Pipeline News North

Northern British Columbia and Alberta's Oil and Gas Industry Vol. 1 Issue 4 • dist: 20,275

April 29 • 2011

h t r No

• Free

in this issue:

• women in the patch • liard basin - still a mystery land • qUICKFRAC - THINKING OUTSIDE OF THE BOX New Brunswick’s Minister of Natural Resources Bruce Northrop and Minister of Environment Margaret-Ann Blaney wait on the tarmac for their chance to see the Horn River Basin by helicopter. (Photo by Rebecca Penty, New Brunswick Telegraph-Journal)

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2 • PIPELINE NEWS NORTH I April 2011

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April 2011 I pipeline news north •

industry news

3

GOING SOUTH

- Calmena is shipping rigs to Brazil

james waterman Pipeline News North

Calmena Energy Services is moving four of their Canadian single rigs to Brazil this year as part of a service contract with an energy company in that country.

The four rigs are currently shut down due to spring break-up, which is part of the reason Calmena pursued this deal. “We expect that the rigs will be more profitable in Brazil due to anticipated year round utilization,” said Fred Meyer, Vice President, Sales and Marketing.

“In Canada, the current utilization for single rigs is high in the winter, due to oil sands coring projects, which can only be done in winter months due to difficult logistics in the summer. However, during other times of the year, under current market conditions, the utilization of single rigs is low.”

Although the economics for that part of their business are not ideal in Western Canada at the present time, other aspects of Calmena’s operations – such as frac fluid management – are thriving in that market.

“Western Canada has seen strong growth in unconventional gas and oil activity,” Meyer explained.

“In particular, the advent of horizontal drilling and multistage fracturing has enabled development of reservoirs that previously were considered uneconomic.

Our frac fluids business and associated equipment rentals have prospered due to the increased demand for services used while multistage fraccing horizontal wells.”

Calmena Energy Services wireline trucks complete a pump down perforating job on a Montney shale gas well.

Photo courtesy of Calmena Energy Services.

“Horizontal wells require different perforating techniques than conventional vertical wells,” he continued.

“The perforating guns cannot be simply conveyed on wireline, which is the case in vertical wells. Instead, technique sensitive pump down perforating technology is used to convey the perforating guns to the desired perforating intervals in the horizontal section of the well.

“Calmena is one of a few companies that have the experience and qualified people to safely and efficiently carry out this operation.”

Horizontal multistage fracturing is also driving interest in Calmena’s unique microseismic technology.

“By understanding the extent and location of the rock that has been effectively stimulated,” said Meyer, describing the applications for their miscroseismic process, “our customers can optimize their fracturing design and development program to maximize recoverable hydrocarbons. Calmena’s unique approach to acquisition and processing is being well received by our customers and we are seeing a significant growth in this service offering.” •

AltaGas & Provident build new pipeline james waterman Pipeline News North

As of March 2, 2011, AltaGas and Provident Energy have entered into an agreement to construct a pipeline from a Montney gas plant to the Younger deep cut extraction facility at Taylor, British Columbia, which is also jointly owned by the two companies.

The 25 kilometre pipeline is expected to boast a capacity of 250 million cubic feet (Mmcf) of natural gas per day and should be fully operational by the fourth quarter of 2012.

“There’s demand in the area for producers to take advantage of a deep cut facility,” said Provident spokesperson Glen Nelson, discussing the reasons behind the project. “The Montney is a liquids rich play. And so it certainly increases a producer’s economics by being able to get some value from the deep cut facility, to extract those [natural gas liquids].”

“It’s a logical fit because we co-own the

Younger extraction facility,” added Nelson, noting that Provident owns a fortythree per cent interest in the Younger facility, which is operated by AltaGas. “Because these liquids will be processed there, it made sense to go in as partners on this.”

The only deep cut extraction facility in the province, the Younger plant is capable of recovering eighty per cent of the ethane and ninety-nine per cent of the propane-plus liquids from the liquid-rich Montney natural gas. The agreement stipulates that AltaGas and Provident will each own a thirty per cent interest in the

$30 million dollar pipeline project. The third partner is an as yet unannounced natural gas producer,“We’ll probably expect to see more projects in the future as the Montney play develops,” said Nelson, discussing the potential for future projects in the region. “But, really, right now, we saw it as an opportunity to take advantage of that as it’s growing now.”

“Certainly,” he added, “we think that we’re able to provide an option to producers to be able to take advantage of a deep cut facility in B.C.. We see that we’re able offer our services and expand as the play expands.” •

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www.pimms.ca

4 • PIPELINE NEWS NORTH I April 2011 special features 4 Women in the patch 16 Liard Basin - still a mystery

land

opinion 6 Columnist: Don Thompson

special feature

women

in the patch

community 7

7

8

A great work place - Devon Canada wins their hearts Penn West - corporate citizen of the year Shoot to score - PA hockey tournament

industry news south - Calmena is 3 Going

shipping rigs to Brazil

3

AltaGas & Provident build new pipeline

11 By the million - OGC renews

its strategy 12 First steps - New Brunswick

delegation visits BC 12 LandSolutions expands into

Grande Prairie 29

29

Going global - Asia Advisory Council Calfrac - a record breaking performance

environment 23 Basin Section 8 - new policy

for basins & pits

careers & training 12 Quirky pipes - a creative

approach to training

technology 18 LiDAR vision - new sight to

study Horn River Basin 24 QuickFRAC - out of the box

profiles 14 Regen Online - working

dehydrator magic 20 Getting pumped - Daski 21 In the pink - K&L Oilfield

safety 26 Enform - occupational health

& safety is on the job

Allyson Rozak runs her own business, Survivor Safety Services, from her home, partly so she can spend more time with her young family. Balancing work and home life is a big challenge for those women who want to work in the oil and gas industry.

Photo courtesy of Allyson Rozak.

james waterman Pipeline News North

By her own admission, Sheri Saunders is not your typical grandmother.

A Fort Nelson dental assistant with ten grandchildren and a Harley Davidson, she also does something that a rising number of women are doing these days. She works in the oil and gas industry.

A few years ago, she began her cleaning business, Simply Spotless Services, after her husband was asked by the management at the gas plant, where he works in instrumentation, if he knew of anyone who would want to clean the mobile homes occupied by the crews when at the job site. He suggested the opportunity to Saunders and she ran with the idea.

“I go up there a couple days a week,” she said. “I’ve been doing it for a long time. I used to haul freight up there to the gas plants for about three years prior to that.”

Saunders describes her business as “character building” work that mostly requires a reliable vehicle with good winter tires and attention to detail.

“I’m actually looking for one or two people to come and join me, though, because I don’t want to always have to go up,” she admitted. “It’s a little wearing with, you know, the dental industry is pretty busy too. And I drive 2400 kilometres a month as it is.”

Jan Buck has also been part of the industry in the Fort Nelson area for a long time. She has been a paramedic in the industry since relocating to British Columbia and taking the Occupational First Aid Level 3 program

through WorkSafeBC, just over ten years ago.

Saunders and Buck have both said they have seen the number of women working in the oil and gas industry in the region rising steadily over the past decade. The increase is not simply in traditional roles either. Buck has met female geologists and plant managers in recent years.

Saunders has met welders, pipefitters and engineers.

“It’s nowhere near fifty-fifty,” said Buck, describing the ratio of men to women in those sorts of professions.

“But it’s getting there. There are a few more [women] every few years in those non-traditional roles.”

Allyson Rozak is another woman carving her own path in the industry.

A lifelong Fort Nelson resident, she was working in the insurance business prior to becoming involved in the oil and gas industry in 2007, after some time as a stay-at-homemom to her children. She started her own business, Survivor Safety Services, in October, 2010.

“I was working for a trucking company as a safety coordinator,” said Rozak. “And what I was doing with them was basically starting from the bottom up, getting their program together, redoing their manual.”

Rozak realized that she could actually help a number of companies in that area by going out on her own and so she started Survivor Safety Services at that time. She also began working with Action Health and Safety, a position that allowed her to go into the field and see the job sites.

Even though women like Saunders, Buck and Rozak have managed to find roles in the sector, it remains a difficult and challenging environment for women who want to take advantage of the opportunities

offered by the oil and gas industry.

“I think probably one of the biggest challenges is probably being over-populated by men,” said Rozak, remarking that when she travels into the field, she might hear a few women on the radio, but the vast majority of voices belong to men.

“I don’t think you’re treated any different,” she added. “But … you go out to a camp where you’ve got a thousand men on site, it’s kind of – you know, the men are sure happy to see a woman out there. And they respond a little different.”

Buck agrees that it can be a challenge to deal with all the “testosterone” in the industry, but she does not feel that she has been treated differently for being a woman.

“Once you get past the gender issue and realize that people are just people,” she said. “And then having the skill set so they see, gee whiz, that actually works, and I really am there to help you. They get past it pretty quick and then it all becomes just regular stuff.”

“For a lot of women, it still is [that] you have to do twice as much to get half the credit,” Buck added. “There’s still a fair bit of that out in the field.

But, you know, those are the challenges, and those can only be addressed as they come up.”

Additionally, Buck feels that it can be a challenging industry for people of both genders, and so she tries not to make any assumptions along those lines. It doesn’t matter if you’re a guy,” she said. “It still hurts when you break your leg.”

However, the large disparity between the number of men and women in the industry can cause difficulties for women who do work in the oil patch. continued pg 5

April 2011 I pipeline news north •

cont’d from pg 4

Connie Kaweesi, an instructor at the Fort St. John campus of Northern Lights College who specializes in women’s issues, conducted a study on women’s employability and health in Fort St. John in 2007. A number of the women surveyed worked in the oil and gas industry and they raised a number of concerns about the profession.

“Some of the … comments were around safety,” said Kaweesi. “And there [were] some real concerns around safety for women living in the camps just for the mere fact that they didn’t feel as secure, because there are one or two women in a camp of 200 [to] 300 men.”

“There’s a lot of sexism in the industry,” she added.

“And it’s not an industry that’s particularly kind to women.”

One of the other major concerns mentioned to Kaweesi during the study is similar to a dilemma that Rozak faced recently.

“Some of the comments spoke to if you’re a woman and you want to work as a first aid attendant or you want to work in the oil patch, you really can’t have children,” said Kaweesi. “So, some of the younger women had worked in the oil patch in those capacities or others, but … once they had a child, they could no longer work in the sector because you can’t be away from your child when you’re out 24 hours a day or you’re living at camp or you’re working 14 hours a day.”

Rozak operates Survivor Safety Services from her home, where she lives with her two children and her husband, who also works in the patch as an operator.

This winter, she became aware of a job opportunity in her field that would allow her to make about $150,000 per year – more than twice her current annual earnings – but would require her to stay at the work camp for four days a week.

“Do I want to leave my family?” she said. “And my kids aren’t so young anymore, but it would still be a matter of having a nanny come in. And my children are eleven and eight. So, they’re old enough for me to work in the oil patch, but not necessarily away from home.”

“If you want to succeed in that position,” Rozak added,

“having the flexibility to leave your family life is huger.”

The situation was especially frustrating for Rozak because she lives about a hundred kilometres from the job site and could feasibly commute. Her feeling is that those shifts are designed to accommodate men who fly to work from other communities, which is unfair to local workers, particularly mothers.

“There’s some real barriers to women working in the patch,” said Kaweesi. “And that’s a really good example.

The other example is, you know, you can work in the patch until you get pregnant and you have a baby and then you’re done. So, the whole camp issue … The camp-based work could be more accommodating for those individuals who live within driving distance of the camp. Some of the requirements of the job seem to be fairly dated … There are men who would like to be home every evening too, right? This is not only a gender issue.

It’s an issue of family. Many people like to be home and would be more than glad to drive back and forth if they were given the opportunity.”

Ultimately, the time spent with her children during spring break this year convinced Rozak that she should not only reject the camp job, but that she should also leave her position with Action Health and Safety to concentrate on her own business and her young family.

It was a tough decision, but she possibly had a better set of circumstances with her particular profession and her business than other women may be facing with their jobs.

Many women may not even be able to get their feet in the door at all.

Koweesi said that many women interviewed during her study claimed that the industry is not sensitive to the needs of mothers.

“Even for some of the women that were in the traditional roles like secretarial support or administrative assistant, if they had sick children, their employers were not always particularly open for them to go home and take care of a sick child,” said Kaweesi.

“One of the women,” she continued, “said if you’re a single parent and you apply to work in one of the offices in the oil and gas industry, they might not hire you because they think you’re going to have to miss work

5

because you have children. So, kind of gender issues around mothering and safety and workplace acceptance.”

Kaweesi’s study also pointed to other family-related issues revolving around the idea that women are unable to really be mothers and work in the oil patch simultaneously. For example, the number of families with both parents working in the industry is increasing and so is the number of nannies in the region. There are also issues with family dynamic when one parent works and the other is at home full-time.

“There are some significant family dynamics around women being the primary caregiver in the home, caring for the children, doing all the day to day tasks of running a house, and then their partner or their husband, he comes home, and there’s a change,” said Kaweesi. “Because, of course, he’s been gone. And [there are] some tensions around the change in the roles in the home.

And real concern for the men coming home and being unemployed for two or three weeks, and sitting at home, and maybe having to reintegrate into the family. So, the family’s kind of changed a little bit while they were gone … and the man comes back in the home and he kind of doesn’t have a role … Men in the industry who are away for such long periods of time and don’t get to enjoy seeing their children grow up or participating in taking their son or daughter to hockey. You know, the day to day things – the role of parenting.”

“And that’s the other reason that we have some issues around addictions and family violence,” she added.

Despite the various challenges, Saunders is thrilled with her role in the industry, just as she is excited about the future for women in the industry.

“There’s quite a bit of work in the next decade or, I’ve heard, for the next fifty years,” said Saunders. So, I think more and more women will take their gas plant operator courses and things like that.”

“Had I been younger,” she added, “then maybe I would have gone for more involvement in it as far as gas plant operator or power engineer or something like that.”

“I’m not wimpy in any way. I stand up to the plate just like all those boys.” •

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April 2011

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opinion Security through the pipe

Pipelines are rarely thought about, but they play a definitive role in our daily lives and are essential to our economic and energy security. Unfortunately, when it comes to these energy lifelines, there is a lack of understanding regarding the importance the network plays in transporting petroleum products, diesel, gas and oil to markets across North America. Because they are largely buried deep underground, they are hard at work – unseen.

For the oil sands industry, our story would not have a complete ending without the pipeline system that connects our reserves in Canada across our country and with our American neighbours to the south. As has been the case over the past year though, intense public scrutiny is questioning the reliability and integrity of this system as well as the need to expand its capacity.

As we are all well aware, the cross-border pipeline projects waiting for the green light from the U.S. government are extremely important for the economic and energy security stability for North America.

Recently in the news you may have seen that Alberta Premier, Ed Stelmach, responded to a New York Times editorial urging the United States government to oppose a key pipeline. In Stelmach’s response letter, he notes that 91 cents of every dollar the U.S. spends importing Canadian oil ends up back in the American economy, unlike other countries that use oil proceeds to fund wars, terrorism and human rights abuses. Of the top five countries that account for 75 per cent of U.S. imports, only two - Canada and Mexico - can be considered democracies.

The U.S. is a key market for our industry. Canada supplies a total of some 2.5 million barrels of crude oil and petroleum products per day to the U.S. and it is their largest source of imported crude oil. This number could not be achieved if not for pipelines to transport Canadian crude; displacing oil that would otherwise be arrriving from less secure sources in north Africa and the Middle East.

From refining to building continental pipelines, from manufacturing machinery for oil sands operations to providing goods and services for production, the benefits to the U.S. are real and substantial.

Over the next five years, oil sands production could create 343,000 new jobs in the U.S. Oil sands activity will increase the demand for U.S. goods and services, adding an estimated $34 billion to U.S. GDP in 2015, $40 billion in 2020 and $42 billion in 2025. Finally, upgrade projects at U.S. refineries, pipeline construction and maintenance and storage tank construction currently account for around 98,000 construction jobs and 500 permanent positions.

Guest Column don thompson President of Oil Sands Development Group (OSDG)

The message is that all of us who are stakeholders in this industry and country, whether oil sands developers, pipeline operators, labourers or citizens, need to become educated and then become vocal about the integrity of Canada’s pipeline system and how important this system is to North America’s economic growth and prosperity. To do otherwise is to do us all a disservice.

The oil sands industry, like the Canadian energy industry in general, is committed to responsible development and to working to reduce our environmental impact. We believe there is no better way to ensure that this global energy resource will be available to current and future energy customers throughout North America.

If you have any questions for me, please contact info@oilsandsdevelopers.ca or leave a message on my blog at www.settingtherecordstraight.ca.

Short and sweet

wendy webb Founding Editor - Pipeline News North

It’s April and incredible to think we’ve completed our first quarter of the Pipeline News North so very soon. I’m very proud to say the response to the Pipeline has been simply overwhelming.

Our distribution is expanding even further as our readership continues to grow, with people as far east as Edmonton and Calgary and as far north as Zama City contacting us to request copies of the Pipeline.

My thanks go out to all those who have honoured us with interviews and photos over these first four months, it is the people of the patch who are making this paper such a great read for all.

I look forward with great excitement to the many stories we will be presenting in future editions.

Help us make this paper great!

We want to hear from you. Do you have a good story to tell, industry history to remember, some great photos to share, or opinions to voice in a letter to the editor?

Then email us at: editor@pipelinenewsnorth.ca or go to our website at: www.pipelinenewsnorth.ca where you can comment on an article, submit a Letter to the Editor or fill out our suggestion box (“Submit Your Story Idea”) We ask that submissions follow the rules of good social etiquette. Opinions expressed in submissions do not necessarily reflect those of the Pipeline News North. Copyright of letters and columns accepted for publication remain with the author, but the Publisher and its licensees may freely reproduce them in print, electronic or other forms. We reserve the right to edit submissions for length, taste, accuracy and libel.

All letters must be accompanied by a daytime phone number (for verification purposes only) and your full name.

April 2011 I pipeline news north •

community

7

a great work place - Devon Canada wins their hearts ryan lux Staff Writer

Devon Canada Corporation has been named third on the 2011 list of Canada’s Best Workplaces with fewer than 1,000 employees.

“It’s not hard to be a salesman for a good product,” said regional spokesperson Chris Dumanowski. “I never hang my head when I tell people I work for Devon,” he added.

Part of the reason he believes employees rate the company so well is the emphasis they provide on balancing family and work life. Dumanowski said that the company really supports its staff whether its through high level safety training or teamwork building professional development sessions.

Devon is the highest-ranking energy company on the list. Earlier this year, Devon was also recognized among outstanding U.S. employers. The company was included on the Fortune 100 Best Companies to Work For list at No. 41, making it the only energy company in North America to be recognized on both sides of the border.

“This is a really big honour,” said Chris Seasons, president of Devon Canada. “This is the third year in a row that we have received this recognition.

To be included again in the upper ech-

elon reflects the commitment, energy and creativity that our employees bring to the workplace. This recognition is really theirs, as each employee contributes to our culture and lives our values on a daily basis.”

This list of Best Workplaces in Canada is compiled by Great Place to Work Institute Canada. The competition process is based on two criteria.

Two-thirds of the total score comes from a 58-statement survey completed by employees, who also have the opportunity to provide open-ended comments. The remaining one-third of the score comes from an in-depth review of the organization’s culture, including an evaluation of human resources policies and procedures.

A blue-ribbon academic Advisory Board oversees the selection criteria for each year’s competition. The distinguished panel members, drawn from universities across Canada, have each written or edited a major HR textbook in Canada.

“Great Place to Work Institute would like to recognize and congratulate Devon for its success in creating a great workplace culture,” said Jen Wetherow, director, Great Places to Work Institute Canada. “Devon was selected for the 2011 list because employees told us they trust management, have pride in their jobs and enjoy the people they work with. Employees at Devon care about their work and understand the

Devon Canada Corporation was named one of the top three Canadian employers with staff of less than 1,000 people. (Above is pictured the local office in Fort St. John, B.C.) ryan lux photo

tangible ways in which each job contributes to the greater good.”

This year’s list received more than 230 nominations. Approximately 44,000 employees participated in the 2011 “Best Workplaces in Canada” survey.

BC Hydro and Enbridge were also named in the top 100 Canadian workplaces.

The Vancouver Sun has praised the list as “a fountain of knowledge about Canadian workplaces, employers, workplace philosophies [and] perks.” •

penn west - corporate citizen of the year james waterman Pipeline News North

Penn West Exploration was recognized for their commitment to community involvement with the Corporate Citizen of the Year award at the 4th Annual Fort St. John Community Awards held on Thursday, April 7.

The award was an acknowledgment of all the work that Penn West exploration has done to sponsor community groups and events ranging from arts and culture

initiatives to local schools and sports teams.

“Penn West has a great sponsorship program where community, non-profit groups can apply for grants,” said Gail Weber of the Community Awards committee, explaining why Penn West was chosen as Corporate Citizen of the Year.

“They have also granted many groups within our community with funds that have made a difference to their organizations.”

Bob Snydmiller, Penn West’s Production Superintendent in Fort St. John, admitted that the oil and gas company was taken by surprise with this honour. continued pg 23

Our Service Makes The Difference

®

Susan Bell accepted the award on behalf of Penn West Exploration, wo was chosen as Corporate Citizen of the Year at the Fort St. John Community Awards.

ryan lux photo

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8 • PIPELINE NEWS NORTH I

April 2011

community shoot to score - PA Hockey Tournament james waterman Pipeline News North

It seemed like the power went out in Fort St. John on the morning of Thursday, March 17 because the energy sector took the day off to play hockey.

It was the opening day of the 2011 Fort St. John Petroleum Association 4-on-4 hockey tournament, a three-day respite from the grind of a long winter season for local men who work in the oil patch, and they weren’t going to let a power failure stop them from enjoying their time off.

“We played right through,” said Petroleum Association President Tyler Kosick. “Back-up generators kicked in.

It was a little dark on the ice, but everybody managed to play straight through, and it wasn’t really an interruption at all.”

“With this facility, with the natural lighting, we were able to play,” added tournament organizer Lee Hartman.

“The only issue we had was with the ice kind of getting soft and not [being] able to flood it.”

The tournament had ten teams evenly split into two divisions. Every team played four round robin games before the finals on Saturday.

The Weir Services Game, the first match of the day, saw fifth place teams CE Franklin and Northern Vac Services skate to an 11-7 victory for CE Franklin.

“It’s always a good tournament,” said CE Franklin captain Wade Wickham, playing in his third Petroleum Association tournament. “Lots of fun. And they put on a great show. They always do a great job for this tournament, and everybody had a lot of fun.”

“Usually, the winter months up in Fort St John are usually very busy,” he added. “So, it’s nice to get away from the office for a couple days and have some fun with the guys.”

The Sexsmith Financial Game had Fort Motors edge Cabre Oilfield 7-6 in one of the tightest contests of the day. Complete Pumpjack Services jumped out to a commanding 6-0 lead in the first period of the Scotiabank Game, before Nabors stormed back to tie it at 6-6 with Darren Peebles leading the way offensively. Nabors kept their foot on the gas on their way to an 8-6 win.

Ditmarsia Holdings boldly pulled their goalie in the final minute of the Spectra Game despite already trailing Magnum Rentals 11-6. Magnum held on to win by that score.

The Petroleum Club Game was a hard fought battle between first place clubs TCL Oilfield Hauling and Baker Hughes. Trailing 6-2 after the first period, TCL mounted a spirited comeback to tie the match at 6-6, only to surrender the go-ahead goal with just over a minute remaining in the final frame. Baker Hughes added an empty-net goal to seal the 8-6 victory and first place in the tournament.

“It was a good game,” said Nathan Waberski of Baker Hughes. “I think both teams played hard. We had a lot of fun throughout the whole tournament.”

“We were starting to hit the panic button a little bit,” he added, referring to the comeback by TCL that erased their four goal first period lead.

The tournament uses a 4-on-4 format partly because of the difficulties attracting players at this point in the season.

“Basically, the time of year that we’re doing it, it’s hard to get a whole bunch of people in,” said Kosick. “And it’s a little more laid back. It’s not as tight. A little more flow to the game. Seems to work a lot better.”

It also makes for a fast-paced, wide-open game that allows the players to show off their talent.

“Lots of room and lots of speed and lots of guys out cherry-picking,” said Hartman.

The organizers are considering moving the tournament to April next year to increase participation.

“With all the year-end tournaments, basically, the ice wasn’t left in long enough for us,” said Kosick. “So, we had to go before all the tournaments, because they were in place before we started, because we’re such a continued pg 9

Weir Services Game champions CE Franklin.

Spectra Game champions Magnum Rentals

Petroleum Club Game champions Baker Hughes

April 2011 I pipeline news north •

9

cont’d from pg 8 young tournament. But there’s talks next year of moving it into April some time.”

“Next year,” said Hartman, “we’re probably looking at moving over to the rec centre and doing it later in the year, once the Flyers and Huskies are done. And with break-up here in April, we should get a few more people interested in playing because they’re not working.” •

Sexsmith Financial Game champions Fort Motors james waterman photos

Scotiabank Game champions Nabors

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10 • PIPELINE NEWS NORTH I

April 2011

environment

basin section 8 - new policy for basins and pits

james waterman Pipeline News North

As of March 2, 2011, the BC Oil and Gas Commission has officially introduced changes to the manner in which water use is approved and reported in British Columbia.

The changes concern Section 8 of the provincial Water Act and are designed to address issues that have arisen from industry use of water in the province. The key change is the immediate elimination of Section A approvals for water use and replacing the Section A process with an application known as a Basin Section 8.

Section A gave companies a blanket approval to draw water from any body of water in northeast B.C., which created a nightmare as far as tracking the actual sources of the water being used by industry, as well as the exact amounts being drawn from those sources.

The Basin Section 8 will narrow the focus to specific basins within the northeast corner, thereby allowing the Commission to more easily and accurately track and report water usage.

“The Schedule A’s are an interesting one,” said Allan Chapman, a hydrologist with the Commission. “They were initially developed in the early 1990s. And so a Schedule A is a list of about 300 rivers or lakes, pretty much encompassing all of northeast B.C. Everything from the Peace River to smaller lakes, you know, up in the far northeast corner.”

Chapman explained that the Commission shifted to a basin-by-basin approach, rather than requiring that water use applications be for specific bodies of water, because certain industry activities, particularly seismic operations, preclude identification of specific water sources.

“They’re just not always able to predefine all the individual points that they need the water from,” he said.

“They just know they’ll be operating in a certain area.

And so that was then the purpose of doing away with the Schedule A and then creating this other thing which we’re now calling a Basin Section 8.

“So the Basin Section 8 still provides the ability for a company to get approval for small volumes of water for some operations. And, again, we think that seismic operations will probably be the major use. So, it’s generally a very small amount of water, but it’s also then defined specifically to a certain drainage basin. And then after the end of that permit period, the company will then report back to us the volume of water that they

took out of the basin.

“So, it then allows us to incorporate that approval into the rest of our approvals so we don’t over-authorize.

And it also allows us then to report out as to what the volume was that was taken.”The new Basin Section 8 is not to allow the Commission to track and report water volumes drawn from specific lakes or rivers, but just from the individual basins. Basin Section 8 approvals are for a maximum of 45 cubic metres of water per day and 5000 cubic metres of water per year.Another change is a new requirement for approvals for water taken from borrow pits.

“Currently,” said Chapman, “the provincial government is not licensing or authorizing the use of water from [borrow] pits. So, where it comes from for the Commission is, we did sort of an audit of water use up in the Horn [River] Basin, and, as a result of that review, we observed that most of the companies operating in the Horn are quite actively using water sourced from borrow pits. And, generally, they’re fairly large volumes of water.

“So it’s a challenge for us – it’s a challenge for the Commission then – to determine, say, the maximum amount of water that can be withdrawn within a basin area. We need to know the volume of water that companies are taking from a Crown source. And so that’s one of the reasons for the requirement.

“The other part of it is that the Commission also needs to report in a public way on how much water is being used. So, on what the volumes of water [are] that companies are taking from different Crown sources. The only way for us to report the volume of water actively used is if we also then have the requirement to license the water use [from borrow pits].”

Borrow pits are not included in the Basin Section 8.

After all, borrow pits tend to range in size from 10,000 cubic metres to 50,000 cubic metres, far greater in size than the maximum 5000 cubic metres per year that companies are approved to withdraw according to the Basin Section 8.

“I think there’s a pretty good awareness of water issues up in the Northeast, certainly from the drought that occurred in the Peace [region] last year,” said Chapman, addressing the question as to whether the new changes my raise awareness of water use and conservation issues.

“And there appeared to be a general awareness that, in particular, the gas industry was using, at times, fairly large volumes of water for their fraccing operations,” he continued. “So, I don’t know whether this will change the

public perception on water issues, but we think that it will be well-received generally by local government, by First Nations and others throughout the Northeast. Because what it does is, it creates a transparent, publicly reviewable water approval and water use process.”

That degree of transparency may actually benefit the reputation of the oil and gas industry in the Northeast, as well as address the concerns of local residents about water use by industry. As Chapman noted, past Section 8 water approvals have been for volumes of water “a couple of orders or magnitude than the volume of water that the industry actually uses.”

The issue was that an energy company would, as an example, apply for 500 cubic metres of water per day from a specific source. An approval for that application would cover a full year of water use. However, that company may only use that 500 cubic metres of water per day for a few weeks or a few months of hydraulic fracturing operations.

“And so what we have found when we did audits of the water use is, the water actually used by industry was about two per cent of the total approval,” said Chapman.

“And so what this will do is allow local governments, local residents, First Nations and others to actually see what the total approval is and also what the companies are actually using. And we think that will go, at least in part, to reduce some of the fear perhaps that exists on the volume of water that the industry’s using.”

“If they’re going to be fraccing in January to March, than they might need 500 cubic metres a day for that fraccing operation,” he added. “But then, once they’re done that and they’re into just drilling wells or watering roads or building ice roads in the winter, then what we see is the volume per day actually falls off a lot ... So, the volumes of water that they need and use for a lot of their operations ... are very small. And it’s really the hydraulic fracturing use, which occurs over shorter periods of time, which is when they need the largest amount of water.

“But the way we approve them, we don’t kind of give approvals that say 500 cubic metres a day for this month and then 50 cubic metres a day for the rest of the year.

It would probably be in some ways good if we could do that, but we don’t.”

The Commission consulted with the Canadian Association of Petroleum Producers (CAPP) when drafting these changes, which is partly why Chapman is confident that it will be considered a positive development by industry.

“I think it will help them demonstrate more effective and more sustainable water use,” he said, “particularly the reporting part of it. CAPP and industry [have] told us that they are interested and in favour of a broader reporting of water use, because they recognize that there are interests in that for a whole bunch of groups and individuals around the province. So I think, generally, the industry will see this as a positive move.”

Initially, it will seem to be a great deal of work, however.

“Because we’re going to be requiring approvals for water from these pits,” Chapman explained, “there will definitely be some work upfront for industry, and for the Commission, now to deal with this fairly large number of [new applications] which will be emerging ... but I think ,once we get through this initial flurry of work, that it’s generally going to be positive.”

“I think the goals of these changes are generally to modernize and enhance the Commission’s water approval and water management processes,” Chapman concluded, summarizing the goals of the amendments.

“It’s recognizing the changes that have occurred in the industry over the last two and a half years or so. So, it’s recognizing that horizontal shale gas drilling and hydraulic fracturing have changed water use and water use practices. And so we’re enhancing our water management processes to recognize and accommodate these changes in industry.

“It’s also clearly focused, I think, on some of the big directions of the Commission, which is to ensure that water use is sustainable and environmentally benign.

And at the same time to ensure that our regulatory practices are consistent with the rest of the government’s direction.” •

April 2011 I pipeline news north •

industry news

11

by the million - OGC renews its strategy james waterman Pipeline News North

A few years ago, when British Columbia was just entering the world of unconventional gas development and the provincial government was busy authoring the new Oil and Gas Activities Act, the BC Oil and Gas Commission began to reconsider its approach to managing oil and gas activity in the province.

The result was a Resource Development Unit that officially came into being in November, 2010 with the appointment of geophysicist Corey Koble as Director of Resource Development with the Commission.

The unit is designed as an alternative to looking at the industry on a well-bywell or pipeline-by-pipeline basis, instead managing the sector in one million hectare segments on a basin-by-basin level. The Commission believes that this approach will help them translate the broad, strategic direction set out by the

government to a form that makes sense to the individual operators working in any one specific area.

Conversely, it will also help them relay information from those operators back to the government when that broad, strategic direction does not seem to work in a specific area.

“What we’re looking at is how much activity is in a given basin from oil and gas specifically,” said Paul Jeakins, Deputy Commissioner, Regulatory Affairs and Stewardship Division with the Commission. “Because, at the tactical level, that’s all we’re mandated to look at. So, strategic level is very much land use ... across all sectors.

We’re looking at the footprint of oil and gas at the tactical level. And, specifically, just oil and gas. So, the footprint – you know, what have we got right now? How much activity is there? So, when we go forward, we go, ‘Okay, well, we need this many hectares for caribou or old growth forest. What have we got now? How much impact is oil and gas having on that right now? What should it look like going forward?’”

“Part of what we’re trying to do is bridge the surface values with the subsurface values,” he added.

“I think it’s very exciting both for the

OGC and for the people of B.C. to have the opportunity to look at surface and subsurface development at the same time and try to understand the entire state of it,” offered Koble.

“I think one of the key roles of the unit is to gather and organize surface and subsurface information from a variety of subject matter experts within and outside of the Commission,” he continued. “So, really trying to determine what information is relevant, where you can best get that information.”

Jeakins explained that an example of the issues that the Commission has experienced along the lines of obtaining relevant information is the matter of receiving numerous “one-off reports” about caribou in areas of oil and gas development, instead of having a coordinated approach to compiling that information.

“What we want to do is get efficiency across the board,” he said. “So, better use of data, better use of limited resources for everybody, whether that’s us or First Nations or industry. So, they don’t have to give us fifteen caribou reports.

“We’re going to do it once.

We’re going to do it right. And we’re going to work with all the parties at the million hectare level, rather than, you know, [one at a time] at a five hectare level. We’re hoping that we get better coordinated planning out of it.

We’re hoping we get better data use. And, again, we’ve all got limited resources and limited money, so we want to make it as efficient as possible.” continued pg 27

Oil and Gas — Fast Facts Working with Landowners and British Columbia’s oil and gas industry

The BC Oil and Gas Commission is an independent, single-window regulatory agency with responsibilities for overseeing oil and gas operations in British Columbia, including exploration, development, pipeline transportation and reclamation.

The Commission has offices throughout British Columbia and employs over 200 British Columbians who are committed to preserving the province’s quality of life.

Come see us at the office in your region: • Fort St. John, #100-10003 110 Avenue • Fort Nelson, #101-4701 55 Street • Dawson Creek, #3-1445 102 Avenue

To learn more visit www.bcogc.ca Follow us on Twitter and Facebook Phone 1-250-794-5200

who

what

The majority of oil and gas activity in British Columbia occurs on Crown land, but there are instances when a company seeks access to private land for operations such as drilling a well or running a pipeline. These situations require the company to consult with the landowner, and potentially anyone nearby who may be affected.

This discussion between the landowner and the company is both regulated by legislation and facilitated by the Commission in a number of ways.

Consultation and Notification Prior to the introduction of the Oil and Gas Activities Act (OGAA) in October 2010, companies seeking access to private land were encouraged to notify and consult with landowners, but it was not a mandatory step.

Under OGAA, the Consultation and Notification Regulation (CNR) sets out a step-by-step process that companies must follow in the preapplication phase of a proposed activity. This gives landowners, whose land the proposed project is located on and those adjacent to it, the option to voice concerns regarding the activity.

The consultation and notification process is separate from the requirement to negotiate a surface lease with the landowner, which are typically conducted prior to the CNR process so the landowner’s input may be included in the

when

why

plans for the activity and CNR documentation for that project.

A brief summary of the consultation process is as follows: 1) The industry applicant provides the landowner with an invite to consult, which includes a description and location of the proposed activity.

2) The landowner responds to either the applicant or the Commission, describing their concern and requesting a discussion.

3) The applicant replies to the landowner, discusses the concern and provides a report to the Commission of how it was addressed.

The landowner has a 21-day timeframe to provide a written response to the applicant, or a written submission to the Commission up until a decision is made on the application. The landowner must describe the nature and extent of any objections, and if possible any proposals for mitigation. This information is then taken into account in the Commission’s application review phase.

Building Relationships The Commission is an objective third party and seeks to strike a balance between industry activity and public input, and this is the role of the community relations department. Landowner Liaisons, located in Fort St. John and Dawson

where

we are.

Creek, provide information for landowners, but also serve in facilitating dispute resolution. Early and effective public engagement by industry reduces the need for dispute resolution, but in the event it is required, Landowner Liaisons seek to mitigate concerns and enhance cooperation.

The Commission’s Landowner Liaison Inspector is in the field ensuring that companies operating on private land are following guidelines in the permit, both legislated and any caveats that may have been placed in regard to landowner feedback. The inspector has the legal authorities to order remedial work or recommend non-compliant activities are shut down.

Quality of Life Increases in safety, and decreases in noise, odour, dust and traffic – these are key to landowners and all residents in the northeast.

The Commission strives to keep these values intact, and tools such as the Oil and Gas Activities Act, the community relations department and ongoing dialogue with industry and residents help to achieve this.

While oil and gas is vital to the economy of northeast British Columbia, it is the people and surroundings that make it what it is. For more information on how the Commission ensures that the quality of life for residents is respected, visit our website at www.bcogc.ca.

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12 • PIPELINE NEWS NORTH I

April 2011

industry news

first steps

- New Brunswick delegation visits BC james waterman Pipeline News North

New Brunswick is facing the dawn of its own unconventional natural gas industry.

Despite being one of the first oil producing regions in the world – the four oil wells that were drilled just fifteen kilometers southeast of Moncton in 1859 were among the first in North America – shale gas development is brand new for New Brunswick.

Consequently, a delegation from that province, including Natural Resources Minister Bruce Northrup, Environment Minister Margaret-Ann Blaney and Energy Minister Craig Leonard, embarked on a fact-finding mission to British Columbia this March, all to get a glimpse of shale gas development in the Horn River Basin, talk about industry-related issues with local government, First Nations and other concerned citizens, and discuss petroleum industry regulations with the BC Oil and Gas Commission.

According to Mark Weis, an assistant deputy minister in the New Brunswick government who is working with the Ministry of Natural Resources on their shale gas initiative, it is all part of their efforts to find a “made in New Brunswick” approach to regulating the industry in their province. A significant factor in the decision to visit B.C. as exploration of shale gas deposits is just beginning at home was the opportunity to learn about the new Oil and Gas Activities Act that was passed by the B.C. government just last year.

“The BC Oil and Gas Commission was very accommodating, and we certainly are appreciative of the approach they took to this,” said Weis, discussing the trip. “We really spent a good solid day with them and they had individuals – directors or the individuals that are leading the specific areas – doing presentations with us and then being available for [question and answer sessions].”

“The new Oil and Gas Activities Act that you guys passed in B.C. last year,” he

continued, “really, what that provides us is the most modern or the most current regulatory framework that’s available. So, we’re in the process now … of seeing how that might pertain to what we’re doing here in New Brunswick. But we’re doing the same thing … in other provinces and states as well. The advantage of the B.C. one is that it’s [the] most current.”

Weis noted that New Brunswick does not necessarily intend to copy the B.C. model, but also mentioned that B.C. does set a good example for New Brunswick, particularly considering the similarities in areas such as geology, environmental issues and the concerns of stakeholders.

“The industry keeps evolving, as the Oil and Gas Commission kept reminding us,” said Weis. “So, we have to make sure that what we do have, at the end of the day, is not just copying somebody else’s regulation, but having a regulatory environment that is right for what we’re doing here in New Brunswick … That’s what the ministers are saying. They want to make sure that we have a ‘made in New Brunswick’ regulatory framework and, at the very least, it’s using best practices from other jurisdictions, if not better.”

The New Brunswick government intends to continue their dialogue with the Commission as they develop their own regulations.

“These folks at the Commission … want to ensure that there’s responsible regulation right across the country,” Weis added, discussing their intentions to maintain contact with the Commission.

“And they made that absolutely clear to us.”

The lessons learned during the trip to B.C. went beyond the regulatory insights provided by the Commission.

The delegation was actually invited to B.C. by Apache Energy, which is participating in a farm-in agreement with Corridor Resources to explore shale gas opportunities in New Brunswick.

“We’ve drilled two exploratory wells, and we’re in the process right now of just waiting for results to come back on that. So, we’re very early on in the area

New Brunswick’s Minister of Natural Resources Bruce Northrop gives a thumbs-up before taking off for an aerial tour of the Horn River Basin. Northrup was part of a fact-finding mission that visited British Columbia in March to learn about shale gas development and regulation.

Photo by Rebecca Penty/New Brunswick Telegraph-Journal.

as far as exploration goes,” said Apache spokesperson Paul Wyke.

“Because we are doing business there,” he added, “we think it’s important for them to see how things are done in other jurisdictions. And B.C. has a very good regulatory regime – it’s something that they need to create their own model. We wanted to give them a chance to discuss [that] with the people that make those regulations in B.C.” “It’s great to see that they’re on a factfinding mission and researching other jurisdictions to determine the best regulatory regime and industry practices for New Brunswick, for shale gas exploration and

development for the future.”

After chartering into Fort Nelson, the delegation was given a bird’s eye view of Apache’s Horn River Basin operations.

“We did it all by helicopter,” said Weis.

“We only had a couple hours. And it was tremendous.”

Their visits to Fort Nelson and the Fort St. John area allowed the delegation to meet with representatives from the Northern Rockies Regional Municipality and the Fort Nelson Chamber of Commerce, the Fort Nelson First Nation, and other concerned citizens eager to discuss the pros continued pg 13

LandSolutions expands into Grande Prairie james waterman Pipeline News North

Due to increased interest in their services from energy sector companies working in northwest Alberta and northeast British Columbia, LandSolutions is expanding its operations into Grande Prairie.

LandSolutions provides land acquisition and environmental planning services to the oil and gas and power generation industries.

“We had received interest from some of the companies that were working in and around that area, both on the Alberta

side and on the B.C. side,” said LandSolutions Vice President Chad Hughes.

“We had been servicing that area in the past from our Edmonton office. So, we saw a need there both expressed by the demand for more services in the area and then also so we could be more efficient in providing a service to that area.”

“It gives the client a more affordable option.”

LandSolutions is not establishing a full office in Grande Prairie, but what Hughes would prefer to call a “field presence.”

“We’re just starting with one full time field agent in Grande Prairie,” he added.

“So, that will be the beginning and we’ll work with that individual at integrating him into the rest of our operations. The administration support is going to be pro-

vided from our other established offices.”

“I could see us having more staff there [eventually],” Hughes continued. “What’s important to us right now is that we are able to integrate the new person we just brought on board into the culture of our company and into the operations of it.

From there I would anticipate adding more resources in Grande Prairie to help support the activity in that area. That will take place over time and in a way that is manageable. We don’t want to bite off more than we can chew.”

Hughes noted that activity in the area of the Montney shale gas play has certainly contributed to the decision to expand into Grande Prairie, but also indicated that companies pursuing oil in northwest Alberta is a significant factor.

In fact, although the company does have a field office in Victoria, they have done relatively little work in the province to date. LandSolutions expects that to change with increased interest in their services from industry companies working in the area as well as a higher profile in the region.

“I think that there’s been a need identified in B.C.” said Hughes. “And we have had companies in B.C. express an interest in having us help them out. Part of the reason why we have established more of a permanent presence in Grande Prairie is to be in an area where we can serve both markets. So, there’s definitely been a need expressed there, on the B.C. side, and I can see that developing into more.” •

April 2011 I pipeline news north •

13

cont’d from pg 12 and cons of shale gas development.

“I think the Government of New Brunswick was a bit taken aback with the shear magnitude of what is going on out there,” said Regional Councillor Kim Eglinski, one of the Northern Rockies representatives who met with the three ministers.

“Having said that, when you are looking at potential growth and diversification of your province, you are also looking at the potential challenges that go along with that. With this visit, I think it shows a real sense of responsibility by both the Government of New Brunswick and Apache – it appears they are doing their homework, and realize that this type of development does have an impact, and they are looking for ways that it can be done in a manner that respects both the environment and the people of New Brunswick.”

Weis found discussions with the Fort Nelson First Nation “very interesting.”

“There seems to be a very healthy relationship there between the First Nations and industry,” he remarked. “They certainly understand the economic benefits that their members are getting from shale gas development and from the industry developing up in that area.

“However, they do also understand that it is partially at the expense of traditional values. So, what they’re faced with is almost what we’re faced with here as well.

And it’s trying to find solutions and trying to find ways that we can actually develop the industry and preserve our traditional way of life. That includes, of course, the environment.”

“The message was, ‘be very cautious in regards to your development of shale gas’,” Weis continued. “They didn’t say do not do it. They were saying be cautious in your approach. And they gave us a lot of information as well in regards to … some of the concerns that they would have had.

And they were also very forthright, providing some of the solutions or potential solutions that they share with industry on an ongoing basis. But what was clear to us, what we really got out of it, was the fact that there is that dialogue between industry and First Nations.”

Weis noted that the key concerns surrounding shale gas development are fairly universal, as evidenced by their similar fact-finding mission to Arkansas at the invitation of Southwest Energy, a major player in that state as well as in shale gas exploration in New Brunswick.

“It’s really all around water,” he said. “It’s around noise. Around roads. So, those were very similar.”

“From people like landowners, farmers, individuals citizens that we’ve met in B.C. as well as other places, even here in New Brunswick, the concerns really aren’t that much different,” Weis continued. “The concerns that they expressed were around water quality and quantity, around some of the seismic testing and the impacts.”

29329

New Brunswick’s Minister of Natural Resources Bruce Northrop (left) and Minister of Environment Margaret-Ann Blaney (right) met with Fort Nelson First Nations Chief Kathi Dickie during their visit to northeast British Columbia in March.

Photo by Rebecca Penty, New Brunswick Telegraph-Journal

“It’s the predator and prey scenario,” he added, describing how straight cut lines for 3D seismic programs can increase predation of certain animal species.

Weis also noticed another interesting similarity between the two regions.

“We’ve found,” he said, “that nobody is really saying, ‘Don’t do this.’”

It is an interesting statement considering that their neighbours in Quebec have put a moratorium on all new hydraulic fracturing, the method of recovering natural gas from these shale formations.

“We have to keep in mind that we’re in a different stage than both B.C. and Quebec,” said Weis. “And B.C. is much farther ahead from the developmental perspective than Quebec.”

“I think they’re two different scenarios entirely,” he continued, referring to the unique situations in western and eastern Canada. “You guys out west are used to the oil and gas development.

And we’re not here in the East Coast. Not nearly as much as you are in Alberta or B.C. or Saskatchewan.

Presently, there is not even any actual drilling in New Brunswick beyond the exploratory work that has been done so far.

So, Weis emphasized that New Brunswick has time to do their research in natural gas producing regions such as B.C. and develop an appropriate approach to the industry in their province, which could mean they will never face the sort of circumstances that have prompted Quebec to put a moratorium on hydraulic fracturing.

“And we don’t have an application in front of us for drilling,” said Weis. “So, we have time. If we look forward, there may be one or two wells drilled – test wells – next year, in 2012. And if this industry goes to the developmental phase here in New Brunswick, we’re looking at three years down the road or so.

Possibly more. So, we have a whole lot of time.”

The New Brunswick delegation was impressed with two aspects of the oil and gas industry in northeast B.C. that are relatively unique to the area. The first aspect was the cooperation between industry companies that exists via the Horn River Basin Producers Group, which offers benefits in terms of “economies of scale” and preventing overlap within the industry in terms of infrastructure such as roads.

“I found that that was very worthwhile,” said Weis. “Especially in addressing some of the environmental concerns, First Nations concerns, and allowing them to find ways that they can work more closely together.”

The second aspect was the use of water from deep saline aquifers for hydraulic fracturing operations.

“The fact that that’s being done is interesting to us,” said Weis. “We have a lot of seawater here. So, it begs the question: would that be a potential source? Who knows?”

Another potential solution to water use issues that the delegation took from the trip was the possibility of using wastewater.

“It might not be the perfect solution,” Weis admitted. “It might not provide all the quantity that’s required. But it definitely could be one solution that’s considered.” •

14 • PIPELINE NEWS NORTH I

April 2011

profiles

Regen Online

- working dehydrator magic

james waterman Pipeline News North

Ten years after starting his company, Lyle Haugen can still vividly remember Regen Online’s humble beginnings in northeast British Columbia.

Quality Post Frame Buildings

He would roll into job sites in his pickup truck, a handcart and two filter pots in the back, ready to work his magic on the dehydrators that dry the natural gas on its way to gathering systems or pipelines.

“The companies would look at me a little sideways, going, ‘You’re going to do what?’” Haugen said with a laugh. “But job-by-job, they kept turning systems around. You know, they would have some very badly contaminated systems that weren’t working right. And within a couple of days they’d be straightened out. And they’d be happy.”

Haugen’s process of regenerating the glycol used in the dehydrators, as well as removing scale from their components and defending them against corrosion, is rather unique. In fact, to the best of his knowledge, his is the only company offering this exact service in all of northeast B.C. and northwest Alberta. Most importantly, it is also a process that can be done without any interruption to natural gas production.

“We regenerate the glycol,” Haugen explained. “Not to brand new condition, but certainly to acceptable levels of contamination. We do it online – that’s the second feature. The [dehydrator is] still running and selling gas [to the gathering system or pipeline]. So, the companies are making money. The third thing is that it touches every piece of pipe that contains glycol. So, anywhere that glycol is touching, it will remove any scale and protect for corrosion.”

“Usually, the first impurities you get – or some of them – is heavier hydrocarbons,” he continued, discussing the problems that energy companies face when it comes to their dehydrators. “So, as you go up the hydrocarbon scale, you get into … liquids and closer to your die-

sel fuels. And then you get your heavier stuff like asphaltenes, paraffin wax, those types of contaminations. They get into the system.”

The biggest issue is the water that enters the dehydrator with the glycol.

“An inherent problem with dehydrators is they only filter the rich glycol,” said Haugen. “That’s the glycol that’s already absorbed the water because it’s under pressure. So, that’s the only part that gets filtered. And because of that there’s three, four, five per cent water content in that glycol.”

That water contains minerals in solution, which contribute to problems of scaling and corrosion.

“You don’t get those minerals out because they’re in solution with the water,” Haugen said. “When it hits the reboiler [in the dehydrator], and that water is vapourized, the mineral is left behind. Consequently, you end up with exactly what you end up having to do with your coffeepot once a year. You have to decalcify it.

So, this process eliminates the build-up on the fire tube, and it allows them, when they do a shutdown or a turnaround, to inspect for corrosion and that type of stuff, it makes it so much cheaper and easier, because everything’s clean.”

According to Haugen, the only alternative to his system is a costly and time consuming process that requires shutting down the operation and removing pieces of equipment in order to do the necessary maintenance.

“Quite costly, especially in the wintertime,” he added. “It never happens smoothly. There’s always freeze-ups. And there’s always other issues.”

The other issue is that most companies try to do this maintenance at the same time, which means there are not enough crews to satisfy the demand. Regen allows those companies to avoid those problems.

“A lot of companies will do a shutdown and a turnaround when Spectra is down for their turnaround,” Haugen explained.

“So, you end up with what is called an outage. So, there’s nobody who can continued pg 15

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April 2011 I pipeline news north •

15

cont’d from pg 14 deliver or sell gas anyway. So, then they rip everything apart. The challenge is, everybody does it.

Then every crew in the countryside is working. So, it’s hard to find crews when you do that. [Regen] saves a lot of money because you’re doing it off peak times when [other] people are trying to do turnarounds. You can do this any time.”

Regen offers two main services: corrective maintenance and preventative maintenance.

“Basically, corrective maintenance, you wait until a system becomes foul to the point where it hardly functions … and then you go and you do something about it,” described Haugen.

He explained that it effectively replaces the traditional method of correcting problems known as “caustic flushing.”

“They used to have to do the old fashioned cleaning of caustic flushing about every nine months,” said Haugen. “And that was usually with three months of struggling. And then you’d finally tear it apart. And we’d flush the system. And then you’d be good for six months. And then you’d struggle for three.”

However, Regen does their preventative maintenance two or three times per year instead of waiting for serious problems to occur.

“Our preventative maintenance … of course, it’s on the go, on the fly,” said Haugen. “We do it while the system is running. And it’s more of a passive element to it. It just kind of continuously keeps cleaning the system and protecting the metal. There really is no situation when you do this program, unless you have an upset, where something in your process goes upside-down and you flood it out with a lot of water and contaminate it.”

“So, on a routine maintenance, we can stay ahead of waiting until it’s catastrophic failure.”

Haugen has brought a lot of experience with dehydrators into this business, as his many years in oilfield operations includes maintaining that equipment.

Eventually, he met an individual who had begun working on the very process that he now employs.

Adding his expertise to the mix, they were able to develop the system he uses today.

“We’re probably now the go-to guys in the area for [dehydrator] knowledge,” he said. “It’s kind of a lost art.”

It is a small operation with just Haugen and one other individual going into the field together on a daily basis.

“We’re able to troubleshoot most of the systems,” he added. “A lot of them I troubleshoot over the phone. I don’t even end up going into the field.”

Regen is still interested in expanding their operations and exploring new solutions to problems that gas companies often face. Haugen said they now have over two hundred clients, but also noted that not all companies stay with the program.

“Usually, when things get tight or slow, when the price of gas goes down, preventative maintenance is the first thing that goes,” he explained, suggesting that companies can also become complacent about this type of maintenance when their equipment is running smoothly.

“I’m hoping to get more into the Grande Prairie area,” he concluded. “We do some work out of the Grande Prairie area right now. We go to northern Alberta, pretty much all of northern B.C. The question is to find the right people. It’s hard to find the right people that can troubleshoot and work with the knowledge that we’ve gained up to this point. •

Lyle Haugen, the founder of Regen Online, sits at the monitoring station where he keeps an eye on his company’s dehydrator maintenance process.

Photo courtesy of Regen

Regen Online’s unique process fluid regeneration system. Regen can regenerate glycol used in gas plant dehydrators, as well as remove scale from the equipment and protect against corrosion.

Photo courtesy of Regen Online

605640

16 • PIPELINE NEWS NORTH I

April 2011

special feature liard basin - still a mystery land james waterman Pipeline News North

Although it has been decades since oilmen first caught a glimpse of its resource potential, the Liard Basin that extends from Northeast British Columbia into the Northwest Territories is still largely an unexplored mystery.

Shale gas plays accounted for ninety per cent of the $893 million in land sale bonuses in B.C. in 2009, but the Liard Basin was only responsible for five per cent of that amount. Comparatively, thirty-six per cent of land sale bonuses that year were from the Horn River Basin and forty-nine per cent were from the Montney shale gas play.

“The Liard Basin was in the early stages then,” said Christopher Adams, Oil and Gas Specialist with the B.C. Ministry of Energy and Mines. “The Horn River and the Montney were the major players for land sales back then.”

Land sales in the Liard Basin in 2009 were just $48.1 million, compared to $316 million for the Horn River Basin.

Possibly the most notable work in the Liard Basin so far has been done jointly by a pair of small gas companies, Questerre Energy and Transeuro Energy.

They have been drilling together in the Beaver River field approximately 150 kilometres north of

Fort Nelson, the discovery of which dates back to 1961.

“Transeuro farmed into our project back in 2005,” said Questerre CFO Jason D’Silva, noting that the companies are operating on a fairly large parcel of land that may hold as much as one trillion cubic feet of natural gas.

“We’ve been involved in a major discovery in Quebec,” said D’Silva, discussing the history of Questerre’s Beaver River project. “We’ve learned a lot about how shale gas gets developed in sort of the more developed plays. Like, it’s all about following a methodical, step-by-step process in terms of, first of all, you’ve got to figure out [if] you actually have sufficient gas in place.

“The next question is, can you actually frac the rock to get the gas to release from there. And the third question is, what are your commercial parameters. Like, what is it costing you to drill a well, how much gas do you get out of the well … But getting to those stages involves a lot of scientific work.

“It’s a very methodical, rigorous process, because you’re talking about hundreds of variables, and if you don’t control for them, you won’t know what caused a good result and what caused a bad result.

And so in Quebec we’ve sort of done that sort of methodical, step-by-step approach where we’ve tested different things, tried them first in vertical wells, then moved onto horizontal wells, and you build on the successes that you’ve had.”

“Now,” he continued, “when we were first involved with Beaver River, we did the complete opposite, because we didn’t understand how shale [gas] was. So, typical sort of small company mentality, we said, ‘Look, we need to find the best result that will be most commercial.’ And so we thought we could just jump the whole learning curve … so we drilled a number of wells together with Transeuro … And some wells tested at two and three million [cubic feet] a day. Some tested at four or five million a day.

“And then we’ve had other wells that tested at less than half a million a day – and other wells that tested nothing. Now, because we didn’t do the rigour on the scientific side of things, we have no continued pg 17

www.fortcitychrysler.ca

April 2011 I pipeline news north •

17

cont’d from pg 16

predictive model to say, ‘Okay, here’s why the four million a day well worked.

Here’s why the less than a hundred thousand a day well didn’t work.’”

“We’ve had one well that’s been producing there for the last four or five years,” he added. “We can’t quite figure why that well does as well as it does.”

D’Silva suggests that the situation in the Liard Basin could be about to change in the next few years, but that may depend on a number of variables – ranging from natural gas prices, the rate of production in the nearby Horn River Basin, and the fate of the proposed West Coast export terminal at Kitimat, B.C. Following the $48.1million in land sales in the Liard Basin in 2009, the land sales in June, 2010 totalled $110.4 million, a significant increase.

“Something’s happening there,” said D’Silva. “Some big lands sales sort of southeast of where we are. I understand that a couple companies up there have been shooting seismic, looking for wells, and that kind of thing.”

“There was some very expensive land sold within the Patry area and around it in 2009 [and] 2010,” said Adams, stating that one major energy company appears to be driving exploration in that area in what may be a Muskwa shale similar to that in the Horn River Basin.

“It’s deeper in the Liard compared to the Horn River,” he added, discussing the land sale activity and the high prices for that land. “I think the Muskwa in the Liard may be deeper than 3000 metres. Maybe 4000 metres.”

The region lacks infrastructure, which can only follow production, especially considering the remote location of the resource and its distance from market. However, production may not happen any time soon with natural gas prices so low.

“There has to be significant production out of the area to build pipelines,” said Adams. “I think what you really need to see is a successful well in the Liard to really prompt activity. And a higher natural gas price would be great.”

“What happened in the Horn River the last two or three years could potentially happen in that Liard area, particularly in the Patry area,” he continued. “But now – I said that six months ago – but now I’m kind of wondering, because even in the Horn River there are some operators that are holding back a little bit because of natural gas prices.”

D’Silva agrees with Adams’ assessment of the obstacles facing Liard Basin development in terms of location, infrastructure, and low gas prices, but also suggests that any shale gas play in northeast B.C. has a significant advantage over his company’s area of operation in Quebec.

“Fort St. John is there,” said D’Silva. “Fort Nelson is there. The service sector is there, which is huge. Having a service sector there makes such a huge difference. I mean, in Quebec, for example, we’ve got to ship equipment all the way from Western Canada to Quebec, because there’s no service sector there. So, having a service sector is absolutely huge. The challenge for this thing is just given the transportation [and] processing charges put it at such a disadvantage to every other shale play.”

“It’s a remote location,” he continued. “So, infrastructure, you know, getting services in and out, ends up being quite expensive. Gas prices. The high transportation and processing costs end up being a huge obstacle, too. The resource is definitely there. The question is in these gas prices, how do you encourage people to spend that kind of money to try and figure out what works and what doesn’t, right?”

Attempting to address that issue, Questerre and Transeuro are looking for an industry partner with the necessary capital to move their project forward, possibly achieving the level of gas production that could encourage investment in infrastructure in the Liard Basin.

“Clearly, having more activity is always good, especially for small companies,” said D’Silva, addressing the difficulties faced by small companies working in a region that is not yet being developed my major players. So, the more activity you have, the more interest there is in your assets, the more things that can happen.”

However, if low gas prices and distance to market are slowing activity in the Horn River Basin, it could still be years until production really begins in the Liard Basin. “If the Horn River was really going, I think the Liard would too,” said Adams.

The game changer could be an export terminal at Kitimat that could make Liard Basin resources available to Asian markets.

“When things like Kitimat open up, I think that creates all kinds of opportunities,” said D’Silva. •

An aerial view of Questerre Energy’s Beaver River operations in the Liard Basin taken in August, 2007. Questerre and their partner, Transeuro Energy, are among the relatively few companies actively working in the Liard Basin today.

Photo courtesy of Questerre Energy

Fire from a flare stack lights up a cold winter night in the Liard Basin.

Photo courtesy of Questerrre Energy

The shale gas potential of the scenic Liard Basin is still something of a mystery, as there has been very little exploration to date.

Photo courtesy of Questerre Energy

18 • PIPELINE NEWS NORTH I

April 2011

technology

lidar vision

- new sight to study Horn River Basin

james waterman Pipeline News North

The BC Oil and Gas Commission, the University of Victoria, and the Science and Community Environmental Knowledge (SCEK) Fund have joined forces on a study that could have a number of applications for oil and gas industry operations in the Horn River Basin.

The study, which began in 2009, employed a pair of remote sensing technologies as well as aerial photography to produce detailed maps of a 700 square kilometre area in the Horn River Basin.

The data obtained through the study can provide the Commission and companies working in the region a variety of information about vegetation and water and aggregate resources, as well as the environmental impacts of energy sector activity.

The two main technologies used in the study were light detection and ranging, commonly known as LiDAR, and an imaging spectrometer used for hyperspectral imaging. They are mounted on an airplane, constantly recording data as the craft flies over the study area.

“The LiDAR that we use,” said Olaf Niemann of the geography department at the University of Victoria, “it’s what we refer to as a discrete multiple return system.

So, it’s a four return system. In other words, for each laser – for each pulse of laser light that goes out – we record up to four returns. And those returns are a function of what the structure of the ground cover looks like.

So, if we have a wide open area, we typically get one return. And if we have enough openings in the canopy, it will go all the way down to the bottom. So, the first return will be from the top of the canopy. The last return will be from the ground. And then there’ll be two [returns] in between.”

The data obtained by the LiDAR system allows them to distinguish the ground from other elements of the landscape, which is largely vegetation in the Horn River Basin. It then enables them to construct an elevation model that is far more accurate than the TRIM elevation model used by the province.

“It’s a provincial generated system or data set,” Neimann said of the TRIM model. “And it has an accuracy of plus or minus ten metres, horizontal accuracy and vertical accuracy. And ours is plus or minus two metres horizontal accuracy and about twenty-five centimetres vertical accuracy. So, we can get an extremely detailed elevation model with that.”

Subtracting that accurate ground height from the height of vegetation provides a canopy height model for the forest. The LiDAR data also enables them to recognize gaps in the canopy and the mass of the canopy, which can help discern between old growth and new growth. Hyperspectral imaging offers additional detail in terms of the tree species that make up the forest and the health of those trees, including the effects of pathogens, forest pests, and water related stress.

“Typically,” said Niemann, “we say that the laser gives us the form and the hyperspectral gives us the functioning. So, the hyperspectral is a very detailed spectral measurement where we get 490 channels to define the electromagnetic spectrum between about 400 nanometres and 2500 nanometres.”

“Human vision,” he added, “is active between 500 and 700 nanometres.”

So, hyperspectral imaging not only sees the visible spectrum, but also extends slightly into the shorter wavelengths of the blue part of the spectrum and deep into the infrared part of the spectrum.

“When we combine them,” Niemann continued, “we get a very, very powerful tool.”

Howard Madill, Director of Stewardship with the Commission, described the potential applications of the study in terms of strategic, tactical and operational levels. The strategic applications are yet to be deter-

The BC Oil and Gas Commission, the University of Victoria and the Science and Community Environmental Knowledge Fund teamed up to produce detailed maps of the Horn River Basin using LiDAR and hyperspectral imaging technology.

The study has oil and gas industry applications ranging from locating gravel deposits to examining the impact of industry activity on water resources and wildlife in the region.

Photo by Dave Olecko, Nexen Inc.

mined, but Madill did have some insight into the tactical and operational uses of the data.

“At the tactical level,” he said, “it gives you some pretty good indications of things like where the wetlands are, percentage of wetlands in the area, soil wetness index, that may be useful to help determine the effects of oil and gas activity on things like draw down on water …

We want to make sure that we’re managing the water properly.”

“It also gives you a pretty good tool to help classify vegetation,” Madill continued. “So, then you can probably do some tactical analysis. Is there specific vegetation or ecosystem types being more or less impacted by oil and gas activities?”

“That area up there is fairly flat in a lot of areas, and there’s these sort of fens and bogs,” he added. “And when you’re out in the field, it’s actually fairly difficult to tell where the flow is from Area A to Area B, because it’s all these fens and bogs mixed up. And combining these two technologies gives you a picture that you can interpret some of that from, which might have some operational implications for how you route roads and how you want to provide for drainage through fens and things like that.”

Scott Wagner, Nexen’s Environment Team Lead for Shale Gas, is hopeful that the LiDAR study can provide valuable information about the natural regeneration of cut lines and other disturbances – such as those made during 3D seismic programs – and other issues related to declining caribou populations in northeast British Columbia. Disturbances of that nature have given wolves easier access to caribou, causing a detrimental change in that predator-prey relationship.

Wagner believes that the detailed habitat mapping that has been done through the LiDAR study will fit hand-inhand with a SCEK funded caribou monitoring study that began this February (See February’s edition of the Pipeline News North, “Caribou.Caribou- Part 2”; http://www.pipelinenewsnorth. ca/article/20110227/PIPELINE0118/302279992/-1/pipeline0118/caribou-caribou-part2).

“We’ll see how caribou and predators are actually using the landscape in relation to those linear disturbances,” said Wagner, noting that the combination of data from both studies can lead to site specific solutions for these types of environmental problems.

“When [we] combine the caribou work and the predator work and the mapping stuff,” he continued, “what we’re hoping to achieve is some specific, effective mitigation that allows oil and gas, at a given pace, to continue to develop, while at the same time protecting caribou in the long term.”

Particular areas of interest for the caribou monitoring study are caribou calving sites and the areas where young caribou spend the first few weeks of their lives.

The LiDAR study should provide a better sense of habitat characteristics associated with calving sites, which could help the industry design better caribou management plans.

“Maybe there is some comparison or some parallel parameters that you find across the landscape [where calving is occurring],” said Wagner. “So, then you can start adding buffers or protective mitigation measures around those specific areas.

“What we have now is really coarse, broad scale mapping, and we have these wildlife habitat areas and ungulate winter ranges that are huge,” he continued.

“And they can’t be no-go zones, because it sterilizes significant portions of land, especially in northeast B.C.. So, if you can get finer scale mapping you can start to focus in on the possible pathways for decline in those specific areas. Maybe it’s a calving area. Maybe it’s a rutting area or whatever it might be. Then you can start developing effective and efficient mitigation specific to those decline pathways in those areas.”

The study also has practical applications for the day-to-day operations of the oil and gas industry in the region.

“We also did some work on finding aggregates,” Niemann explained. continued pg 19

April 2011 I pipeline news north •

19

cont’d from pg 18

“So, we looked at the geomorphology as expressed by the bare earth model. We can map, for example, moraines versus dune fields, shorelines. And we can look at the vegetation structure that’s on top of it. So, certainly, up north, better drained areas tend to have different types of vegetation on them …

They tend to be taller. They tend to be primarily deciduous in there. And as you get wetter, the vegetation changes to more coniferous and the spacing of the trees starts to increase as well. All this we can pick up quite nicely from the LiDAR data and the hyperspectral combined.”

Wagner believes this will take a lot of the guesswork out of locating gravel required for roads and lease sites.

“It’s just simply the fine scale topography,” he said, “and you can kind of see the landform characteristics that would be more likely to have gravel.”

The Commission originally approached Niemann and the University of Victoria about conducting a LiDAR study in the Horn River Basin because of what they had heard about similar work that the university had done with Canfor.

Initially, the Commission was mainly interested in mapping bodies of water in the region.

“They wanted depth,” said Niemann, “but the water up in that area is just too opaque.

There [are] just too many tannins in the water.

It’s too brown. We don’t get any depth penetration at all for the light.”

According to Madill, there have been numerous LiDAR projects in the past, but this was the first one designed to use both LiDAR and hyperspectral imaging to examine such a large area.

“It’s pretty cool stuff,” he said. “And now that we’ve got it, we’re trying to figure out how to make best use of it in an oil and gas context.

And if we need to continue down this path or not.” •

right: Wetlands Discrimination and Mapping • major forest species mapped to a high degree of accuracy

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20 • PIPELINE NEWS NORTH I

April 2011

profiles getting pumped -DASKI Contracting Ltd.

Husband and wife team, Dave and Angela Kowalski, started DASKI Contracting in 2005, becoming the first company in the region to offer frac-out control services.

Photo by James Waterman

james waterman Pipeline News North

It was a logical career path for a man and his family who grew up fishing the lakes and rivers of the North Peace.

Dave Kowalski, who runs DASKI Contracting along with his wife, Angela, had been a mechanic for fifteen years in Fort St. John. His knowledge of the equipment and his passion for environmental preservation eventually led him to develop solutions to problems that he was noticing with respect to how gas companies were conducting their operations near bodies of water. Kowalski used those ideas to launch his new business.

“We started out doing river crossings and frac-out control,” Kowalski said of the early days of DASKI Contracting.

“Frac-out control is for horizontal drilling.

We don’t do the drilling, but when they’re drilling, they’ll drill under a creek. That drilling mud can quite often come to surface in the creek or on the shores of the creek. And, therefore, they call it a deleterious substance to the creek. It’s basically a sediment type of pollutant, so it’s harmful to fish and all that stuff. What we do is, we’ll dam and divert the creeks, and we’ll collect this fluid, and we’ll capture it and return it back to the drilling rigs so they can continue their operation.

Creeks range from six inches wide [and] a couple inches deep to, you know, quite vast. Like, we’ve done the Kiskatinaw

River. We’ve done the Murray River.”

“Generally,” he continued, discussing the frac-out control process, “if somebody’s doing a creek bore … they’ll have us on site before they start drilling.

Because there’s always a chance of that fluid coming up to surface in the creek.

The problem is, once that fluid comes to surface in the creek, all operations cease. Then they have to report the spill to Alberta Environment if it’s in Alberta or [the BC Oil and Gas Commission] if it’s in B.C. “So, they’ll have us on site ahead of time. We’ll do a pre-set-up. What we’ll do is run some of our hoses from the creek up to the borrow pits or the discharge area … and then, that way, as they start to drill, we just walk the banks and we monitor the banks and we monitor the creek for sediment. And then, if we notice a release of fluid in there, we’re in contact with the drilling rig. They stop.”

DASKI will subsequently divert the creek and dam the contaminated area using sandbags or an Aquadam, essentially a large bladder that fills with water, effectively using water to control the flow of water in the creek.

“We’ll put our pumps in,” said Kowalski. “We’ll divert the creek. Dam up the contaminated area. Recover that fluid.

Pump it back up the drilling rig. And then, at that point, once we have control of that area – of that release area – then they`re allowed to continue again.

“Now, our procedures are monitored by an environmentalist … They do turbidity

monitoring of the waters. And they have to get approval from [the Commission] or the regulating bodies before they can start. Once we get our stuff done, then [the drillers] have to ask for approval to start [up again].”

“Generally,” he added, describing the benefits of using DASKI’s services, “what`s happened in the past, if somebody`s drilling, and they don`t have a service like us on site with a frac-out control, they will stop. And, at times, it takes two or three days to get approval for them to continue again. If we`re on site, we`re usually up and drilling again in, usually, anywhere from twelve to fifteen minutes to a couple hours. That`s where the saving comes in. And then, of course, once they`re done the drill, then what we do is we clean up the creek bottom, and then we take our dams out, and it`s all inspected by the regulating body.”

DASKI are pioneers in this area. They were the first company in the region to develop and use this type of frac-out control technology, as well as being the only one with their level of expertise and experience with water diversion and Aquadam installation. DASKI first began doing frac-out control in November, 2005, and services northeast B.C. and northwest Alberta.

It has been a family effort right from the start. The husband and wife team – proud to be running their own business in their own hometown – comprised the entire DASKI staff in the beginning.

Their children have also played their part, providing their input when choosing

company colours, trucks, and the name of the company.

During the past year, demand for their services has seen their staff grow from just six individuals to about twenty employees.

“We’re unique,” said Kowalski, explaining DASKI’s popularity. “We’re proud of the fact that it wasn’t an idea that was out there. The Aquadams have been out there. There are companies that rent pumps.

“There are companies that will come and put the Aquadam in for you. But we’re the only company still that [is] certified to put in the Aquadam, to sell it, install it, remove it, and have the pumps and the knowledge to be able to take care of the [project] from start to finish.”

A “one-stop-shopping” experience is provided, which is always valuable to energy companies.

DASKI began to shift into a new area about three years ago when pipeline construction in the region began to slow.

Seeking new uses for their equipment at that time, they began to move into doing water transfers for hydraulic fracturing of horizontal shale gas wells.

Kowalski said this is “currently the bigger part of the operation.”

DASKI pumps water from lakes, rivers and borrow pits to hydraulic fracturing sites via surface lines, existing pipelines, or underground infrastructure that has been built by the oil and gas companies. continued pg 21

April 2011 I pipeline news north •

cont’d from pg 20

“So,” said Kowalski, “we’re getting some of these pushes where we can push from a source and we can go fourteen [or] fifteen kilometres without a break in between – with no station in between. Just specialized equipment.”

A few companies did not initially believe that it was possible to pump water such long distances without stations along the way, but DASKI has proven them wrong from the start. Every transfer does have its challenges, however. The temperature and the slope of the ground can differ from job to job and those types of variables must always be taken into account when planning a water transfer.

Kowalski believes that the demand for DASKI’s water transfer services will remain strong.

“I don’t see it slowing down.” •

21

LEFT: Shown is a creek diversion for pipeline installation performed by DASKI. The Aquadam is at the left of the photo.

The creek water is pumped through hoses, which are held off the creek bed by a bridge so that the excavators are able to dig. The excavator is just starting the ditch, which is always at a ninety degree angle to the flow of the creek.

The pump hanging from the bridge will be used to discharge dirty ditch water so that it does not flood the area. It is lowered into place when the ditch is dug to full depth.

Once the ditch is completed, the pump will be raised to allow the pipeline to pass under it and sit on the ditch bottom. The pump is then lowered beside the pipe and continues to run as the ditch is backfilled, burying the pipe.

The small blue and silver pump near the Aquadam catches clean water that trickles under the dam and returns it to the creek, minimizing the amount of water to be handled by the hanging pump.

A DASKI Contracting crew pumps water and installs an Aquadam for a creek diversion.

Photo courtesy of DASKI Contracting

IN THE PINK

-K&L Oilfield has the local angle james waterman Pipeline News North

K&L Oilfield Holdings has one important difference from the service providers located in towns such Dawson Creek, Fort St. John or Fort Nelson.

“We’re just more convenient,” said Lory Ollenberter, co-owner of the company with her husband, Korey, discussing the benefits of being located in Pink Mountain.

“This is right where all the activity is. We started out with one water truck, and then just as the oil patch grew, we just grew with it.”

Korey and Lory – the K and the L in K&L Oilfield Holdings – met when he was driving a snowplow and she was a cook at one of the industry camps. They began to consider starting their own business in 1996 with their sights on purchasing a water truck to supply drinking water to the camps. “We knew that work was here for the water truck,” said Lory. “So, we purchased the one water truck. And then we had no place to locate because, homes, there’s no land or anything, nowhere to live.”

The couple rented a cabin from the owners of Pink Mountain Campsites until they had the opportunity to purchase that store in 2000, mostly so they had a location where they could keep their trucks.

During the early days, Lory drove the

water truck as Korey continued to plow snow. After they bought the store, Korey took over the water truck, driving twelve to sixteen hours a day, as Lory ran the store sixteen hours a day.

“It wasn’t all that busy back then though,” she added.

As industry activity in the area grew, K&L Oilfield began to haul water for the drilling rigs as well as drinking water, gradually adding vac trucks, steamer trucks and additional staff. The company now has a staff of sixteen people.

Although they owe some of their success to their position in Pink Mountain, Lory admits that running a business in that locale does have its challenges. They have to provide accommodations for all

their staff. If they have problems with one of their trucks, it takes time for new parts to be delivered.

“And we have to usually take the trucks to Fort St. John or Grande Prairie,” she said, noting that it is a costly process that can take from three days to three weeks until the truck is ready for work again.

Lory and Korey work seven days a week for the most part. Lory works from five o’clock in the morning until five o’clock at night, while Korey works from eight o’clock in the morning until eight o’clock at night.

However, the long hours and the hard work has not put a strain on their marriage in any way. “Actually, we get along quite well,” said Lory. “We just kind of share the work.” • 28392

www.trojansafety.com

22 • PIPELINE NEWS NORTH I

April 2011

careers & training quirky pipes

- a creative approach to training

james waterman Pipeline News North

Students in the Industrial Instrumentation Foundation Trades program at Northern Lights College’s Fort St. John campus had an opportunity to show off their recently acquired skills and their creativity with a unique piping project this March.

Instructor Stacy Smith had his students work in teams to design and construct three-dimensional shapes that could hold 30 pounds per square inch of pressure.

“Part of the Foundation Instrumentation program is to do some piping work,” said Smith. “And with piping it can be either something that’s kind of fun and interesting, or it can be boring, [where] you can you just basically measure out pieces of pipe, cut threads on them, and then you’re finished. I decided that I wanted something a little fun for the students to do. So, I decided to let them be a little creative, and not only learn how to cut and thread pipe, but to assemble the pieces together in something that could be pressured up, and could be something kind of creative at the same time.”

“So,” he continued, “I gave them the option of building something sort of geometrically shaped. I wanted three-dimensions to it so that it could have a lot more bends and turns and structure to it. And then I told them not only did they have to do that, but we had to be able, in the end, to pipe in regulated air pressure.

“It had to hold pressure to 30 PSI. So, that was the other little thing I threw in there. It was just a piping project that I thought would be more interesting for them to do, to add a little bit of a creative element to it.”

The students worked on their designs for about a week and Smith was very impressed with the results.

“I was blown away, to be honest,” he said. “I think they did a fantastic job …

They definitely got creative – especially the girls’ group. They built a robot.”

“It’s a great thing,” he added, “when they can take their basic hands-on skills, throw a bit of creativity in there, kind of stretch the boundaries a little bit, and they loved it. It was great. It was a great project.”

Unfortunately, their new creations could not stick around for very long.

“To be more cost effective, it’s good to reuse the stuff. They were kind of sad when I told them that we would actually have to disassemble everything and use the pieces for the class that came in next year,” said Smith. •

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April 2011 I pipeline news north •

23

Penn West - corporate citizen of the year cont’d from pg 7 “We’re extremely pleased about it,” said Snydmiller, noting that the award is a validation of the Community Matters program that Penn West has implemented.

“It’s basically just trying to be a better steward in the community,” he added, describing the program. “Getting involved in things. Sometimes, oil companies have this stigma of being the big, bad oil company, and that’s not the case. It’s a thing where we feel we can operate an oil and gas company in a community and be a positive influence.”

According to Snydmiller, Penn West receives hundreds of requests for the thousands of dollars that they invest in the community, and the trick is the best value for their money.

“We always have to try and weigh where it will be probably the most positive impact on the community,” he said.

“The schools seem to be a really good place that we feel that money is very well spent,” Snydmiller continued. “Typically, we get a really strong response back from it. And it can be something as simple as a barbecue for the kids or helping to plant trees. We did that along the roads to keep dust down.”

ABOVE: Christopher Brown and Dylan Weibe

A number of community investment ideas also come from within their own organization, originating with employees who live in the communities where they work. That is partly why this award is so gratifying to Snydmiller and Penn West’s staff in the region.

“Some people put a substantial amount of time into [these] things.”

Snydmiller explained. “And it paid off.

It’s turned out to be a very positive thing. And people [in the company] are really encouraged.”

“And any time you can have a positive influence instead of a negative, it’s a great thing,” he added.

Ultimately, Snydmiller feels the most important aspect of being a good corporate citizen is working to protect the health of the community and the local environment.

“Always trying to do the right thing,” he said. “Basically, minimize impact on the environment. Minimize our footprint. Because you know [how] the old saying goes: we don’t inherit the land from our ancestors; we’re just borrowing it from our kids. I think it’s only fair to say that doing the absolute proper thing every time is the answer. And that’s what we strive to do.”

“And not only just meeting government requirements,” Snydmiller concluded, “but trying to exceed them wherever we can.” •

30583

BELOW: Travis Martens and Ryan Graydon

Working with industry to help eliminate work-related incidents and injuries Enform is the safety association for Canada’s upstream oil and gas industry.

Established by industry for industry, Enform helps companies achieve their safety goals by promoting shared safety practices and by providing: » Effective training, including courses on general and operational safety programs and petroleum fundamentals » Expert audit services » Professional advice Our vision is no work-related incidents or injuries in the upstream oil and gas industry. Contact Enform today for more information.

Email bc@enform.ca Fort St. John 250.785.6009 Toll-free 1.800.667.5557 www.enformbc.ca

24 • PIPELINE NEWS NORTH I

April 2011

technology

QuickFRAC

- thinking outside of the box

Packers Plus QuickFRAC multi-stage batch fracturing system enables simultaneous stimulation of multiple stages (group) with a single fracture treatment at surface.

james waterman Pipeline News North

A new hydraulic fracturing technology from Packers Plus Energy Services could help the oil and gas industry improve its efficiency and environmental footprint while increasing recovery rates.

QuickFRAC, which is now available for industry use, offers energy companies the ability to fracture as many as sixty stages downhole with only fifteen pumping treatments at the surface. The technology can enable operators to save time, money and water, as well as increase recovery by fifteen to seventy per cent over pre-existing methods, depending on the well.

“Really, QuickFRAC is a breakthrough technology,” said Dan Themig, President of Packers Plus. “And the reason I say that is, as we begin to understand more and more about producing tight oil and tight gas out of shales and unconventional reservoirs, what we have found is the number of stages – frac stages – required just continues to grow.”

He continued, “For example, a few years ago – probably six or seven years ago – everybody thought five fracs in a horizontal well would be more than sufficient to drain it. We developed technology to take it to ten and then later to take it to twenty with our StackFRAC HD. Guess what? We’re still not there. And so what we’re seeing now is numbers that [are] astronomically high with regard to how many fracs are actually required to effectively drain some of these reservoirs, numbers that a few years ago we

would have thought would have looked like insanity. But the industry, when they adopted our HD technology, has taken it to twenty. And now we’re seeing [wells] in the range of forty to sixty and, in some cases, even a hundred fracs required.”

“Doing a hundred fracs becomes economically impossible with existing technology, until QuickFRAC came along. And now we can do fracs five at a time. So, we’re really still talking about doing twenty total fracs on surface, while Packers Plus delivers sixty to a hundred stages downhole.”

It has been just over a year since Packers Plus did their first trial test with QuickFRAC. Trials have been conducted in the Horn River Basin and the Montney shale gas play, as well as recent tests in oil producing areas such as the Cardium. One of those trials in the Cardium allowed the company to complete a twenty-four stage fracturing job in just ten hours. That project would have previously taken three or four days to complete using what is known as the ‘cemented plug and perf’ method.

“One of our guys was working on a proposal for a fifty-five stage job in the Horn River area,” said Themig, discussing the time saving benefits of the new process. “And so they just can’t afford to stay on location for, you know, twenty or thirty days to do these. We can do them in a couple of days, probably.”

Cost savings, particularly in terms of time spent on the job site, is the major advantage of using QuickFRAC in the gas plays of northeast British Columbia, according to Themig. He anticipates a significant decrease in the amount of time required to complete wells for those operators using the new technology.

“Currently,” he said, “operators are on

location on a well for maybe five to ten days to do existing numbers of stages.

And we think we can cut that down to a day or two provided they can get the fluid and the sand on location. So, it’s just a reduction in time required.”

Themig explained that there are other important benefits as well.

“Anybody who works in our industry knows there’s a critical shortage of frac equipment throughout North America and really throughout the world,” he said.

“And so, to some degree, if you’re an operator trying to complete, you know, maybe fifty wells a year, or something in that range, you may not have enough frac days available. And so this technology directly affects that.”

“Lastly, what we think it will do,” Themig continued, “is significantly increase ultimate recovery on these wells. I saw some reservoir modeling in a presentation that was done at one of the investors’ symposiums. And what it was, was some reservoir modeling done by one of the frac companies at current frac spacing. So, the stuff they’ve been doing for the last year or so out in Horn River.

What it showed was they actually had virgin pressure between the fracs after fifteen years of production because the rock’s so tight. In other words, they’re not being very effective on recovering all the reserves in place and they probably never will. What we think can happen is, we’ll be able to increase ultimate recovery in the range of fifteen to seventy per cent on a per well basis.”

QuickFRAC could also improve the economics of working in the Horn River Basin and encourage production in the Liard Basin. Low natural gas prices and distance to market has caused some operators to decrease their activity in the

Horn River area. Those same issues, coupled with a lack of infrastructure in the region, appear to be delaying exploration and production in the Liard Basin. If operators are able to recover a greater percentage of the gas in-place at a lower cost than with previous methods, that could possibly spur greater activity in those plays.

Addressing that matter, Themig mentioned a case study in which an operator compared – side-by-side – a conventional ‘cemented plug and perf’ well and a Packers Plus StackFRAC HD open-hole system.

“They were actually able to save ten per cent of the total well cost [with StackFRAC HD],” he said. “Not ten per cent of the stimulation cost, but ten per cent of the total well cost. And that was StackFRAC. We think QuickFRAC will take that to the next level.”

“But the other part of the issue is, if you have high decline rates,” Themig continued, “like what we’re seeing in a lot of these shale reservoirs and some of the tight reservoirs, we think we can significantly change that. So, the first year production and second year production and third year production are not quite as different from each other.”

Trials are also underway in natural gas plays in the Marcellus and the Rocky Mountains in the United States. Additionally, QuickFRAC should be making its first appearance in the Middle East this spring.

“A lot of the technology involved in it was initially developed, actually, about six years ago – initially for carbonate reservoirs that require acidizing,” said Themig. “And so our experience with the technology is extremely high for a new continued pg 25

April 2011 I pipeline news north •

25

March drilling level highest since 2006 Daily Oil Bulletin www.dailyoilbulletin.ca

cont’d from pg 24 product. What we’ve been able to do is reconfigure some of our existing technology and then design a series of new tools that make this possible. So, you know, in reality, some of the technology was used as much as six years ago. But the QuickFRAC system itself we’ve been trialing for over a year. So, we’re well up the experience learning curve on it.”

Packers Plus did not begin developing its QuickFRAC technology with water conservation in mind, but Themig noted that this is one if its side benefits.

“We were just looking at efficiencies,” said Themig. “At the time, I’m not sure that we knew really how many frac stages were going to be required on these wells.

We continue to learn as we go along. So, we worked on it initially as an efficiency generator. And my belief was always that more water isn’t the answer. But now the industry has kind of come alongside and they are beginning to say, ‘Yeah, it is more stages, and not just more water.’”

Themig noted that he had seen a trend toward increasing the size of fractures, which was causing companies to more than double their already substantial water usage.

“And they got a net twenty per cent increase in productivity,” he said. “Those are big numbers, and I’m not sure that they’re great numbers.”

Packers Plus was certain that companies working in areas such as the Montney play in northeast B.C. were actually “over-fraccing” their wells.

“In other words,” Themig explained, “they were using too much water for each stage and they were creating these really long fracs that were well in excess of what was required. We eventually were able to verify that, by some data from offsetting wells where a company actually fracced from one well into another well.

Preliminary data suggests less than 30 per cent of the wells being drilled are resulting in gas wells this year, down from about 43 per cent in the first quarter of 2010 and 69 per cent in the first three months of 2009.

Of the wells rig released in the first quarter in Alberta, 1,458 were licensed to drill for oil or bitumen, up from 1,081 wells in the first three months of 2010 and only 390 in 2009. Gas and coalbed

And it was then that the operator finally said, ‘Okay, yeah, you guys are right. We are using probably too much fluid,’ “So what we’ve begun to do for them is, we’ve actually reduced the water by almost half on a per stage basis. And we’ve increased stage numbers. And their decline curves are really better than they’ve ever been. So, when I talk about reducing water usage, there are a couple of reasons we’re able to do it. With this technology, on a per stage basis, the amount of water required is less because of the mechanics of the way the system is pumped. It’s much more efficient. But, secondly, as we grow in an understanding of some of the shale reservoirs as an industry, what we’ve found is, it’s not bigger fracs with more water and more water and more water.

“What it appears – and every reservoir’s a little bit different – but what it appears in most of these tight reservoirs and these tight shales is that it’s more stages with less water per stage that actually create better wells with better decline curves. So, really, it’s not more, more, more water. It’s just more stages with less water per stage. And so I think we can have a significant effect in reducing how much water is required to stimulate these wells.”

Although they have just released their QuickFRAC technology, Packers Plus is hard at work exploring new ways of improving efficiency and increasing recovery rates. They have over eighty engineering projects currently underway, including ten projects related to the new QuickFRAC system.

“We’ve got a tremendous future in technology development to really make the industry more efficient, more environmentally responsible, and ultimately to recover more reserves from these tight formations,” Themig concluded. •

methane wells, by contrast, were down to 902 wells this year from 1,362 in 2010.

In Saskatchewan, 745 of the wells drilled were licensed to search for oil while only 19 were targeting natural gas.

Industry drilled 6.85 million metres of hole in the first three months of 2011, a healthy 16.5 per cent rise from last year and the most since the winter of 2007.

Since the year 2000, the nadir occurred

in the first quarter of 2009 when slightly more than four million metres were drilled and the zenith occurred in 2006 when over nine million metres were drilled.

The average depth/length per well for the three months ended March 31, 2011 was 1,760 metres, eight per cent above last year’s average of 1,634 metres and 48 per cent more than the average well depth/length in the winter of 2006.

28524

With cold weather keeping the ground frozen, March was a strong month for drilling in Canada as producers drilled 1,226 wells, 47 per cent more than in the same month last year and about triple the number of wells drilled in March 2009.

The March count was the highest for that month since 2006, Bulletin records show. Industry drilled 2.25 million metres of hole last month, almost triple the metres drilled two years earlier in March 2009.

With the high level of activity last month, first quarter numbers show 3,893 wells rig released across Canada, eight per cent or 292 wells more than a year ago.

While Alberta’s well count was nearly 60 per cent higher in March 2011 than in March 2010, the count for the first quarter shows only a four per cent rise this year to 2,691 wells from 2,579 wells for the three months ended March 31, 2010.

British Columbia is the only Western Canadian province with declining drilling in 2011 while Saskatchewan and Manitoba are both having very strong years.

Operators rig released 196 wells in B.C. to the end of March, down 20 per cent from 244 wells a year earlier.

In Saskatchewan, by contrast, the well count rose 26 per cent to 809 wells from 632 in the first three months of 2010. And Manitoba’s well count jumped 54 per cent this year to 193 wells, almost as many as in B.C.

www.arctech-welding.com www.arctech-welding.com

26 • PIPELINE NEWS NORTH I

April 2011

safety

finance

Insuring your biggest Insuring your biggest - your home investment - investment your home

ENFORM

Your home is probably the biggest investment you’ll ever make.

When arranging your mortgage company may offer you ever make. When arranging a mortgage, your Your home aismortgage, probably the biggest investment you'll mortgage insurance.

Have you considered themortgage advantages insurance. of personal Have you considered the advantages of personal mortgage company may offer you insurance to your cover your mortgage? lifelife insurance to cover mortgage?

Consider theConsider differences:the differences: Mortgage insurance

- occupational health and safety is on the job

Individual life insurance

You can choose term coverage and match the term length to your amortization period. A term policy may be converted, regardless of health, until james waterman employed in that field in 2009. age 65.

North Harman agrees that health and safety •Pipeline OrNews you can choose permanent coverage is in a growth sector, noting that schools immediately. At some point the future, Lloyd Harman prefersoftoa permanent such aspolicy the University of Alberta and the cash value may be sufficient theare balance starting to offer new programs to downplay Enform’s role to in pay offBCIT of the mortgage. develop health and safety professionals. occupational health •improving You appoint a beneficiary who can use a move forward on “There’s definitely and the safety standards proceeds in and whatever manner it,” said Harman. “I think it’s something he/she wishes (i.e., to invest than that rather the industry – both the oil and gas performances in the upstream pay off a low interest mortgage). industry and other industries – are going gaspolicy industry.

•oil and Your is portable. If you to betransfer looking for, more health and safety your mortgage to another company, professionals.”

As your Vice President of Operations for insurance remains in force.

HarmanYou also agrees that a significant that industry’s safety association, Harman don't need to re-apply and percentage prove your of new hires in the next ten knows full well that occupational insurability.

You'rehealth protected from the years could be made to replace those and safety in the of energy sectoryour has come danger losing insurance individuals who will retire from the profesa change a longbecause way in recentof years.

According in to your health. sion during that time, but that is not a •him, Alberta You may select an insurance amount has experienced an apr the differences: certainty. sufficient toper cover your mortgageActually, and he suggests that health proximately forty-five cent reduction andterm safety professionals can be a differother outstanding debts and length in lost time injuries from 2005 to 2009, ent breed when it comes to their views on match amortization.

Individual life insurance whileto similar trendsyour have been seen in retirement.

•both Saskatchewan You can insure both you and your and British Columbia. know a lot of them do stay in it bespouse even if theshould mortgage“I is However, he insists that Enform • You can choose term coverage and cause they love it,” he said. “Health and registered in credit one for spouse's name. not take too much of the those fit match the term length to your safety [is] a little bit different because it’s advances. he amortization period. A term policy may more than just a job. It’s more of a pas“I’m a very factual type individual,” said he be converted, regardless of health, until sion for a lot of people.”

Harman, “I think the most important part e or Submitted age by:65.

First Choice Insurance & Investment Services Inc “It’s almost like a calling at times,” Haris that it’s a collaborative approach. The • Or you can choose permanent coverage man continued. “I know it might sound © industry has a safety association – and At some point in the future, Sun Lifeimmediately.

Assurance Company of Canada, 2007. a little on the soft side, but it sort of is. here we are. We’re at their disposal to th, the cash value of a permanent policy I’ve seen people when I’ve been training help them improve their performance. We may be sufficient to pay off the balance them, on the second day, they’ll come up

offer the safety stuff. We offer the training. e of the mortgage. to me and say, ‘You know, Lloyd, I finally And we offer that in a seamless package, • You appoint a beneficiary who can use know what I want to do. I’ve been working so to speak. ce the proceeds in whatever manner for twenty years, and now I know what But it’s the employers out there – and he/she wishes (i.e., to invest rather than it is. It’s health and safety. I didn’t know we can be over here trying to influence pay off a low interest mortgage). what it was, but that’s what it is.’” all sorts of things – but if employers aren’t by • Your policy is portable. If you transfer Still, there appears to be a tremendous doing their part and stepping up to the your mortgage to another company, opportunity for people to enter the field plate – the supervisors and the workers your insurance remains in force. You over the next few years. working together out in the field – that’s don't need to re-apply and prove your Harman keeps a log of attributes of not going to work.” insurability. You're protected from the good occupational health and safety “So,” he added, “it’s a collaborative efdanger of losing your insurance professionals that catch his eye through fort moving the health and safety agenda because of a change in your health. his work with Enform. Not surprisingly, forward. No one group can stand up and • You may select an insurance amount professionalism tops the list. say, ‘We did it all.’” sufficient to cover your mortgage and “And you’ve got to be a motivator,” he Enform is already celebrating its fiftieth other outstanding debts and term length added. “And that motivation both goes up anniversary in 2011, but the unconvento match your amortization. and it goes down inside the organization. tional side of the oil and gas industry – oil • You can insure both you and your So, you’ve got to motivate management. sands and shale gas – is still a young spouse even if the mortgage is They need to understand what safety’s all animal with a lot of potential for growth. registered in one spouse's name. about. For a lot of people, they don’t reThe Petroleum Human Resources ally understand it as such. They think it’s Council of Canada has released a report Submitted by: First Choice Insurance & Investment Services Inc. some big mystery thing.” on labour issues the energy sector will be “Actually,” Harman continued, “there’s ©Sun Life Assurance Company of Canada, 2007. facing until 2020. The report estimated ent Services Inc science and there’s art.” that the amount of employment in 2009 in The job also requires leadership and four key areas of the oil and gas industry 7. interpersonal skills, business acumen, – services, exploration and production, knowledge of relevant legislation, and oil sands, and pipeline – was approxia genuine interest in the well being of mately 170,000 people. The Council other people. As well as being honest predicts that, in a scenario in which there and knowledgeable, they have to be what is growth on both the oil and gas sides of Harman calls “systems thinkers.” the industry, the sector will need to hire an “And someone who can be a good role additional 130,000 people by 2020. model,” said Harman. “Nothing worse Approximately 76,000 of those jobs will [than] if you saw a health and safety probe the result of an increase in industry fessional speeding down the road at 180 activity and the other 54,000 will be to kilometres an hour.” replace those workers that will retire over According to Harman, it is also vital that the next decade. health and safety professionals be able The health and safety component of the to adapt to new environments with new industry is included in those projections. companies or organizations.

For example, in the previously mentioned “Going into an organization,” he growth scenario, the industry is expected explained, “there are certain things you to hire about 1000 inspectors in public want to get across, but you’ve got to and environmental health and safety, 28381 which is almost as many people as were continued pg 27

Most companies offer decreasing term insurance. Even though the death benefit is decreasing, the cost remains level. The coverage expires without allowing you the opportunity to purchase other insurance or provide you with cash values.

• The proceeds are payable to the mortgage company. In the event of death, the mortgage is automatically repaid.

• In most cases, if you take your mortgage to another company, you lose your protection. To obtain mortgage insurance with the new company you must submit new satisfactory evidence of health and our home are subject to the current rate charged by the new mortgage company.

• The face amount can only be the exact amount of your mortgage (no more, no less).

• You may not be able to insure both you ou'll ever make.

When arranging a mortgage, your and your spouse if the mortgage is urance. Have you considered the advantages of personal registered in only one spouse's name.

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April 2011 I pipeline news north •

27

By the million cont’d from pg 11

As the safety association for the upstream oil and gas industry, Enform has played a vital role in advancing occupational health and safety standards and performances in the energy sector. The profession is expected to be an area of job growth over the next decade.

Koble believes that the work of the Resource Development Unit has been proceeding as planned during its first few months of operation.

“I think, overall, the concept that this unit would be responsible for organizing and understanding the state of both the surface and the subsurface for key identified areas, I see that as progressing as expected,” he said.

“The areas that we’ve identified are the areas that British Columbia is seeing the most oil and gas development in. So, we feel like we’re focusing in the right places.

And the key thing, really, is to keep track of the rapidly evolving public expectations on environmental management and also strategic direction from different ministries within the government of B.C.” However, Koble also admitted that the unit has had to face some “initial trepidation” from the oil and gas industry. “They don’t know exactly what it’s about and I think they’re always concerned when they see some new, big regulatory view,” he said.

“We’ve had a series of meetings [with the industry] on a few of our identified basins to help them understand what we’re looking for, what the expectations are going to be on them in the future,” Koble added. “And also to help clarify how they can participate and improve this process.”

Since an initiative such as this can be cause for concern in the oil and gas industry, it appears as though the Commission has found the right person to take charge of the Resource Development Unit in Koble, considering his background in the energy sector. “I spent about ten years in Calgary working as an exploration geophysicist in the oil and gas industry,” said Koble. “So, I do have a technical background, understand how oil and gas is developed. After that I spent a little under two years with the Ministry of Energy in the government of Alberta. And so it helped me to understand some of the policy issues around energy development, some of the environmental issues, and the social issues.” •

RIGHT & BELOW: A lot of good health and safety practices are fairly simple, such as using earplugs, safety goggles, and hard hats when on a drilling rig.

BELOW RIGHT: A worker demonstrates the use of a PPE (personal protective equipment) gauge.

Photos courtesy of Enform

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Mon-Fri: 9am - 6pm • Sat: 9am - 5pm 9813 116 AVE., GRAND PRAIRIE Across from Value Village

PROFESSIONAL SALES & INSTALLATIONS

cont’d from pg 26

change your game plan for how you’re going to deal with those as you’re going through, because no two companies are the same. So, you can’t go in there and say, ‘Well, it worked over there, so I’m going to make it work over here.’ When the culture is quite a bit different. Another way of saying it is, workplaces are very dynamic and you got to be willing to adapt. You can’t be the one trick pony.”

Consequently, it is just as important to be able to speak to others in their language.

“I call it sales, but it’s not really,” said Harman. “You got to be able to sell ideas.

You got to understand return on investment strategies. You’ve got to understand cost-benefit analysis. And you got to understand that when you’re talking to an owner of a company, you got to talk their language. You can’t sit there and speak safety lingo, because they’re not going to get you. They’re not going to understand where you’re going.”

Finally, health and safety professionals must know their limits.

“Sometimes,” Harman explained, “I think the expectation of a safety professional knowing everything is there. And we all have our strengths and we’ve got to know when we’re starting to push the limits of what we know and be willing to bring in other specialized people.”

“Knowing what you can do and what your limitations are is critically important.”

Harman chose this career path simply because he dislikes any kind of loss,

whether it be injuries to workers, that result in lost health and lost time, or damage to equipment.

“I just see that as a waste,” he said.

“And it kind of bothers me.”

Harman emphasizes that workplace safety does not begin and end with the health and safety professionals, but extends to all of those on the job site.

So, Enform also offers health and safety training courses for other professionals such as engineers.

“At the end of the day,” he said, “Enform’s role is to help the industry develop the health and safety professionals. We get a lot of folks that are just coming into the health and safety profession … and they’re just getting started. So, we’ve got some courses that can help them get started. But it’s a start. It’s not the end. In most jobs, you never stop learning.”

“We’re basically the leading resource for continuous improvement in the oil and gas industry’s safety performance,” Harman continued. “We’re dedicated to the oil and gas industry. Our mission is to help companies achieve their safety goals by providing practices, assessment, training, support, metrics and communication to help the industry get better at that health and safety performance.”

Among Enform’s most significant initiatives is its Certificate of Recognition program that rewards “employers who implement and maintain a health and safety management system.”

It has become an industry standard to some extent.

“A lot of the oil producers do ask

contractors if they have a Certificate of Recognition,” said Harman. “And so it’s a driving force to get it. But really it’s critical. If you want to improve health and safety performance without a health and safety management system, it’s very difficult. The system approach allows you to go about it systematically, of course. And that way you’re managing health and safety instead of it just sort of managing you.” •

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28 • PIPELINE NEWS NORTH I

April 2011

regional map

April 2011 I pipeline news north •

industry news

29

going global - Asia Advisory Council

james waterman Pipeline News North

Continuing their efforts to access Asian markets hungry for their natural resources, the Alberta government has introduced a piece of legislation.

The Asia Advisory Council Act is designed to help accomplish that aim.

“The bill itself is really what we would call ‘enabling legislation’,” said Jerry Bellikka, an Alberta government spokesperson. “One of the key elements to it is setting up an Asia Advisory Council of people with expertise that can help the government set our direction for the future and how we can best maximize the opportunity in the emerging markets of Asia.”

“Our premier has, in the last year, been to both India and China, as well as to Japan,” he continued. “And we see tremendous opportunity in all of those places – especially China and India – in those emerging markets for our food, our fuel, and our fibre. Our primary customer right now is the United States. No question about it. Eighty-five per cent of our products go to the United States.

“So, one of the reasons that Alberta joined Saskatchewan and British Colum-

bia in the New West Partnership was to market our area of Canada as one large trading block – one large economic block – with a huge GDP and millions of people to be able to offer our services and our products to countries and companies in Asia who are hungry for products. Like fibre, as in wood. Fuel, as in natural gas or oil. And food, as in wheat and other [agricultural] products, beef, and all those types of things.”

It is a move that fits “hand-in-glove” with the Memorandum of Understanding signed by the energy ministers from British Columbia, Alberta and Saskatchewan in December, according to Bellikka. That MOU also contained elements involving exploring Asian markets and facilitating trade with that continent. Part of those plans could include the completion of the Enbridge Northern Gateway pipeline to transport bitumen from Alberta to the west coast, as well as a liquid natural gas export terminal at Kitimat, B.C. that could be used to ship natural gas products from areas of northeast B.C., such as the Montney shale gas play and the Horn River Basin, to Asia.

“Our premier sees the Asian marketplace as a tremendous window of opportunity,” said Bellikka. “One of the things we need to be able to do is be able to access west coast transportation hubs to be able to get our food, fuel and fibre to – some people would call it the Far East;

we’d call it the Near West.”

Alberta Premier Ed Stelmach discussed the concerns that led to this bill – as well as potential solutions – during a speech to the Edmonton Chamber of Commerce on February 2, 2011, which could be seen as a prelude to the Asia Advisory Council Act. “The message we should take from the recession is that Canada and Alberta are far too reliant on one market to sustain the kind of incomes and social programs we have come to expect,” Stelmach said during that speech, referring to the United States as that single market.

“Alberta has long done the heavy lifting in Canada’s economy,” he continued.

“And for this to continue, we must gain better access to the markets of Asia and the Pacific. This is in the national interest.

And Canada’s economy will wane in relation to others – and Canadians will see relatively lower incomes and less quality of life – if we do not.”

During that speech, Stelmach urged an immediate increase in port, rail and pipeline capacity in Western Canada so that the country can continue to be an global economic power by accessing growing markets for food, forest products, energy, and technologies in Asia, the Middle East, and Africa. He also encouraged a re-examination of immigration and labour policies that he suggested are inhibiting Alberta’s abilities to meet the demand of

such markets.

“In the new global marketplace,” he concluded, “to maintain the many advantages we enjoy as Albertans, we must make sure we’re competitive and adaptable.”

North American energy companies Encana and Talisman have recently formed partnerships with PetroChina and South Africa’s Sasol Energy, respectively, aimed at working jointly to develop natural gas resources in Western Canada. These types of deals appear to lend credibility to the notion that this proposed legislation is necessary.

“It’s a two way street,” said Bellikka.

“I mean, we have in Alberta a number of foreign companies who partner with Alberta-based companies in the ... energy sector to try and develop more of our resources. And that’s everything from bitumen production in the oil sands to natural gas to petrochemicals. So, the markets in Asia and India are huge right now. And the potential for us to diversify not just our economy, but Western Canada’s economy, and indeed Canada’s [economy], involves reaching out to these new markets.”

“I mean, the United States market, as I say, number one customer right now – 335 million people. We’re talking about markets [in Asia] that have a billion people. And we see that as a huge potential for the future.” •

Calfrac

- a record breaking performance

james waterman Pipeline News North

If you ask CEO Doug Ramsay, Calfrac Well Service’s record performance in the fourth quarter of 2010 is just a sign of things to come for the company.

He speaks with confidence, despite the insistence of certain analysts that the industry is facing a glut of pressure pumping services in North America.

Driven by demand in the Western Ca-

605786

nadian Sedimentary Basin, Calfrac saw a significant rise in their horizontal well count over previous years, which led to record revenue for the service provider.

The Montney shale gas play in northeast British Columbia has been a major factor in that growth.

“It’s one of the big drivers in the gas side of things, for sure, in Canada,” Ramsay said of the Montney formation.

The increasing popularity of horizontal drilling and hydraulic fracturing also helps explain Calfrac’s record fourth quarter.

“That’s the preferred method of the completion nowadays, because of the ability

to contact the reservoir and do multi-fracs per wellbore,” said Ramsay. “That’s the reason why. And the technology is there to drill economically in a horizontal fashion. And the technology is there to do a multi-frac style of completion at an economic value to the customer.”

Ramsay does not see business slowing down at any time in the near future. In fact, he insists that the demand for pressure pumping equipment is going to exceed the available supply into 2012, with the industry being twenty to twenty-five per cent under supplied through 2011. continued pg 30

www.aspenindustrial.net

30 • PIPELINE NEWS NORTH I

April 2011

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cont’d from pg 29

“When we do our market review, there’s actually an under-capacity of … pressure pumping capacity, certainly in Western Canadian [Sedimentary] Basin, and we think through all of 2011 and 2012,” said Ramsay.

Consequently, the outlook is bright for Calfrac, as they try to improve their operations in order to meet the growing demand for their services. “We’re adding capacity in Western Canada,” said Ramsay.

“Some of our crews are moving to 24 hour operations to get higher utilization.”

Along those lines, Calfrac is also opening a new facility in Dawson Creek this year.

“The area we’re working is in the Dawson Creek-Fort St. John vicinities,” he explained. “And we picked Dawson Creek as our expansion from our Grande Prairie base for

access to, certainly, the opportunity for a commercial property to build a base on, save on the transportation time between Grande Prairie and Dawson Creek. In fact, a couple of very large customers we work with are working right in that vicinity.”

If the trend continues, there might even come a day when Calfrac may be opening a terminal in Fort Nelson, but that depends on how work in the Horn River Basin and Liard Basin proceeds.

“When the Horn River and Liard get [into] more of a production mode, it’s going to take a lot of pressure pumping capacity to make that economic and productive,” said Ramsay, noting that he is looking at late 2012 or early 2013 for when work will really increase in the Horn River Basin and Liard Basin areas.

“We’ll do more work in that area this year than we did last year.” •

trade shows 9 – 10 May, 2011

ASME Turbo Expo

Canada, Fort McMurray Oil Sands Trade Show and

Canada, Quebec IWA/WEF Wastewater

22 – 23 June, 2011

Conference

Treatment Modelling

Canada, St. John’s

3 – 4 October, 2011

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30 May – 1 June, 2011

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International Pipeline

13 – 14 September, 2011

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April 2011 I pipeline news north •

publication schedule

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32 • PIPELINE NEWS NORTH I

April 2011

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