assets that the centre monitors stored on servers. Not all of the assets monitored by the control centre today have the nSight functionality. “It’s all different data coming back from various energy assets, whether it’s an oil well or a gas well or water disposal or any sort of production facility or compressor station.â€? said Young. ɸ Page A15

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PIPELINE NEWS March 2015 ɺ Page A14 “There is really nothing that we can’t monitor if we have the instrumentation on site that we can talk to. “We can bring that data back and build alarm parameters around it and make sure that site is performing at peak performance at all times.” The control centre provides real time troubleshooting of automation equipment and systems to provide a high level of personal safety and protection of the environment. “We don’t monitor the cameras 24/7, but we do monitor that status of the camera, so we make sure that they are always reporting,” said Young. “All of the information that we get from the cameras goes onto our servers, and we make that available for the clients to log into and view from their desktops or their phones.” The control centre reads those images every three minutes and also receives images when motion is detected

onsite. The images typically come from one to three video cameras required depending on the size of the facility to get proper coverage. “Because most of our connections are via cellular modems, we don’t usually receive a high definition image,” explained Heggerud. “What we do is we record video in high definition locally when motion is detected. “We automatically put together a time lapse video of the previous day, so it would take about a minute and a half to two minutes to scan through all the images from the previous day.” Clients can access those pictures or live streaming brought back to the Control Centre with any mobile device. “It provides a lot of accessibility so guys can be in the middle of nowhere. All they have is their phone and they’re still able to see those sites remotely,” said Young. “They can check

their sites a hundred times a day, and it will cost no more than 30 seconds of their life. It will cost you nothing in gas. “There’s just a lot of different reasons for having all of that information right at your finger tips all the time.” As nSight continues to sell well as a surveillance tool, Noralta is focusing on the business of securing industrial control systems due to increasing risks from cyber threats. “We are implementing for our clients levels of security on their industrial control systems that they never previously had before,” said Young. “It’s just the reality of the world today. “If you leave the door open on a network or a control system, and somebody can get in and they want to cause some damage, they can certainly do that unless you implement some controls.” Calgary hosted the Cyber Security for Oil & Gas Canada Sum-

A15

dhis is an example of real-Ɵme nSight video integrated with real-Ɵme data on a lease. dhe data and images are stored on servers at Eoralta’s control centre in Calgary.

mit on Jan. 26-28 on the exploitation of data vulnerability including oil and gas controls. “We need to make sure people realize the need and are interested in closing that security loophole,” said Heggerud. “It’s quite scary and we would like to advise people to close them up.” Cyber security is a growing market that Noralta expects to tap

into in the future. “Certainly we’ve seen it in pipelines for years now, and it’s starting to take hold more in the upstream producers,” said Young. In the meantime, Noralta is helping companies protect large amounts of equipment lying around yards and construction sites from theft and vandalism. “To combat this, we offer a rental fleet of portable nSight trailers

as well,” said Young. “We had clients this summer that were building brand-new facilities and we would just peel a trailer out to there and stand it up and able to watch right from Calgary. “You could watch anywhere and see what’s going on onsite. It helped them track progress of construction as well monitor anyone who shouldn’t have been on site there.”

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PIPELINE NEWS March 2015

PIPELINE NEWS March 2015

cheers charity cheque day The biggest charity cheque from the Husky Energy Lloydminster charitable campaign went to Lloydminster Θ District hnited Way for over Ψϲϰ,Ď´ĎŻĎ°. LeĹŒ to right areÍ— Al MacLauchlan event co-chair from Husky with United Way reps Pat Horton, Arshi Mirza and Cindee Zoy. Al MacLauchlan, a co-chair of the Husky Energy Lloydminster charitable campaign presents a cheque to Leanne Wildeman, Kinsmen &oundaĆ&#x;on chair for Telemiracle.

Al MacLauchlan, leĹŒ, congratulates Jakki Tyson for accepĆ&#x;ng a charity cheque for SPCA funding.

received just over $8,009 for its life enrichment program. „ Story and photos by Geoff Lee KidSport received a cheque for over $9,237 to the delight of its vice chair Lloydminster – Another annual community building day took place at Husky Alison Fulkerth. Place in Lloydminster on Feb. 3. She noted the donation is “an excellent opportunity for us to help individual That’s when 11 local charities received their funding cheques from a total of children participate in organized sports in our community.â€? $190,150.78 raised by the 2014-15 Husky Energy charitable campaign. The donation will also allow KidSport to make program grants available to “It’s nice to see lots of smiling faces out here and it’s just a pleasure on my sporting organizations that want to include children who are unable to participart to be able to put the accumulation of everyone’s events together here,â€? said pate otherwise. Al MacLauchlan, campaign co-chair. “It is very awesome to be able to receive a donation like this,â€? she said. Each year, a Husky committee selects the agencies to receive campaign funds The Husky charitable campaign is often the largest source of additional that help those in need through community programs. funding available to the many of the selected agencies. “It’s very important that we sponsor those things in the community that “For some of them this is a big boost for keep the community strong and growing and viable and just a better place to some of the programs they are looking at live,â€? said MacLauchlan. specifically trying to get going,â€? said MaThis year’s total includes cLauchlan. $120,000 raised by Husky em“They raise funds throughout the year. ployees and contract staff through In own small part, we like to assist them in pledges and fundraising events with creating those things that they feel are really an added contribution from the oil their important things to do this year.â€? and gas corporation. Despite the slump in oil prices and Last year, the campaign generactivity levels in the field, MacLauchlan ated just over $194,000 for charity is confident contributions for the next causes. campaign which is already underway will “We set our goal to be in the be strong. same league as last year and we came “What it comes down to here is the through,â€? said MacLauchlan who is employees are always looking toward the also vice-president of Canadian downcharities, and I believe the donations to stream operations at Husky. the worthy causes will keep in the same “All the employees did a fantastic sort of levels that we’ve seen in the past,â€? job of generating funds through the difhe said. ferent events and actually donated their e th r “We’ve seen low prices before and own money. 7. Smiling fo r over $9,23 p fo re e y u c q a charitable campaign has not suffered n “So there was lots of time and money e e h g c a d Husky charity hair, leĹŒ, an a -c d co e iv n e ig c a noticeably because of that. p re donated by the employees.â€? cam KidSport uchlan, the La c a M l A “I think it is important to keep the MacLauchlan presented the largcamera are . h rt e donations going.â€? est cheque of the day for approximately lk u F Alison The first event of the new charitable campaign was a raffle $64,834 to the Lloydminster United Way of a Pipemaster Oilfield Services’ travel voucher that was due to take place a for approved projects for 14 agencies. The Lloydminster Region Health Foundation received just over $16,387 for week or so after the cheque presentations “That will start the year off well,â€? said MacLauchlan as the clocked ticked. cardiac care and the Lloydminster & District SPCA accepted a cheque for over “Then coming up we get hanging plants grown in a local greenhouse and sell $21,427 for a new building project. those off around Mother’s Day. Approximately $12,482 went to Lloydminster Handivan Society that its “Then we go to other events like wheel barrow raffles and parking stall president Glenn Fagnan said will go towards general operations. raffles. “The revenue that we have coming in from our fares do not cover our ex“There’s chili luncheons that are held in different facilities.â€? penses so Husky has been donating to us for a number of years. We use it for our The campaign shifts into high gear in the early September to late October daily operations,â€? he said with his cheque in hand. timeframe with some major events including an online silent auction at hun“Without donations like that, we wouldn’t be able to function.â€? dreds of locations. The Canadian Cancer Society was awarded more than $13,185 for research “There’s lot of good events that can generate money throughout the year,â€? and development while over $8,622 of campaign funds went to Big Brothers and said MacLauchlan. Sisters of Lloydminster for after school programs. MacLauchlan is one of four charity campaign co-chairs that rotate with a Other recipients were Canadian Diabetes with a cheque for over $11,489 for research and development and the Salvation Army for approximately $16,160 to lead chair named for each campaign. “Right now, we have representation from the refinery, the pipeline, heavy oil support families in need. and gas the upgrader as the co-chairs,â€? he said. Telemiracle received over $8,317 to medically support families and Labis

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PIPELINE NEWS March 2015

Hurry hard to the Lloyd bonspiel By Geoff Lee

Hurry hard: That’s what George Kobsar, Brian Findlay and Jerry McGarry on Bidell Gas Compression did in 2014 to sweep this rock into play. A maximum of 72 teams will contend at the 2015 spiel March 18 to 22. File photo

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Lloydminster – Hurray hard and get your entries in for the 48th annual Lloydminster Heavy Crude Open Bonspiel. That’s what event chair John Stanyer was yelling to curlers on Feb. 11 two weeks ahead of the registration deadline hoping to draw the

maximum 72 teams. “I’m very concerned,” he said at the time. “The entries aren’t coming in fairly quickly so hopefully they’re going to pick up here in the next week or two.” Last minute or late entries have been the new tournament norm. Stanyer and his committee are once again ready to solicit late comers by phone. “I could be doing that. It seems like that’s kind of a tradition. You’ve got to be doing a bunch of calling,” he said. Stanyer wasn’t ready to pin this year’s lagging team registrations on the current oil price environment but he wouldn’t rule it out either as a contributing factor. “Well I don’t know if that’s it or if people are just on holidays. It’s usually slow to start with entries coming in,” he said. “The deadline is the 24th. Usually by that time guys are ‘Oh geez I got to get this done’ so then you get a bunch of phone calls at the end of that.’ ” It’s crunch time now for overdue entries as the action will take place from March 18 to 22 with opening ceremonies at the Communiplex on March 19 at 6:30 p.m. “You expect the worst and hope for the best. I am hoping for 72,” said Stanyer the same as 2014. “The problem this year too – although it won’t affect us a lot – but the Edmonton oilmen’s has jumped on our date this year. “We might lose two or three teams to that because there were a couple or three teams that used to come out of Edmonton.” Despite the plunge in oil prices over the past few months the event has only lost a few sponsors to the surprise and delight of organizers. “I’m surprised by the reaction we’ve getting some our sponsors which is great,” said Stanyer. “Just about everybody we’ve had for

sponsors over the years is in. It makes it pretty good, “You talk to them and they say no matter how bad it is they still have to keep a presence in the community. Once you lose that then you have nothing. “I haven’t seen too much from donations yet but I won’t until I see entry forms and that sort of stuff. That’s usually when that comes in.” Stanyer is hoping would-be curlers will look at paying to play as an opportunity to party like there’s no tomorrow and escape the worries of this troubling downturn. “That’s been the experience over the years. We have had pretty good responses when you get into a downturn because guys aren’t doing anything,” said Stanyer. “If they can get their sponsorships or get their entries together – they’re not going to be working if thing are really slow. It’s time to blow some steam off.” Stanyer recalls there being 96 teams during the 2009 downturn before it dropped to 80 for two years then 72 the past four times in boom years. “I don’ think we’ll ever see 80 teams again. I know we will never see 96 again,” he said. “There’s too many conflicting activities. I think what you get with that is young families doing stuff with family hockey and that sort of stuff,” he said. “I know there’s guys that have curled in it and then all of a sudden then get their winter holiday planned and they go in March. Why don’t you go in February?” Stanyer recently did talk with a guy who took his holiday in February and now that his kids are grown up he plans to curl this year. He also spoke with another curler who told him club membership was up this year. “So maybe that’s an indication it might be coming back,” said Stanyer. ɸ Page A19

PIPELINE NEWS March 2015

Will Baker Hughes be back to defend their A-Event Ɵtle in 2015? Baker Hughes sweepers Joe Halbach, leŌ and Brian Robinson work a rock into the house late in their 2014 A-Event Įnal to defeat HunƟng Titan. File photo

ɺ Page A18 That would be good news considering the 50th anniversary bonspiel is just two years away. Team fees for the 2015 event are the same as last year at $440 in recognition of the economic times. “It’s pretty tough to raise any of your fees the way the industry is right now. You can’t go and say I’m going to raise my fees by 20 per cent,” said Stanyer. “That’s when you’re going to get people digging in. You try to work with the teams that you’ve got com-

ing. You want to make sure that they’re welcome here.” Stanyer said the fee is certainly a bargain given the value that is packed into the five day event. “You get your two breakfasts and your banquet on Friday and there’s team platters that every team gets,” he said. “There’s one platter per team and you get a couple of jugs of beer over the weekend.” The highlight is the mixed banquet and the Oilman of the Year Award at the Stockade Convention Centre on March 20.

Is ethanol by rail in Unity’s future? Unity – North West Terminal Ltd. in Unity moved it first trainload of grain by CP Rail on Jan. 30 with ethanol by rail a future possibility. NWT owns and operates an inland grain terminal and a bio-products facility in Unity. The startup of grain by rail with CP follows the completion of an expansion of the system to NWT’s rail infrastructure. The project included the construction of about a mile and half of trackage from NWT to the CP mainline at the north end of Unity. “The two projects combined came in around $4 million,” said Jason Skinner CEO of NWT. “We built the trackage up to CP then it was just a matter of tying into them. “We completed it here in the winter so we’re thinking come spring or early summer we’ll try to have some type of grand opening for the new facilities.” NWT now has access to CN and CP rail networks with a rail car siding capacity to allow for the shipment of unit trains of up to 150 cars of grain. Prior to the expansion, the terminal was capable of shipping unit trains of grain of up to 104 cars with access to only CN’s rail network. “We believe that access to both of Canada’s major railroads is important in terms of remaining competitive in the future and offering local farmers the best access to offshore markets,” said John Leier president of NWT in a statement. NWT also produces approximately 25 million litres of ethanol

that is currently trucked to blenders in Saskatchewan. The terminal’s hook up to CP and CN rail systems begs the question if there are plans to ship some ethanol by rail. “We don’t at this point, but we may look at some of that in the future,” said Skinner. “It all goes by truck at the moment.” Ethanol is added to gasoline as an octane booster. “Ethanol is used all across North America but a lot of production just stays in Saskatchewan,” added Skinner. Moving volumes of ethanol by rail at some point in the future to access new markets wouldn’t be a stretch given the reach of CP and CN lines to move crude oil from the Unity terminal operated by Torq Transloading. Unity terminal is connected to the shortest rail line haul from Western Canada to U.S. Gulf Coast for heavy undiluted crudes and benefits from access to both CN and CP lines. “The connection to the two rail lines and the rail for the grain is our baby,” explained Skinner as NWT and Torq are separate companies. “We have a lease agreement with Torq where they’ve put down a bunch of tracks for the oil business. “The lease agreement covers a 30 acre parcel – something like that. “There’s another 128 cars there and trackage for oil as well. So they’re actually separate sets of trackage.” NWT is also an owner of Alliance Grain Terminal Ltd. in Vancouver British Columbia.

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PIPELINE NEWS March 2015

Husky is cuĆŤng its 2015 capital budget by up to $400 million and looks to ÄŽnd up to $ϲ00 million of addiĆ&#x;onal savings from operaĆ&#x;ons due to the current low price commodity environment. /n Lloydminster, Husky is working on expanding its South Saskatchewan gathering system to accommodate growing producĆ&#x;on from its thermal oil proĹŠects. File Photo

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Husky circles its balance sheet „ By Geoff Lee Calgary – Husky Energy has sharpened its pencil to cut this year’s capital budget by as much as $400 million and is seeking up to $600 million in additional operational savings due to current low commodity prices. The company is cutting its 2015 capital spending to between $3 to $3.1 billion from its previous $3.4 billion plan to maintain a strong balance sheet. “Today’s adjustments and refinements allow us to maintain the backbone of our plan in these volatile market conditions,� said Asim

$*,

Ghosh Husky’s CEO in conference call on Feb. 12. “To state the obvious, the industry at large is facing a new supply demand dynamic and that continues to put pressure on oil prices. “We remain sharply focused of finding efficiency in our business, managing investment flows and most importantly, maintaining a strong balance sheet. “To that end, we’ve identified an additional $300 to $400 million in savings in our capital plan for the rescheduling of discretionary activities in Western Canada and other initiatives.� This will include more effective partnering with suppliers, consolidation and standardization in services.

“In volatile times such as these the strength of our balance sheet is our insurance policy,â€? said Ghosh. The cutbacks have led to some layoffs noted in January, but Husky wouldn’t say how many employees are being affected or offer additional details. “The number has been small, but we’re going to continue to manage our business and our workforce in accordance with the pricing environment around us,â€? said acting CFO Darren Andruko. Despite the cost cutting, Husky expects this year’s production to remain within the previously announced guidance range of 325,000 to 355,000 barrels of oil equivalent per day. ɸ Page A21

*** Correction ***

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This photo and its caption were mismatched in our February edition story on Lloydminster (section B page 3). We apologize for the error. Terry Burton, director of planning and engineering for Lloydminster literally makes a point while talking to Mayor Rob Saunders during a recent 2015 tour of the city’s new operations centre that opened this past November.

PIPELINE NEWS March 2015 ɺ Page A20 Husky also reported a net loss of $603 million in the fourth quarter mainly due to a write down of its Rainbow asset in northern Alberta and inventory reductions in response to low oil prices. Excluding those one-time charges, Husky’s net earnings for the quarter was $147 million. Husky’s reduced spending plan for 2015 is designed to result in a moderate net debt to capital ratio close to their 25 per cent objective according to Andruko. “Also, we currently have about $1.9 billion available in undrawn committed term credit facilities,” he said. Husky has a number of growth projects on the go including the Sunrise oilsands project in Alberta and the White Rose offshore production off the coast of Newfoundland that are expected to add about 85,000 net barrels per day by the end of 2016. Additional production will come from four new thermal heavy oil projects in the Lloydminster area are all scheduled to come on stream this year and in 2016. Construction is nearly completed on the 10,000 barrel per day Rush Lake project with first oil expected in the third quarter of this year. Further site work and engineering is underway at the two 10,000 bdp thermals at Edam East and Vawn as well as the 3,500 bpd Edam West project. All three of these projects are slated to start up in 2016 starting with Edam East in the third quarter. “In the current environment, we have dialed back some of our heavy oil CHOPS and horizontal drilling plans,” said COO Rob Peabody. Peabody also said Husky has the ability to be choosey in speeding up or slowing down specific projects in its Western Canada resource plays in tune with commodity prices. “Additional savings have been identified in our capital expenditure program some of which are related to rescheduling of discretionary activities in

Western Canada” he said. “In other words we have the ability to leave the oil and gas in the ground for another day.” In downstream operations, Husky brought its two new 300,000 storage tanks in Hardisty Alberta into service in January. “These new tanks will expand our blending capacity of Western Canada Select and better serve

A21

our third party customers,” explained Peabody. “As important they increase our flexibility to hold more product in storage through this low and volatile price cycle.” In addition, Husky is expanding its South Saskatchewan gathering system into Lloydminster to accommodate the anticipated growth from its heavy oil thermal projects.

Raging River buys, drills Viking play Calgary – It’s damn the torpedoes and full speed ahead for Raging River Exploration Ltd. in the light oil Viking play near Kindersley in the early going of 2015. The Calgary-based company is keeping busy in the downturn with a $35.6 million Viking consolidation cash transaction announced on Feb. 9 in an operations and guidance update. The purchase includes 600 barrels a day of light oil production per day and 30 net sections of land prospective for Viking light oil with operating netbacks at $30 per barrel of oil equivalent. “The acquisition is consistent with Raging River’s continuing strategy to consolidate the Viking light oil fairway,” said the company. The acquisition includes wells and facilities throughout Raging River’s producing areas of Forgan, Plato and Dodsland. It also eliminates the promote and timing commitments associated with one of the farm-in agreements previously completed by Raging River. In addition, it provides access to prospective lands that were previously excluded under the farm-in agreement. The drilling inventory associated with the acquisition includes 100 net drilling locations of which more than 50 are currently unbooked. The acquisition increases the company’s total 2015 budget from $175million to approximately $210 million. The deal is also anticipated to add approxi-

mately 500 bpd of production for the last three quarters of 2015. As a result, Raging River has increased to its average guidance for 2015 from 13,100 barrels of oil equivalent per day to 13,500 boepd and hiked its exit production guidance from 14,500 boepd to 15,000 boepd. Meanwhile the is in the midst of another active quarter in which they anticipate drilling 50 net horizontal wells. “We have drilled 43 gross (39 net) wells at a 100 per cent success rate this quarter and anticipate being complete on our first quarter program within the next 2-3 weeks,” said the company in its update. The company reported the first six wells have been drilled on the previously announced west Dodsland farm-in with early encouraging results. Up to Feb. 9, Raging River had successfully tested eight previously undrilled net sections, five of which were on the Dodsland farm-in lands. “Raging River continues to focus on operational and execution excellence while diligently pursuing accretive acquisitions,” added the company. “The recently completed financing and acquisition emphasizes your team’s dedication to continuing to create shareholder value throughout all commodity environments.” The company also reported a year over year increase of 49 per cent to proven plus probable reserves to 63.6 million barrels of oil equivalent.

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A22

PIPELINE NEWS March 2015

Oil man travels well but can he curl? By Geoff Lee Lloydminster – Don Bertrand likes to say it took him 31 years and three million miles to find his way from his hometown of Frenchman Butte to Lloydminster where he lives today. “It’s because after I left Frenchman Butte, I’ve been everywhere,” he explained with a laugh. Bertrand is this year’s oil man of the year who is actively chalking up another million miles of travel with his wife Jodi since he retired as a sales rep for MRC Midfield last June. “It’s a lot easier than the first million,” he said about vacation travel on Jan. 27 with his bags packed for another vacation in Aruba in February. His have job, will travel career story will be retold in his banquet speech at the 48th annual Lloydminster Heavy Crude Open Bonspiel from March 18-22. Bertrand’s been a man in motion

since being born and raised on a farm near Frenchman Butte, Saskatchewan then living in town at an early age when his dad bought the local hotel. His dad was also an oilfield boiler man who moved the family to Edmonton for work where young Bertrand went to high school. He was just 15 in 1955 when he landed his first job on a drilling rig in Drayton Valley with stints in Stettler and Swan Hills in Alberta. His next stop was Edmonton for a dispatch job with M & P Transport. He got married in Edmonton for the first time then got hired on with Trimac Transportation hop scotching to Dawson Creek, Winnipeg, Edmonton and Fort Nelson as a dispatcher and manager. Being an employee in motion, he also worked for Tompkins Contracting and Keen Industries in Fort Nelson where fate took him east then west to Lloydminster – eventually.

Don Bertrand is this year’s oilman of the year who will speak at the banquet on March 20 during the 48th annual Lloydminster Heavy Crude Open Bonspiel. The 75 year-old who is fresh from reƟrement ũust got back from a two week vacaƟon in Aruba. WŚŽƚŽ ďLJ 'ĞŽī >ĞĞ

“The way I got back to Lloydminster was because of one of last big turndowns when our friend Pierre Elliott (Trudeau) introduced the National Energy Plan,” he said with a laugh. To make a long story short, Bertrand escaped unemployment in Fort Nelson by accepting a job as a manager for Loomis Armored Car Service in Edmonton. “Then they transferred me to Toronto for awhile. There was a guy in Toronto who used to do a lot of the hiring personnel for me,” he said. “I was in his office one day discussing things and he asked, ‘Do you know where Lloydminster is?’ “I said ‘Hell ya, I was born and

raised not 30 miles from there,’ so he said ‘Would you be interested in a job?’” Motorola was looking for a manger in Lloydminster. “They just bought out the outfit Till Communications Ltd. in 1985, so I ended up moving back to here. Like I say, 31 years and three million miles and here I am,” he said. Bertrand also worked for Lloydminster Heavy Crude Hauling and BMW Monarch (now Weatherford) in town before beginning his final job in sales at MRC Midfield in 2006. Out of all the jobs he had, the one with Loomis gets the nod as the more memorable. ɸ Page A23

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PIPELINE NEWS March 2015 ɺ Page A22 “It was very interesting but stressful. Just to hire a person takes you two months because you have to do a whole background checks on them,” he recalled as if it were yesterday. “Then you have to put them through shooting and different kind of courses, but it was really interesting work. “Of course, every now and then you have a little robbery – another guy likes his money better than we do.” At MRC Midfield Bertrand sold mainly pipes, valves and fittings which added to his three million miles of travel. “I was on the road about five days a week,” he said. Apparently he stayed home long enough to get remarried one day in 2009 to his current wife Jodi. Aside from his “been there, done that” career, Bertrand is well known for his volunteerism that he figures played into him being selected as the oil man of the year. “Basically, the biggest thing besides my experience in the oilpatch is the amount of volunteering I did in the city,” he said. Bertrand has logged over 20 years of committee work on the Lloydminster Heavy Crude Golf Tournament and 25 years as a volunteer for the Oilfield Technical Society. The OTS is the group that organizes the biennial heavy oil shows in the city. Bertrand has also worked tire-

lessly to bring two Allan Cup tournaments to Lloydminster. He also pitched in to help run three sportsman’s dinners that raised over $500,000 to build the multiplex recreation centre now called the Servus Recreation Centre. Bertrand has served on several benefit functions for the Lloydminster Bobcats hockey organization long after catching the volunteer bug. “Just like everything else once you get on a committee, it’s hard to get off,” he said. “I just got started and it just carried on from there. I kind of like volunteering. It’s a lot of fun.” About the bonspiel and banquet he said, “It’s just a chance for everyone in the oilpatch to sort of get together for a bit of camaraderie and that sort of thing.” Bertrand anticipates the turnout will be smaller this year due to low commodity prices, but he advises would-be oilmen curlers out there to stay calm. “I think this is my fifth or sixth one – downturns like this – and I don’t think it’s going to last,” he said. “It will blow over. It always does just; sometimes it takes longer than others, but don’t panic. It will come back.” One thing that will remain the same he joked is his personal curling DNA. He noted that bonspiel chairman John Stanyer didn’t phone to ask him to accept the oilman of the year nomination based on his winning

curling record. “To me curling was fun. I had no delusions of grandeur when it comes to curling,” he said with only one second place prize in a C Event years ago to brag about. Bad knees and a bad back have kept him from curling for the past few years. “I don’ t like the idea of using that stick,” he said even though he’s earned it as an active 75 year-old who walks and exercises five or six days a week at the Servus centre.

A23

He also loves to golf and has fond memories of days playing hockey and fastball. More about the life and times of Don Bertrand as an oilfield worker and community volunteer will be revealed during his presence at the banquet. Leading the audience applause will be his wife Jodi and his two daughters Kelly and Laurie who work in town and one of his three local grandchildren Nicole, Cody and Myles.

Lloydminster new strategic plan Lloydminster Mayor Rob Saunders introduced the city’s new strategic plan for 201517 to the media on Jan. 30 at the OperaƟons Centre. The plan’s four obũecƟves are listed as strong relaƟonships, vibrant city, sustainable infrastructure and healthy Įnancial posiƟon. WŚŽƚŽ ďLJ 'ĞŽī >ĞĞ

A24

PIPELINE NEWS March 2015

7UDQV&DQDGD Ă€[HV H\HV RQ WKH SUL]H „ By Geoff Lee Calgary – TransCanada Corporation is keeping its eyes on the prize to secure a U.S. presidential permit to build the Keystone XL pipeline with $3 billion already invested in the project. The U.S. regulatory process has dragged on for six-and-a-half years with the potential for further delays and reviews. A new review could originate over a comment letter from the U.S. Environmental Protection Agency on Feb. 2 on the U.S. State Department’s Final Supplemental Environmental Impact Statement (FSEIS) for Keystone. The EPA is questioning the impact that current low oil prices might have on greenhouse gas emissions in Alberta’s oilsands if the pipeline if built. TransCanada held a news conference on Feb. 11 to restate its resolve to build a safe and environmentally friendly pipeline to transport about 830,000 barrels of heavy crude from Alberta to the U.S. Gulf Coast. The media event was triggered by a same day letter that TransCanada sent to the U.S. State Department to refute what it considers to be misleading points made in the EPA’s comment letter. “TransCanada disagrees with any suggestion that the Department of State has not fully and completely assessed the environmental impacts of Keystone XL,â€? said Russ Girling, TransCanada’s chief executive in a news statement. “We also reject the EPA’s inference that at lower oil prices, Keystone XL will increase the rate of oil sands production and greenhouse gas emissions. “This conclusion is not supported by the conclusions drawn in the FSEIS or by actual market prices and production rates since TransCanada first applied for Keystone XL in 2008.â€?

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If approved the Keystone XL pipeline will transport heavy oil from the Alberta oilsands and light oil from the U.S. Bakken to the U.S. Gulf Coast. Image submiĆŠed. The pipeline will run south from Hardisty Alberta to Steele City Nebraska as part of the Keystone system. /žĂĹ?Äž Ć?ĆľÄ?ĹľĹ?ƊĞĚ

tive and as factual as we can. “Our primary focus is building a safe and efficient pipeline, and if takes more information to satisfy people, that’s what we need to do. “That’s what we’ve done for the last six-and-ahalf years.â€? Later that day, the U.S. House of Representatives approved a bill to build the pipeline with amendments previously approved by the Senate. ɸ Page A25

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In its letter TransCanada stated that short and medium term changes in oil prices don’t significantly impact whether the oilsands will be developed. The company argues that even with price volatility from $110 per barrel to $39 a barrel since the Keystone permit application was filed in 2008 oil has been making its way to market. “Oil sands and U.S. Bakken production are both up by one million barrels per day since 2008,â€? said Girling. “So it is clear that building or not building Keystone XL will not cause production to go up or down nor does the pipeline significantly exacerbate the problem of GHG emissions.â€? Girling noted TransCanada would assist the State Department in reviewing issues raised by the EPA on current low oil prices and their impact on GHG emissions associated with the pipeline if a review is required. Asked by the Wall Street Journal if the TransCanada would prefer a delay on a final decision over an outright rejection in the short term by President Barack Obama, Girling chose neither. “I think what we’re saying is we prefer that the Department of State has all factual information that it needs to make a decision – that the decision isn’t based on misleading conclusions,â€? said Girling. “Our preference is obviously we support approval and to have that sooner rather than later. “That desire hasn’t come true. We’ve been at this for six-and-a-half years and if it takes us a bit longer to get to the place where everybody has the factual information‌. “If you look at the criteria that’s been laid out for this decision it not only includes a environmental review but it also includes trade, energy security, job creation – a number of other factors which I believe all point to approval.â€? “But again we’ve done our best to be as objec-

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PIPELINE NEWS March 2015 Éş Page A24 The amendments acknowledged the existence of climate change, and noted the Alberta oilsands should not be exempt from a tax to clean up oil spills. President Obama is threatening to veto the bill. The extensive delays that have ensued for Keystone over the years prompted a query from the Financial Post about the extent that this creates uncertainty for future cross border pipelines. “It does create uncertainty. I do believe that

there will be additional market need going forward for cross border permits between our two countries going both directions,� admitted Girling. “Before we make those applications and others, I am sure that they’re looking at this process looking for some more clarity as to what the criteria are going to be for those crossings. “I’ve been at this business for about 30 years and the cross border movement of oil and gas has been free and well regulated. I think there was recognition that was good for both sides of the

A25

borders.� Girling added that for increased trade to occur between Canada, the U.S. and Mexico involving the transport of oil, “we are going to need greater clarity before people are willing to step up and commit their capital to these processes. “At the current time we have about $3 billion into this process, and I can tell you it’s not a very comfortable place to be not knowing what the criteria or where the end of the regulatory look like.�

Saturn to drill for Bannock Creek oil Vancouver – Saturn Minerals Inc. is set to drill its first exploration well for light oil on the Bannock Creek property in eastern Saskatchewan following the latest seismic data. Permitting and licensing for a well at the target location is underway will be drilled and completed conventionally to a depth of less than 1,000 meters. The Vancouver-based company made the announcement on Feb. 10 with the news they completed seismic data with three additional recently acquired lines now totaling 60 km on the Bannock Creek site. Saturn reports that the recently acquired data has confirmed “closure for potential light oil traps� in the stacked Red River, Winnipeg and Deadwood formations of the northeastern Williston Basin. “This is the third seismic program completed on the Bannock Creek project since 2012,� stated Stan Szary, president and CEO of Saturn, “and we’ve established a strong exploration target with these multiple fault bounded closures. “The amount of faulting and trap structures that are shown within the known oil-producing reservoirs underlying the Bannock Creek area prove that conventional oil exploration is viable and exciting in this part of the Williston Basin.� This “closed fault bounded roll over structure� is 480 acres minimum in area and has the potential to contain up to 38 million barrels in place of resource

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Saturn says this target remains an exciting future target in Saturn’s inventory along with several other structures which have been mapped from the recent seismic. The company has amassed over 370,000 acres of oil and gas drilling rights in Manitoba and Saskatchewan. Saturn partnered with Fishing Lake First Nation, Kinistin Saulteaux Nation, The Key First Nation and Yellowquill First Nations in 2011 to launch Inowending Exploration & Development Corp. to co-own and co-develop resource projects.

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A26

PIPELINE NEWS March 2015

Wainwright Curling Club sweeps house

Meet the A-Event champs from Doug’s Well Service and ConstrucƟon. (l-r) are: Brad Hopestad, Doug Dalton, Terry Ermel, and Kerry Frissel the skip receiving their trophy from Mitch Wahlberg, president of the Wainwright Oilmen’s Bonspiel. WŚŽƚŽƐ ƐƵďŵŝƩĞĚ

Wainwright – Belt tightening this year due to low oil prices makes the Wainwright Curling Club the hands down winner of the 37th annual Wainwright and District Oilmen’s Bonspiel. On the ice Doug’s Well Service and Construction captured the A-Event title, but the curling club raked in the dough from a committee decision to hold the banquet and silent auction there this year to save money. “Rather than having a banquet and a dance and a rent a hall we just had it all at the curling club,” explained organizing rep Bob Bishop from Bakker Hughes. “We kind of cut down on some of our bigger expenses. We made it work and hopefully we can support some of the local charities this year. “A big part of our bonspiel is supporting the Wainwright Curling Club. “By having everything at the curling rink it was kind of a win for them because they are getting

(L-r) is the Baker Hughes B-Event team of CharloƩe Humphrey, Barr Humphreys, Dennis Gibb-and DusƟn Haun the skip with Mitch Wahlberg, president of the Wainwright Oilmen’s Bonspiel presenƟng the trophy.

more kitchen and bar sales.” The impact of low oil prices forced the committee’s hand to circle the wagons for the event played Jan. 30 to Feb. 1. That meant shifting the banquet from the Elk’s Hall to the curling rink and cutting the usual dance and DJ from the budget. “That’s part of the stuff we pulled back on,” said Bishop. “We have a meeting every week before the bonspiel and we kind of knew at that point that where our sponsorship and things were that we would have to scale things back a bit this year.” Mitch Wahlberg, president of the oilmen’s bonspiel who works for Caradan Oilfield Chemicals blames low commodity prices for having to downsize to a 16-team draw in three events. “Everyone’s tight on their budgets,” he said noting that caused one event sponsor to pull out. “I ended up having to pull my team because I

was working the whole weekend. “It’s unfortunate I had to miss it, but I can’t turn away work right now. It is what it is kind of thing.” Wahlberg did manage to pop by the rink a couple of times and probably wishes he had stayed longer based on Bishop’s insider report to Pipeline News. “We had everyone there for the banquet on Saturday night. We had draws at 6 p.m. and at 8 p.m., so all the curlers were there,” said Bishop noting the banquet ran from 5 p.m. to 7 p.m. “There were about 100 to 120 people. We did have a good time. Saturday night for sure was a party.” As the for effect of low oil prices Bishop said, “We had a couple of teams that couldn’t make it work this year, but overall it was pretty positive. “We were really happy with the donors and the sponsors that were able to support us again this year.” ɸ Page A27

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PIPELINE NEWS March 2015 Éş Page A26 There were no complaints from the champion Doug’s Well Service rink with skip Kerry Frissel, third Terry Ermel, second Doug Dalton and lead Brad Hopestad on board. They defeated last year’s champs from Ron’s Vacuum Service in the finals and, by doing so, claimed the $100 bounty for being the first team to topple the prior champs. The bounty is a $100 bar tab sponsored by Dog’s Hot Oiling and will be claimed next year by the first team to upset Doug’s Well Service. “That’s something fun that we do. We try to have some fun with the

team that wins the spiel,� said Bishop. The liquid bounty was swallowed quickly following the trophy and prize presentations that wrapped up early on Super Bowl Sunday afternoon. “You get to enjoy a beverage and support the club a little bit with some bar sales. It was really good for the curling club,� said Bishop. Bishop also gave a thumbs up to the rink staff and the icemaker for glitch free curling. Conditions were ideal for the B-Event team from Baker Hughes with skip Dustin Haun, third Dennis Gibb, second Barr Humphreys and lead Charlotte Humphrey.

Bishop found himself in the winners’ circle of the C-Event team skipping another team from Baker Hughes, but he credits his Talisman playing buddies for the victory. “They’re all Talisman guys that I curl with. They all played pretty good for me,� he said noting he selected a gift certificate from the prize pool. Bishop’s crew defeated a gang from Stinger Trucking in his event final. “I think he wins it every year,� chipped in Wahlberg. The day after the event, Bishop revealed he made the practice roster for the men’s Alberta Provincial

A27

Championship played at the local hockey arena Feb. 4 to 8. “I’m going to get to throw some rocks on it on Tuesday night,� he said the day before he got his chance. “I’m excited about that. I’ve never thrown a rock on the arena ice here.� If one of the players on a provincial team gets injured and they don’t have a spare, then local practice roster players like Bishop could land on a provincial team. Bishop headed to the provincial venue at least as an interested spectator knowing his nephew – the son of Olympic gold medalist Kevin Martin – would be playing.

)LUVW ODQG VDOH ODVW LQ Ă€VFDO \HDU Regina – Call it a first and last land sale of petroleum and natural gas rights. The February sale generated $17.5 million in land sale revenue for Saskatchewan as the first sale of 2015 and the last one in the fiscal year ending March 31, 2015. The next sale of Crown petroleum and natural gas rights will be held on April 6. The dual identity February sale brings the fiscal year total to $164.7 million and overshoots the 2014-15 March budget forecast of $99 million by nearly $66 million. The best months of the 2014-15 fiscal year were April and August to account for the increase over the initial forecast. “Saskatchewan remains one of the best places for oil and gas companies to invest,â€? said Economy Minister Bill Boyd in a news release. “The sector will continue to play a part in our diversified economy in 2015.â€? The Weyburn-Estevan area garnered the most bids in the February sale to generate $8.3 million in revenue. The Lloydminster area was next at $5.3 million, followed by the Swift Current area at $3.2 million and the Kindersley-Kerrobert area at $694,039. The highest price paid for a single parcel was $3.5 million by Windfall Resources Ltd. that acquired the 1,036-hectare lease east of St. Walburg. The highest price on a per-hectare basis was $8,586 by Stomp Energy Ltd. that bid $1.1 million for a 127-hectare lease southeast of Estevan. Weyburn-Estevan area (numbers rounded up) The top purchaser of acreage in this area was Stomp Energy Ltd. which spent $2.7 million to acquire 10 lease parcels. The highest price paid for a single lease in this area was $1.08 million by Stomp Energy for a 127 hectare parcel located within the Pinto Midale and Frobisher Beds Oil Pools, 23 kilometres southeast of Estevan. This is the highest dollar per hectare in this area at $8,585 per hectare. Lloydminster area The top purchaser of acreage in this area was Windfall Resources Ltd. who spent $4.2 million, to acquire four lease parcels. The premium price paid for a single lease was

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PIPELINE NEWS March 2015

Wait list up for Energy Centre studies By Geoff Lee Lloydminster – Hard times in the oil and gas industry are good times for energy program enrolment at Lakeland College in Lloydminster. The current downturn due to low commodity prices for oil and gas is no exception. “In times of economic downturn we typically see increasing enrolment,” said Kara Johnston dean of energy programming “If people can’t go to work, they go to school, so actually our enrolment numbers are really strong for next fall and even beyond then. “We still have a waiting list. This is probably our biggest waiting list ever.” Johnston noted Lakeland has gotten “tons of inquiries” for enrolment from parents and students this year. “I think everyone recognizes it is a bit of a downturn and it might take a bit longer to get back to the levels that we were,” she said. “However, I think there are other industries like the fracking industry that are going to be harder hit than our oilsands or the upstream stuff that we have in our area.” There are 104 first year students and 28 second year students currently taking classes in 2015 with a lot more to come next fall.

Johnston said some of the interest is coming from one year Heavy Oil Operations Technician students who’ve decided to come back for a second year diploma in 3rd class power engineering. The expected opening of the new $23 million Energy Centre this April will further add to the demand for fall enrolment with its state-of-the-art training equipment. Students will be able to simulate complete heavy oil upgrading and steam-assisted gravity drainage (SAGD) processes, as well as achieving advanced power engineering certification. Students have been using the simulation classrooms since early January with the commissioning process of the steam lab to begin in March as facility construction winds down. “We’re just doing the fine tuning on the controls and the boiler wiring,” said Jeff Dustow, Lakeland’s manager of capital projects during a tour on Jan. 28. “All the boilers are in place and connected. The boiler suppliers will be coming out possibly within the next couple of weeks to start verifying that all the controls are working the way they should.” “Students will be in there starting in April. The plant may not be fully operational, but they will be in there helping with the commissioning.”

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Jeī Dustow, manager of capital proũects, reports the new Energy Centre at Lakeland College in Lloydminster will start commissioning the new teaching boilers in the steam lab in March.

“It will be nice to see it completed and the students in there.” The upcoming commissioning follows news that power engineering students scored an overall 88.5 pass rate on their Alberta Boilers Safety Association exams in November and December. “That is unreal. The provincial average is about 67 per cent,” said Johnston with more exams scheduled. “We have a really dedicated group of students that have really taken their studies seriously.” The college is confident the current class of power engineering and heavy oil students will find jobs despite the slowdown in the industry based on past hiring experience. “One of the great things about Lakeland is we have a high employment rate,” said Darrel Howell Lakeland’s new chair of the board of governors. “A high 90 per cent of our graduates are employed from year-to-year and we haven’t seen any change in that to this point.” Howell expects the Energy Centre will put Lakeland on the map for the oil industry right across Canada. “Industry is the driver behind the new Energy Centre. We’ve been graduating 4th class power engineers for 30 years probably,” said Howell. ɸ Page A29

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PIPELINE NEWS March 2015

Kara Johnston, dean of energy programming at Lakeland, said the waiƟng list for fall enrolment for power engineering and heavy oil programs could be the biggest one yet as returning students or laid oī workers upgrade their skills.

ɺ Page A28 “The new norm in the industry is becoming 3rd even 2nd class, so this upgrade has really been driven by industry. They are really competing for our graduates at this point.” Plans for the Energy Centre began in 2010 during renovations to the old lab with thanks to industry support. “We have some very generous donations from the oil industry to help pay for the centre,” said Howell who has

lots of industry connections as chair of the board. Howell is currently retired, but he’s worked in the energy sector for over 30 years in senior management roles primarily in heavy oil. He was president and then chairman of Tartan Canada Corporation and has worked with Flint Energy Services, Husky Energy, and Syncrude Canada. “Industry partnerships are very important,” he said especially with cuts to education spending expected soon

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by the Alberta government. “We’re expecting some kind of a cut in funding. We don’t know what at this point. It’s been in the news, so we’re expecting it. “Little over half of our funding comes from government grants so it’s significant.” The first time Howell sat on the board for six years in the ’90s government grants covered about 95 per cent of Lakeland’s budget and now it’s down to 58 per cent. “There is a big need for industry partners to help you through things,” said Howell who will chair the board for three years. Howell took over the role of chair from Milt Wakefield on Dec. 19 when companies began to cut their capital spending budgets for 2015. Lakeland believes companies like Husky Energy, a major supporter of the Energy Centre, will continue to hire power engineering and heavy oil grads with its regional focus on

thermal heavy oil. Husky is constructing or ramping up a series of thermal projects including new plants in Edam and Vawn in the Lloydminster region that require skilled workers. “If you look around Western Canada, we haven’t lost a lot of our major projects that are coming on line,” said Johnston who keeps her industry ear close to the ground. “When it comes to power engineers – Husky especially with lots of what they have going on line in the Edam and Vawn area – none of

those projects have been scaled back. “There’s still quite a demand for those students and especially qualified students. “That’s one of the advantages of our program is the handson learning and our phenomenal facilities that we have here. “Our students are able to go to industry a little more job-ready.” Meanwhile a date has yet to be set for the grand opening of the Energy Centre until it’s fully operational. “It could be late spring or we might even do it in the fall,” said

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Howell. “We want to have good representation from various interested groups including politicians.” The grand opening might also have to wait for the hiring of a new president for Lakeland. An executive search is being conducted by Davies Park in Edmonton that will provide the board with a short list of candidates. “There will be probably three or four individuals for interview by the board,” said Howell who noted the board hasn’t set a definite hiring deadline.

Third class powering students Holly Hetherington, leŌ, and Paul Wang soak up a lesson from instructor Norm Arsenault in the old renovated steam lab at the Lakeland campus.

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CAPP weighs impact of lower spending Calgary – Forecasted cuts of $23 billion in capital spending by oil companies in Western Canada this year will have a measurable effect on the Canadian economy. In a short term review of its industry forecast, the Canadian Association of Petroleum Producers said its members will cut capital spending by 33 per cent to $46 billion in 2015. A capital investment in the oilsands is forecast at $25 billion in 2015 compared to $33 billion a year ago. CAPP said lower oil prices impose a significant burden on the industry as companies reign in spending. The industry’s news was timed on Jan. 21 the same day the Bank of Canada lowered interest rates. CAPP president Tim McMillan spoke about the cause and effect of both conditions on the economy during an on-air interview with CBC television that morning. “This industry continues to grow within Canada and it’s important,� said McMillan. “The Bank of Canada came out this morning and lowered its expectations for national growth by almost 1 per cent of real GDP based on the price of oil and I think that speaks to how the lowering oil prices are having a reeling-in effect

across Canada.� CAPP asserts the long term need for Canada to diversify its oil and gas markets and build infrastructure to move products to market remains strong despite the sharp oil price decline and cut in capital spending. McMillan told CBC that the industry is optimistic new east and west pipelines in Canada will get built to help offset the Western Canadian oil price discount. “There’s obviously more work to be done. There’s some very important projects that are on the drawing board,� he said on air. “I think if we look at what’s driving the low cost today it’s because North America’s supply continues to increase. “Our ability to produce in Canada and the U.S. are affecting world markets. That same effect I think is an imperative that we look at options at getting our oil east and west to meet world growing demand in India, Asia Africa. “That’s where the International Energy Agency is pointing to growth in the next 25 years.’ McMillan also spoke about the importance of pipelines and other means of transporting oil to markets in the news release. “Canada has the opportunity to be the supplier of choice at home and in the global market

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and that’s why market access - by all means, in all directions - is so critically important to improve the health, wealth and quality of life of all Canadians, even with the current declines in prices and investment,� said McMillan. Capital spending in the conventional oil and gas portion of the Western Canada Sedimentary Basin is forecast to decrease to $21 billion this year from the $36 billion invested in 2014. The total number of wells to be drilled in Western Canada this year is forecast to decline by 30 per cent to 7,350 wells. “These are challenging times and Canadians across the country will see or feel the impacts,� McMillan said in a statement. “Purchases will be down, including purchases from the more than 2,300 businesses from coast to coast, excluding Alberta that sell goods and services directly to the oil sands. Investors have seen their portfolios shrink. “And governments will see reduced revenues from the industry’s royalty and tax payments. We all will feel the effects,� McMillan said. Despite the spending cutback oil production is expected to grow by 65,000 barrels a day in 2014 and by 120,000 bpd in 2016. The new 2015 forecast for total Western Canadian oil production is 3.6 million barrels per day, about 150,000 barrels per day higher than total 2014 production of 3.5 million barrels per day, with a similar rate of growth expected in 2016. Conventional oil production is flat at 1.3 million barrels per day in 2015 and oil sands production increases to 2.3 million barrels per day due to projects coming on stream from prior-year investments. CAPP said this production growth underscores the ongoing need for market diversity and increased transportation capacity. The industry forecasts are developed from oil producer data and CAPP analysis of production trends, expected drilling activity, recent announcements and ongoing discussions with industry stakeholders and government agencies. CAPP does not forecast oil prices.

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SECTION B March 2015

1HZ 3HWUR 3DVV FDUGORFN ÀUVW retail service on Estevan bypass By Brian Zinchuk Estevan – With the new Estevan truck bypass, decades in the making, finally coming to fruition, there’s now a serious incentive for business to establish a presence on that new route. The first retail establishment to open will cater directly to the redirected traffic, a new Petro-Pass truck stop operated by franchisee Girard Bulk Service Ltd. of Estevan. Raymond Girard, owner, spoke with Pipeline News on Jan. 26 about the opening of the new facility. “It’s a greenfield site, a brand new site,” he said. The placement is strategic, to service both local needs and the large quantities of trucks that will go by when the new bypass goes into full operation. It’s been a long time in coming. “We’ve been going to meetings for 20 years on the bypass,” Girard said. Indeed, Estevan’s bypass was announced in the 2008 provincial budget on the same day as Yorkton’s, but while Yorkton’s was completed several years ago, Estevan’s is in its final stages of construction. The new facility is one of three lots. Lot one is home of the PetroPass truck stop. The second lot is open for future development. The Raymond Girard, owner of Girard Bulk Service Ltd., would rather be third lot will be home of the Girard early to the game than one day late when it came to opening the new Petro-Pass truck stop on the new Estevan bypass. The facility is the Įrst propane division. “We’re going to retail service of its kind to open on the bypass, which is expected to be set up bulk propane,” he said. The cardlock area of the truck paved and opened later this year. Photo by Brian Zinchuk

stop has a total of seven diesel hoses and two hoses for gasoline. There are two channels with slaves, two more high spend and one low speed hosed for clear diesel. One hose is equipped for dyed fuel sales. Bulk DEF will be on-tap. Girard made clear that their facilities within Estevan on 4th Street are going to continue in full operation. “We’re continuing our operations on 4th Street. It’s staying there. There will be no change,” he said. “Our bulk plant is over there, propane bottle-filling, admin and lube warehouse. We still anticipate a large amount of fuel (sales) will be on 4th Street.” The new facility on the bypass adds a convenience store or “C-store.” It has all new staff, and is Girard Bulk Service’s first retail location. While the cardlock will feature 24-hour access to both the pumps, driver’s lounge and showers, the C-store will run from 6 a.m. to 5 p.m. for now. Girard noted they’re not going after the 24-hour convenience store market, and that most similar facilities close at a similar time. The three showers are all activated by cardlock, and can be used if the user bought fuel from any Petro-Pass in Canada in the last 24 hours. For instance, if a driver fueled up in Lloydminster in the morning, they could shower in Estevan in the evening. The C-store has all the expected snack foods, drinks and extras expected, but there’s something special in one of the corners – a brand new, high-powered oven that can cook a whole Vern’s Pizza in just a few minutes. “We can cook a pizza in our $10,000 oven in three-and-a-half minutes,” he said. If someone is working at a nearby business and calls in they’d like a pizza to pick up on their way home, they can have it ready. Just remember the store closes at 5 p.m. ɸ Page B2

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Room for 30 semis to park overnight

Jim Ludwig checks out the drivers’ lounge, which has satellite Ts and Wi-Fi.

ɺ Page B1 Vern’s Pizza are renowned for being incredibly thick. The company started in Saskatoon and is now in Martensville, Prince Albert, Regina and Lloydminster in Saskatchewan as well as Calgary, Brandon and Winnipeg.

While you can pickup cold Vern’s Pizza’s in Estevan, this will be the first location to offer them cooked, either by the slice or whole, in the Energy City. The paved lot has room for 30 semis to park overnight, with a mix of back-in and pullthrough stalls. While

the lot is paved, the road to the site from the bypass is gravel, and there are no plans to pave that just yet. Girard expects the bypass to be paved by the fall of 2015. A brief warm spell in January made the current bypass a little sloppy, however, delaying the planned opening, which

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From leĹŒ: Connie Moberg, Brenda Bod and GineĆŠe LapensÄ e can be found at the new Petro-Pass convenience store on the east side of Estevan.

took place Feb. 2. “We’re here before the roads are. We might be six months early,� Girard said. “We wanted to be here for years, and wanted to be here before, and not after, the bypass opens.� He noted the bypass took longer than expected, but “maybe it takes longer to get things done right. “The long-haul truck driver with oversize loads does not want to go through Estevan. We’ve already had customers try to buy fuel,� he said the week prior to opening. Major fuel supplier Girard Bulk Service has grown to be the largest supplier of bulk fuel sales in southeast Saskatchewan. Their trucks can often be seen in the field, filling drilling rig tanks on location. They opened a new cardlock in Oxbow, where Girard himself calls home, in 2014. Other locations include Carnduff, Alida, Redvers, Carlyle, Lampman, Stoughton and Kipling. Since the oilpatch by-and-large runs on

diesel, Girard is keenly in tune with the ups and downs of the oil business. Asked about life with oil at $50 or less per barrel WTI, he said, “People are going to be careful with their money. Some sectors are going to be hurt.� A lot of rigs have been racked, for instance. “We service a lot of rigs,� Girard said. “All services are not as busy as they have been. But,� he stressed, “it’s not dead yet. It’s slowed.� Girard concurred with what a lot of oilpatch veterans told Pipeline News throughout January – that they weren’t expecting things to improve until the fourth quarter of 2015. Spending in place right now was from budgets that were set when oil was still $100 a barrel. The slowdown will be something of a relief, staffing-wise. “We had lots of overtime. We were always shortstaffed,� Girard said. “We still have farming, trucking. I don’t see oil going to zero. There’s still flowlines, pipelines,

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service rigs, Shand and Boundary Dam (Power Stations).� Farmers will benefit from cheaper diesel, but conversely, they may not see the payments from additional wells being drilled on their land. One of the conundrums this past winter has been the fact that Saskatchewan gasoline prices have declined to a great degree in step with the decline in world oil prices, but diesel has remained relatively high. Girard explained that there are two cycles that are related. Diesel is in high demand during the winter months and declines in demand, and price during the spring. Gasoline, on the other hand, sees its price fall during the winter months and rise during the summer months. Thus the high price of diesel, relative to gasoline, can be attributed to its cyclical nature. This is also the first winter in several years that Pipeline News has not called Girard to comment on diesel shortages that have been in play during previous winters. “You always have diesel higher in the cold months. Gas is a good buy,� he said of prices at the end of January, where local pumps were posted around 84.9 cents a litre. Diesel, he noted, was down almost 35 cents a litre from previous recent highs, while gasoline was down 60 cents a litre.

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PIPELINE NEWS March 2015

B3

Combatting fuel theft Fuel theft can total millions of dollars

Truckers will be able to ÄŽll both tanks at once on their trucks. Bulk DEF will also be on-tap.

Estevan – Probably one of the most prevalent security issues in the oilpatch is fuel theft. When your business is supplying bulk fuel sales to hundreds of oilfield services, it’s a top-ofmind concern. With that in mind, the new PetroCanada Petro-Pass on the Estevan truck bypass has 27 high definition cameras on the site, getting a photo of every driver as they enter the property. There’s also a camera trained on each of the 11 hoses, and another seven in the convenience store. “Suncor’s main thing is security, of the staff, of the customers. It trumps everything,� said Raymond Girard, owner of Girard Bulk Service Ltd. and franchisee for the new truck stop. Every time a vehicle is fueled, a record is kept both of the transaction

and on video. “Fuel theft is a big problem with company cards,� Girard said. At a presentation in late November in Estevan, David Hammermeister, chartered professional accountant and partner with MNP, spoke about how it’s possible to identify fuel theft by looking at fuel economy records. When one truck gets 12 miles to the gallon, and another gets two, there may be an issue. Girard concurred. “Absolutely,� he said, noting that using those records, they can go back and get video records to show when those particular fuel cards are used, determining just what tank was being filled up. Girard Bulk Service will help their clientele sort out any issues. “We keep files for 60 days. Every

transaction on paper is matched with video cameras for 60 days.� As for fuelling up on leases, he noted, “We at Girard Bulk put fuel only where the consultant tells us to put it. People ask us to fill their truck. No, we won’t do it. I’ll ask the consultant. “I don’t play around with fuel. My job is at risk if someone gets a free tank of fuel. “Fuel theft is in the

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the past. Padlocks, he noted are not really a deterrent. “Fuel has to flow, so it has to come out somehow. It’s not like locking up gold.�

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on the boss. “It’s a lot of money,� he said. “Nobody keeps gas on the farm anymore.� If there is fuel on the farm, it’s just a bit, not the large tanks of

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B4

PIPELINE NEWS March 2015

Lining up students with work „ By Brian Zinchuk Estevan – The Saskatchewan Energy Training Institute has number of initiatives coming up with one key intention: finding their students jobs. On Feb. 11, four electrical student had an opportunity to meetand-greet two electrical firms. Power engineering students will have a meet and greet with potential employers on March 12 from 10:30 a.m. to 12:30 p.m. ‘�It’s a new initiative this academic year,� said Sheena Onrait, east division general manager

for programming and student services, Southeast College (parent organization of SETI). It’s intended to connect students with employers in the area, and designed around labour market attachment. There are very specific aims. “We target employers with power engineering in the area to come and meet our students. There are 12 students in the program which concludes in May. It’s fully subscribed. Onrait expects their meet-and-greet will result in jobs, either On the leĹŒ, in no parĆ&#x;cular order, are SETI electrical students Dylan Tourand, Amy Friess, Joelle Silzer and Kaelee Trail. They took part in a meet-and-greet with potenĆ&#x;al employers on Feb. 11. Photo by Brian Zinchuk

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solidifying an offer or providing a definitive lead before they leave school. SaskPower, Cenovus, Crescent Point, NAL and the Co-op refinery have all been invited. As for the electri-

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cal side, Onrait acknowledged not a lot of companies attended. They invited more, but not a lot are hiring. “It sounds like a lot have slowed down in hiring. We attribute it to the slowdown in oil.� Most electrical work in the Estevan area is industrial and commercial, she noted, with few residential electricians in comparison. The new welding program will start March 16. It was moved back to allow more students to sign up. In mid-February eight of 12 slots were taken. One thousand dollar entrance scholarships are being offered. The course ends July 31. Spring breakup

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Things really get humming at SETI during spring breakup. Planning for this year is going on as normal, with all their regular Enform specialty classes offered. There’s more courses and course dates, she noted. The litany of courses includes H2S, fall protection, rig rescue, confined space, well service BOP, first line BOP, certified health and safety, safety management and regulatory awareness for wellsite supervisors, detection and control of flammable substances. Fire extinguisher training is available on demand. With the slowdown, she’s not sure what to expect from mid-March to mid-May.

PIPELINE NEWS March 2015

B5

Crescent Point accounts for nearly half of all Sask. drilling activity „ By Brian Zinchuk Estevan – The drilling activity for Saskatchewan was down by roughly half as of Feb. 16 compared to the previous two years. With 50 active drilling rigs that day, things were slow indeed at a time of year when drilling is typically still ramping up before spring breakup. Around the same time in 2014 there were about 105 active drilling rigs in the province. In 2013, the number was around 95 and on the rise. With just 50 rigs working out of 139, that made for a 36 per cent utilization rate, by far the worst utilization rate at this time of year since the Bakken boom hit in 2008. Out of the western provinces, it was the lowest utilization rate of the four. Alberta had 42 per cent (227/540 rigs working). Manitoba had 44 per cent (7/16 rigs working). British Columbia had 67 per cent (52/78 rigs working). Crescent Point Energy Corp. was still the most active driller in the country, by far, with 24 active rigs. This outpaced second place Progress Energy at 19 and third place Tourmaline at 15. However, from a Saskatchewan perspective, those other two companies were not focused in this province. As of Feb. 16, all but one of Crescent Point’s rigs were work-

ing in Saskatchewan, having apparently shut down their one rig in northwest Alberta. The other rig was working near Elkhorn, Man. Two rigs were working due east of Kindersley. Five rigs were working the Shaunavon trend, of which four were within eight miles of Shaunavon. Four were working within three miles of the U.S. border, stretched out along 18 miles of the border, south of Oungre. The remaining cluster of rigs was in the Stoughton area, with 12 rigs working there. With a total of 16 active rigs out of 25 working in southeast Saskatchewan on oil (an additional two of which were doing potash), Crescent Point accounted for just under two-thirds of all drilling activity in that area. In the southwest, with six of 14 active rigs, it made up almost half of the activity. Indeed, there were so few rigs working in the province, it’s not that hard to do a roundup of those which were working. Husky Oil Operations had five rigs working in Saskatchewan, from Lloydminster to Edam, all north of Highway 16. The only other operators in the Lloydminster area drilling on the Saskatchewan side were

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Serafina, Term Oil and Twin Butte Energy. In the Kindersley area, Raging River had three rigs, Teine Energy, Beaumont Energy and Penn West had one each. Plains Midstream also had a rig working six miles southeast of Kerrobert in the vicinity of the planned rail terminal for that area. Swinging back to the southeast again, Lightstream had one rig near Griffin.  Canada Golden Fortune Potash Corp had one

rig working just outside of Benson. Wyatt Oil + Gas Inc. had another rig working near Alameda. Legacy Oil + Gas had one rig near North Portal. Federated Coop had one rig south of Oxbow. Midale Petroleums had one rig just north of Carnduff. Spartan Energy Corp. had one rig south of Carievale. Noticeably absent was Cenovus, which typically has kept one or two rigs working in the Weyburn Unit

AcĆ&#x;ve drilling rigs in Saskatchewan in mid-February. Graphic courtesy Rig Locator

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PIPELINE NEWS March 2015

Who is going to answer? Estevan – A major portion of overall security is having someone answer the phone when it rings, and having someone to check in with when you’re working out on your own. Those are some of the services Estevan Telephone Answering Service has been providing for many years. A little over a year ago the company moved a few doors down Estevan’s Fifth Street to a new, purpose-built building with much more room. Rose Saxon, owner, talked about some of their services on Feb. 6. For instance, if you get stuck in an elevator and pick up the phone, you might be routed to them. “I got one call yesterday,� she said. The person had hit the wrong button in the elevator. They also monitor an automated teller machine in town. However, the bulk

Riza Lugnasim answers phones at at Estevan Telephone Answering Service.

of their business is in the oilfield. They’re often the ones workers will check in with on a regular basis while working alone in the field. If wells or batteries have automated dialing systems, they take many of those calls, and then alert the respective operator. Things get really interesting in the summer, when electrical storms can cause outages or burn batteries to the ground. They call in extra staff when the lightning storms come, and have up to four to

six people manning the phones. “It just hums,� she said. “It’s overwhelming.� The company has backups for their backups. Critical computers have uninterruptable power systems, backed up by a generator for the building which will automatically kick in in the event of a local power outage. There’s even a flashlight on the desk, just in case. They’re prepared to cover every contingency. “We can provide 24/7 service, another

layer of redundancy,� Saxon said. They’ll even occasionally get test calls from their clients during mock emergencies. One came in recently. “We passed,� she said. The slowdown in the oilpatch has affected them. They haven’t laid anyone off, but she noted, “I’ve lost four companies last week, just because they’re slow.� Companies are cutting expenses wherever they can, it seems, including their safety monitoring.

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B7

57th Annual Weyburn Oilfield Technical Society Curling Bonspiel Jan. 23-24 Team photos courtesy Michael Mainil. Action photos by Jon Gillies, Images by Gillies

The skins format bonspiel was won by the Skjerdal rink, composed of Danny Clark, Clare Johnson, Schenley Borys and Tanner Wallin.

The B-event winners were the Junior Oilmans. It was made up of A.J. Mitchell, Jaedon Miller, Tyson Verbeem and Daylan Swanson.

In the C-event Miller Well Service was the winner. They were Lawerence Woodard, Bruce Miller, Jason Woodard and Pierre Mondor.

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B8

PIPELINE NEWS March 2015

Dayman Trucking sending the iron to auction „ By Brian Zinchuk Estevan – In late January Dayman Trucking Company Ltd. lined up their equipment for some photos. These photos would be used to promote the sale of the equipment, as well as keepsakes for the wall, joining many other pictures over the years. The equipment didn’t stay lined up long, however. As soon as the photographer in the manbasket on the end of a telehander was down on the ground, drivers were in their trucks and much of the fleet dissipated im-

mediately. There was still work to be done, it seems. Dayman Trucking Company Ltd. is selling off most of its iron and by-and-large shutting down, but not entirely. The owners are holding onto the yard and a few pieces of equipment. It’s the end of an era for a family operation that has been around in two forms since 1956. That’s when it was founded by the late Lorne and Iris Dayman. Lorne passed away in 2011, and Iris in 2000. The company started with one truck

From leĹŒ: Kip, Dave and Bill Dayman, along with their brothers Allan and Kelly ran Dayman Trucking since 1982. Photo by Brian Zinchuk

hauling gravel in cooperation with Glen Peterson. Prior to that

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he used to haul logs in Ontario before coming to Saskatchewan. “He met Glen Peterson in Regina and they gravelled the airport,� Kip Dayman said. “Dad met mom in a restaurant in Swift Current. They moved here in ’56 to do general oilfield hauling.� An important part of the work was moving treaters. Indeed, after seeing a similar unit in action, he got a man to assist him to design a treater-hauling unit of his own, able to erect a

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vertical treater with just one truck. That replaced the use of three trucks; two gin-poles and a winch truck. Tony and Moss Naka helped build it. “Dad was going for $18 an hour, replacing the $30 an hour for three trucks,� Dave Dayman said. A lot of the treater work was for National Tank and Treater as well as BS&B. “Dad sold out in ’77 and sold the last unit in 1980,� said Dave, noting their parents retired. But that wasn’t the end of the Daymans in the trucking business. The company was reborn in 1982. That’s when the five brothers, Allan, Kelly, Dave, Bill and Kip came together to own and operate it. Bill said, “I was out moving rigs. I fired up with a one-ton hotshot.� That was in October, 1982. Dave soon

came in on the company. By the next fall, they had a picker. “We all came home for Christmas 1982,â€? said Dave. They bought the first winch truck that December. Soon, all five brothers were involved. Allan retired five years ago from the company. Kelly, Dave, Bill and Kip remained. While the roles were not sharply defined, Kelly looked after the yard, Dave took care of paperwork, Bill turned a lot of wrenches, and Kip took care of dispatch. However, each and every one of them had another key responsibility – get out in the field and drive. “Everyone did everything. We all just drove trucks,â€? said Dave. “We’ve been hands-on since day one. Whether that’s good or bad, we’re not sure,â€? Kip added. ɸ Page B9

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PIPELINE NEWS March 2015 Éş Page B8 Projects over the years included doing ground work at the Shand Power Station with PCL. A picture on the office wall shows a 60-ton lattice boom crane at work on the project. The company worked primarily in southeast Saskatchewan and southwest Manitoba. They used to do a bit in North Dakota, but Kip said, “After 9/11, it was no longer worth it.â€? “We’re mostly focused in the service sector for oil and mines, setting treaters, tanks, vessels, all on the service end. Also we do a bit of drilling, putting rigs together,â€? said Kip. Tough love Several of the brothers said there weren’t a lot of hugs when it came to their father’s attitudes about work. It was a nononsense, old-school upbringing, where hard work was expected. They laughed as they essentially all said the same thing. “Get your @#% ass out of bed and go to work,â€? was their dad’s common refrain when they were young and might have been up a little too late the night before. Another pearl of wisdom from their dad was, “The highway is 99 feet wide and runs from B.C. to Halifax. You can get on at any time,â€? recalled Dave. “It’s been good.

We’ve had a good life, raised families,� Kip said. Dave added, “The first law (of their father) was no wives to be involved.� “All our wives have separate careers,� Kip said. It was enough that the five of them work together, apparently, without the family politics of additional people. “We all got along. We still do,� Kip said. “Our biggest asset was having our dad around to get us started,� Dave said. “It was old school – head down, ass up,� Bill added. Off to auction Forty pieces of iron are going for auction. That’s down somewhat from their peak several years ago. Kip said, “We were bigger years back. At peak we had about 70 pieces.� In the early 2000s they got rid of some older equipment and refreshed the fleet. Three years ago they picked up a 100-ton hydraulic crane. Since December oil companies have been sending letters out to their vendors, essentially demanding a cut in rates. “Everyone wanted a cut. But there wasn’t much profit to begin with,� Kip said. Additionally, their company has given back to the community for years. One would be hard-pressed to see a community charitable

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cause, from rinks to hockey teams, where a Dayman trucking logo was not found at some point. “You give back to the community as much as you can,â€? Kip said. They started calling all their customers at 8 a.m. on Jan. 26, letting them know what was going on. “Rumor by 11 a.m. was the bank was taking over. That’s not the case,â€? Kip said with a laugh. Nearly all the equipment is going to the Ritchie Bros. auction in Saskatoon on March 23-24. The big crane is headed to the Leduc Ritchie Bros. spring auction, where it is expected to fare better. The company had 12 people on payroll including the owners prior to the sale. So what are they going to do? ɸ Page B11

B9

What’s Kelly Dayman going to do now that his company is selling oč their iron? Maybe buy a boat, he said. Photo by Brian Zinchuk

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B11

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Dayman Trucking Company Ltd. lined up their iron for some pictures prior to sending it to aucƟon in March. Photo by Brian Zinchuk

This bill from Lorne Dayman Trucking from 1962 shows a ginpole truck billed out for $10 an hour (with operator) and the swamper was another $2 an hour. Total cost for two ginpole trucks, two operators and two swampers for an hour? $24. The sons joked that might be their new rate this spring, given what oil companies want to pay.

ɺ Page B9 “We’re really not sure,” said Kip. “We’re going to wait and see. The last talk was to do some pilot work, some rigging supervision. All the iron goes and we’ll see what happens. We’ll maybe keep a crane in the yard, a loader and

zoom boom, do loading and yard storage. We’re keeping the yard and rental properties. “We’ve done it for 32 years. It was just time.” Kip noted their kids are grown and there’s not much interest among them in talking over the company, even

if some did want to run equipment. As for the slowdown in the oilpatch due to the dramatic drop in oil prices, he said, “We’ve been down this road before. This is not our first by a long shot.” Kip recounted how they billed 425 hours in October 1988. “In November, we had five hours.” “A lot of young guys are going to have a tough time making it,” he added regarding the current slowdown. Dave said, “I have no plan. I’m probably going to go fishing. I’m probably going to smell

the roses.” Bill said, “I’m going to start living.” “I don’t know what I’m doing yet. I’m thinking of buying a boat,” Kelly said. Asked about pull-

ing out of the game, he said, “Maybe it’s a good time to pack it up,” but added, “I remember when oil was $11.50, and we were still busy.” Kip said, “I’ve got to find something to do.”

Don’t count the Daymans out yet, though. All the brothers seemed to suggest there might be something else in store down the road, if and when the time is right.

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B12

PIPELINE NEWS March 2015

Welcome Curlers To The 56th Annual Open Bonspiel March 26-29 ‡ )ULGD\ 0DUFK &RFNWDLOV SP %DQTXHW SP ‡ %DQG &URVVURDGV ‡ %HHIHDWHU 3OD]D

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Ron Areshenkoff & Reynold Bert

Good Luck!

5

405 Kensignton Ave., Estevan, Sk. 306- ‡ ZZZ FURZQDG FD ( SURPR#FURZQDG FD ‡ ( VLJQV#FURZQDG FD

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PIPELINE NEWS March 2015

B13

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The Estevan bonspiel wraps up the curling season for the year in the southeast. File photo

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B14

PIPELINE NEWS March 2015

Have Fun Curling! PERCY H. DAVIS LTD. CUSTOMS BROKERS

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Estevan OTS Bonspiel coming up Estevan – The big kahuna of the oilfield curling season in southeast Saskatchewan is the annual event in Estevan. This year will mark the 56th Annual Open Bonspiel hosted by the Estevan Oilfield Technical Society. The event will take place from Thursday to Sunday, March 26-29 at the Power Dodge Curling Centre in Estevan. There’s room for up to 64 teams, with the entry fee at $320 per rink. On Friday, March 27 the banquet at the Beefeater Plaza will take place at 7 p.m., preceded by

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cocktails at 6 p.m. The band this year is Crossroads. Spokesperson Blair Wilchynski is a recent addition to the OTS. “I enjoy doing this,� he said, adding he recently took part in the Kindersley bonspiel. This will be his first in Estevan. “Money raised will stay in the community,� said Wilchynski. Even though there’s been a slowdown in the patch, he said, “I think the interest will still be there.� Registration can be done online at estevanots. com

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PIPELINE NEWS March 2015

B15

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Welcome Curlers! LEVEL BEST Technologies Ltd. Dave:ĂŠĂŽäĂˆÂ‡{ĂˆÂŁÂ‡{ĂŽĂ“Ă“ĂŠUĂŠPat: ave: ĂŽäĂˆ äĂˆÂ‡{ĂˆÂŁ £‡{ĂŽĂ“ ĂŽĂ“Ă“ Ă“ U Pat Pat: 3 Pa 306-861-9986 06-8 06 861-998 9986 UĂŠAndrew: 306-461-4323

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Last year Amy Harker, leĹŒ, and Dena Bachorcik could be found sweeping in the Estevan OTS bonspiel. File photo

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B16

PIPELINE NEWS March 2015

PIPELINE NEWS March 2015

TS&M moves into new headquarters in Estevan

TS&M Supply moved into its new building on Estevan’s Kensington Avenue last November.

Kim Graham does inside sales. Behind the front desk at TS&M Supply in Estevan are, from leĹŒ, Ryan MiĆŠelholtz, inventory control manager; Lindsay Faris, accounts receivable; Dallas Taillon, branch manager; Chantel Thompson, recepĆ&#x;on.

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Saskatoon, SK

March 23 | 8 am

2001 Mack CL713, 2— 2011 Kenworth T800, 2013 Kenworth T800 & 2006 Peterbilt 378

1 of 13— 2012 Case IH 500 Quadtrac

B17

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„ By Brian Zinchuk Estevan – The largest oilfield supply store in southeast Saskatchewan just got a lot bigger, with TS&M Supply moving into their new Estevan headquarters. The impressive new building on Kensington Ave in Estevan is part of their substantial complex of buildings running for more than a block down that street. The purchase of CE Franklin a few years ago provided an additional facility further down the block to the south, now home to the fiberglass division. Dallas Taillon has been branch manager for the last year-and-a-half, and he’s worked with TS&M since 2004. His office is the first one to the left you encounter when you walk in the door, right beside the reception desk. It leads to a large lobby and what could likely be considered the brain of the operation – the front desk. That’s the nerve centre where orders come in and shipments are dispatched. Beside it is a new breakfast area where customers can fuel up on toast, oatmeal or coffee when they walk in. “We built a big facility, with just over 40,000 square feet of warehouse,â€? said Taillon. If the front desk is the brain, then the warehouse is the heart. TS&M services 17 branches out of Estevan, an increase from the 11 they had before the CE Franklin purchase. TS&M has been around for 43 years. They had operated under the NOV banner until recently. Of all the various companies acquired by NOV over the years, TS&M was the only company to keep its name, a testament to the strength of their brand. A year ago they were spun off from NOV and are currently part of Distribution Now. “They got out of the distribution business,â€? Taillon explained about NOV. They still carry National Oilwell products. “We consider ourselves the only one-stop shop in town as a supply store. We have pipe, valves, fittings, artificial lift, our automation department, multiplex pumping division, Estevan Fire & Safety‌â€? Taillon said. “We have a repair shop on site as

well for general repairs, and fiberglass pipe sales which is a very big part of our market.� And they still carry the rope, soap and dope, “all your basic oilfield needs,� he noted. The Estevan branch fluctuates between 90 and 100 employees, and as of early February numbered 95. There were some emotional ties to the old building which was demolished in January. “Some people have been here 30-plus years,� Taillon said. But it had to go. “We need the yard space.� The new building was welcomed and needed, he added. Another building to the south, built a few years ago, hosts the multiplex, artificial lift and automation divisions. In the main building, there’s a lot more office space in the upper floor for the administration group, which has approximately 20 people working in it. There are also offices for the area manager and safety co-ordinator. Estevan Fire & Safety, a division that was always kind of hidden in the old building, has its own main floor retail area, entrance and sign on the northeast corner of the building. There you can find technicians servicing fire extinguishers for redeployment. TS&M has been investing in some of its other areas as well. At Virden, Man., they have a new location for their fiberglass division. Planning for the new Estevan headquarters and warehouse began three or four years ago, Taillon said. Construction began in late 2013. Depending on the week, there were as many as 30 to 50 construction workers on site. Ledcor was the general contractor. “It was an interesting time,� Taillon said. They moved into the new building in mid-November. Last June a new computer system was brought in. Now that they have a new, shiny building in place, oil prices and the activity that goes with it have taken a nosedive. Is that going to be an issue? “It’s the oil industry. You expect it. We’ve always persevered, and I don’t

see that changing,� Taillon responded, adding they still have a “hometown, locally-owned feel. � “We’ve been through it all.� When Pipeline News visited on Feb. 2, Taillon was dealing with stack of letters from oil companies requiring cuts in prices. “That’s just a few,� he said, pointing to the letters. “It’s very difficult on the distribution end. We sell with thin margins, and already try to give cost savings day-in and day-out. “We work with them all the time. Most customers understand this. You look at categories and you look at case-by-case (for savings).

“It’s a scary time. There are a lot less players now. There are big customers, but a lot fewer junior players.� For the largest customers, they have dedicated employees who look specifically after their needs. The winter season has still been active. “We’ve been very busy up to last month. With low oil, we’ve cut back hours and reduced overtime,� said Taillon. The intention is to keep their staff during this lull. TS&M is open Monday to Friday, from 6 a.m. to 6 p.m., 6 a.m. to 1 p.m. on Saturday and has 24-hour on-call service for all departments.

Dallas Taillon had an epiphany which resulted in the breakfast bar in the new TS&M Supply building in Estevan. If customers are there ÄŽrst thing in the morning, why not feed them? Taillon is the branch manager in Estevan.

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B18

PIPELINE NEWS March 2015

Thru Tubing Solutions has new Estevan location Estevan – While other companies offer thru tubing services, and have divisions with names to that effect, Thru Tubing Solutions is just that. That’s what they do, period. Well, that and a few other things… The company moved into its new shop just northeast of Estevan in November 2014, providing some much-appreciated space over their former one-bay facility in downtown Estevan. “We had one bay, one office,” said Jordon Blanchette, district co-ordinator. The new place has three bays plus a wash bay. The larger facility means they can carry more inventory and reduce freight costs. Six people work out of the Estevan location, including Blanchette. “We do run lean, but we have support from Alberta when needed,” he said. He expects they will be able to keep their staff during this slowdown, but that would be tough if they had 12 people. Alberta is still busy, he added. As for their field staff, he said, “Our field guys have a lot of experience.” All have over 10 years experience in the field. With $50 oil a current reality, Blanchette said, “You know, we’re staying steady. We’re keeping our guys busy. You’ve got a bunch of good guys, you want to keep them.” It helps that they don’t have to rent proprietary tools. “Every tool we have, we own, or are the designated distributor for,” he said. “That’s why we won’t be beat on price. We set the bar for low price with great tools and even better tool hands.” “We at TTS are a mud motor company. We do mud motors, fishing, coil tubing and service rig tools, from 3.5 to 1.5 inches. Our motors go from 1 11/16 to 3 1/8 inches. We drill cement, frac ports

Thru Tubing SoluƟons district co-ordinator Jordon BlancheƩe, leŌ, and BreƩ Campbell, technical sales, stand behind a variety of downhole tools they oīer. The tools on display include a Stone Age Spincat, coil connectors, drill bits, mill, tri-cone journal-bearing bit, sidewinding frac port mill, rotaƟng casing scraper, external coil connector and two mud motors.

and plugs. We come in after the well is drilled, cased in the hole. We do a lot of optimization if the well has already been producing, cleaning it to continue or improve production,” Blanchette said. When a well is milled, for instance, it will be made so that the inside is flush, with no protrusions from frac ports and the like. They can mill out plugs and frac ports. A specialty item in increasing usage is the XRV,

Was $82,110

$18,000 DISCOUNT

$64,110 or $418 bw

Was $84,210

$65,210 or $425 bw

$19,000 DISCOUNT

D8333

2014 RAM 2500

2014 RAM 3500

LARAMIE MEGACAB 4X4 LOADED

LONGHORN LIMITED 4X4

$20,000 DISCOUNT

Was $88,835

UP TO $20,000 OFF REMAINING 2014 HEAVY DUTY AND HALF TON INVENTORY

8308

or Extended Reach Vibration tool. It’s an agitation tool used in drilling operations. The concept is similar to striking a rusty nut with a hammer while applying force on a wrench. “We can pump anything through that (XRV). There’s no rubber or elastomer that acid or nitrogen would damage,” he said. Brett Campbell looks after the drilling sales, where the XRVs are kept busy. ɸ Page B19

$68,835 or $455 bw

8212

2014 RAM 3500 LONGHORN LIMITED 4X4 DUALLY

Was $84,800

$66,800 or $436 bw

$18,000 DISCOUNT

8255

2014 RAM 3500 SLT 4X4 OVER $12,000 IN ACCESSORIES

PAYMENTS ARE BIWEEKLY, 84 MOS, OAC. PRICES PLUS TAXES AND FEES.

PIPELINE NEWS March 2015

B19

This is the new home for Thru Tubing SoluĆ&#x;ons’s Estevan base. It’s just oÄŤ the new truck bypass under construcĆ&#x;on, northeast of the city of Estevan.

Éş Page B18 “Ten years ago, I thought we were drilling wells that were just smokin’ fast,â€? he said, but that’s nothing compared to today. The agitation tools reduce friction and increase rate of penetration, or ROP. “It really helps with slides,â€? he said, referring to when directional drilling changes the direction of the well. Wells are being drilled faster and faster these days. That’s due in part to polycrystalline diamond cutter (PDC) bits, improved mud motors, and agitation tools, according to Campbell. “When I left directional drilling one-anda-half years ago, a high differential pump was 5,000 kilopascals on a mud motor. Now it’s up to 12,000 to 18,000 kilopascals.â€? Using vibration tools also allows a driller to reduce other costs, such as the amount of walnut shells used, he noted. As for activity levels, Campbell said he’s seeing some companies shutting down early while others are going right until spring

breakup. “It’s a real mixed bag. A lot of companies are taking the waitand-see approach, while others are going ahead as usual,� he said. Some companies are reducing drilling budgets by as much as 30 per cent, but are drilling similar numbers of wells due to cost reductions. While TTS is capable of providing fishing services, locally they partner with Command Fishing and Pipe Recover (formerly Hess Fishing). “They do the fishing, we do the mud motors and coil work,� Blanchette said. Fishing is one of those areas of the oil-

patch no one really likes to acknowledge, generally because it means something went wrong. Blanchette’s description of fishermen goes like this: “They’re the penalty killers, the last case scenario. They’re the heroes. “You don’t want them out there, but once they are out there, you need them. They’ll save the day.�

30

ĹśÄ?ĆŒĹ?ÄšĹ?Äž ^Ä‚ĨÄž ŽžžƾŜĹ?ƚLJ ŽŜÄ‚Ć&#x;ŽŜ Enbridge presented the Town of CarnduÄŤ and RM of Mount Pleasant No. 2 Emergency Measures OperaĆ&#x;ons CommiĆŠee for $5500 for their Safe Community Program. The donaĆ&#x;on was made in late January. From leĹŒ are EMO Coordinator Kris Carley, Enbridge Advisor JeÄŤ zanko and EMO Co-Coordinator Jamie Sorestad. WŚŽƚŽ Ć?ĆľÄ?ĹľĹ?ƊĞĚ

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PIPELINE NEWS March 2015

PIPELINE NEWS March 2015

B21

Estevan vacancy soars to 12.5% By Brian Zinchuk Estevan – Nearly every story Pipeline News has written concerning Estevan since 2008 has had an underlying element – the continual housing shortage. A few months ago, it stopped being mentioned. Now, that shortage is no more. “The housing has been tight up till now,” said Estevan Mayor Roy Ludwig on Feb. 6. But all that’s changed. Estevan now has a 12.5 per cent vacancy rate, up from around one per cent for years. The vacancy rate in October 2014 was 12.5 per cent, compared to 1.8 per cent in October 2013, according to Canadian Mortgage and Housing Corporation’s rental market statistics available online. That’s a huge change from a year ago, according to Ludwig. There are several factors. According to Ludwig, the city has worked very hard with developers to increase the supply of housing. Also, most work on the Boundary Dam Integrated Carbon Capture Project was wrapped up by the fall of 2014. “We’ve had some layoffs on the oil industry side,” Ludwig said. “We’re cautiously optimistic things will turn around in the short term, six to eight months. The oil industry tends to be cyclical.” Ludwig has been an elected official in Estevan for 20 years over six terms, so he’s seen this before. He said, “1998 hit us harder than 2009.” The lessons he’s learned include staying positive and remaining optimistic. “Do what you can to lessen the burden on these companies hurting most,” he offered. However, the reality is that while oil companies are demanding service companies cut their prices, there’s little a city can do when it comes to items like municipal taxes. The bills still have to be paid. Ludwig noted they are

restricted on what they can and can’t do. Specifically he noted setting precedents for concessions could be problematic in the long run. “Realtors will tell you sales are down across the spectrum,” he said The city, in the corporate sense, hasn’t been impacted negatively yet. There hasn’t been a rash of defaults on taxes, for instance, and there hasn’t been “substantial” job losses yet that he can identify. Estevan is also fortunate to have agriculture, coal mining and power generation as other key industries. The city will continue to work with Southeast College and the Saskatchewan Energy Training Institute on its housing project for students. Now may be a good time to build since labour may be at a more reasonable cost, he noted. Developers in recent years have had to bring in crews from as far as Alberta to work on Estevan projects due to the shortage of local building tradespeople available. There are several hotel projects in Estevan in the works. One, the Western Star, is nearing completion. Foundation work has been done on two Holiday Inns, but little action has taken place over the past year. Asked about these projects, Ludwig said, “We haven’t heard. As far as we know, they’ll continue.” However, Ludwig expects those behind the projects will be looking at their options. As mentioned, now might not be a bad time to build, given better labour availability. Also, one might want to be ready for the turnaround which Ludwig expects will happen at some point. “You have to have faith things will turn around,” he said. In the February edition of Pipeline News, Millennium Stimulation CEO Mike Heier chastised Estevan for its

lack of housing and high costs of operation. In response, Ludwig said, “We can’t deny Estevan is an expensive place to operate. We’ve done our best to get developers to ease up the housing end. Communities that are busy tend to be expensive.”

Estevan has seen vacancies shoot up recently, according to Mayor Roy Ludwig. Photo by Brian Zinchuk

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PIPELINE NEWS March 2015

A shift from construction to equipment rentals „ By Brian Zinchuk Estevan – Eric Salmers was born to be in business. His most recent venture is Caliber Equipment Rental Ltd., of Estevan. It seems there was no question Salmers would become an entrepreneur. His childhood neighbours still talk in admiration at how he started cutting grass at a young age and by the time he was in high school, he had worked his way up to having a small crew cutting grass in the summer and shovelling snow in the winter. He’s worked in carpentry and as a contractor for years, primarily building commercial property through Salmers Contracting. That company is what lead to Caliber Equipment Rental Ltd. “The initial thought was to supply Salmers Contracting with equipment,� he said. He

was frequently renting equipment anyhow, so why not bring it inhouse? Two years ago Caliber Equipment Rental, which has three partners, started with four units. “We’re up to 60 units now,� he said. “Pretty much all my time is dedicated to this.� He loves building, but with the dramatic downturn in the oilpatch, and a corresponding reduction in construction of commercial and industrial property for the foreseeable future, it’s a good time to shift gears. A “good transition,� he said. Salmers Contracting is still involved with a 14-lot residential subdivision in Bienfait, where he partnered with Ed Turnbull. One duplex is being built and another house is planned for the spring. “We saw last year the market was becoming flooded. We lowered

Eric Salmers ÄŽrst looked at oÄŤering equipment rentals as a way to supplement is contracĆ&#x;ng business. Now Caliber Equipment Rental has taken up most of his Ć&#x;me. Photo by Brian Zinchuk

our lot prices next to our development a new outdoor pool and park is being built which I hope will set our lots apart from other lots on the market in the Estevan area.� He quoted a recent statistic that saw Este-

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van’s vacancy rate shoot up from next to nothing to 12 per cent. Caliber is based in a commercial building he built on Estevan’s 5th street. Three years ago the first phase, 150 feet long, went up. Last year another 116 feet were added. In addition to Caliber, it is home to

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Additionally, Shona More joined in January, taking care of the office. Salmers, 28, says he’s been fairly aggressive. “I’m geared to grow all the time.â€? That aggressiveness is tempered by his partners, he noted, and together they make a good team. ɸ Page B23

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PIPELINE NEWS March 2015 Éş Page B22 When things slow down at home and you’re in the construction business, you are forced to find work in other cities. But with equipment rentals, it is the equipment itself that can go further afield to find work, chasing projects. “That’s what I like about equipment,â€? he said. “We run all new iron, so service is not bad. From the get-go, we wanted to offer better equipment and better service,â€? Salmers said. “Everyone wants our iron after they use us.â€? Most of the equipment is used within a two-hour drive of Estevan, including southwest Manitoba. Some of their equipment has gone as far as Swift Current and Shaunavon. Caliber is tendering for a project up at Bonnyville. They’ve supplied a whole gas plant project with up to 30 units, and are looking forward to similar future work. “Honestly, I didn’t think we would be in oil as much. But oil is a big part of it. They expect good iron. Positive air shutoffs, fire extinguishers, the whole works; it has to be there,â€? Salmers said. That fleet of approximately 60 units includes nine JLG boom lifts, six Cat telehanders, five Cat and Deere skid steer loaders, two mini-excavators and 13 light towers. While light towers are plentiful in the region already, Caliber carries them so that they can offer complete packages of rental units without the client having to go here and there to put together what they need. “They round out a package to round out our service,â€? he said. “There’s a lot of people who aren’t committing to full service. We had to commit.â€? They also carry some smaller items, like submersible pumps, small generators, diesel air compressor and hammer drills, all to round out their offerings. “I know the core units – manlift, telehandlers – are critical. Every site needs them,â€? Salmers said. Additionally, they carry 10 diesel and propane heaters. They haven’t been in demand for much of this winter compared to last year due to much warmer temperatures, but they saw a lot of use on the carbon dioxide pipeline built from the Boundary Dam Power Station to the Weyburn Unit. Salmers and another worker ran shifts serving and fueling the heaters in the field during that project. “We manage the iron on your site,â€? he explained. “For the gas plant project I was on site regularly checking the units and ensuring everything was in perfect working order. The on-site service we provide differentiates us from our competitors in the equipment rental business.â€? Caliber is also able to source additional equipment if needed.

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PIPELINE NEWS March 2015

From bodyguard services to protests to pipeline patrols: Experti Security Group „ By Brian Zinchuk Cochrane, Alta. – Do you have a VIP that might need protection? What do you do if you think protesters might picket your site? Do you suspect an employee of wrongdoing? How do you keep your equipment and material from “walking away?� Two retired members of the Calgary Police Service created a company whose specialty is dealing with just those types of questions. Experti Security Group of Cochrane, Alta. is made of up Phil Rydl and Jim Amsing, plus numerous contractors as needed. The company was started by Rydl in 2009, two years after he retired. It was initially a num-

bered company. Rydl spent 25 years with the Calgary Police Service, finishing his tenure there as a detective. “Over half of my career was intelligence, drugs, counterterrorism and organized crime,� he said by phone on Jan. 22. He led national and international organized crime projects. “That work really led well to establishing service in the oilfield,� Rydl said. He had been headhunted by a bank to do risk-management corporate security. This included bodyguard service, upper level fraud investigation, procedural processes, and ensuring regulatory compliance. Since then he’s served more than 25

different oil sector companies as a direct contractor or subcontractor. This includes executive protection, security vulnerability assessment, intelligence collection, security program development and deployment. Rydl is the president and senior partner of Experti Security Group. Amsing joined in 2012 as the junior partner. He was a police officer first in Edmonton in 1978, in Hinton for a short time, Edmonton again, and then Calgary after 1987. He retired in 2004 as a constable. Most of his career was spent as a street officer. He was a supervisor for the crowd control team, and was involved with the G8 conference at Kananaskis and Cal-

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gary in 2002, not long after the events of 9/11 changed security considerations the world over. Amsing also had a short stint as an acting detective. Crowd control is commonly referred to as “riot police.� That training included monitoring demonstrations and being ready to deploy. In the G8 case, it meant being prepared to react quickly to protests expected in front of oil company offices. His crowd management experience also includes the visits of Pope John Paul II and Prince Charles and Princess Diana. “Major crowd management is to deal with little problems before they become big problems. We would put out the fires before they became problems,� Amsing said. That includes being “firm, but fair,� mingling with the crowd and trying to keep the peace. Protests When crowd control goes wrong, it can go really wrong, such as the APEC 1997 riots in Vancouver. Prime Minister Jean Chretien may have joked that, “Pepper, I put it on my plate,� but the repercussions of the RCMP’s use of pepper spray on protesters were real for years to come. Now, in a time when every proposed major pipeline is seeing fierce

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opposition, and First Nations protests in New Brunswick effectively killed the fracking industry there, protests cannot be ignored. Rydl said, “Those incidents are incidents that can cause a lot of political and corporate damage. Jim and I are aware of the potential outcomes of incidents like that. What we try to do is position things, to have the intelligence, to put the proper safeguards in place to prevent them.� Also they prepare the best ways to deal with them if these situations do come up. “There’s a lot of forethought that comes from experience in managing incidents,� he said. Rydl suggested searching Google for “opposition Northern Gateway Pipeline.� Doing so resulted in 155,000 hits. “It is very concerning,� he said. Monitoring protests is part of what they do. “I think where we provide the most value is conducting the proper threat risk assessments before the event, identifying what the issues are, getting our intelligence assets positioned so that we have a current read as to what the issues are and what the thought processes behind the potential problematic factors are. “In doing this we can provide a plan and recommendations to mitigate the potential of these events and diffuse them as they arise,� said

Rydl. “Oftentimes it’s a certain amount of communication between the oil company and a local band, for instance, that may be the key in preventing an issue (or dealing) with it once it does arise. “But the proper threat risk assessment needs to be conducted. The client, in our case, the oil company-designates, the pipelinedesignates, need to be know what the issues are and to be provided with recommendations to prevent these incidents before they get off the ground. “Once they’re off the ground, absolutely we need to be present to continue to assess the situation and as things materialize, address the level of threat and implement risk-mitigation strategies. Also, we liaise with the police or the intelligence communities to ensure safety and adherence to the laws. “We also position the client, the oil company or pipeline company, to prevent potential harm to their reputation. That may be by verbal engagement with the parties causing the protest or making their point. Or it may be in guiding them (the client) in making a public response to the public or the media. There’s different ways to get our message across that will either have positive repercussions or negative ones. We try to position for the positive.â€? ɸ Page B25

PIPELINE NEWS March 2015 Éş Page B24 Prior to a protest, they would like to see the parties get into a boardroom and see if terms can be negotiated beforehand. If that can’t be reached, at least an agreement on how a protest can be done that is safe, secure and nonconfrontational as a secondary goal. But what about protestors with whom there is no reasoning? Rydl said, “One of the methods is finding out who the higher level stakeholders are, having a pre-engagement meeting with them; ensuring they’re present so you have a certain amount of business and common sense that you can share viewpoints and come to respectful agreements. “We would like somebody with status from the concerned party to liaison with people who are more difficult to communicate with.â€? Aboriginal protests In the wake of Oka and Ipperwash, First Nations protests have been treated differently compared to other protests, with police often reluctant to show a firm hand. What are their recommendations? “This is something I am engaged with at this very moment. I’m engaged with conversations with leadership of a First Nations band right now. I won’t mention who they are. But those conversations are about determining what those concerns are, getting information out to the oil company as well as the First Nations about potential opportunities for both sides. (We’re) trying to find common interests and a win-win situation rather than a confrontation situation,â€? Rydl replied

“Our focus is to prevent a potential incident, or rally, or bad media attention for our clients. Our recommendation is to open up communication with the properly identified stakeholders that have the ability to make decisions in the best interests of both parties.� A lot of their work is in mediation, intelligence collection and strategic recommendations. Rydl said, “If we do our job at the front end, it can save a lot of risk, a lot of money, a lot of additional security requirements and address safety needs. We can circumvent a lot of that. So our benchmark for success is one that is very hard to measure – the absence of an incident – rather than dealing with an incident that is well underway.� Rydl agreed that the New Brunswick fracking protests were a no-win situation, one that would get a lot of negative attention. “If it’s not preventable, the best you can do is get your best intelligence, your risk assessment, find out how to best address the situation to the media and public, and contain your interaction with the protesting party. You are on full mitigation mode there instead of prevention. The risks can very high, and a no-win.� Is the energy industry dealing with increasing numbers of no-win situations, be it pipelines or fracking in the east, where it is impossible to accomplish your goals without substantial negative interaction? Rydl replied, “The challenges the energy sector is facing right now are enormous.� Noting they’re highly regulated, reporting to everything from the National

Energy Board to the Conservation Act and even the Criminal Code of Canada. It’s difficult and cumbersome to be compliant with all of these regulations. This means opponents can look under numerous legislative areas to find issue with. “This is why they require more understanding and expertise than just a regular security company. Most security companies will just put a guard out front to guard a certain piece of equipment or assets. However, what I would recommend to oil companies today is to find service providers that are aware of the challenges the oil company faces, aware of the potential risks and pitfalls, and for those service providers to conduct their business in a way that best positions the client. To do that, they have to be experienced and dedicated at a very high level in some areas that are outside of their (typical) scope of experience,� Rydl said. “If it’s a concern to my client, it’s a concern to me. Not only do I need to know the regulations with respect to providing security service, I need to know the regulations with respect to regulatory compliance related to my client so I can get the proper information, so they can make informed decisions, and we can conduct our business in a way that properly serves them in a broad spectrum.� Who do you hire? Rydl and Amsing deploy contracted resources as needed, bringing in

B25

people as needed. “We’ve got access to between 20 to 50 people depending on the project and timing,â€? Rydl said. Amsing added, “Let’s say you have a protest, there’s all kinds of problems on site. What you want there is levelheaded, cool, calm, collected people that can assess the risks at the site, that can deal with these heated emotions with compassion, but still professionally, without getting off-base with their emotions. That’s why we target retired police officers who have handled these situations in the past, retired military personnel who have had these situations in peace-keeping and combat situations. “We try to keep people employed who can think on their feet, deal with emergencies in a proper way, and liaise with local authorities, who have the background to speak their language, and to manage their actions in a way that is as professional as you can get out there.â€? More mundane work While high-profile protests are a portion of Experti’s work, it’s not all of it. Far from it. Rydl said, “The vast majority of our work would be risk mitigation – security risk assessments and security boots on the ground for instance, for a segment of pipeline operation.â€? Intelligence collection plans are another portion of their work, as mentioned before. ɸ Page B26

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PIPELINE NEWS March 2015

Mediation to prevent incidents from occurring

He used to wear a police uniform. Now Phil Rydl is in coveralls, providing security in the oilpatch. WŚŽƚŽ Ć?ĆľÄ?ĹľĹ?ƊĞĚ

ɺ Page B25 In recent years they’ve done a lot of executive protection and security at annual general meetings for oil companies. Executive protection isn’t just in the oilpatch. Rydl, for instance, worked as the security manager on an Elton John performance, which included the pro-

tection plan, extraction, and ensuring proper resources for the event. “It went without a hitch,� he said. “There were a lot of moving parts. It was a very highrisk situation, but it went very well.� However, as is common in Canada, security personnel are not armed. Rydl said, “If the level is to such a degree that is required, we would engage the law enforcement community. We have the ability to put sworn peace officers or police officers in our contingency on a paid-duty basis. Can we procure that element? Yes we can. But Canadian law does not allow civilians to carry firearms unless special provisions are set out by the government.� Amsing personally did this sort of work when he was off-duty while he was still a police officer. He recounted one instance when a prominent figure had retired U.S. Secret Service members as security, while Amsing was the “shadow guy carrying the weapon.� Whereas Canadians in urban centres generally don’t bring firearms with them, in a rural setting such as a pipeline project, many people might have firearms for hunting. Some people have the right to hunt year-round. “That’s why we want the right people who can diffuse a situation out in the field,� Rydl said. What about the lone nut? “The rate of incidents is low, however, when there is an incident, the risk is extremely high,� Rydl said. “I have been involved in those kinds of situations which involved surveillance of a potentially violent subject as well

as attending court cases to be privy to the evidence to determine the level of threat.� He’s also talked to Crown prosecutors and police to deal with legal court orders and police operations. Those who have worked in an industry, say pipelines, are also familiar with its vulnerabilities. “We address that by knowing the client’s business, knowing about the pipeline, knowing enough to understand what the vulnerabilities are.� They utilize project manager expertise to identify vulnerabilities. Rydl’s been to many compressor and pumping stations, conducting penetration testing. “Security is poor, even if it’s there,� he commented. He noted a company will typically hire a poorly-paid security guard with minimal training. “My recommendation is to have a highly-qualitied security professional conduct an assessment, and implement a security plan that is outside of a uniformed security guard making $18, $20, at most $30 an hour. I suggest prudent use of resources, but highly qualified people at your location.� “Arming is not the solution. It is a tool in the toolbox. The best tools are the experience, the communication plan, your procedure, your ability to respond properly to deter it.� Amsing noted there isn’t the political will to have armed guards in this country at this time. There’s an even more fundamental

level of security service Experti provides, preventing “leakageâ€? is one. On a pipeline project that can be pretty severe. “Stealing items off sites can destroy a company,â€? Amsing said. Rotating patrols and a uniformed presence can make a difference in preventing thefts of fuel and other high value items from warehouses and along pipeline right of ways. At a recent pipeline project, wouldbe thieves were frustrated by their presence guarding a warehouse. If you are present, visible and diligent, you will deter fuel theft, according to Amsing. “It’s going to put a crimp on them stealing stuff.â€? Terminations Sometimes a person just has to be let go. Experti has been involved in close to 200 high-risk terminations, providing evidence to support the firing. “Sometimes our boots on the ground gives us the information to identify a problem employee and (cause for) a termination. When a company does make a termination, it should be made in a professional way, regardless of what their system is to mitigate liability, but also ensure they have all the (corporate) information (and property) like a laptop, entry keys, and access to company assets. Make sure those assets are harnessed in the termination process so the company is not at (further) risk. An exit interview should include a check list to ensure assets are returned. ɸ Page B27

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B27

SEESS 2015 coming March 18 to SETI

The annual South East Enviro & Safety Seminar this year will again take place at the Saskatchewan Energy Training InsĆ&#x;tute in Estevan. File photo

Estevan – The 2015 edition of the South East Enviro & Safety Seminar will take place at the Saskatchewan Energy Training Institute in Estevan on March 18. The annual event focuses on environmental and safety issues not just in the oilpatch, but in industry as a whole. Five speakers have been announced. Tony Crow’s presentation is entitled “In the Blink of an Eye.� His bio states, “On Feb. 15, 2003, while enjoying his favorite hobby, quail hunting, Tony was accidentally shot. He was totally blinded for life. “Tony’s life drastically changed that day, as well as the lives of his family and friends. When we think of people who have been in accidents, we don’t consider how it will affect those closest to them. Everything about Tony and his family’s lifestyle has had to change. “Tony believes leadership is best shown by example. He shares his thoughts on safety as well as leadership in the workplace, at home and through everyday life. Tony models his personal philosophies at home, church, and in the community.

“Life’s journey is not always easy, but Tony’s attitude will leave you inspired! He has let life’s difficulties make him better, not bitter.� Sylvia Yaeger will speak on building healthy lives and work places. Her bio reads, “Her years of assessing and treating injuries as an occupational therapist offer Sylvia a unique insight through which she has developed a proactive approach to preventing stress and workplace injuries. “Stressed out employees make more mistakes, take more time off work and are less safe on the job due to preoccupation, poor judgment and fatigue.

Recognizing we are a mind-body, not a mind and a body, has helped her educate people on truly effective ways to change their health. Sylvia’s presentations invite audiences to laugh along and learn practical, powerful tools to handle stress, reduce repetitive strain injuries and prevent burn out.â€? Curtis Weber will speak on “Danger High Voltage.â€? Originally from Battleford, he grew up in a typical outdoorsy, sports orientated, hard working prairie family. His bio said, “Following his graduation Curtis had his life heading in the exact direction he always dreamed it would take him. ɸ Page B28

Using retired police and military Éş Page B26 As former police officers, their presence can be imposing if necessary. “I’m six-foot-three and 245 pounds,â€? said Amsing. Rydl said, “I’m fivefoot 10, 195, but I am fit and well-trained. I’ve worked in the toughest assignments I can get my hands on, including undercover operations.â€? “I don’t want to intimidate or scare people right away. It closes avenues and opportunities to reach a peaceful resolution. When I need to step up to the plate, I am noteworthy.â€?

Professionalism “To wrap this up, we feel we bring a lot of experience and professionalism to this kind of work, and we demand that kind of professionalism and ethics from the people that work with us. In essence, we want to be viewed as a company that is honest, industrious, cutting edge and that is willing to give a good product to the clients that engage with us. You have to have the eth-

ics and integrity to do a good job in this field, and that’s what we’re trying to provide to our clients,� Amsing said. There’s more of an awareness that our critical energy assets are vulnerable, and we need to step up to the plate and realize our threats are not just domestic, but international now, according to Amsing “We have to find ways of stepping up our professionalism, our intelligence capabili-

ties, and our protection of these critical areas. If we don’t do that, our economy, our people are going to be at great risk.� With two homegrown terrorists from Calgary getting killed overseas fighting for ISIS, and two home-grown ISIS-related attacks last fall within Canada, Rydl said there is an increase in domestic terrorism linked to international terrorism. “It is a concern, absolutely,� he said.

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PIPELINE NEWS March 2015

A unique place to stay „ By Brian Zinchuk

This is what The LoĹŒ on 4th looked like as it was guĆŠed. WŚŽƚŽ Ć?ĆľÄ?ĹľĹ?ƊĞĚ

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Estevan – It started out as a quest for some jamming space, and ended up as a unique “one-suite hotel� right when Estevan needed housing the most. The Loft on 4th could be called many things: an urban revitalization project, a business venture, a boutique accommodation, and a response to a tight housing market. Whatever you call it, it brought back to life a building constructed in 1907 on Estevan’s main drag. Mike Beriault and Gregg Milbrandt, two professional engineers with large energy-sector firms in Estevan are partners in the project, along with their respective wives Tereen and Jodi. “Part of it was a persona interest in having some loft space,� said Beriault over lunch at the 1124 Social House, located right next door. The lounge is significant, because the combination lounge/restaurant/bar being adjacent to The Loft on 4th pro-

vides three different venues to eat at as well as conduct business meetings at, just across the parking lot. From early morning breakfasts to late night drinks, it is all just a few steps away. “We started construction in 2010 and completed in the fourth quarter,â€? he said. They gained possession Jan. 1, 2010. “At the time I was active in music,â€? Beriault noted. He had wanted potential jam space. He realized that the property could be made into a business opportunity instead, and he knew Milbrandt was looking for an investment property. “I had the idea for a lot of years, and then this place came up,â€? he said. The concept was beyond a simple apartment suite above the main floor office space. It would turn into a “onesuite internet hotel rather than a basic rental.â€? This would allow much more flexibility. Clients could stay for one night or months at a time. It also meant a lot more flexibility operations-wise. ɸ Page B29

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ɺ Page B27 That is until July 29th, 1999, where the young teen from small town Saskatchewan’s life had taken a different turn. At the age of just 17 on the third day of a new job Curtis’s life was taken down a long, dark path following a workplace injury that nearly resulted in his death. He is here today to share with us his courageous story of a battle between life or death and a positive outlook on the day his life was changed forever.� Brad Wagner will talk about liability management programs in the oil and gas industry. Wagner is the director of liability management at the Petroleum Development Branch, Ministry of the Economy where he has worked for the past 15 years. In his capacity there Wagner oversees the Acknowledgment of Reclamation Program, the Orphan Well Program and the Licensee Liability Rating Program, all of which have been introduced in the past 10 years. Wagner will provide an overview of these liability management programs; why they were necessary, how they have changed the oil and gas industry in

Saskatchewan and what challenges lay ahead. Terry Gibson of the Southeast Saskatchewan Airshed Association will also provide an update. In recent years there have been numerous display booths in the lobby for participants to visit between presentations. With the slowdown in the oil business, Wayne Irwin, chairperson of the event, said they don’t know if they will fill all 200 attendee slots this year, but they’re hoping it will fill. In the past it’s generally been a full house or close to. The non-profit organizing committee is also looking to the future. “We’re trying to get some students to come, too, and we pay their expenses,� he said. Two to four students from throughout the southeast who have taken part in the early safety training program and have been picked by their school principals will be invited to attend. Additionally, the luncheon will be prepared by the “Iron Chefs,� students from Estevan Comprehensive School.

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PIPELINE NEWS March 2015 ɺ Page B28 The project was a lot of after-hours work for the pair, taking the better part of the year. They did most of the work themselves, except for plumbing, electrical, mudding and taping. It was a lot of hard work. The main floor, which is currently the constituency office for Estevan MLA Doreen Eagles, was left largely unchanged. That was not the case, however, upstairs. The upper floor was gutted right to the outer walls, totally opening up the place. Where there was once an enclosed stairway, it was now open. Three, yes, three layers of ceilings came out. Apparently as one became damaged from water leaks, another was simply added to cover it up. Now the ceiling has open timbers and spray foam insulation along the roof, emphasizing the loft concept. Former windows that had been bricked-in along the side wall were opened up once more for the two bedrooms. New building codes required they have a fire shutter system installed in case a new building be built adjacent to theirs (The Loft on 4th is right on the property line). The front room is now wide open, with a brick feature wall showing off the building’s heritage. Since it’s three layers thick, it’s well insulated. There’s seating, a table you can put a laptop on, and a large-screen TV. The modern kitchen is fully equipped with everything needed except the food itself. There’s in-suite laundry, one double and one queen-sized bed between the two bedrooms, and a large washroom with a separate shower and bathtub. There’s also two parking spots reserved for the suite. All total, there’s 1,100 square feet, and the daily rate is comparable and even favourable compared to some other local temporary accommodations, with a discount for longer stays. Bookings are done online through their website. “We think we’re double the value of anybody else,” he said. “You can have a private meeting here.” Indeed, with ample space for entertaining, The Loft on 4th allows for private conversations and business meetings that one might not want to have in a more public place, like a restaurant. “We wondered if people would find that attractive. We don’t really know,” Beriault said. It took a few months to get going, but from 2011 until November 2014, they had almost 100 per cent occupancy. The slowdown in the patch has meant it’s been empty from then until the end of January, when Pipeline News toured the place. “In the early going we had some clients associated with the work at the (carbon capture) plant,” Beriault said. There were also long-term clients as a result of flooding.

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In addition to potential oilfield or power plant clients, the Loft on 4th’s proximity to both City Hall and the Court House make it an attractive location for out-of-towners on civic or legal business. “We thought the market would be industry people working remotely. If they stay at a hotel, why wouldn’t they stay at our place?” said Beriault.

Mike Beriault stands before The LoŌ on 4th, a building 108 years old that he and his partner Gregg Milbrandt renovated.

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PIPELINE NEWS March 2015

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Redvers – Eleven community organizations were recently recipients of a total $40,000 in donations, money raised by the Redvers & District Oil Showcase last year. The fifth Redvers & District Oil Showcase was held on May 8- 9, 2014, and was a considered by organizers to a great success, with 1,500 people attending. The show was sold out and included over 150 indoor and outdoor booths that highlighted the best of what the oil and gas industry and our region has to offer. The keynote speaker was Tim McMillan when he was minister responsible for Energy and Resources and he spoke to a sold out supper crowd. With the continued success over the last five shows the Redvers & District Oil Showcase has been able to make substantial contributions to organizations the region. Prior to 2014 the oil show was able to make donations upwards of $60,000 over a period of seven years to non-profit organizations in Redvers. “These donations would not have been possible without the hard work and dedication of the countless number of volunteers that work tirelessly and the commitment of our gold sponsors and those sponsors that go above and beyond to ensure that our oil show goes forward despite the elements that can make our show a little muddy,� Jasmin Carlton, one of the organizers, said in a release. After a successful 2014 show organizers were able to donate over $40,000 to organizations in six different communities in the region. These organizations are all community-based organizations dedicated to the continued advancement and development of the region and the betterment of children and families that call our area home. “Many of these organizations were hard hit by the flooding that took place during the summer of 2014

and we were encouraged by the resistance and hard work of all the dedicated volunteers that responded to and continue to rebuild their communities,� said Carlton. The Redvers Arts Centre received $10,000 to help rebuild their building following the flood that condemned their building. The Carievale Hall Auxiliary was the recipient of $5,000 to renovate their flooded basement. The Carnduff Theatre was presented with $5,000 to renovate the stage and redo the lighting. Another $4,000 went to smart boards for classrooms in Ecole de Bellegarde. The Redvers Activity Centre received $3,000 to upgrade their computer system. The Redvers Early Learning & Child Care Centre got $2,500 to upgrade their sprinkler system. The Gainsborough Community Theatre received $2,500 to install new front doors for their building. Redvers Golf Course, which is adjacent to the oil showcase site, received $2,000 to assist with their new club house. Envision Counselling in Oxbow got $2,000 to bring a family and women’s counselling centre to Oxbow. The Carievale Rink got $1,000 towards their ice plant upgrade. Finally, Redvers Fire & Rescue received $1,000 to facilitate the new fire hall. The next Redvers & District Oil Showcase will be held May 12-13, 2016, with registrations currently being accepted. The committee would like to thank all of those sponsors and volunteers who helped to make the 2014 event a success and look forward to seeing you in May 2016.

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PIPELINE NEWS March 2015

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