Pipeline News 20190102

PIPELINE NEWS SASKATCHEWAN’S PETROLEUM MONTHLY Canada Post Publication No. 40069240

January 2019

www.pipelinenews.ca

Vol. 11/9

Our winter of discontent

WƌŽƚĞƐƚƐ ĂŶĚ ƚƌƵĐŬ ĐŽŶǀŽLJƐ ŚĂǀĞ ďĞĞŶ ƉŽƉƉŝŶŐ ƵƉ ůŝŬĞ ǁŝůĚĮƌĞƐ ĂĐƌŽƐƐ ƚŚĞ WƌĂŝƌŝĞƐ͕ ĚŝƌĞĐƚĞĚ ƉƌŝŶĐŝƉĂůůLJ Ăƚ ƚŚĞ ĞŶĞƌŐLJ ƉŽůŝĐŝĞƐ ŽĨ ƚŚĞ :ƵƐƟŶ dƌƵĚĞĂƵͲůĞĚ ĨĞĚĞƌĂů >ŝďĞƌĂů ŐŽǀĞƌŶŵĞŶƚ͘ tŝƚŚ ŵĂŶLJ ƉĞŽƉůĞ ĚŽŶŶŝŶŐ LJĞůůŽǁ ǀĞƐƚƐ͕ ƚŚĞLJ͛ƌĞ ŵĂĚ ĂďŽƵƚ ƉŝƉĞůŝŶĞƐ ƚŚĂƚ ŚĂǀĞ ďĞĞŶ ŬŝůůĞĚ ďLJ ƚŚŝƐ ŐŽǀĞƌŶŵĞŶƚ͕ ƚŚĞ ƌĞƐƵůƚĂŶƚ ƉƌŝĐĞ ĚŝīĞƌĞŶƟĂůƐ͕ ĞƋƵĂůŝnjĂƟŽŶ ǁŚŝĐŚ ƌĞǁĂƌĚƐ YƵĞďĞĐ ǁŚĞŶ ŝƚ ƐĂLJƐ ŶŽ ƚŽ ƉŝƉĞůŝŶĞƐ ĂŶĚ ƚŚĞ ŝŵŵŝŶĞŶƚ ĚĞŵŝƐĞ ŽĨ ĐŽŶǀĞŶƟŽŶĂů ĐŽĂů ƉŽǁĞƌ ƉƌŽĚƵĐƟŽŶ ĂƌĞ ũƵƐƚ Ă ĨĞǁ ŽĨ ƚŚĞ ŝƐƐƵĞƐ͘ &Žƌ ƐŽŵĞ͕ ŵŝŐƌĂƟŽŶ ƉŽůŝĐLJ ŝƐ ĂůƐŽ ĂŶ ŝƐƐƵĞ͘ /Ŷ ƐƚĞǀĂŶ͕ ϰϮϳ ƌŝŐƐ ŽĨ ĞǀĞƌLJ ƐŝnjĞ ƐŚŽǁĞĚ ƵƉ ŽŶ ĞĐ͘ ϮϮ ƚŽ ƉƌŽƚĞƐƚ ŝŶ Ă ϭϱͲŬŝůŽŵĞƚƌĞ ůŽŶŐ ĐŽŶǀŽLJ͘ ^ĞĞ ƐƚŽƌLJ ŽŶ ƉĂŐĞ Ϯ͘ WŚŽƚŽ ďLJ ƌŝĂŶ ŝŶĐŚƵŬ

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PIPELINE NEWS January 2019

Our winter of discontent

By Brian Zinchuk & David Willberg Estevan – It took less than 48 hours, from the time the decision was made to go ahead with a truck convoy protest in Estevan, until the first truck rolled out of Bert Baxter Transport’s yard.

That decision was made just a day after trucks clogged the streets of Nisku and south Edmonton, and less than a week after a similar rally in Grande Prairie.

It was almost like a moment from the Christmas classic movie, It’s a Wonderful Life. When George Bailey was in desperate trouble, the call went out and people came. In this case, the call went out and 427 trucks of every type and size came. And while it wasn’t quite the 1,000 screaming trucks in Paul Brant’s song, Convoy, there was some inspiration drawn from that, too, with plenty of noise to be heard. That noise came from both the convoy and the 170 people who braved a cutting wind in front of Estevan City Hall, many wearing the yellow vests that have become the symbol of the movement. Some people who didn’t have yellow vests even chose to wear yellow garbage bags.

That 170 didn’t include the many people who sat in their vehicles lining the route, recording the biggest protest in Estevan in many years on their cellphones and posting them to social media.

The convoy started a little after 11:30 a.m,

with a route that would take it from Bert Baxter Transport’s new yard, down the truck bypass, and along Estevan’s three main drags – 4th Street, King Street and Kensington Avenue. The lead elements passed the Estevan Shoppers Mall as the last trucks were finally leaving Baxter’s yard. That meant the convoy was a total 15 kilometres in length.

It took an hour from the time the first trucks passed the rally at City Hall until the tail end Charlie reached that point.

No fans of Trudeau And of everyone Pipeline News spoke to, not one complimentary word was spoken of Prime Minister Justin Trudeau.

Many of the signs and stickers on trucks gave the symbol his father was so famous for, the bird, to Trudeau, the younger.

Several trucks had images of Trudeau splayed across the front of their grills, like parliamentary roadkill. Two men in the centre of the crowd wore shirts saying, “F--- Trudeau.”

That was very much a common theme of the sentiment, as the issues raised by the protesters on the street and those in the convoy were all in opposition to the policies of the federal Liberal government. The impending carbon tax, ongoing frustration on pipelines, the demise of conventional coal-fired energy production and federal equalization were significant issues for many. Some were also concerned about migra-

tion policies and Canada recently signing onto the United Nations Migration Pact.

Why are they protesting?

Among those at the City Hall rally, Bobby Kyle, a long-time worker in the oil and gas sector, was carrying a Canadian flag, and even led the protesters in a rendition of O Canada while the Yellow Vest protesters were waiting for the trucks to reach the rally.

He said he was there because the energy sector shaped him into who he is.

“I’m proud of our oil and gas and our energy sector,” said Kyle.

Mel Fitzpatrick cited several reasons for attending. He’s frustrated with the regulatory hurdles that have kept pipelines from being built.

“A lot of these companies are trying to get something done in this country,” said Fitzpatrick.

Fitzpatrick also criticized the Liberals’ plan to impose a carbon tax on Saskatchewan.

“We have a better plan called the Prairie Resilience plan, and they have a really messed up plan, which is taxation,” said Fitzpatrick.

He also said he didn’t enjoy being talked down to by Finance Minister Bill Morneau during the review of small business taxes last year, and he’s opposed to the government’s support for the United Nations migration treaty.

Participants in the convoy focused principally on energy issues.

Mike Grant said,

,ƵƩ͛Ɛ dƌƵĐŬŝŶŐ >ƚĚ͘ ŽĨ >ĂŵƉŵĂŶ ďƌŽƵŐŚƚ ƚŚĞŝƌ ĞŶƟƌĞ ŇĞĞƚ ŽƵƚ ƚŽ ƚŚĞ ĐŽŶǀŽLJ͕ ĂƐ ƐĞĞŶ ŚĞƌĞ ŝŶ Ăƚ ƚŚĞ ŵƵƐƚĞƌ ƉŽŝŶƚ͕ Ğƌƚ ĂdžƚĞƌ dƌĂŶƐƉŽƌƚ͛Ɛ ŶŽƌƚŚ LJĂƌĚ͘ WŚŽƚŽ ďLJ ƌŝĂŶ ŝŶĐŚƵŬ

The lead elements of the convoy had signs saying, “Make Trudeau a drama teacher again,” and “Trudeau must go now.” Photo by Brian Zinchuk “We’re here to show unity in the West. There’s multiple issue wrong with this government here today, and we’re here to protest all of it.”

Sitting in his welding rig at the Baxter yard an hour before the start time, Lanny Martindale, a pipeline welder said, “I’m here from Oxbow, Saskatchewan, and I’m here to help support the oil industry and get some more pipelines built to get rid of our oil.

Ben Highmoor said, “I’m here to support the pipeline going across Canada. " Jerry Mainil Ltd. brought several trucks from its base in Weyburn.

Calvin Tracey said, “We’re here to support our industry, the oil industry.”

Asked what issues he was concerned about, Tracey said, “Carbon tax!

Pipelines! We need to get our oil to tidewater, and we need to get rid of this carbon tax.”

Kent LaCoste, also with Jerry Mainil Ltd., said, “We don’t need Trudeau’s carbon tax in this province. We need jobs. Pipelines will produce jobs. We don’t want handouts. We want to work.”

The cacophony of truck horns was so loud in the Baxter yard, it took a few seconds before Nick Mayer of Mayco Well Servicing Inc. in Oxbow could say his peace. When the din died down, he explained, “To be honest, I’m not happy about be-

ing here. I’d like to have this equipment out in the field, working, so we can continue to build infrastructure, roads, schools, hospitals. I’m concerned about the regulation that’s been smothering us in our industry right now.

Shane Blackstock of Excel Well Servicing, said, “I’m here to support the oilfield. I hope that I have a job in the new year.”

Ron Bye said, “(I’m here) to support the oil industry.”

Gordon Nelson said, “I’m just here for the UN and oil and gas and everything here. I’m not working no more. I’m retired.

MP rides with son-in-law Souris-Moose Mountain Member of Parliament Robert Kitchen was riding along with his sonin-law, Dylan Gilliss, of Gilliss Casing Services.

Kitchen said, “It was a great turnout and fantastic to see.”

“It says that not only Estevan, but the whole southeast corner is very proud of our energy sector. This sector brings a lot of wealth and prosperity, not only here to us, but also to all Canadians. And that’s what this movement is about – telling all of Canada that we want to contribute. We want to continue contributing by providing jobs and building this country.”

Not in his wildest dreams Jay Riedel and Darryl “Buzz” Shirley were two of the principle organizers. Asked if he expected

such a turnout, Riedel said, “Not in my wildest dreams. That was such an overwhelming spectacle of people. We thought, maybe 100 people. The final count was 427. To see all the people lining main street and all the support of the convoy that went through, and the support of the people that came in the convoy, to bring this community together, I mean, it’s going to be forever in the history of Estevan.”

As for the message they were trying to send, Riedel said, “We’re trying to tell our federal government, look, things aren’t exactly the way you think they are, and Canada needs to come together as one. This isn’t between the east and the west. This is trying to get all Canadians together, to get our resources to market and get this country back on the top. We should have so much money in this country, that nobody should be worried about anything.”

“We get this country back online again, get everybody working, get some resources to market, we can bring all kinds of people in and have education and jobs for them.

The way things are right now, without having pipelines, we have no jobs.

This country is going to fail. We’re running out of money. It’s all going overseas.”

Darryl “Buzz” Shirley of Bert Baxter Transport Ź 3DJH $

Crescent Point is proud to be part of your community. crescentpointenergy.com

Sharing The Energy

PIPELINE NEWS January 2019

A3

ZŽƵŐŚůLJ ϭϳϬ ƉĞŽƉůĞ ďƌĂǀĞĚ ĐŽůĚ ǁŝŶĚ ĂŶĚ ƐŶŽǁ ƚŽ ƌĂůůLJ ŝŶ ĨƌŽŶƚ ŽĨ ƐƚĞǀĂŶ ŝƚLJ ,Ăůů͘ dŚĞƌĞ ǁĂƐŶ͛ƚ ŽŶĞ ƐŝŐŶ ĨĂǀŽƵƌĂďůĞ ŽĨ WƌŝŵĞ DŝŶŝƐƚĞƌ :ƵƐƟŶ dƌƵĚĞĂƵ͕ ĂŶĚ ƉůĞŶƚLJ ƚŚĂƚ ǁĞƌĞ͕ ƐŚĂůů ǁĞ ƐĂLJ͕ ůĞƐƐ ƚŚĂŶ ĐŽŵƉůŝŵĞŶƚĂƌLJ͘ WŚŽƚŽ ďLJ ƌŝĂŶ ŝŶĐŚƵŬ

ƐƚĞǀĂŶ ƚƌƵĐŬ ĐŽŶǀŽLJ ƉƌŽƚĞƐƚ ĂƩƌĂĐƚƐ ϰϮϳ ƵŶŝƚƐ͕ ϭϱ ŬŝůŽŵĞƚƌĞƐ ůŽŶŐ Ż 3DJH $ said. “We had 427 trucks at this event.”

Was this what he expected?

“No!” he replied.

“I expected maybe 150 trucks. The turnout and support is amazing. It’s astronomical.”

He went on, “The energy sector needs help.

We need to be able to build pipelines to market our product. We need a government that can actually make business easy, not harder. We don’t need

anymore taxes. We need a prime minister that cares about working Canadians, not the whole world.”

Baxter’s had a large representation.

Hutt’s Trucking of Lampman brought their entire fleet of trucks, pickers and pilot trucks. The contingent from Carnduff clogged the highways coming into town, with Bandit Oilfield Hauling, Integrity Oilfield Hauling, Fast Trucking Service, Competition Environmental

and Day Construction being just some of the companies represented.

Element Technical Services brought in frac units from Carlyle. Trican Well Service of Estevan had a large contingent. As noted above, Jerry Mainil Ltd. of Weyburn had a substantial contingent.

Indeed, a very large share of the oilfield service sector in southeast Saskatchewan had representation in the convoy.

Put another way, few oilfield services in the region

didn’t show up.

David Heier of ALX sat near the Baxter yard and broadcast live on Facebook, listing off the companies as they drove by him. His posting was one hour, 14 minutes long, and had 15,750 views within eight hours.

He started out his post by saying, “We just want to go to work.” *** A documentary video of the convoy protest can be found at www.pipelinenews.ca/1.23557019

/ƚ ƚŽŽŬ ĂŶ ŚŽƵƌ ĨŽƌ ƚŚĞ ϭϱͲŬŝůŽŵĞƚƌĞͲůŽŶŐ ĐŽŶǀŽLJ ƚŽ ƉĂƐƐ ƐƚĞǀĂŶ ŝƚLJ ,Ăůů͘ WŚŽƚŽ ďLJ ƌŝĂŶ ŝŶĐŚƵŬ

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PIPELINE NEWS January 2019

PIPELINE NEWS

EDITORIAL

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Let us have our pipeline In Lin-Manuel Miranda’s hit musical Hamilton, the character George Washington offers Alexander Hamilton a job.

“We are a powder keg about to explode. I need someone like you to lighten the load, so?” Washington says.

That’s a pretty good description of what’s going on in the oilpatch right now when it comes to frustration with the Justin Trudeau-led federal Liberal government.

On Dec. 5, the Yellow Vests Canada Facebook page was created. By Dec. 18, less than two weeks later, it hit 100,000 members and was climbing. Three days earlier, that number was only 55,000.

And on that day, Dec. 15, people dawned yellow high visibility vests across the country, but more specifically, in oilpatch town like Lloydminster, Red Deer and Grande Prairie (on Dec. 16.)

Grande Prairie formed a truck convoy. It was so large, at an estimated 750 trucks, mostly heavy trucks, that the convoy touched its tale, circling the whole city.

How does a movement go from 0 to 100,000 and organize rallies in communities across the nation in less than two weeks without being a powder keg about to explode?

It takes next to zero effort to join a Facebook group. But to show up at a protest is something else entirely.

There were protests all over on Dec. 15. Grande Prairie had a huge one on Dec. 16. On Dec. 18, 2,700 rallied in Calgary. The next day, something like up to 2,000 trucks formed a convoy around Nisku then headed into Edmonton, where they played havoc with rush hour traffic.

And then came Estevan’s on Dec. 22. The count came it at 427 trucks of every kind. The convoy was 15 kilometres long and took an hour to pass Estevan City Hall, where 170 whooping protesters waved and hollered.

This is militancy that is totally unheard of in the oilpatch, at least over the past few decades. And it is pretty much spontaneous in nature.

These are not earth muffin tree huggers who take their infants to a dozen protests before they reach six months old. These are people who have probably never carried a sign in their life. They are hopping mad. Some are even using the term revolution online.

And all those trucks in these convoys? Many of them charge out for hundreds of dollars per hour. Their owners and employers were willing to throw away a day’s muchneeded revenue to be there. The Nisku/Edmonton convoy

took place on a Wednesday. Do you think these people wouldn’t have otherwise been at work? That that iron wouldn’t otherwise be used?

On Dec. 18, the federal government announced $1.6 billion, primarily for loans. Yeah, because that’s what we all need. More debt.

It could best be called unwanted corporate welfare.

We can’t repeat what it was called at worst. And someone pointed out in one post online, it’s Alberta being bribed with money that came from Alberta in the first place. I don’t think he was off the mark.

The reaction can best be summed up as this: We don’t want your stinkin’ money! We want pipelines! We want to be allowed to do our job and make money honourably!

Get out of our face!

Small wonder, then, that the next day saw the Nisku/ Edmonton convoy take place. Initial estimates early in the day thought 100 trucks would show up. It turned out to be 20x that. The convoy was 22 kilometres long!

The Alberta government figures the Canadian economy was losing $80 million a day when the West Texas Intermediate (WTI) to Western Canadian Select (WCS) differential was at its worst. That means it would only take 20 days to equal this whole supposed bailout. That’s just a few days over the amount of time it took Yellow Vests Canada to hit 100,000 members on its Facebook page.

If Northern Gateway had been built, there would be no need for the Dec. 18 bailout, which, by the way is a very, very small drop in the bucket compared to the capital expenditures of just one oilsands project or pipeline. If Energy East had been built, which should have been in service somewhere around now. If initial plans had progressed, there would be no need.

Oil prices rise. Oil prices fall. We, in the oilpatch understand that. We’ve dealt with it forever. But the downturn since 2014, which seemed to be ending as oil reached US$75 for a barrel of WTI, has come crashing down on our heads again, and reinforced by the policies of this current federal government.

As one person said on the Pipeline News Facebook page, “They clearly Do Not Get It. This proves it once more.”

“We need pipelines and jobs not money handouts,” said another.

“Really? Just let us have our pipeline,” said a third.

Let us have our pipeline, indeed.

PIPELINE NEWS January 2019

OPINION

How do you charge your electric truck when the power goes down?

I was listening to British Columbia Premier John Horgan talk on Dec. 5 about CleanBC, his government’s climate change plan. Of particular interest was his reference to mandating zero emissions vehicles by 2040, in just 21 years. He’s aiming at electric and hydrogen fuel-cell vehicles.

And then I thought back to Dec. 4, when Saskatchewan had one of its greatest power outages ever. The most recent one of that scale was in the early 1980s, although we did have a big one in June.

Estevan was fortunate.

Our power was out for about 25 minutes. That’s probably because if Estevan doesn’t have power, pretty much no one will have power, due to the two nearby coal-fired power plants. Both of them, Shand and Boundary Dam Power Stations, and the Poplar River Power Station at Coronach, went down due to heavy frost taking down transmission lines.

With nowhere to send power, they tripped off. We soon saw what happens

in Saskatchewan without coal-fired power. We lose almost half of our power generating capacity, and a huge chunk of the province goes dark.

A heroic effort by SaskPower workers, some of whom are my neighbours, got those power plants up again, and found ways to patch together the grid after hundreds of thousands of people spent a good chunk of a winter’s day in the dark.

I then thought of Horgan’s initiative to rid us, or at least B.C., of gasoline and diesel-powered light vehicles. If they go, so, too, will the gas station infrastructure that supports them.

After all, “Just over 20 years from now, all new light-duty cars and trucks sold in British Columbia will run on clean electricity from batteries or hydrogen fuel cells,” according to the CleanBC full report.

Now what happens if you end up with a scenario like Saskatchewan just endured? How do the linemen, in their pickups, go out and fix the grid if their

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FROM THE TOP OF THE PILE

By Brian Zinchuk

batteries are running low?

Where do the superchargers get the juice to charge these absolutely critical vehicles? And how do you recharge vehicles in the field working 16 or more hours straight, with heat going and motors running? It’s not like you can top them up with a tidy tank. And what if it’s not -12 C, but -43 C? How do you fix the grid?

You don’t. Now we’re in an apocalyptic death spiral where nothing works.

You can’t charge the vehicles once their batteries die. You can’t fix the grid without vehicles. Do you cue the zombies next? Call in reinforcements from a neighbouring jurisdiction?

How do they fuel their fleet, with no gas stations?

What did hospitals in the region turn to during the blackout? Diesel generators. Okay, maybe diesel might be around still (for the transport trucks). But

how many people, on Dec. 4, pulled out their gasolinepowered generators when the blackout started to get uncomfortable?

And if our electrical grid is so fragile that twice in six months, most of southeast Saskatchewan went dark, and all three coal-fired power plants tripped off and went down due to weather, how will it cope when each and every garage has a battery charger in it? Will we have to double our grid’s capacity?

Triple it?

Let’s do a thought experiment. The Regina Refinery Complex is capable of processing 135,000 barrels per day of oil, the bulk of which is consumed in Saskatchewan, but also in Alberta and Manitoba.

Wherever it is consumed, if we were to replace that energy with electrical energy, we would need, get this, 219,807,000 kilowatt hours of electrical power,

per day. That would be 9,158 megawatts of electrical generating capacity required to replace the energy of 135,000 bpd of oil.

SaskPower currently has 4,493 megawatts of capacity – and that have to be running at 100 per cent capacity, since the consumption of 135,000 bpd is 100 per cent.

So we would need three times more power generating capacity than we have right now. Put another way, we would have to build NINE 1,000-megawatt nuclear power stations to replace that much oil consumption with electrical energy.

Or we could just build the eight-unit Bruce Nuclear Station (6,234 megawatts) one and a half times, and hope it never goes down.

Ever.

All of this is to replace the energy output of just one refinery, in Regina.

How many more nukes

will you need to replace Edmonton’s refinery row?

But let’s get back to more practical considerations.

I never thought of this before - how do people who do not own their own parking spot, charge their vehicles? What if they must park on the street?

Or in an apartment parking lot? Where will they charge their SUVs and pickups? Since GM and Ford don’t plan on making many cars anymore, how much juice is going to be needed to charge all these electric pickups?

Even if a miracle occurs in the next few years in battery capacity, there will be no miracles on the grid and electrical capacity side.

Horgan’s 2040 plan will never work.

Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@ sasktel.net.

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PIPELINE NEWS January 2019

ALX to build pumpjacks in Estevan

By Brian Zinchuk Estevan – Artificial Lift Werx Ltd., or ALX, is now working on bringing incomplete pumpjacks to life, and will soon be building brand new ones in Estevan.

The company was incorporated in April by Dave Heier. This is a rebirth of the company. He started a private placement to raise money. Realizing there wasn’t an appetite in the industry, he took a different route and got bank financing through the Business Development Bank of Canada.

“I’ve got substantial financing in place. I went to the BDC, they’re very pro business,” he said. “I was surprised. They advertise the hell out of it. They say they’re pro business. And they have a mandate to help new businesses, and they came through. They really vet the application to every last detail.”

“Now we’re starting to resurrect some of the old,

new inventory. I can put together about 30 units from the inventory that was left over from early days, from 2006. The technical term is new old stock. So we’re going to go through, re-sandblast, and start over. Most of the parts that rotates are going to be all brand new.

“That’s the first kick of the cat.

“I sold ALX in 2013. I got it back.

“The deal went sideways. I finally reacquired it in 2017,” Heier said.

The first goal is to get the new old stock out the door. But the next units, all new, will incorporate a new drive for which he’s in the process of applying for patents. He can’t say more than that.

“Let’s just say the box is more efficient. The pumpjack overall will be safer. The brakes will be positive. The efficiencies, using proprietary drive programming, may save up to 50 per cent power usage,” Heier said.

ŽƌĞLJ ůƐŽŶ͕ ůĞŌ͕ ĂŶĚ Jesse Heier ƉŽƐŝƟŽŶ Ă ŐĞĂƌďŽdž͘

The design will include a proprietarily programmed variable frequency drive (VFD) made exclusively for ALX. The pumping units will be sold with VFD-only. The pump off programming, gas locking and other problems will be dealt with by the programmable logic controller (PLC) within the VFD. “The program senses loading and crankweight positioning through a proprietary system,” Heier said.

“It’s going to be epic!” he exclaimed with a laugh.

There isn’t a name for the new jack yet. It’s not likely going to be ALX 2.0, as this will be the new design going forward. “I’m not going to be making conventional jacks anymore,” he said.

After the new old stock is gone, everything will be newly made.

Heier pointed out there are about 5,000 pumping units coming into North America each year. “I just want sell 200 to 300 per year,” he said of his sales goal.

The current sizes include 114, 160, 228, 320, 456 and 640. In the future, ALX will also design a 912 unit. In the future, only sizes 228 and larger will be made.

The financing is in place, and a patent has been applied for. He’s bringing in inventory of needed components to complete the existing units. He’ll be getting castings and buying beams. “All the fun things.”

Castings come from China. “China owns the casting business of the world. There’s no choice,” he said. “They drove everybody else out of business.”

By and large all of the bases and T-frames are done, as are most of the walking beams. But

Oleksandr Koziuchenkv, right, and Oleg Khotnski work on ALX pumping unit. Photo by Brian Zinchuk they were all stopped midstream. When the first ALX stopped building pumping units, in 2006, Heier said, “I had over 400 jacks in stock, so we stopped building. The price of oil had a slight crash in 2006.

A slight correction. And I was selling jacks all over North America, and it dried up overnight.”

The slowdown lasted about six months, but it took until 2009 to get rid of most of those jacks. And then the downturn of 2009 came around.

“We were never able to re-kickstart manufacturing, until 2019” he said.

Over 700 ALX jacks

were built, and they went to work in every producing province and state in North America. “And they have a good name,” he said.

“There’s zero pumpjack manufacturers of any consequence left in North America. There’s some small guys. They’ve all gone to China. Weatherford, HG (Schlumberger), and GE (Lufkin) are the major players now,” he said.

Asked what he’s doing different, he said, “I’ve got a game-changer for my drive. Pumpjacks haven’t changed much since the 1940s.”

“Big corporations always make mistakes. They leave room for the little

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guy. They either can’t service a person, or tick them off, or they’re just too big to change. I can change quickly. I can do whatever the market wants.

“I’m going to be priced the same, if not higher, than everybody. My drive isn’t cheaper. But in the long run, your maintenance, and your power bill, will pay the difference, and of course, increased production. Lower maintenance, lower power bill, increased production.”

The structural steel they purchase will be lasercut or plasma-cut elsewhere. Heier said, “But all assembly, all welding, is Ź 3DJH $

PIPELINE NEWS January 2019

A7

First old new stock will be prepared, then new units will be built ŝ 3DJH $ done here in Estevan.�

The swift drop in oil prices since early October prices has given ALX a bit of a reprieve. He wanted to be further ahead than where he is now. “I was gearing up for $80 oil, thinking I’m going to have a great opportunity.

I’m about 8 months slower than I expected to be.

I’m quite confident that, this time next year, we’ll be at $80 or $100. That’s the way the world goes.

The Saudis won’t allow it to stay down. They want to do an IPO on Aramco.

That’s the future of Saudi Arabia,� he said. “I’m okay with the timing.� “Our problem, right now, is only in Canada.

There’s no problem anywhere else. They’re all ramping up at $50 oil.�

The manufacturing is being done contractually through Waterflood Production Systems (WPS).

Heier used to own Waterflood, but sold to Harvey King several years ago. He acts as general manager for WPS. “I’m taking their

highs and lows out of their manufacturing, and I can supplement it with my own employees, in his shop. It’s a two-way street.

If he gets behind, my guys can help do his stuff. I think it will benefit both of us. “It’s a temporary basis. It could be two to three years. I have 11 acres, back with ALX,� Heier said.

Kresten, his son, is general manager for ALX. Heier said, “I hope to have three to six people next year, and to utilize three to six people from waterflood. The long-term goal would be to have a purpose-built shop and 20 to 40 people working.�

Getting there in three to four years is his goal. “It’s my last hurrah,� he

said. “I’m doing it as a legacy to hand down to my children.� “I grew up in Estevan my whole life. Estevan deserves some manufacturing stability, because who knows what’s going to happen with coal and the power plants. I think there’s a lot of good people here, and staff to be had.�

Protests across Western Canada, led by the Yellow Vests

By Brian Zinchuk Lloydminster, Kindersley, Grande Prairie – While a Yellow Vests protest drew over 50 people to Estevan’s City Hall, it was just a small part of a phenomena that drew people out across the country on Saturday, Dec. 15.

The rallying point has been the Yellow Vests Canada Facebook Page. It was started on Dec. 5. By Dec. 17, it had grown to 93,900 members, adding nearly 40,000 members from Dec. 15. In the space of time it took from beginning to write this article to posting

it, 1,400 people joined the Yellow Vests Canada page.

By Dec. 23, the number hit 113,000.

In Regina, approximately 200 people lined the bridge along Albert Street near the Legislature on Dec. 15.

Lloydminster had upwards of 500 people, said Daniela Tobler, who does sales with Classic Oilfield Service, a local company.

Tobler was one of 16 people from Classic which attended the event. It took place at Lloydminster City Hall, at the intersection of Highway 17 (the border)

and Highway 16, the Yellowhead Highway. “There were tons of people driving by, honking and waving,� Tobler said on Dec. 17. “From our company, we had 16 people.�

Asked what message they wanted to get out, Tobler said, “We were trying to convey that we’re not happy with the carbon tax.

We think these pipelines need to move forward.�

Tobler added, “We think its important the rest of the country becomes educated. This is Canadian oil, not Alberta or Ĺš 3DJH $

Some of the signs read “No carbon tax,� and “Canadian oil is ethical oil.� Photo by Daniela Tobler

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Η/ƚ ĨĞĞůƐ ůŝŬĞ ǁĞΖƌĞ ƵŶĚĞƌ ĂƩĂĐŬΗ Ż 3DJH $ Saskatchewan oil. Importing from countries with lower environmental standards has a bigger footprint than using our own oil.”

While not directly affiliated with the Yellow Vests, Kindersley held a rally on Dec. 15 in support of oil and gas. The event, held at the Kindersley Mall, that attracted over 150 people.

Ryan Orton, organizer of the Kindersley event, said, on Dec. 17, “I wanted to focus more on pro-Canada oil and pipelines.

“People are really upset. It feels like we’re under attack from our own federal government.

I wanted to create a positive thing to show support for our local oil and gas workers and their families. Their families feel it the most.”

Although no longer working in the patch, he

Hundreds came out to Lloydminster’s Yellow Vests protest on Dec. 15. Photo by Daniela Tobler had previously worked seven years in the oil patch, as a pipeliner and on service rigs.

He noted, “People are ashamed we’re an oil-producing country. I’m proud, and we’ve got ethical oil.”

Grande Prairie drew one of the largest, if not

the largest, turnouts on Sunday, Dec. 16. Various estimates note around 750 trucks took part in a convoy through the city that acts as the hub for northwest Albertan and northeast British Columbia.

Aerial photos show bumper to bumper trucks of

every conceivable application in the oilpatch: pump trucks, pickers, cranes, frac units, service bodies and everything in between taking part. RCMP estimates for the rally are at least 1,500 people showed up at Grande Prairie’s Muskoseepi Park, accord-

ing to Global News, but hundreds if not thousands lined the streets that the convoy wound through, as evidenced by video posted on social media. It was at this rally that United Conservative Party Leader Jason Kenney spoke.

Kenney told the

crowd, “This is not just the fight of our lives, for our prosperity, for our schools and hospitals and way of life. This is a fight that matters for the world. We need more Canadian energy to displace dictator oil all around the world.”

tank,” he said.

“I can understand, but I’ve never seen anyone hated as much as Trudeau,” he said of

Prime Minister Justin Trudeau.

Regarding the rally, he said, “I’m very vocal. I was at a loss for words.”

“We’ve got nothing to lose” Grande Prairie, Alta.

– Cory Yeik attended the Grande Prairie rally on Dec. 16. Idled from oilpatch work for much of the last three years, he just recently went back to work, near Grande Prairie.

He also owns a clothing company fittingly called Rig Pig Apparel, catering to the drilling industry.

Yeik was “born and bred” in Weyburn, and now calls Lethbridge, Alta., home. Speaking to Pipeline News by phone on Dec. 17, he said, “After working 25 years in the industry, three years ago I

could see this coming. It’s like the perfect storm. Everybody hoped it would get better, but here we are.

“We’ve got nothing to lose.”

He added, “It’s finally really good to see everybody starting to see the trickle-down effect in a country that got a large part of its economy from natural resources. Everyone is affected, from the top down.”

“It’s nice to see everyone standing together.”

Asked where he was, Yeik said, “I was in the convoy. I’ve got good

friends that own trucks.”

It took an hour for the convoy to go around the city. It was so long, “The convoy touched its tail.”

In all his time working in the oilpatch, he said he had never seen anything like it.

“It really tugged at my heart really hard,” he said.

“These rallies need to continue.

Yeik is not the type to frequent protests. He said, “That was my very first protest.”

The downturn and

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Stewart Steel’s diversity helped it through the downturn

By Brian Zinchuk Weyburn – Stewart Steel of Weyburn has taken diversification to heart

in many ways.

“The level of diversification in the shop has been exponential,” said

^ƚĞǁĂƌƚ ^ƚĞĞů ǁŽƌŬƐ ŝŶ ƐĞǀĞƌĂů ĚŝīĞƌĞŶƚ ŵĂƚĞƌŝĂůƐ͕ ŝŶĐůƵĚŝŶŐ ĂůƵŵŝŶƵŵ͘

Brad Stewart, owner, on Nov. 22.

That includes products, materials used, coatings, and customers.

“We’ve always been a diversified company,” he noted.

“We’ve probably gone to twice as many customers, but our volume isn’t up substantially.

But here’s what’s exciting for us: the level of diversification we’ve got in the shop, that’s gone exponential, both from the type of work we’re doing, to our customer base.

“We’ve had oilfield parts go as far as the Middle East. Other projects have gone to Texas.

“Our forte has been doing the drawings that would either get engineer-stamped of customer approval, once they see it on paper,” he said. Stewart Steel uses SolidWorks.

“A big advantage for our customers over the years is being able to visualize working models in the design stages.”

Stewart said they’ve developed great relationships with certain engineering personnel. “If it’s structural, we’ve got the right engineer for that.

If its rotary components mounted on a trailer, we’ve got the right engineer for that. If it’s something flow related, for instance, fluid, grain, or gravel or frac sand in its tanks, we’ve got the right engineer for that.”

Stewart Steel currently operates with five project managers, each responsible for their projects from concept and design to manufacturing, finishing with the appropriate coating and then shipping. A project manager assigned to each job makes specific requirements and details much more streamlined.

Coating Stewart Steel is an approved shop for “Zinga.” It’s a product used instead of hot-dipped galvanization. It’s a highzinc product that is coldspray applied. Items that require galvanization are sent to Saskatoon or Winnipeg.

They also have highbuild liners for tanks and

trailer.

Another offering of coating is the same sort of spray-applied liner that is commonly used for truckbeds. This is used for durability applications like decks and walkways.

“Everybody knows what a truckbed liner is. This is the exact same product,” Stewart said.

On high-end paint that’s often used in mining applications, there can be up to four inspection stages. This can be internal and external.

This includes having a paint inspector approve the applications.

Then there’s normal painting, everything from direct to metal, to as much as two primer coats and three top coats.

“We do not do powder coat,” he added.

They used to have a powder coat oven, but they took it out. “Our product was too diverse. We didn’t see enough benefit to the customer. Powder coating is oversold,” Steward said.

“We also do urethane foam spray,” he said.

“There is a urethane spray foam that is rodent resistant. For doghouse trailers, it’s very important that the proper urethane that’s anti-rodent is used, or you just made a mouse house.”

Material Stewart said they use a diverse range of raw material for processing.

In their shop these days there’s carbon steel, stainless steel and several grades of aluminum.

They’re also working with other, more exotic material.

That includes sheet and structural aluminum, as well as sheet and some structural stainless steel.

In carbon steel, they carry from 16-gauge to 1-inch thick plate, as well as lots of structural steel, including hollow structural steel and I-beam. There’s also wear plate like and chromium carbide overlay plate (a mild steel plate Ź 3DJH $

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PIPELINE NEWS January 2019

ŝǀĞƌƐŝƚLJ ŝŶ ĐĂƉĂďŝůŝƚLJ͕ ŵĂƚĞƌŝĂů͕ ĐŽĂƟŶŐƐ͕ ƉƌŽĚƵĐƚ͕ ŐĞŽŐƌĂƉŚLJ ĂŶĚ ŝŶĚƵƐƚƌLJ Ż 3DJH $ with an extremely hard overlay). They can also bring in varying types of hard plate.

Wear plate sees application for abrasion, wear or corrosion. “Some have all three,” he noted of the material being handled.

Stewart said, “The reason behind diversified material is because we have an even larger lineup of diversified equipment.

Their stainless steel finishing is done using a method called “pickling,” where it is washed down with an acid.

Capabilities “The reason for this diversified line of material, is we have an even larger line of diversified equipment,” Stewart said.

For cutting material, they have a plasma table, water jet and a laser torch. The key thing is using the right tool for the job. Cutting one inch cylinder lugs would be best cut with by plasma, but 16-gauge steel might be better cut with a laser.

They have five different breaks and five different plate rolls. Their bending capacity ranges from small pipe and small radius to six-inch diameter pipe.

“We’ve got a very diverse and up to date set of welders,” Steward said. That includes pulse machines, solid core, flux core and TIG welding.

They even do some titanium work.

Manpower “To do this, we have the right manpower,” Stewart said. There are over 30 people with the company. “When we came through the big crash, we didn’t lay off any people A few left on their own,” he said. “We retained everyone else.”

This was despite the fact they had three major projects cancelled within two weeks. “We were forced to hugely diversify,” Stewart said.

Stewart spoke of their training matrix which covers many disciplines.

“We’ve had some of our staff go to the state-of-

the-art Lincoln training school. Our people and their training sets us apart.”

They’re certified to do ceramic tile for wear and abrasion.

The shop is certified to B620 for transportation of dangerous goods.

For crude haulers, they can do inspection and repair. They also have TC44 certification allowing the company to build fuel tanks for drilling rigs.

They’ve built combination and boiler buildings for rigs.

With regards to being “Made in Canada,” he said they’ve received awards in the past for exporting ag products presently ship to Europe and Australia.

Some exports go to North Dakota and Texas, both parts and complete products. They’ve been exporting for over 20 years.

“They’re coming to us, and we’re building it for them. It’s their ideas,” he said. “They brought us the concept. We did the design, the prototype, the testing. Now we’re build-

This hopper, made by Stewart Steel, was just about to be shipped to Ontario for a ŵŝŶŝŶŐ ĂƉƉůŝĐĂƟŽŶ͘ ing the saleable product.”

Sales of one of Stewart Steel’s flagship products, the Vac-U-Spread, have been slow in recent years, but they just sold one in November.

Since the downturn, Stewart Steel has been fortunate to win structural contracts with PCL, doing a variety of projects at Mosaic Stadium. Another contract recently was a

large mining contract in Ontario which pushed the envelope for their SolidWorks design, engineers and shop. “Some of the hopper tanks were too large to ship and required being bolted together and disassembled for shipping,” he said.

“An interesting design, build, prototype, test and now manufacture job came to us from Kansas.

It’s a ‘Dose N Go,’ a portable machine to dispense helix, or reinforcing fibre, into concrete. Two of these machines went to New York to be used building a tunnel.”

“We are looking to add quality people.

We’re looking for trades, from drafting and design through to fabrication, paint and assembly,” he said.

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Lloydminster-made MANTL pumps are being exported to a dozen countries Lloydminster – The Progressing cavity pump changed Lloydminster’s oilpatch nearly 40 years ago, and a manufacturer of those pumps, MANTL, set up shop in the border city three-and-a-half years ago.

Jordy Gerling, vice president of Canadian operations and a partner in the business since day 1. “We have 11 workers out of the office,� he said

on Dec. 4 by phone. The majority are focused on manufacturing, while the remainder do field service work.

Asked why they chose Lloydminster to establish their manufacturing facility, Gerling replied, “We are in Lloydminster because we looked at where the heart of the usage is, and where the heart of manufacturing was.�

That mean there were a lot of people in Lloydminster with experience in progressing cavity pumps (PCPs). There had been three other manufacturers of PCPs in Lloydminster, but two have since relocated to Edmonton.

There are two key components to progressing cavity pumps - the stator, which is a metal barrel lined with an elastomer,

and the rotor, which is turned by sucker rods from the surface, driven by a top drive.

These pumps function similar to a grain auger, with the pump’s rotor work similar to the flighting in an auger. The stator is like the barrel of the auger.

The stators have their elastomer-to-metal injection done in Germany. The elastomer is key, as down-

hole conditions change, so does the elastomer requirement going into these wells. Sand and other solids require a softer elastomer, while aromatics require a harder elastomer with better chemical resistance.

In Lloydminster, they make the rotors from raw metal.

Gerling said, “In Lloydminster, as a standard, we are turning raw 4140 steel

into a usable rotor. We’re also experimenting with stainless steel and other materials for coatings as well.�

They also do customization of the stator element, machining it and adding length to them which, in turn, adds lift to that particular series of pump, while in operation. Ĺš 3DJH $

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A12

PIPELINE NEWS January 2019

DÄ‚ĹŹĹ?ĹśĹ? ƉƾžƉĆ? Ç Ĺ?ƚŚ Ď­ÍŹĎŻ ƚŚĞ Ć?ƚĂč ŽĨ Ä?ŽžƉĞĆ&#x;ĆšĹ˝ĆŒĆ? Ĺť 3DJH $ MANTL is partnered with an outfit out of Edmonton on its drive heads. “We do all the final assembly in our Sedgewick branch,â€? he said.

That’s by design, distributing the manufacturing throughout the company’s footprint. Gerling called it “level loading all our field locations with alternative functions,� which allows them to get better use out of their staffing.

MANTL doesn’t manufacture sucker rod or continuous rod, but it does sell those products.

The Lloydminster facility focuses on manufacturing, as opposed to field sales.

PCPs with elastomers don’t see usage in hightemperature thermal projects. Without a lot of action happening in the Lloydminster area, and the largest oil producer there focusing on thermal extraction, the local market is affected. “It’s hurting, yes,� Gerling said, when asked about that. “It’s been on our radar for three-and-a-half years.�

So how will they deal with the challenge of the local conversion from CHOPS

to thermal? “When we set out and started planning how this company was going to evolve, we looked at spaces to manufacture and resources. We chose Lloydminster for that.

But we also made a decision going into Lloydminster. It’s a tough market, even in the best of times. Lots of competition. All the manufacturers are here. There’s a lot of wells here. We made the decision to come here knowing full well we don’t necessarily want to chase that market Year 1, 2, 3 or 4, but someday we’re going to have to chase it. “So let’s get good at what we’re doing. We’ll be best set up in three, four years, to start chasing the biggest PCP market in the world.

It’s questionable that it is, today, but with the recovery for price differentials, it’ll still be a heavy target for PCP. “Has it changed in the last four years? Yes, but I still think we made the right decision,� Gerling said.

MANTL also sells internationally into 12 countries. A few include Columbia, Venezuela, U.S.A., Iran and Australia, and Romania.

Early in their second year they were shipping to Romania and Australia. “We

In Lloydminster MANTL peels the steel to create the rotors used in progressing cavity pumps. Photo courtesy MANTL took some time to break down the walls in the U.S. PCPs are not the artificial lift of choice in the U.S. It’s a small, small sampling of artificial lift,� he said.

Failures with early designs many years ago have soured the market south of the border.

MANTL saw “huge growth� in its first few years, but he expects this year

things will level out. “We’re opening up micromanufacturing centres in other countries. We’re looking at international growth opportunities.�

They set up six domestic field stores in the first three years. “We set up our first micromanufacturing facility in Columbia last year. We’re in the process of setting one up in Texas this year. We’re

6ÂˆĂƒÂˆĂŒĂŠĂ•ĂƒĂŠ>ĂŒĂŠĂŒÂ…iĂŠ7iĂžLĂ•Ă€Â˜ĂŠ"ˆÂ?ĂŠ-Â…ÂœĂœĂŠÂ‡ĂŠ ÂœÂœĂŒÂ…ĂŠÂ›Ă“ĂˆÂŁĂŠEĂŠÂ›Ă“ĂˆĂ“

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looking potentially at Oman to do another one,� Gerling said.

In Australia they’re working with a partner to service the market. There, PCPs are used for dewatering coal seam gas. A few years ago, Australia was installing up to 200 PCPs a month, even before the pipeline infrastructure was in place to take away the eventual gas that would be produced. “I feel this is MANTL’s opportunity,� he said, noting service will be an important part of it. They recently sent a test bench to Australia. “Our products are

known. Our people are known,� he said, adding that working out of Canada gets MANTL a checkmark right out of the gate. “We have produced volumes of product out of our shop that was unheard of in places that I’ve been, working for the competition. “We’re doing it with a third of the guys that I’ve ever been exposed to in any of my previous jobs with competitors. We’re a single cell facility producing an outrageous amount of product with the minimum amount of people, and we’re doing it very well,� Gerling concluded.

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PIPELINE NEWS January 2019

A13

Wil-Tech launches bigger, more powerful bucking unit

By Brian Zinchuk Estevan –About 10 years ago, Wil-Tech Industries of Estevan started building bucking units.

Now, with around 30 units deployed, the company is shipping its first third-generation unit, the Wil-Torq 16000EXT. That EXT stands for extended. This unit is substantially larger than previous ones. That and an additional 5,000 foot-pounds of torque compared to previous models meant it the frame had to be substantially beefed up.

The Estevan-made bucking units are primarily used to for assembly of downhole tools, especially for well completions. Oil tool companies are the principle customers.

Essentially the bucking unit is made up of service rig power tongs, on its side, with a frame holding the backing unit.

The torque monitoring system electronically logs the torque applied when putting the components together.

The software behind it is already it its fifth iteration.

That’s a far cry from the old way of doing things, where workers would use pipe wrenches, snipes and forklifts to accomplish the same thing.

Aaron Salamon is a

mechanical engineering technologist who is also the manufacturing manager for Wil-Tech. Jason Hale is the Estevan branch manager.

Dustin Wilson is general manager and Jim Wilson is president of Wil-Tech.

They spoke to Pipeline News on Dec. 3.

Aaron said the new bucking unit has 10-feet of travel, as opposed to four or six feet on previous units.

“It gives the ability to work on larger tools,” he said.

The tongs are mounted in a static position on one end of the unit, and the backing unit can slide as needed on rails to whatever length is needed within that 10-feet of travel.

Jim noted it’s been four years since they’ve built a unit due to the oil downturn. But fortunately they’ve found other things to get into.

The downturn in the oilpatch resulted in a slower time, but that time has had benefits, too. Aaron said, “It allowed us some time to refine the design.”

That included using a more powerful tong unit.

From the time of order to shipping, it takes about 12 weeks to produce a bucking unit. Part of that time is due to the fact most of these units have not been cookie-cutter, but rather customized for each customer, Jason explained.

“Every customer’s demands

are a little different.”

And Wil-Tech sees their ability to produce custom units as a strength.

Dustin pointed out it means doing what different markets need.

Jason pointed out there is a growing trend for higher torque specifications.

What was once uncommon has now become more common. This includes items like premium thread.

“The dies have to match the quality of the tool,” he noted. (The dies are the part of the tongs and backing units which physically grip the tool.)

One large order a few years ago was all the same, however. It was for a larger oilfield services firm for use across North America.

Roughly half of the bucking units Wil-Tech has produced have been used in Canada, and the remainder have been exported to the United States. “We have quoted into South America as well,” Jason said.

There are bucking units from Grande Prairie to Texas now. This 10-foot unit will be going to North Dakota.

They would like to get further established in the American market. “Lack of being in the U.S. market hurt us,” Jim said. “Our necessity to get into the U.S. is there.”

They’ve talked about getting a distributor.

CAD drawings, like this one of Wiltech’s most recent version of its bucking unit, are a crucial part of the design process. Aaron Salamon is the manufacturing manager.

Jim noted the downturn has given them time to formalize their manufacturing department, with Aaron heading it up.

He added they’ve changed their way of designing things as well. Before, they would make it, then do the drawing for it. “We would build it, and if we really liked it, we’d draw it. Now we draw it first. Everything is CAD (computer-assisted drafting) drawn,” he said.

They use sophisticated software like Autodesk Inventor. Aaron noted that trial and error works on one or two items, but not on something that will be made repeatedly.

“We want to take an

idea and concept and make it a reality,” Dustin said.

“Ask the 15 different questions they need for that applications. Conversations are a lot easier with tools like this. We use it as a sales tool.”

They are even looking at augmented reality applications in the future.

Power units In addition to making bucking units, Wil-Tech also builds power units for

underground potash mining. They are fluid power supplier for one mine in particular. The power unit is in keeping with WilTech’s principle specialty as a hydraulics business. They are affiliated with Parker Canada.

The power units are built to supply hydraulic power to tensioners on conveyor belts used underground in the mines. They Ź 3DJH $

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A14

PIPELINE NEWS January 2019

WĹ˝Ć?Ĺ?Ć&#x;ǀĞ ĆŒÄžÄ‚Ä?Ć&#x;ŽŜ ƚŽ W Ĺ?ÄžĹ˝ĆšĹšÄžĆŒĹľÄ‚ĹŻ Ć‰ĆŒĹ˝ĹŠÄžÄ?Ćš ĆšĹ˝ĆľĆŒ

By Brian Zinchuk Torquay – With the drilling rig having reached 2,700 metres already out of a planned 3,500 metres, the first well in a geothermal electrical power project was well underway on Nov. 23. That’s what roughly 40 people saw when they had the opportunity to tour Deep Earth Energy

Production Corp.’s project south of Torquay.

The rig tour came a day after the big announcement was made in Regina that drilling had commenced south of Torquay the previous week.

There was a strong turnout from the Estevan’s economic community, including civic and

business leaders. A few people believed enough in the project to have invested in it, so for them, it was gratifying to see things in motion.

Others in attendance were neighbours to the project, coming to check it out.

Ron Carson is both an investor and a member Ĺš 3DJH $

Jon SaundersÍ• ŽŜĞ ŽĨ ƚŚĞ Ç ÄžĹŻĹŻĆ?Ĺ?ƚĞ Ä?ŽŜĆ?ƾůƚĂŜƚĆ?Í• ƉŽĹ?ŜƚĆ? Žƾƚ ƚŚĞ Ç ÄžĹ?Ĺ?Śƚ Ĺ?ŜĚĹ?Ä?Ä‚ĆšĹ˝ĆŒ ŽŜ ƚŚĞ ÄšÄžĆŒĆŒĹ?Ä?ĹŹÍ˜ WŚŽƚŽĆ? Ä?LJ ĆŒĹ?Ä‚Ĺś Ĺ?ĹśÄ?Śƾŏ

Power units are made for mine conveyor belt tensioners Ĺť 3DJH $ include an electric motor, hydraulic pump, accumulators, and fire suppression system. “The mine supplied the design on these,â€?

Aaron said. “We’ve been playing in potash for five-plus years,� Jim added.

Dustin said they had a request to manufacture three units. Could they do it? “Of course,� he said.

He spoke of the importance of their asset managing system. For instance, each part, like individual hoses, will have a unique identifier

number. This is integrated into an asset management system. The mines have underground repair shops, and by calling up the identifier number for a particular hose, for example, they can produce the exact replacement.

Dustin also talked about preventative maintenance through the asset management system, to limit downtime.

While the current power units are to the customer’s designs, Dustin noted Wil-Tech has some ideas for improving them in future models. “The products have

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evolved, and we have evolved as manufacturers,� Jim said. “The moral of the story is we’ve gotten a lot better at it. We’ve upped our game,� Dustin added.

Present and future The price of oil dropped one third in two months, for US$75 to US$50 per barrel for WTI. Jim said, “It certainly adds caution.�

Steel prices and tariffs have been attracting headlines over the past year. Aaron said their last steel purchase did see steel go up.

Wil-Tech had done a lot of work over they years in equipping newbuilt drilling rigs with their hydraulic systems.

But the last new rig they worked on was in 2014, and with oil prices still half of what they were five years ago, the pros-

Aaron Salamon Ć?ĹšĹ˝Ç Ć? Žč Ä‚ ĹśÄžÇ Ä?ĆľÄ?ĹŹĹ?ĹśĹ? ƾŜĹ?Ćš Ä?ÄžĹ?ĹśĹ? Ć‰ĆŒÄžĆ‰Ä‚ĆŒÄžÄš Ä¨Ĺ˝ĆŒ Ć?ĹšĹ?ƉƉĹ?ĹśĹ?͘ dĹšĹ?Ć? ŽŜĞ Ĺ?Ć? Ä‚ ůŽƚ ůŽŜĹ?ÄžĆŒÍ• ĂŜĚ ĆšĹšÄžĆŒÄžÄ¨Ĺ˝ĆŒÄž Ä?ÄžÄžÄŽÄžĆŒÍ• ƚŚĂŜ Ć‰ĆŒÄžÇ€Ĺ?ŽƾĆ? žŽĚĞůĆ?͘ WŚŽƚŽ Ä?LJ ĆŒĹ?Ä‚Ĺś Ĺ?ĹśÄ?Śƾŏ pects of new builds are still a ways off. However, Jim foresees the next generation of drilling rig having a substantial hydraulic components, where pipe handling is all

done by equipment, not muscles. These rigs exist today in what are know as advanced drilling rigs, or ADRs. Jim sees the future in ADRs. In the meantime,

he noted, “This is keeping us building.�

As for the bucking units, they are a long ways from market saturation, especially worldwide.

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A15

Η,ƵŐĞ ƉŽƚĞŶƟĂů ĨŽƌ ŽƵƌ ĂƌĞĂΗ Ż 3DJH $ of DEEP’s board. He said, “I’ve been involved, somewhat, I guess for the last five years, but a little more involved after they asked me to be on the board. I help them out wherever I can. I’m not an expert on the drilling end of this, but I guess it helps to be a little practical, once in a while.”

Asked how he got involved, Carson responded, “Kirsten came and was kind of soliciting a few people a few years back. It interested me. I got involved to a certain point, not in a big way, but somewhat. As time went on, I got a little more interested in it and became

more invested in it. When this rig is off here, and we test this formation to see if we’ve got continuous flow and we’ve got everything we need, it’ll be very interesting. It’ll be, I think, bankable then. Right now, there’s risk. But I believe in it. I think this is going to be it, hopefully.”

Clare Johnson owns the land the well is being drilled on. He has surface rights, but not mineral rights. He said most of the land around there has Crown minerals, so it’s a matter of surface leases for most of the local drilling.

“I think it’s pretty exciting.

This is something new that

Estevan Mayor Roy Ludwig takes a picture of the derrick ĨƌŽŵ ƚŚĞ ĚƌŝůůŝŶŐ ŇŽŽƌ͘

looks possible, creates some jobs and provides some clean energy.”

He lives in Weyburn but the home farm is 10 kilometres west of the site.

Cathy Welta-Eagles is with Estevan’s economic development board and is the current president of the Estevan Chamber of Commerce. She said. “I think it’s a fantastic opportunity for our area.

“Huge potential for our area, which is obviously struggling,” she said.

“We are looking at the future of coal. We’re looking for alternatives, and this is a fantastic alternative for energy.”

Ed Turnbull has some money involved in it. “I’m a small investor. It’s really exciting. This is something that I really hope is the future for the southeast here.

We need a kick here, and hopefully this is something that will be the way of the future.”

Asked about the lengthy timeline it has taken to get to this point, he responded, “They’ve done a lot of homework. It’s taken a lot of time. I don’t know how many years – a few years now, we’ve been waiting for something to

One of the tour groups stops on the mud tank, where they were checking out the shaker table. happen here. But I think they’ve done their homework and everything works out well.

“It’s good to see.”

Estevan MLA Lori Carr was thrilled with the project. She noted, “I think this is absolutely monumental, not only for the province of Saskatchewan.

This is the first project of its type across Canada. It’s really exciting, that it’s happening right here, in the constituency of Estevan."

Carr also lives not terribly far, as the crow flies,

from the site, living relatively close to Torquay.

For Nathan Wilhelm, it’s not only an interesting project, but also potential opportunity for his construction business down the road.

“We need a good new story that somebody is investing in technology – new technology, the first in Canada, right, and for that to be happening in our back yard.”

He hasn’t invested in it, but he knows people

who are. “It’s also exciting to hear how many local vendors are involved in the project,” Wilhelm said.

He’s on Estevan’s economic development committee.

“Once they get done this observation well and get going on the whole infrastructure, we want to at least have a shot at providing contracting services with our local construction business, also.”

Asked about the Ź 3DJH $

A16

PIPELINE NEWS January 2019

JK Junior secondary Ä?ŽŜƚĂĹ?ŜžĞŜƚ Ĺ?Ä‚Ĺ?ĹśĹ?ĹśĹ? ĆšĆŒÄ‚Ä?Ć&#x;ŽŜ

By Brian Zinchuk Estevan – The JK Junior, a secondary containment system for stuffing boxes on pumpjacks, is gaining traction.

That’s according to Jayson King, who created the JK Junior. “They’re starting to kick off here, in southeast Saskatchewan and Manitoba, but not getting much traction in

Alberta, for some reason.

Starting to get a little bit of traction in North Dakota,� he said on Dec. 14.

There’s some interest in the Shaunavon area as well.

A few went over to Saudi Arabia, but that’s it so far. The political tension between the desert kingdom and Canada has not been helpful for sales.

The JK Junior is

manufactured in southeast Saskatchewan. A recent production run was to replenish stock. “I changed it up a bit,� he said. The side clamps for the lid have been changed to a bolts, a more rugged design.

There’s been some minor internal changes as well.

That would bring the design to version 3 now. Ĺš 3DJH $

dĹ&#x161;Ä&#x17E; :< :ƾŜĹ?Ĺ˝Ć&#x152; Ć?Ä&#x17E;Ä?ŽŜÄ&#x161;Ä&#x201A;Ć&#x152;Ç&#x2021; Ä?ŽŜĆ&#x161;Ä&#x201A;Ĺ?ŜžÄ&#x17E;ĹśĆ&#x161; Ć?Ç&#x2021;Ć?Ć&#x161;Ä&#x17E;Ĺľ Ĺ?Ć? ĹśĹ˝Ç Ĺ?ĹśĆ&#x161; Ĺ?Ć&#x161;Ć? Ć&#x161;Ĺ&#x161;Ĺ?Ć&#x152;Ä&#x161; Ĺ?Ä&#x17E;ĹśÄ&#x17E;Ć&#x152;Ä&#x201A;Ć&#x;ŽŜÍ&#x2DC;

DÄ&#x201A;Ć&#x152;Ć&#x152;Ç&#x2021;Ĺ?ĹśĹ? ĹŻĹ˝Ä?Ä&#x201A;ĹŻ Ć&#x161;Ä&#x17E;Ä?Ĺ&#x161;ŜŽůŽĹ?Ç&#x2021; Ä&#x201A;ĹśÄ&#x161; ĹŻĹ˝Ä?Ä&#x201A;ĹŻ Ä&#x17E;Ç&#x2020;Ć&#x2030;Ä&#x17E;Ć&#x152;Ć&#x;Ć?Ä&#x17E; Ĺť 3DJH $ current mood of Estevan, which has had apprehension due to the announced retirement of part of the Boundary Dam Power Station, Units, 4 and 5, Wilhelm said, â&#x20AC;&#x153;The current mood is everybodyâ&#x20AC;&#x2122;s still in a holding pattern. Stories like this give people a little bit more confidence that thereâ&#x20AC;&#x2122;s going to be a future if we donâ&#x20AC;&#x2122;t get some movement on the coal.

Itâ&#x20AC;&#x2122;s not so much just what Deep Earth is doing, but thereâ&#x20AC;&#x2122;s also the offshoot of what Deep Earth is going to provide, for greenhouses and technologies that can piggy-

back with this.â&#x20AC;?

Pauline Ziehl-Grimsrud has a farm a few kilometres due west of the project.

At the conclusion of the tour, DEEP president and CEO Kirsten Marcia was quite pleased with the response. â&#x20AC;&#x153;This is a great day.

Weâ&#x20AC;&#x2122;re so excited that this project is finally underway.

Weâ&#x20AC;&#x2122;ve got such wonderful support from this community and the people that have believed this project would be a possibility,â&#x20AC;? Marcia said. â&#x20AC;&#x153;We formed the company in 2010. And the reality is itâ&#x20AC;&#x2122;s made progress,

but at times, itâ&#x20AC;&#x2122;s stalled out. We were underfunded. But now, everything is in place and thereâ&#x20AC;&#x2122;s really nothing stopping us now. â&#x20AC;&#x153;Things are going great.

This is the best, world-class drilling expertise that we have, local and home grown. â&#x20AC;&#x153;This is exciting. This is the first geothermal project for Canada. I love the fact itâ&#x20AC;&#x2122;s marrying our local technology and our local expertise, but in a brand new way.

Weâ&#x20AC;&#x2122;re taking this world-class oilfield expertise and paring it on a clean, renewable energy project. I think thatâ&#x20AC;&#x2122;s great,â&#x20AC;? she concluded.

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A17

tÄ&#x201A;Ć&#x161;Ä&#x17E;Ć&#x152;Ĺ&#x2021;ŽŽÄ&#x161; Ć&#x2030;Ć&#x152;Ĺ˝Ĺ?Ć&#x152;Ä&#x201A;Ĺľ Ĺ?ĹśÄ?Ä&#x17E;ĹśĆ&#x;Ç&#x20AC;Ä&#x17E; Ä&#x201A;ŜŜŽƾŜÄ?Ä&#x17E;Ä&#x161; ĨŽĆ&#x152; Ć&#x2030;Ć&#x152;Ĺ˝Ç&#x20AC;Ĺ?ĹśÄ?Ä&#x17E;Í&#x2022; Ĺ?ĹśÄ&#x161;ĆľĆ?Ć&#x161;Ć&#x152;Ç&#x2021; Ć&#x152;Ä&#x17E;Ä&#x201A;Ä?Ć&#x161;Ć?

GOVERNMENT SAYS IT SHOULD SUPPORT 500 FULLTIME JOBS Regina â&#x20AC;&#x201C; The government of Saskatchewan announced a program on Dec. 5 designed to improve the petroleum industryâ&#x20AC;&#x2122;s long-term operating environment, sustain jobs, and increase investment activity in our province.

Minister of Energy and Resources Bronwyn Eyre spoke of the realities of the high Western Canadian Select (WCS) to West Texas Intermediate (WTI) differential. â&#x20AC;&#x153;Whether itâ&#x20AC;&#x2122;s a $300 million impact to our royalties over the course of a year, and a $5 billion impact to the sector, or a fluctuation that would create a $500 million impact to royalties, and a $7 billion impact to the sector, theyâ&#x20AC;&#x2122;re all big numbers. Numbers that affect our ability as a government to fund hospitals and highways, social services and schools. Numbers that affect the ability of our energy sector to get product to tidewater.â&#x20AC;?

In â&#x20AC;&#x153;leaving no stone unturned,â&#x20AC;? she said. â&#x20AC;&#x153;This is just the beginning.â&#x20AC;?

The Waterflood Development Program will replace a previous program with a more aggressive competitiveness initiative to provide long term, stable production, she noted. It also complements an existing horizontal drilling incentive. â&#x20AC;&#x153;This initiative is about planning the future,â&#x20AC;?

Eyre said.

It will incentivize the conversion of producing wells into waterflood injection wells or the drilling of new dedicated waterflood injection wells. At maximum uptake, the program will support $375 million in new investment over the next five years and 500 new permanent jobs. Over 10 years, the program will lead to an estimated $245 million in new provincial royalties, and $1.9 billion in direct gross domestic product (GDP) impacts, and 14.5 million barrels of new oil production.

The program will also enhance the competitiveness of Saskatchewanâ&#x20AC;&#x2122;s energy industry by facilitating an

economically sustainable increase of production capacity by an estimated 72 million barrels over the course of the next 35 years, Eyre said. â&#x20AC;&#x153;Waterflooding is a proven enhanced oil recovery strategy that is good for sustainability and good for the environment,â&#x20AC;? Energy and Resources Minister Bronwyn Eyre said. â&#x20AC;&#x153;In the face of a rapidly changing global market, Saskatchewan is addressing competitiveness by supporting our provinceâ&#x20AC;&#x2122;s largest economic sector with a cost-effective policy that encourages long-term capital investment.â&#x20AC;?

Waterflooding is a secondary recovery oil production technique that repressurizes an oil reservoir to boost total oil recovery from the reservoir. The Waterflood Development Program promotes good production practices and better reservoir management, the government said in a release. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s important to note, this program will not un-

Oil producers like it, says King Ĺť 3DJH $ â&#x20AC;&#x153;All the stuff thatâ&#x20AC;&#x2122;s out there, Iâ&#x20AC;&#x2122;m getting good feedback on it. People that have them, like them. A lot of people wanted to go, but the last quarter, quarterand-a-half, budgets were out of money, and they had money allocated with other things.â&#x20AC;?

He anticipates things will pick up in the new year. Sales have picked up every year. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s going the right way,â&#x20AC;? he said. â&#x20AC;&#x153;We get lots of good

feedback. Everybodyâ&#x20AC;&#x2122;s happy with the way its working. Theyâ&#x20AC;&#x2122;re getting three to four times more life out of their packing and itâ&#x20AC;&#x2122;s working well,â&#x20AC;? he said.

The design has a wick which applies oil to the polish rod, keeping it cool and lubricated. It is also cleaned with the integrated wiper within the JK Junior.

Most of the sizeable oil producers in southeast Saskatchewan have at least a few, trying it out. â&#x20AC;&#x153;And theyâ&#x20AC;&#x2122;re liking it,â&#x20AC;? he said.

â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s built in Saskatchewan. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s all 100 per cent done here. A lot of other guys get everything built overseas and they bring it here, box it up and call it built in Saskatchewan. Itâ&#x20AC;&#x2122;s not. â&#x20AC;&#x153;(The JK Junior) is 100 per cent built in Saskatchewan,â&#x20AC;? King said.

tÄ&#x201A;Ć&#x161;Ä&#x17E;Ć&#x152;Ĺ&#x2021;ŽŽÄ&#x161; Ć&#x161;Ä&#x17E;Ä?Ĺ&#x161;ŜŽůŽĹ?Ç&#x2021;Í&#x2022; ĹŻĹ?ĹŹÄ&#x17E; Ć&#x161;Ĺ&#x161;Ĺ?Ć? Ä&#x161;ĆľÄ&#x201A;ĹŻ Ĺ&#x161;Ĺ˝Ć&#x152;Ĺ?Ç&#x152;ŽŜĆ&#x161;Ä&#x201A;ĹŻ Ć&#x2030;ƾžĆ&#x2030; Ć?ĹŹĹ?Ä&#x161; Ä?ĆľĹ?ĹŻĆ&#x161; Ä?Ç&#x2021; Ć&#x152;Ä&#x17E;ĹśĆ&#x161; 'Ä&#x17E;Ä&#x161;Ä&#x201A;ĹŹ tÄ&#x17E;ĹŻÄ&#x161;Ĺ?ĹśĹ? ŽĨ Ć?Ć&#x161;Ä&#x17E;Ç&#x20AC;Ä&#x201A;ĹśÍ&#x2022; Ĺ&#x161;Ä&#x201A;Ć? Ä?Ä&#x17E;Ä&#x17E;Ĺś Ä&#x201A; Ä?Ć&#x152;Ĺ?Ć&#x;Ä?Ä&#x201A;ĹŻ Ć&#x2030;Ä&#x201A;Ć&#x152;Ć&#x161; ŽĨ Ć&#x161;Ĺ&#x161;Ä&#x17E; ^Ä&#x201A;Ć?ĹŹÄ&#x201A;Ć&#x161;Ä?Ĺ&#x161;Ä&#x17E;Ç Ä&#x201A;Ĺś Ĺ˝Ĺ?ĹŻĆ&#x2030;Ä&#x201A;Ć&#x161;Ä?Ĺ&#x161; ĨŽĆ&#x152; Ć?Ä&#x17E;Ç&#x20AC;Ä&#x17E;Ć&#x152;Ä&#x201A;ĹŻ Ä&#x161;Ä&#x17E;Ä?Ä&#x201A;Ä&#x161;Ä&#x17E;Ć?Í&#x2DC; &Ĺ?ĹŻÄ&#x17E; Ć&#x2030;Ĺ&#x161;Ĺ˝Ć&#x161;Ĺ˝ dermine the actions of Alberta in its attempt to solve the differential crisis, because this isnâ&#x20AC;&#x2122;t heavy oil.

This is about enhancing the competitiveness of our energy industry in other plays, into the future, ensuring weâ&#x20AC;&#x2122;re ready to address not only todayâ&#x20AC;&#x2122;s challenges, but those which lie ahead.â&#x20AC;? â&#x20AC;&#x153;We have to do something to address capital flight, and the risk of capital flight,â&#x20AC;? She said. Capital spending in the oil and gas sector in Canada has dropped 39 per cent since 2014, and the majority of that money has gone to the United States. Oil production in Saskatchewan has dropped six per cent since 2014. â&#x20AC;&#x153;The value of oil has dropped 42 per cent, oilwell drilling, 30 per cent, employment, 10 per cent, and investment, 37 per

cent. Provincial total oil revenues between 2014 and 2017 declined 50 per cent.

Across Canada, as many as 100,000 workers have been laid off in this downturn, and Saskatchewan hasnâ&#x20AC;&#x2122;t been immune to that. So the time to act is now, to do all we can, as a government, to send the signal, that despite all the challenges we face, we stand with our oil and gas sector, with the 35,000 people who go to work every day in Saskatchewan in our oil and gas industry.â&#x20AC;? â&#x20AC;&#x153;And with this waterflood initiative, and initiatives to come, we want to thank energy companies for helping to change the face of this province, from have not, to have. And for everything they do, big and small, in the communities where their people live and work,â&#x20AC;? Eyre said.

Scott MacFarlane, president and CEO of Cathedral Energy Services, a directional drilling company, said, â&#x20AC;&#x153;With todayâ&#x20AC;&#x2122;s announcement, weâ&#x20AC;&#x2122;re very excited about it. It will bring further investment in the Saskatchewan economy. Itâ&#x20AC;&#x2122;s a further boost to strengthen the overall sector to Saskatchewan. It will help Cathedral as well as other oilfield services companies, by way of increased operating activity levels, which we are desperately needing at this point in time.â&#x20AC;?

He noted the government involved industry in this plan.

MacFarlane added, â&#x20AC;&#x153;We need to be getting the message through to the federal government that we need to be building pipelines so that we can get our Ĺš 3DJH $

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A18

PIPELINE NEWS January 2019

Tenaris establishes new yard west of Bienfait

By Brian Zinchuk Bienfait â&#x20AC;&#x201C; Itâ&#x20AC;&#x2122;s hard to miss the new, very well-lit pipe yard west of Bienfait, especially at night. Thatâ&#x20AC;&#x2122;s the new Tenaris Bienfait service centre, which is now in full operation.

Guillermo Moreno is the president of Tenaris in Canada. He visited the new Bienfait site on Dec. 13, touring the facility with Pipeline

News.

Tenaris first established itself in 2015 west of Bienfait at the terminus of the CN rail line, where CN established a transloading facility.

They started in partnership with CN, with services coordinated by Tenaris. Initially the employees and equipment were CNâ&#x20AC;&#x2122;s.

CN was doing the transloading, and it wasnâ&#x20AC;&#x2122;t a

storage facility or pipe yard at first.

But Tenaris decided to establish their own facility, a stoneâ&#x20AC;&#x2122;s throw away across Highway 18. â&#x20AC;&#x153;We now have 17 employees working here,â&#x20AC;?

Moreno said.

Bienfait was chosen due to its proximity to the rail line and operations of its customers. Those customers,

oil companies, use Tenarisâ&#x20AC;&#x2122; principal product â&#x20AC;&#x201C; oil country tubular goods (OCTG) â&#x20AC;&#x201C; the well casing and tubing that makes oil production possible.

About 80 to 90 per cent of the pipe that passes through their Bienfait facility comes from Canada, although a small portion does come from Tenarisâ&#x20AC;&#x2122; global network of facilities. Tena-

ris has a seamless pipe mill in Sault Ste. Marie, Ontario, and a welded pipe mill in Calgary. In Nisku, they thread premium connections.

Moreno said all the casing coming to Bienfait was made in Canada.

Tenaris is a global company operating in 30 countries, operating in Canada since 1999. They employ about 1,000 people in Can-

ada.

A few months ago the company opened a new Grande Prairie, Alta, service centre which services northwest Alberta and northeast British Columbia. Moreno called it â&#x20AC;&#x153;One of the best pipe yards in the world.â&#x20AC;?

At Bienfait, construction started about a year ago. The landowner Ĺš 3DJH $

WĆ&#x152;Ĺ˝Ĺ?Ć&#x152;Ä&#x201A;Ĺľ ĹľÄ&#x17E;Ä&#x201A;ĹśĆ&#x161; Ĺ?Ĺś Ć&#x2030;Ä&#x201A;Ć&#x152;Ć&#x161; Ć&#x161;Ĺ˝ Ä&#x201A;Ä&#x161;Ä&#x161;Ć&#x152;Ä&#x17E;Ć?Ć? Ä?Ä&#x201A;Ć&#x2030;Ĺ?Ć&#x161;Ä&#x201A;ĹŻ Ĺ&#x2021;Ĺ?Ĺ?Ĺ&#x161;Ć&#x161; Ĺť 3DJH $ product to market, and get the price for it that we deserve.â&#x20AC;?

Jenson Tan, vice president of business development with Vermilion Energy, said, â&#x20AC;&#x153;We see this waterflood incentive initiative as another

example of continuing to make the province an attractive place to invest. â&#x20AC;&#x153;In our current capital spending plan, Vermillion plans to invest $225 million in Saskatchewan in 2019 in our light oil assets in southeast Saskatchewan. We will

be drilling 150 wells, with many of these having some of the best economic recurrence in North America. What we are really excited about is the waterflood potential on our asset base. We plan on investing at least $30 million on waterflood and enhanced

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oil recover assets in the coming year which will be used to pilot and implement several waterflood projects.â&#x20AC;?

Several will be directly impacted by this new initiative. â&#x20AC;&#x153;The incentives announced today support this waterflood investment, which we believe could unlock significant resource potential, which would further increase our investment levels in the near-term, mid-term and long-term.â&#x20AC;?

Eyre explained the incentive is revenue neutral. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a royalty deferral, not a royalty break or royalty reduction.

Itâ&#x20AC;&#x2122;s a three-year royalty referral which allows companies to make the $500,000-ish in capital investment and flow that capital through as quickly as possible in order to make the conversion.â&#x20AC;?

Eyre told reporters the initiatives has been in development for a long time. â&#x20AC;&#x153;On behalf of the members of Energy Producers Association of Canada, it is a pleasure to support the good work of the Government of Saskatchewan,â&#x20AC;? Energy Producers Association of Canada president Tristan Goodman

said. â&#x20AC;&#x153;Waterflooding is an important long-term reservoir management strategy that improves oil recovery.

Given the current challenges facing the Western Canadian oil industry, initiatives such as this will assist the sector over the next few years.â&#x20AC;?

Brent Gedak is owner of Brent Gedak Welding of Estevan, a firm which specializes in building the surface pump packages used in waterflood applications. He said, â&#x20AC;&#x153;That would drive my business up, and I would be able to bring on more people and execute more projects. Itâ&#x20AC;&#x2122;s very slow.â&#x20AC;?

Waterflood Production Services of Estevan was founded in 1970. General manager Dave Heir said, â&#x20AC;&#x153;I think itâ&#x20AC;&#x2122;s absolutely brilliant.

Everybody gets to participate, from drilling down to packagers like myself. Itâ&#x20AC;&#x2122;s a gift that just keeps on giving.

This gives for 30, 40 years, at least. The waterfloods dad put in Steelman field in the late 1950s, early 1960s are still operating today.â&#x20AC;?

NDP critic questions if waterflood technology is proven Buckley Belanger, NDP energy and resources critic, said, â&#x20AC;&#x153;Obviously, if you look at the technology that has already been in use, we havenâ&#x20AC;&#x2122;t got any information to show that the technology is proven, and thatâ&#x20AC;&#x2122;s always something we want to see as part of the whole process. So access to

that information and results of that are very important to us. â&#x20AC;&#x153;We obviously are very supportive of getting the industry moving as quickly as we can. The ultimate solution is the pipeline, but some of these initiatives offhand may or may not help the industry overall if we donâ&#x20AC;&#x2122;t have the pipeline answer.â&#x20AC;?

Asked by reporters about how revenue neutral the program might be, Belanger said, â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s exactly it.

The technology is here. You would assume the incentives are in place to prove that technology works. Now what if it doesnâ&#x20AC;&#x2122;t work? And then do we lose those royalties?

Thatâ&#x20AC;&#x2122;s the real question here.

But if it does work, and then we would have the royalties, plus interest. Thatâ&#x20AC;&#x2122;s how I understand it. â&#x20AC;&#x153;So I think thatâ&#x20AC;&#x2122;s the big question around the revenueneutral argument the minister alludes to. If it works, then obviously itâ&#x20AC;&#x2122;s going to stimulate the sector. Itâ&#x20AC;&#x2122;s going to provide revenues to the provincial coffers. But if it doesnâ&#x20AC;&#x2122;t work, thatâ&#x20AC;&#x2122;s a risk that weâ&#x20AC;&#x2122;re going to be taking as a province, and this is why itâ&#x20AC;&#x2122;s important that we look thoroughly at what is being proposed, and see exactly where the risks are for the taxpayer, and, of course, at the same time weâ&#x20AC;&#x2122;re trying to stimulate that part of our economy,â&#x20AC;?

Belanger said.

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PIPELINE NEWS January 2019

A19

Tags on every pipe and an app on your phone provide Ć&#x2030;Ĺ?Ć&#x2030;Ä&#x17E; ĹľÄ&#x17E;Ä&#x201A;Ć?ĆľĆ&#x152;Ä&#x17E;ĹľÄ&#x17E;ĹśĆ&#x161; Ĺ?Ĺś Ć&#x161;Ĺ&#x161;Ä&#x17E; ÄŽÄ&#x17E;ĹŻÄ&#x161; Ĺť 3DJH $ prepared the ground to stringent specifications, with plenty of compaction to prevent dust in summer. The brilliant lighting is aimed to fall principally within the fence line, and fall off immediately outside of it.

Open facility Typically pipeyards are affiliated with trucking companies. Those companies often act as â&#x20AC;&#x153;pipe custodians,â&#x20AC;? storing pipe, often at no cost, with the expectation the oil company will use their trucks to eventually haul the pipe.

Moreno explained the Bienfait service centre is an â&#x20AC;&#x153;open facility.â&#x20AC;? â&#x20AC;&#x153;We donâ&#x20AC;&#x2122;t own trucks.

Weâ&#x20AC;&#x2122;re not in the trucking business,â&#x20AC;? he said. The oil companies decide which trucking firms they want to employ. â&#x20AC;&#x153;We subcontract different cargoes,â&#x20AC;? he added.

They do have heavy duty trailers to shuttle pipe from the railyard to the pipe yard. Specialized forklifts can reach down into rail cars to unload the pipe.

Rig Direct Tenaris has made its pipe inventory system â&#x20AC;&#x153;smart,â&#x20AC;? in that every single joint of pipe is tracked, in a business model known as â&#x20AC;&#x153;Rig Direct.â&#x20AC;? It includes a suite of services including technical consulting, pipe management, and field services.

One end cap protector on each joint of pipe has an RFID (radio frequency identification) tag, and the other end incorporates a 2-D barcode similar to a QR code. Moreno explained they â&#x20AC;&#x153;allow us to know exactly this pipe, where it is produced, dimension, weight, thickness.

We keep track of all of this for our clients. We keep track of every single pipe.â&#x20AC;?

Information is also stencilled on the pipe for when the end cap is removed.

In the yard, that means they can use a scanner to quickly identify each pipe. When a load is apart from the racks, such as on a truck, they can identify the entire load by RFID with a quick scan.

And that technology

is applicable for the end user as well. The Tenaris PipeTracer app, found on the respective app stores, allows workers in the field to use all that information as well. As each pipe is precisely measured in the factory, that information can be used instead of using a tape measure in the field.

How did they get to this point?

Moreno said in 2014 the price of oil was high and everything was fantastic. But then the downturn hit. â&#x20AC;&#x153;We had to do something different to help our clients,â&#x20AC;? he said. â&#x20AC;&#x153;That kind of innovation could bring a lot of savings to our clients,â&#x20AC;? he said. The result was Rig Direct. â&#x20AC;&#x153;Every pipe has its own RFID,â&#x20AC;? he said. â&#x20AC;&#x153;We are the only ones doing this.â&#x20AC;?

Tenaris also has dopeless technology with a specific dry coating meaning pipe dope is not applied.

This is used offshore, he noted, as the company supplies pipe to the offshore oil industry in Newfoundland.

While trials have been

Guillermo Moreno is the president of Tenaris in Canada. The white tags on the ends of each pipe, behind him, are key to their business strategy. Photo by Brian Zinchuk done in Western Canada, cost is a factor.

Domestic supply chain Moreno commented on the importance of having a domestic supply chain. â&#x20AC;&#x153;This is the fantastic thing about energy, and where we need to help everybody in Canada to understand and connect the dots, of the benefits of the development of natural resources, how they impact the total Canadian economy. We connect Canada.

We have a supply chain from Quebec, all the way to Alberta, Saskatchewan, Manitoba and British Columbia. We take iron ore produced in northern Quebec that is converted into steel in Ontario, then into pipe in either Ontario or Alberta. Then we have dedicated service centres in Alberta and Saskatchewan, and also in St. Johnâ&#x20AC;&#x2122;s, Newfoundland. â&#x20AC;&#x153;Oil and gas means jobs across Canada, not

just in the energy industry.â&#x20AC;?

To support careers for the next generation, Tenaris has supported a program connecting children with STEM â&#x20AC;&#x201C; science, technology, engineering and mathematics. In September they donated a half million dollars to the University of Albertaâ&#x20AC;&#x2122;s â&#x20AC;&#x153;DiscoverEâ&#x20AC;? program, and that will benefit children in Estevan and Bienfait. Thirty children from Grade 2 to Grade 7 can take part.

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A20

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