Special Report: Layoffs come with hidden costs, biz leaders told / Page 15 JULY / AUGUST 2016
PIPELINENEWSNORTH.CA
PIPELINE NEWS NORTH VOL. 8 ISSUE 7 DIST: 11,600
SERVING THE OIL & GAS INDUSTRY IN NORTHERN B.C. AND ALBERTA
FREE!
LNG or BUST returns home with optimism on PNW LNG, but FID may not come until 2017 Northern Gateway officials ‘fully committed’ to project in wake of appeals court ruling Maryon: Uncertain business environment unhealthy for Canada’s future Stereotypes & stigma: Pipeliner’s rant against lifted truck schadenfreude strikes a nerve
JUSTIN VIDAMO PHOTO
When You Are Out in the Field, Time IS Money. Call Us For ALL Your Oilfield Needs QUALITY PARTS, EXPERT SERVICE!
2
• PIPELINE NEWS NORTH
JULY 15, 2016
FORT ST. JOHN
PETROLEUM ASSOCIATION
SAVE THE DATES Family Campout Weekend August 12 - August 14, 2016 Peace Island Park, Taylor, B.C.
Oilmen’s Curling Bonspiel November 16 - November 19, 2016 FSJ Curling Club
R003152861
JULY 15, 2016
MIKE CARTER Photo
PIPELINE NEWS NORTH •
3
LAND ENVIRONMENTAL ARCHAEOLOGY UAV/REMOTE SENSING GIS
HIGHWAY 2 UPGRADES NEARLY DONE Three years and $21.4 million later, the Highway 2 four-laning project in Dawson Creek will be complete at the end of this month, according to the Ministry of Transportation and Infrastructure. The total budget for the project came in at $36.5 million. Only one contract was awarded for the work and it went to Dawson Creek’s Brocor Construction, who began the project in June 2013. Four million was spent on the highway this year including paving, concrete barrier placement, gravel shouldering and signage. The project is part of overall highway improvements the ministry had planned from the Alberta border to Fort St. John. Other projects within the corridor included a 2.8 kilometre southbound passing land at Blockline Road in Tomslake, with intersection improvements at Highway 2, Blockline, Arndt and Wade Roads.
SINCE 1980 www.roynorthern.com Terrace Fairview Fort St John Calgary Phone: 1.888.835.6682
Intersection improvements were also made at Highway 2 and Tremblay Trail and a 2 kilometre, northbound passing lane at Mile 10 north of Dawson Creek. These projects were all completed in 2013.
Birchcliff calls $625M acquisition of Encana’s Gordondale assets ‘transformational’ In what it deems a “transformational” move, Birchcliff Energy Ltd. announced yesterday thatit will acquire Alberta Montney assets in its core Pouce Coupe/Gordondale area from Encana Corporation for $625 million in cash. “The acquisition further strengthens Birchcliff’s business model and creates one of the largest concentrations of high quality, low-cost production in the area,” the company said in a press release. “The assets have an inventory of oil and liquids weighted drilling locations that complement Birchcliff’s existing Montney/Doig inventory and will provide Birchcliff with an opportunity to drill oil wells and liquid- rich Montney/Doig natural gas wells in a similar area to where Birchcliff’s management and technical team have a proven track record to efficiently integrate, optimize and grow the assets being acquired.” The acquisition will be funded by the aggregate net proceeds of concurrently announced financings and the company’s credit facilities. Through the transaction, the company will take ownership of a contiguous land position of 91,833 (54,206 net) acres of lands of which 46,233 (40,920
net) acres (64 net sections) are core Montney lands with a high average working interest of 89 per cent. The assets include 74,873 (42,862 net) acres of developed lands and 16,960 (11,344 net) acres of undeveloped lands, with an average working interest of 57 per cent in developed lands and 67 per cent in undeveloped lands. Darrell Bishop, an analyst with Haywood Securities Inc., said the transaction is an “exceptional deal” for Birchcliff. “They are acquiring an excellent complementary Montney asset base, within the company’s existing core area, at very attractive metrics. We expect the market to respond favourably to the news,” he said. “From a Gordondale perspective, it was an undercapitalized asset by Encana and now within the context of a more synergistic portfolio between Birchcliff, it is a very focused consolidated asset that they can direct the cash flows from the combined Gordondale/Pouce Coupe area and really drive some synergies to develop this asset in a better way.” Birchcliff noted that drilling buffers on lands
bordering its lands will be eliminated, allowing for optimal well development planning and reservoir drainage from the lands. In light of the acquisition, the company said 2016 capital spending is expected to increase 35 per cent to $140 million from previous guidance of $103.5 million. Encana said no drilling or completions capital has been spent or was planned for the area in 2016. Following the sale, Encana’s Montney play will include over 9,000 potential drilling locations with two-thirds of those wells located in the condensate-rich part of the play. “We are tightening our portfolio and sharpening our focus in the Montney where we expect to grow liquids production to 50,000 barrels per day by the end of 2018,” Doug Suttles, Encana president and chief executive officer, said in a statement. “This transaction further strengthens our balance sheet and gives us greater financial flexibility as we look to the future.” —Daily Oil Bulletin
Published monthly by Glacier Ventures International Corp. Pipeline News North is politically independent and a member of the B.C. Press Council. The Pipeline News North retains sole copyright of advertising, news stories and photography produced by staff. Reproduction is prohibited without written consent of the editor.
4
• PIPELINE NEWS NORTH
JULY 15, 2016
PIPELINES Northern Gateway ‘fully committed’ despite court’s ruling Plans for the Northern Gateway pipeline have been dealt several blows in the last few weeks, but officials say they remain “fully committed” to building the project. The Federal Court of Appeal ruled June 23 that the federal government failed to properly consult First Nations impacted by the pipeline before approving the $7.9-billion project--quashing the certificates of public convenience and necessity for the project and sending the matter back to the federal government for redetermination. The judgment says the government neglected to discuss subjects of critical importance to First Nations by ignoring many of the project’s impacts and offering only a “brief, hurried and inadequate” opportunity for consultation. “The inadequacies—more than just a handful and more than mere imperfections—left entire subjects of central interest to the affected First Nations, sometimes subjects affecting their subsistence and well-being, entirely ignored,” stated the judgment. “It would have taken Canada little time and little organizational effort to engage in meaningful dialogue on these and other subjects of prime importance to Aboriginal peoples. But this did not happen.” The pipeline, planned to carry more than 500,000 barrels of Alberta crude oil to the B.C. coast per day for export, was approved in 2014 with 209 conditions. The Joint Review Panel charged with examining the project concluded the pipeline was in the best interest of Canadians, weighing information it received during 180 days of public hearings in 21 communities throughout Alberta and B.C. But the court’s ruling outlined Canada failed during Phase 4 of the review process – the phase which followed the release of a report of the Joint Review Panel. The Crown was to then engage in consultation concerning that report but failed to “engage, dialogue and grapple” with First Nations concerns. “We conclude that Canada offered only a brief, hurried and inadequate opportunity in Phase IV – a critical part of Canada’s consultation framework to exchange and discuss information and to dialogue,” the court wrote in its ruling.
John Carruthers, president, Northern Gateway
John Carruthers, president for Northern Gateway, said the court “addressed important concerns” about the project. “Though the court found that the JRP recommendation was acceptable and defensible on the facts and the law and is reasonable they concluded that further Crown consultation is required,” he said. “While the matter is remitted to the federal government for their redetermination, Northern Gateway will consult with the Aboriginal Equity Partners and our commercial project proponents to determine our next steps.” He added: “However, the Aboriginal Equity Partners and our commercial project proponents are fully committed to building this critical Canadian infrastructure project while at the same time protecting the environment and the traditional way of life of First Nations and Métis peoples and communities along the project route.” NEB suspends review of sunset clauses The Joint Review Panel recommended approval of the project on Dec. 19, 2013, and the former Conservative government of Prime Minister Stephen Harper approved the project on June 17, 2014. Northern Gateway had until the end of 2016 to begin building the pipeline, but applied to the National Energy Board for a threeyear extension in May. The request was supported by several local governments in Northeast B.C., including the City of Dawson Creek and the Peace River Regional District.
“The Aboriginal Equity Partners and our commercial project proponents are fully committed to building this critical Canadian infrastructure project while at the same time protecting the environment and the traditional way of life of First Nations and Métis peoples and communities along the project route.” But the National Energy Board said it is suspending its review of the request, and will also suspend its review of any filings from Northern Gateway regarding compliance with the 209 conditions attached to the project. The NEB said it made the decisions in response to the court’s decision. ‘Mortally wounded, maybe’ Kathryn Harrison, a political science professor at the University of British Columbia, believes the ruling means the Enbridge pipeline is now in serious jeopardy. “It’s pretty close to a death blow,” said Harrison. “Mortally wounded maybe.” When the project was approved, now-Prime Minister Justin Trudeau promised to reverse the decision if elected, saying the project threatened B.C.’s coastal economy. During his election campaign, Trudeau promised a moratorium on crude oil tankers on B.C.’s north coast. But in recent months, Transportation Minister Marc Garneau said that isn’t necessarily a death knell for Northern Gateway. Trudeau, however, has also reiterated his opposition to the route of the pipeline in the wake of the court’s reversal. Implications of the decision Industry observers are asking what impact it might have on other
major Canadian pipeline projects, such as the Trans Mountain expansion (TMX) project proposed by Kinder Morgan Canada Inc. Not unlike Gateway, TMX weathered a review by the NEB, which in May of this year also recommended conditional approval by the federal cabinet. The cabinet has until midDecember of this year to decide on the project. Kinder Morgan executives have offered little in the way of comment on the impact of the appeal court decision on Trans Mountain. “We are aware of the … decision … and will be reviewing it in detail,” Ian Anderson, company president, said in a prepared statement. He said Trans Mountain has long-term relationships with Aboriginal communities along its pipeline corridor and is committed to creating new opportunities and shared prosperity. “The federal government is currently consulting about our project directly with Indigenous peoples as well as through its ministerial panel and we anticipate those processes, along with what we’ve already undergone, will ensure the interests and needs of Indigenous peoples are taken into account when the federal government makes the final decision on the (TMX) project.” —Staff, with files from Daily Oil Bulletin, Business in Vancouver, Canadian Press
JULY 15, 2016
PIPELINE NEWS NORTH •
5
OUTLOOK
Uncertain business environment unhealthy for Canada’s future
C
anada’s business climate is becoming increasingly uncertain and we see this as a problem. The most recent illustration popped up right in our backyard. The Federal Court of Appeal last month overturned the federal government’s approval of the Enbridge Northern Gateway pipeline project. The Court found that the federal government had not adequately consulted with First Nations groups that would be affected by the pipeline. “It would have taken Canada little time and little organizational effort to engage in meaningful dialogue on these and other subjects of prime importance to Aboriginal Peoples. But this did not happen,”
the ruling states. Based on previous approval from the federal government, other groups involved had, in good faith, been investing time, energy and money, upholding their commitments and doing their part. Notably, the chief proponent, Enbridge, the company behind the Northern Gateway project, went through extensive consultations with aboriginal groups. The federal government obviously chose not to. This government may elect to blame this failing on its predecessors, the Harper Conservatives, but the uncertainty surrounding another major business venture, the Pacific NorthWest LNG project, falls squarely on the current Liberal government.
In March, the Liberals stated they’d decided to tighten up their environmental review process and wanted more time to review the effects of the LNG terminal, planned for Lelu Island off Prince Rupert. Local operator, Progress Energy, has already cut back its drilling and completions activities as it waits for a decision. In late June, the federal government finally agreed to start the clock on another 90-day review period from the date of the latest submission from Pacific NorthWest LNG. At the end of this latest review, we all hope finally to hear the fate of this project, which is critical to Northern B.C. Prudent investors look for certainty and stability when they shop their dollars around. If Can-
Tim Maryon OIL MATTERS
ada wants to attract the investment it needs to sustain a robust economy, it must present a vastly different picture from the one it’s displaying now. If Canada becomes known for a business environment subject to continuing and extended government approval delays, coursechanges, and not keeping up its end of the bargain, potential investors will take their business elsewhere hurting everyone in Canada. I call on the federal Liberal government to step up and fix this now. Tim Maryon is vice-president of sales and business development at Peace Country Petroleum in Fort St. John.
Enbridge looking to rent Dawson Creek office space after gas plant acquisition JONNY WAKEFIELD reporter@dcdn.ca
BRONWYN SCOTT PHOTO
FSJ FOR LNG RETURNS WITH OPTIMISM FSJ for LNG founder Alan Yu returned from his LNG or BUST mission to Ottawa with optimism on Tuesday, June 28. Yu travelled the country to inform the federal government of the precarious economic situation in the region and to encourage the government to get liquefied natural gas to market. With the clock ticking toward a federal decision on Pacific NorthWest LNG this September, Yu says he’s optimistic his presence in Ottawa will help sway officials. “I know for a fact that we did hit the daily summary news for Parliament ... I feel that they are aware of the economic need to approve the (the project),” Yu said. “We are very happy, and I am optimistic that the federal government will approve Pacific Northwest LNG. Everyone in Ottawa is saying that it will be up to science, which is good. I just hope it is the right science that also involves economics.”
Enbridge is considering opening an office in Dawson Creek after acquiring a pair of natural gas plants in the region earlier this year. The company bought the Tupper Main and Tupper West gas processing facilities southwest of Dawson Creek from Murphy Oil Corp. in January. The plants, located in the heart of the Montney shale gas field, treat raw natural gas extracted in the area. The $538 million deal included 53 kilometres of high-pressure gas pipelines. Enbridge took over the operations April 1. Fred Schuetz, Enbridge’s senior manager of Canadian midstream assets, told council “our plan is to be here for the long-term.” Troy Rider, another Enbridge official, told the Dawson Creek Mirror his
company was considering leasing office space in town. Murphy Oil currently has an office in Dawson Creek. “We’re looking at our needs for an administration office here in town,” Rider said. “We haven’t made the final decision on it yet, but we’re certainly evaluating that right now. We’re looking at leasing opportunities for sure.” In a presentation to Dawson Creek City Council June 27, Enbridge officials said the plants employ 42 people fulltime, many of them former Murphy Oil staff. The company planned to hire up to six additional full-time staff. According to a release when Enbridge bought the plants, Tupper Main and Tupper West are adjacent to the company’s existing Sexsmith gathering system, as well as the Alliance Pipeline, which carries natural gas from Northeast B.C. to Chicago.
6
• PIPELINE NEWS NORTH
JULY 15, 2016
fb.com/pipelinenewsnorth
PNN MISSION STATEMENT Our mission at Pipeline News North is to provide the most current, interesting, and relevant news and information about the oil and gas industry in Northeast B.C. and Northwest Alberta. Have an interesting story to share or a news lead? Email us at editor@ahnfsj.ca.
WILLIAM JULIAN REGIONAL MANAGER 250-785-5631 wjulian@ pipelinenewsnorth.ca
ROB BROWN PHOTO
Roy Whitford of Armada Security. When it comes to security, the job is sensitive in nature—nothing could be happening and then the next second everything is going down.
Site security more than being a night watchman
MATT PREPROST MANAGING EDITOR 250-785-5631 C: 250-271-0724 editor@ ahnfsj.ca
ROB BROWN editor@dcdn.ca
RYAN WALLACE ADVERTISING MANAGER 250-785-5631 C: 250-261-1143 rwallace@ ahnfsj.ca
ROB MONAHAN SALES ASSOCIATE 250-785-5631 C: 250-794-2683 rmonahan@ ahnfsj.ca
CONTACT US Phone (250) 785-5631 Fax (250) 785-3522
www.pipelinenewsnorth.ca BILLING: Lisa Smith - Accounting Manager 250-562-2441 ext 352 Fax:250-960-2762 accounting@ pipelinenewsnorth.ca
If you look close enough, you may see Roy Whitford spending his days and nights with his eyes peeled on both people of the region and their property. But don’t worry, the owner of Armada Security is making sure things are locked up tight. Working the dead of night, sometimes the roads are quiet. Other times it can be more exciting. Specializing in oilfield site as well as oil and gas security, Whitford has more than five years experience in the field. He said security comes down to a similar word. “It is all about safety. Whether we are talking land security or oil and gas. There are safety drills and other formal operating procedures to be performed as well.” Whitford, based out of Dawson Creek, says the job is more exciting than sitting through the night on a stakeout in his vehicle.
“We could be working a site that has more than 500 people coming on and off it on any given day. Employers need to know who is coming onto and leaving the sites,” he says. “The responsibility of maintaining and even creating a safe environment is part of the job.” Sometimes this includes monitoring or surveillance. When it comes to security, the job is sensitive in nature where nothing could be happening and then the next second everything is going down. It is not just being the night watchman, he says. “Helping people is something we do even as children. Health and safety is so key.” Currently with a contract for substation work near Tumbler Ridge, Whitford would like to employ more First Nations representatives in security. “It is rare to see them in security and also rare in the oil and gas sector,” he said. “I’d like to change that. This is a good industry to be in and great career to have.”
Thieves strike CNRL work sites, RCMP on the hunt Dawson Creek RCMP are investigating thefts from Canadian Natural Resources Ltd. (CNRL) properties in the South Peace area. The thefts happened on July 4. Police say the thieves targeted several of the company’s work sites, taking an undisclosed number of deep cycle solar batteries. RCMP have received several reports of solar panels and batteries being stolen from oil and gas sites this year, as well as vandalism on a gas site near Fort St. John. Surveillance video captured a vehicle RCMP believe was involved in the thefts—a silver/grey 20132016 Dodge Ram 3500 Turbo.
Police say there is a large dent on the driver’s side near the gas cap and a small dent over the rear passenger’s side wheel well. The truck also had a thin red tidy tank in the box. Vehicle registration numbers were seen printed on the side of the truck under a set of after-market dual antennas. “The suspects may have known there was a surveillance system at the sites as they took time to cover the front and back licence plates,” Cpl. Dave Tyreman said in a release. Police are asking anyone who recognizes this vehicle to contact the Dawson Creek RCMP at 250784-3700, or if you wish to remain anonymous, call Crime Stoppers at 1-800-222-8477 (TIPS).
JULY 15, 2016
PIPELINE NEWS NORTH •
7
Wiebo Ludwig’s son lends support to Encana protest MIKE CARTER dcreporter@dcdn.ca
The son of suspected 2008 Encana bomber Wiebo Ludwig has thrown his support behind residents in Tomslake protesting a natural gas facility planned near Blockline Road south of Dawson Creek. Josh Ludwig joined a protest July 7 near the area off of Highway 2 where Encana wants to build the South Central Liquids hub on a 19 hectare plot of land. The plant will take in natural gas from existing pipelines in the area and extract liquids such as propane and butane. About 25 residents live within a two kilometre radius of the proposed facility. They fear their slice of rural living will become an industrial park and are concerned about emissions from the plant. “I remember how badly we wanted some support (when we opposed Encana projects) and it was often hard to come by,” Josh said. “So many people (work) for the oil and gas industry and don’t want to compromise their salaries. “The scripture says do unto others
as you’d have them do unto you—and I thought these people could use our support,” he added. In recent years, Josh has vowed to continue the fight against oil and gas development started by his late father—a preacher and leader of the Trickle Creek Christian community near Hythe, and anti-oil and gas activist who was convicted in 2000 of bombing a Suncor site near his home. Ludwig has always maintained his innocence. Before his death in April 2012, Wiebo Ludwig was the subject of another RCMP investigation after Encana wellheads and pipelines in the Tomslake area were the targets of several bombings between October 2008 and July 2009. Wiebo was arrested at a Grande Prairie hotel in 2010 after forensic experts found his DNA on two letters sent to the Dawson Creek Daily News that threatened Encana operations. He was held for 24 hours before being released without charge. The RCMP had no comment on MIKE CARTER PHOTO Ludwig’s appearance at the protest, Wiebo Ludwig’s son-in-law Sebastian Mair, pictured, joined other members from saying it respects the right to democratic the Trickle Creek farm, including Ludwig’s son Josh, at a July 7 protest against a and lawful protest. proposed Encana natural gas plant in Tomslake.
We Rent, Sell & Lease...
R0011162706
ALL MAKES AND MODELS! • • • •
Flat decks Cube vans Pick-ups SUVs
• 4x4s • 7 & 15-passenger vans • Cargo vans
On-line inventory at www.drivingforce.ca Daily, weekly and monthly rates
Dealer #30221
Locations coast-to-coast-to-coast
6674 Airport Road, Fort St. John 9919 - Terminal Road, Fort St. John Toll Free:
1•888•464•2758
11507 - 100 Street, Grande Prairie Toll Free:
1•877•959•8574
8
• PIPELINE NEWS NORTH
JULY 15, 2016
Follow the Leader.
This is the game we like to call “Follow the Leader”. Ram 1500 is powerful enough to tow 9,200 lbs and delivers up to 29 miles per gallon highway which is Best-in-Class. With more people driving Ram Trucks more than ever before, we’ve built quite the following.
2015 starting at RAM $ 1500
21,695
See Dealer for complete details.
FORT CITY
www.fortcitychrysler.ca
250-787-5220 1-877-787-5220 8424 Alaska Road Fort St John
R001697748
Guts. Glory. Ram. Progress Energy supports extension of North Montney sunset clause Earlier this year, NOVA Gas Transmission Ltd. applied to the National Energy Board (NEB) for a one-year extension to the sunset clause for its North Montney project, citing continuing uncertainty about the timing of Progress Energy Canada Ltd.’s Pacific NorthWest LNG project. In a letter to the NEB dated July 5, Progress noted that unanticipated regulatory delay has been experienced in obtaining approvals associated with the downstream Pacific NorthWest LNG facilities. This delay has affected the ability to make a final investment decision (FID). Achieving FID was incorporated into the board’s approval conditions for the North Montney project. “It now appears that this regulatory delay will continue through the summer and into the fall,” the company stated, adding that “Progress Energy urges the board to grant the extension as requested by NGTL.” “The requested extension is warranted and is consistent with the past practice of the board to extend its approvals in order to accommodate delays associated with obtaining approvals from other regulatory authorities,” the letter noted. “Progress Energy further notes that significant costs have been incurred in advancing the North Montney project. “As the board is aware from evidence submitted in support of the North Montney project, there is a large gas supply that requires the construction of the North Montney facilities. The requested extension is critical to preserving the significant investment made to date to accommodate the development of this North Montney gas supply.” —Daily Oil Bulletin
JULY 15, 2016
PIPELINE NEWS NORTH •
LNG
9
Wait for Pacific NorthWest LNG FID could drag into June 2017 JONNY WAKEFIELD reporter@dcdn.ca
SUPPLIED PHOTO
The suspension bridge which would carry processed LNG from the Pacific NorthWest LNG facility to a marine berth off Lelu Island. A decision to invest in the project likely won’t come until next June, the head of Energy Services BC says.
said. “We’re a long ways out yet.” A spokesperson with Pacific NorthWest LNG would not confirm when a final investment decision would take place. The company gave conditional approval to the project in July 2015. However, the Canadian Environmental Assessment Agency has since delayed the project, saying it needs more time to review its impacts on carbon emissions and the Skeena River salmon fishery.
Squamish First Nation approves pipeline for Woodfibre LNG NELSON BENNETT Business in Vancouver
Squamish First Nations chiefs and councilors have approved a new pipeline and compressor station that will provide natural gas to the Woodfibre LNG plant in Squamish. The Squamish Nation last year approved the Woodfibre liquefied natural gas plant itself, which also received federal approval in March. The one final piece of the puzzle was the pipeline extension and compressor station, which will be built by FortisBC. The Squamish Nation conducted its own environmental assessment, and issued 25 conditions for approving the LNG plant and the FortisBC pipeline extension. Nine of those conditions related to the FortisBC component of the project. One of the concerns addressed in the Squamish environmental assessment agreement was the location of a compressor station. Another was the routing of a new pipeline extension. FortisBC agreed to relocate the
compressor station and to take a different route on the pipeline extension to avoid the Skwelwil’em wildlife management area. Squamish Chief Ian Campbell said that the environmental assessment agreement undertaken by the Squamish First Nation – agreed to by both FortisBC and Pacific Oil and Gas (the company behind the LNG project) – is a legally binding agreement that gives the Squamish Nation legal recourse, should the conditions be breached. “Under the environmental assessment agreement, we become watchdog over our territory — our land and aquatic habitats,” Campbell said in a memorandum to the greater Squamish membership. “Squamish Nation has approval authority over aspects of the project that are much stronger than allowing the provincial government to monitor and enforce its conditions and plans.” One of the 25 conditions that has been agreed to but not yet negotiated is an economic benefits agreement with both Woodfibre LNG and FortisBC.
The facility and upstream assets total nearly $36 billion dollars, making Pacific NorthWest one of the largest foreign direct investments in Canadian history. A June 2017 final investment decision would be politically difficult for the governing B.C. Liberal party, which is facing an election campaign in May 2017. Developing a liquefied natural gas (LNG) industry was a major plank of the B.C. Liberal platform during the 2013 election.
Your Peace Region
Dealer
You want
competitive genuine Perkins Parts to keep your engine running
efficiently and effectively...
... we are giving you just that WE KEEP INDUSTRY RUNNING!!
R0011233523
The head of an advocacy group for B.C.’s oil and gas service sector says it could be almost another year before Petronas makes an investment decision on its Pacific NorthWest LNG facility. At the annual general meeting of Energy Services BC late last month, President Dave Turchanski told members that, according to a source within the company, the Malaysian oil and gas giant likely won’t make a final investment decision on Pacific NorthWest until June 2017. The facility, which would be built on Lelu Island near Prince Rupert, would process gas from Northeast B.C. for export to Asia. It is undergoing a review by the Canadian Environmental Assessment Agency, with a decision expected by mid-September. “At the earliest is June of 2017, Petronas might come out with a final investment decision (FID),” Turchanski said in an interview. “If they come out with an FID, that doesn’t mean they’re going to go to work right away. They might delay it another year, they might delay it two years, they might delay it five years.” “We’re looking at (the second quarter) of 2018 before things really get going again,” Turchanski
11115 - 100 Avenue Grande Prairie, AB T8V 3J9 Phone: 780-532-5900 Fax: 780-532-5904
1.888.532.5900 | WWW.GPRINDUSTRIES.COM
10
• PIPELINE NEWS NORTH
JULY 15, 2016
LNG
FID for LNG Canada delayed
Site work continues; CEO reiterates project is not cancelled MIKE CARTER dcreporter@dcdn.ca
BUSINESS IN VANCOUVER PHOTO
In October 2015, LNG Canada CEO Andy Calitz told the Vancouver Board of Trade that Shell and its partners planned to make a final investment decision in 2016.
A final investment decision has been pushed back for a Shell-led liquefied natural gas (LNG) export facility planned for the B.C. coast near Kitimat. LNG Canada officials announced the news July 11, but weren’t saying when the decision will be revisited. “Given the challenges of the global energy market, our joint venture participants …have decided to delay a final investment decision on LNG Canada,” LNG Canada CEO Andy Calitz said in a teleconference call.
The company will continue site preparation work for the LNG site in Kitimat, Caltiz added. “The project in Canada is FID ready and has not been cancelled,” he said. An announcement on whether the project would receive funding was originally planned for the end of 2016. The partners—who include PetroChina, Mitsubishi Corporation and Kogas, the South Korean national gas company—said it would need more time to make the choice on whether it would fund the estimated $40 billion project. The project would process natural gas from Encana’s Cutbank Ridge Partnership in the South Peace for export to Asia. It would employ 7,500 people during peak construction. In January, the proposed plant was the first LNG project in the province to receive permits from the B.C. Oil and Gas Commission. “LNG Canada remains a promising opportunity,” the partners said in a release, noting that the company has “important commercial and engineering contracts in place to design and build the project.” Calitz also gave a nod to the province and First Nations. “Our project has benefitted from the overwhelming support of the BC Government, First Nations–in particular the Haisla, and the Kitimat community,” LNG Canada he said. “We could not have advanced the project thus far without it. I can’t say enough about how valuable this support has been and how important it will be as we look at a range of options to move the project forward towards a positive FID by the Joint Venture participants.” Kathleen Connolly, executive director of the Dawson Creek & District Chamber of Commerce, said the news didn’t come completely as a surprise to her. But, “it’s very disappointing that we’re seeing another project go into a pause mode,” she said. “It’s very concerning in the bigger picture that we see these projects face such a tough uphill battle and then when they do get approval, the market has changed.” Connolly blamed Canada’s lengthy regulatory process for the province “losing its spot in line” for LNG exports. ”Everyone in our region understands the importance of the energy sector,” Dawson Creek Mayor Dale Bumstead said. “It’s so important to the development of the area around Dawson Creek so to hear (this project) has been delayed is just disappointing to me.” Bumstead said it was hard to predict what the impact of this decision would be on the local community, but feared that it could mean less investment in the area. “It’s a real biggie for (the area)—the drilling and the exploration and all that stuff drives the investment in the community, businesses and people coming here for opportunities to work. So, (losing that) is the worry.” —with files from Business in Vancouver
JULY 15, 2016
PIPELINE NEWS NORTH •
OILMEN’S
11
Dudley Wagner recognized at 33rd annual Oilmen’s Trapshoot
RON CARTIER PHOTOS
The Fort St. John Petroleum Association held its 33rd annual Oilmen’s Trapshoot at the North Peace Rod and Gun Club July 8 and 9. Dudley Wagner was handed the Ivor Miller award for his commitment to the association. Wagner first came to the Peace Country in 1956, and moved up in January 1957. He opened up Fort St. John Aviation where he taught locals how to fly and delivered mail to communities around the area. He was also involved in a number of other local businesses throughout the years. Association President Sean Thomas says Wagner was a member of the club before it was officially the petroleum association. “He was a member in 1958 and was one of the original members to sign the charter,” Thomas says. “He was the first secretary of the club, was part of the first trapshoot and had shot in the first 27. He is the only original member that still attends the monthly meetings on a regular basis, and always says a heartfelt and oilpatch-oriented grace for all of the guys before every meal.” High Teams 1st Place: Twilight Pressure Controls, Score 413 2nd Place: Rapid Wireline Services, Score 397 High Overall for the shoot 1st Place: Mike Nielsen, Score 91 2nd Place: Bruce Bell, Score 89 High Senior 1st Place: Dave Wallace, Score 89 The Petroleum Association’s next event is the Family Campout Weekend set for Aug. 12 to 14 at Peace Island Park. The club hopes to fill all 120 spots, but is only about three-quarters full so far. Visit fsjpetroleumassociation.com for more information. Attendees must be a current member with dues paid. —Matt Preprost
12
• PIPELINE NEWS NORTH
JULY 15, 2016
FIRST NATIONS
No more drilling in Peace-Moberly Tract as part of reconciliation deal Crew Energy issued new tenures
Late last year, Saulteau Chief Nathan Parenteau said that oil and gas, forestry, and hydroelectric development in the nation’s traditional territory was opening the door for increased wolf predation.
JONNY WAKEFIELD reporter@dcdn.ca
B.C. will no longer sell the right to drill for gas in a swatch of territory south of the Peace River, part of an agreement with Saulteau First Nations aimed at environmental protection. In an order signed March 8, Minister of Natural Gas Development Rich Coleman removed natural gas and oil dispositions from the Peace-Moberly Tract, a 107,000-hectare area south of the Peace River of cultural importance to the Saulteau and other Treaty 8 First Nations. The land has been heavily impacted by industrial development, including construction of the Site C dam. B.C. agreed to quit auctioning oil and gas parcels in the tract as part of its New Relationship agreement with the Saulteau, signed late last year.
SUPPLIED PHOTO
Crew Energy, the oil and gas operator in the area, was issued new tenures further east, according to ministry spokesperson Lindsay Byers. “The Peace-Moberly Tract was recognized as a significant area for
the Saulteau First Nations and as part of the New Relationship and Reconciliation Agreement,” Byers wrote in an email. “As part of the agreement, tenure in the PeaceMoberly Tract was relinquished last year.”
While the company owned tenures in the area, there were no wells or gas production going on in the tract. Late last year, Saulteau Chief Nathan Parenteau told the Alaska Highway News that oil and gas, forestry, and hydroelectric development in the nation’s traditional territory was opening the door for increased wolf predation. Roads, seismic lines, and other development allows wolves to move easier through the backcountry. On July 1, the province made changes to the moose hunt in the area aimed at taking pressure off ungulate populations.
Horizontal Directional Drilling and Punch Boring American Augers DD110
Horizontal Punch Boring
American Augers DD6
Tridem Hydrovacs
- Wire-line & Mud Motor capabilities with 14 000 lbs torque
- A powerful rig with a smaller footprint
- A fluid-less alternative for environmentally sensitive crossings
- Day lighting hotlines & drilling fluid removal
Call or Email today for a free estimate
1-250-329-4324 or bud@fullborehdd.ca | www.fullborehdd.ca
JULY 15, 2016
PIPELINE NEWS NORTH •
ECONOMY
13
Pipeliner’s rant against lifted truck schadenfreude strikes nerve JONNY WAKEFIELD reporter@dcdn.ca
Marc Morrissette works in the oilpatch, drives a big truck and enjoys mixing it up with the anti-pipeline crowd on social media. So in some ways, the rant was inevitable. “I’ve had a lot of (rants),” said Morrissette, a pipeline boss and father of three who lives just outside Fort St. John. “My wife said ‘don’t get so fired up, just clean up your vocabulary and make it public and see what happens.’” Morrissette’s Facebook post, which went up earlier this summer, tackled the “douchebags in lifted trucks stereotype” of the Canadian oilpatch. “That was the first one I made public.” As of July 13, it had been shared 6,648 times by oilpatch workers weary of lectures on their choice of vehicle. Morrissette, who drives a F-350 diesel (with no lift) to get to work over rutted oilpatch roads, said he was sick of hearing about how Western Canadians are suffering due to their foolish choice of vehicle. This Hour Has 22 Minutes, for example, has riffed on down on their luck oilpatch workers in at least two segments this year. One features a greasy Fort McMurray correspondent lamenting the economic downturn (“I even had to sell the smaller truck that
SUPPLIED PHOTO
Marc Morrissette’s Facebook rant against people lecturing oilpatch workers on their lifted trucks was shared nearly 7,000 times.
sits in the bed of my bigger truck in case my bigger truck breaks down, bud!”) Another featured two Maritimers forced to move home to their mother’s house (“He had to sell his truck. Now he’s only got two trucks left!”) It’s a sentiment Morrissette says has been thrown in his face during the latest debates over Pacific NorthWest LNG: hard times? Shouldn’t have bought that big truck. “(It’s like) when Newfoundland lost its fisheries, if the West made fun of them and said get rid of those big fancy boats,” he said. “It’s the same
reason people like to drive by an accident to see the carnage. It’s the wrong way to be.” He said he hoped to convey that for many people working in the oilpatch, a big truck is a necessity. While some young “meatheads” might blow their money on bells and whistles, most just need to get to work. “Pipeliners work on the road, so 90 per cent of them own travel trailers,” he said. “You’ve got to be able to pull it. You need a truck to get your trailer to where you’re going to be living for the summer or the next three months or whatever. Also, as soon as you get
off the highway, you’re on dirt. “You’re pulling trailers, you’re hauling tools. It’s very important to be driving a truck. You can’t drive a car out there,” he said. Morrissette spent years working north of Fort St. John when times where good, saying he put in “hundreds of kilometres of pipe up there.” He said he moved his family to Fort St. John full time when the NDP were elected in Alberta. He described the new reality in the oilpatch as “brutal.” Companies looking for work “are bidding so low just to have cash flow, and they’re driving rates down for guys who haven’t worked in awhile… let’s say you made $30 an hour, you’re going back to work for $17.” Morrissette said he wasn’t surprised by the reaction he got to his rant, saying many in Western Canada feel they’re being kicked while they’re down. While he drives a less ostentatious truck now, he doesn’t begrudge others their souped up ride. “When you get a truck, you love it and you want to dress it up,” he said. “You put some rims on it, you put on some tires. It’s part of life that any young man in the North or in the West or anywhere goes through.” Lifted trucks have become “part of the stigma that makes people against pipelines,” he said. “Yeah, (it’s) overkill, maybe, but according to who?”
At 69 wells, Progress Energy the most active driller in the NEBC Drilling activity in British Columbia over the last year has been focused on the Montney natural gas reserves, with Progress Energy leading the way in wells drilled, according to BOE Report. BOE reports that a total of 256 wells were drilled in the province since June 2015, with 226 in the Montney. Of those 226, Progress
has drilled 68 wells since June 2015, all in the Montney. Tourmaline Oil Corp. is the next most active driller in B.C., with 21 wells drilled, all in the Montney. Rounding out the top five are ARC Resources (17 wells), Shell Canada (15 wells), and Crew Energy and Encana with 12 wells each.
According to BOE, Progress produces more than 750 million cubic feet equivalent of natural gas in Northeast B.C. and Northwest Alberta. The company’s production serves Canadian markets while it expands production capacity on its Montney land holdings in preparation for the possible opening of new LNG markets in Asia. R001697755
14
• PIPELINE NEWS NORTH
JULY 15, 2016
LAND SALES
Scott Land the top Crown buyer at the six-month land sale mark Saskatchewan, Manitoba spending down
Crown land spending in the first half of 2016 in Canada was $80.18 million, the lowest for a sixmonth period for at least 21 years. Industry has acquired 492,844 hectares at an average price of $162.69 so far this year. At the six-month mark of 2015, government bonus revenue was $205.81 million, which was spent to pick up 1.09 million hectares at an average price of $188.25. The second-lowest bonus total for a six-month period from 1995-2016 was in 2015. By contrast, the highest collected during a six-month period was in 2006, when industry shelled out $2.66 billion during a rush to tie up oilsands acreage. Alberta While Crown spending has been very weak so far in 2016, Alberta has carried the lion’s share. Year-todate, the province has attracted $63.77 million in bonus revenue on 428,269 hectares at an average price of $148.91. To the same point of 2015, industry had paid $165 million for 1.01 million hectares at an average price of $164.15. Alberta’s July 6 land sale produced $6.28 million. Industry purchased 55,872 hectares at an average price of $112.44. B.C. land sales continue sluggish pace Between 1978 to 2015, the lowest bonus haul in a single year for B.C. was $16.72 million in 1982, and the second lowest was in 2015 at $18.36 million.
RICHARD MACEDO PHOTO
After six sales so far in 2016, the province has collected $4.22 million, with six sales left this year to avoid the low watermark. So far in 2016, the province has sold 27,377 hectares at an average price of $154.20. To the same point of 2015, B.C. had collected $6.77 million on 24,203 hectares at an average of $279.68. The heyday for land buying in Northeast B.C. occurred in the late 2000s. The peak of this land rush came in 2008, when industry paid $2.66 billion for 756,752 hectares. In 2007, the government collected $1.05 billion in bonus bids. B.C. pulled in $510,660 at its July 13 land sale. Industry picked up 14 drilling licences covering 4,249 hectares, at an average price of $115.
Over the first six months of the year, Saskatchewan Crown land spending is down at $12.04 million. Industry has acquired 35,784 hectares at an average price of $336.59. To the same point of 2015, industry had spent $32.65 million tying up 62,194 hectares at an average price of $525. Manitoba spending, meanwhile, dove to $141,859 on 1,413.62 hectares at an average price of $100.35. Over the same timeframe of 2015, the province had collected $1.33 million on 1,360 hectares at an average of $979.50. Scott Land top Crown buyer in Canada Scott Land & Lease Ltd. was the top buyer of Crown land in the first half of 2016, spending $34.55 million, with $29.49 million for acreage in Alberta. The broker acquired 154,410 hectares on behalf of its clients for the six-month period at an average price of $223.77. Scott Land picked up 126,803 hectares in Alberta from January-June 2016. The top bonus for a single parcel occurred at the June 22, 2016, land sale, where Plunkett Resources Ltd. acquired a parcel for $3.48 million in the Athabasca oilsands area. Several other multimillion-dollar parcels that were sold in the Athabasca oilsands area at the auction, and were also acquired by Plunkett. —Daily Oil Bulletin
2016 SCHEDULE PUBLICATION DATE
BOOKING DEADLINE
AD COPY DEADLINE
15 JAN 2016
13 JAN 2016
14 JAN 2016
12 FEB 2016
10 FEB 2016
11 FEB 2016
11 MAR 2016
9 MAR 2016
10 MAR 2016
15 APR 2016
13 APR 2016
14 APR 2016
13 MAY 2016
11 MAY 2016
12 MAY 2016
17 JUNE 2016
15 JUNE 2016
16 JUNE 2016
15 JULY 2016
13 JULY 2016
14 JULY 2016
19 AUG 2016
17 AUG 2016
18 AUG 2016
16 SEP 2016
14 SEP 2016
15 SEP 2016
14 OCT 2016
12 OCT 2016
13 OCT 2016
18 NOV 2016
16 NOV 2016
17 NOV 2016
16 DEC 2016
14 DEC 2016
14 DEC 2016
R0011177933
JULY 15, 2016
PIPELINE NEWS NORTH •
BUSINESS
15
Layoffs come with hidden costs, business leaders told JONNY WAKEFIELD reporter@dcdn.ca
Two years ago, business owners gathered at a Dawson Creek hotel for a panel called Living With The Boom to discuss labour shortages, climbing rents and other problems arising from a liquefied natural gas bonanza. Two years later: a presentation from an employment lawyer on downsizing. On June 21, the Dawson Creek and District Chamber of Commerce hosted Geoffrey Howard, a labour and employment lawyer with the Vancouver firm Roper Greyell. Around a dozen local business people turned out for a crash course in their legal obligations when laying off employees. For Executive Director Kathleen Connolly, it’s a reflection of how quickly Northeast B.C.’s fortunes have changed. Connolly said there wasn’t “a ton of interest” in the event, partly because “a lot of our employers have already done most of that stuff.” “They’ve done the 20 per cent
rs : Drille l report Specia RTH.CA
NEWSNO
PIPELINE
ISSUE
,000
16 6 DIST:
C tap Site
SERVING
THE
n for clea
power
ORTH
WS N INE NE
PIPEL
VOL. 7
n may e Regio in Peac
(cut), they’ve done the work-share, they’ve done all that stuff and now they’re just waiting for the economy to turn around,” she said. Over the past two years, oil prices have dropped precipitously, bringing natural gas prices down with them. Twenty LNG export projects were once proposed for the B.C. coast—now, some analysts say it’s possible none will move forward. Northeast B.C. has consistently had the province’s highest unemployment rate this year. Howard said many employers facing those odds turn to layoffs, but don’t realize the hidden costs of staff reductions. More than 129,000 people lost their jobs in Alberta last year, he said. “There’s a lot of academic literature out there studying businesses that go through these massive downsizings,” Howard said. “What they show is it doesn’t always end up delivering the results (managers and business owners) are planning on.” Any savings from layoffs can quickly be lost in severance, legal challenges and lost productivity, he said.
JUNE /
JONNY WAKEFIELD PHOTO
Geoffrey Howard, a labour and employment lawyer with the Vancouver firm Roper Greyell, said many businesses aren’t aware of the hidden costs that come with layoffs.
He also outlined the tricky question of how much notice must be given to employees in a tough job market. “A couple of judges made the good observation that you can’t double punish the employer,” he said. “They didn’t want to lay this person off, they only did it because the industry’s in recession. You can’t increase
the notice awards by 50 per cent just because it’s a tough job market. You can’t shift it all onto the employer, it’s a bit of a balance.” “The fact the employer had to do it to save the company is not a factor that reduces how long the notice period is,” he added. “It’s specifically excluded.”
Northern British Columbia and Alberta’s Oil and Gas Industry
15
JULY 20
Full Page 6 col x 180 ag (9.448” x 12.857”)
FREE!
BERTA . AND AL RN B.C NORTHE TRY IN S INDUS OIL & GA
y A heav f reality dose o
Half Page horizontal 6 col x 90 ag (9.448” x 6.429”)
Half Page vertical 3 col x 180 ag (4.645” x 12.857”)
Banner 6 col x 42 ag (9.448” x 3”) – 1/2 Banner (---) 3 col x 42 ag (4.645” x 3”)
“Pipeliner” 2 col x 32 ag (3.045” x 2.28”)
bate line de da’s pipe r Cana wrong have it check fo ly critics A reality l pp oi su 0 s me ga en at $6 fracking Why so ound, ev t to fear nities ab mish no Opportu lls Squa Creek te n so Daw
file lamers matt
Photo
Quarter Page vertical only 3 col x 90 ag (4.645” x 6.429”)
to fuel ntinue will co ergy. me. It able en y. e to co ng tim d afford ss the countr lo an a e r re fo reliabl s acro ld’s futu cess to and ga the wor with ac transport oil s d an an di da na way to ing Ca of Cana provid most efficient a part d y, while remain gas will of the econom the safest an Oil and part given to be ld a large shou eration Consid
PRINT & ONLINE EXPOSURE
46
R0016977
LOCATIONS THAT SUIT YOUR BUSINESS NEEDS
ADVERTISING RATES 2016 (colour included)
Back Page - $1500 Inside Back - $1000 Inside Front - $1000 Centre Spread - $1500 Full Page - $1000 Half Page - $600 Quarter Page - $350 Front Banner - $600 (limited Banner number) - $300 Half Banner - $200 Pipeliner $100 DISCOUNTS: 1 year - 15%, 6 months - 10%
• Distributed to the community in general through these fine publications, Alaska Highway News, Dawson Creek Daily and Fort Nelson News. • Distribution by mail and direct drop-off to Oil & Gas companies,and related businesses and organizations, in the following communities: BRITISH COLUMBIA – Arras, Baldonnel, Cecil Lake, Charlie Lake, CHETWYND, Clayhurst, DAWSON CREEK, Farmington, FORT NELSON, FORT ST. JOHN, Goodlow, Groundbirch, HUDSON HOPE, Moberley Lake, Pink Mountain, Pouce Coupe, Progress, Rolla, Rose Prairie, Sunset Prairie, Taylor, Tomslake, TUMBLER RIDGE, and Wonowon. ALBERTA – Baytree, Bear Canyon, BEAVERLODGE, Berwyn, Bezanson, Bonanza, CLAIRMONT, Eaglesham, FAIRVIEW, Falher, Girouxville, GRANDE PRAIRIE, Grimshaw, Grovedale, HIGH PRAIRIE, Hines Creek, Hythe, LaGlace, MANNING, McLennan, PEACE RIVER, Rycroft, SEXSMITH, Silver Valley, Spirit River, VALLEYVIEW, Wembley, and Worsley, Zama City.
• PIPELINE NEWS NORTH
JULY 15, 2016
UNRESERVED PUBLIC AUCTION SEPTEMBER 21 | EDMONTON, ALBERTA Join IronPlanet® and Cat Auction Services for our Next Unreserved Public Auction in Canada HOSTED BY
CONSIGN EQUIPMENT & TRUCKS NOW All equipment sold onsite or virtually from your lot For more information visit
IronPlanet.com CONTACT YOUR LOCAL REPRESENTATIVE Northern Alberta Chris Huot: (780) 914-5299 chuot@IronPlanet.com
Managing Director, IronPlanet Canada Sue McGregor: (780) 238-1560 smcgregor@IronPlanet.com
Southern Alberta Steve Wicks: (587) 434-7707 swicks@IronPlanet.com
Central Alberta Gord Mills: (587) 988-5119 gmills@IronPlanet.com
Northwest Alberta Brian Petkau: (780) 975-7356 bpetkau@IronPlanet.com
British Columbia Rob Dickson: (778) 847-7957 rdickson@IronPlanet.com
Region Manager, AB Site Operations & Key Accounts Kelly Vandenberghe: (780) 690-2858 kvandenberghe@IronPlanet.com
Buy with confidence! Look for the IronClad Assurance® logo for inspected and guaranteed items.
Cat Auction Services an IronPlanet Marketplace
California Auction Company Bond #70259785. Preliminary list to date. Equipment subject to change. © 1999-2016 IronPlanet, Inc. All Rights Reserved. IronPlanet® and IronClad Assurance® are registered service marks of IronPlanet, Inc. All other marks and brands are the property of their respective owners.
R0011275702
16