Pipeline News North

Northern British Columbia and Alberta's Oil and Gas Industry Vol. 1 Issue 8 • dist: 20,325

august 26 • 2011

h t r No

• Free

in this issue:

• energy strategy - ministers in kananaskis • a thirsty issue - water, water, everywhere • megaminded - tlc’s got a new truck

Spectra Energy’s natural gas processing plant in Fort Nelson. Spectra is working on attaching a carbon capture and storage facility to the plant, which could sequester as much as 2.2 megatonnes of carbon dioxide per year. (Photo courtesy of Spectra Energy)

www.inland-group-fsj.com

2 • PIPELINE NEWS NORTH I August 2011

Fort St. John Petroleum Association scholarship recipient Kyle Carlstrom is heading to the University of Alberta to study engineering in September

Telia McLeod, who has also received a Fort St. John Petroleum Association scholarship, has enrolled in the business administration program at Grande Prairie Regional College.

The Fort St. John Petroleum Association is helping two students from this year’s North Peace Secondary School graduating class achieve their goals with a pair of $2000 scholarships.

The Petroleum Association will be helping Kyle Carlstrom pursue an engineering degree at the University of Alberta and Telia McLeod study business administration at Grande Prairie Regional College as she works toward becoming an accountant.

The students were eligible for the awards in part because their fathers are members of the Petroleum Association, but there were other criteria as well.

“There’s a number of factors,” said Ted Pimm, a member of the Petroleum Association’s scholarship selection committee. “One was how good their grades were.

Whether or not they’re going into something that is related to the petroleum industry. What their community service was like.”

“They’re both very involved in the community,” he added. “And they both had very good grades.”

“I did work bees and stuff,” said straight A student Carlstrom, describing his community involvement efforts in the nearby community of Bear Canyon, Alberta, about an hour road trip from Fort St. John.

“My community’s like a hundred people,” he continued. “So, basically, everyone had to do it. So, we did ditch clean-ups and work bees and all that stuff.”

McLeod didn’t quite match Carlstrom’s straight A performance, but her high B’s and A’s were certainly good enough to earn the scholarship. Her community involvement efforts were impressive too.

“I volunteered for coaching little kids’ basketball for Spring League,” said McLeod. “And I did ditch clean-ups and stuff for Club Volleyball. And stuff like that.”

McLeod’s interest in business and accounting began with an accounting course at North Peace Secondary School.

“I took it and it was really easy and I liked it,” she said. “So, I thought I might as well pursue it.”

McLeod has a fairly simple and admirable career goal.

“Get a steady job in accounting, hopefully,” she said with a laugh.

“It’s obviously easier on my parents for paying for some of the schooling,” McLeod added, discussing the Petroleum Association’s contribution to her tuition fees.

“And it will help me out with the money I’m saving up.”

Carlstrom is heading into the first year of general engineering in September with a few possible directions in mind, including petroleum engineering.

“And nanotech, actually,” he said. “I’ve been looking into that. But, right now, it’s petroleum. And I’m just going to go general first year and see how that goes.”

“I’m pretty excited about it,” he added. “And it’s going to be pretty good, because I’ve got a few scholarships, including this one.”

Carlstrom, a good math and science student, has been interested in engineering for the past few years. The generosity of the Petroleum Association will help him turn that interest into a career.

“It’s definitely a big help on tuition and stuff like that,” he said. “I mean, I’m not going to have to worry as much about it and, hopefully, get out of school debt free, no student loans. So, that would be nice.”

“I just want to thank the Petroleum Association for giving me this scholarship,” he added. “And I’m very grateful.”

Fort St. John Petroleum Association President Tyler Kosick, scholarship winners Kyle Carlstrom and Telia McLeod, and Ted Pimm from the Petroleum Association’s scholarship selection committee.

Photos by James Waterman

PETROLEUM ASSOCIATION - HAPPENINGS

August 2011 I pipeline news north •

community

3

getting ready

- Fort Nelson is expecting a boom james waterman Pipeline News North

It might not happen on the scale of Fort McMurray, but Fort Nelson is preparing for a boom.

As shale gas development in the Horn River Basin of northeast British Columbia picks up, the population of the nearby community is also expected to rise, and it is going to need to meet the demands of that growing population in terms of essentials such as housing, office space, and, of course, water.

Fort Nelson, which is governed by the Northern Rockies Regional Municipality (NRRM), draws its water from the Muskwa River. NRRM is confident that the community currently has water capacity for the next twenty years, accounting for population growth projections for that same time period.

“The projected population of 8300 in 2020 is based on our consultations with industry and then anticipated economic impacts,” said Jaylene Arnold, Economic Planning Officer with NRRM, noting that BC Stats has projected a population of 6000 people in 2020, which is approximately where Fort Nelson sits right now.

“That’s based on their historical growth rate,” she continued. “But we can imagine that that’s probably going to change because, I mean, historically, we didn’t grow.

But we didn’t have this kind of opportunity.”

“In 2008, we had the closure of both forestry mills here,” added Jack Stevenson, Director of Community Development and Planning with NRRM, suggesting that that cost the community as many as 400 jobs.

“We did see an impact,” he said of those lost jobs. “But it was almost a blip on the radar screen. … What happened was, the oil and gas companies, realizing there were people coming out of the job market from [forestry], they did a lot of recruitment … They hired a lot of people at that time. And then you had kind of the trickle of people into oil and gas jobs. And

then you had the trickle of people who left town. Maybe they felt they were underemployed, didn’t like the oil and gas, and ultimately left town. So, once we went through the trough, I think now we’re going back up the other side of the mountain again. We’re seeing an increase in population.”

The claim that the community has enough water for the next twenty years even given that the population could climb by over 2000 people in just nine years isn’t a haphazard guess.

“We have a water model,” said Stevenson. “So, if you’re planning subdivisions, theoretically you can use the water model to say how many more houses can you put in that area with the existing infrastructure. When do you have to add new infrastructure? Because in the past we have added Rural West, where we’ve taken water services up to Rural West. We’ve taken water services down to what we call Rural South. That’s down to Muskwa Heights. So, there has been planning in terms of taking water to additional locations within the municipality. And so when we’re looking at housing expansion, part of the drill there is to check, if you’re in Mountainview, for example, at the top of Simpson Trail, how many more houses can you put up there with the existing infrastructure. We’ve a reservoir up that way. So, we check the water model and verify that we can put a hundred plus whatever houses up that before we have to do things.”

Low natural gas prices could delay that population growth, however, as it also appears to be delaying development in the Horn River Basin. Stevenson suggested that set of circumstances actually gives NRRM the luxury to plan for the boom as it is already slowly starting to happen.

“Probably, in some ways, we’re lucky that gas prices are in the $4 range today,” he explained. “Because if they were in the $8 range, than we would have a mini Fort McMurray here. I know [we] would.

We’d be inundated with people that we wouldn’t have the infrastructure to look after.”

Jaylene Arnold, Economic Planning Officer, and Jack Stevenson, Director of Community Development and Planning, Northern Rockies Regional Municipality, examining the Official Community Plan for Fort Nelson. The Fort Nelson population is expected to rise by about 2000 people by 2020, but Arnold and Stevenson are confident that the town can meet the growing demand for water.

Photo by James Waterman.

Importantly, it allows them time to address an issue concerning how and when they draw their water from the Muskwa River.

“Right now, we only really pump water when there’s ice in the water because of the turbidity,” said Stevenson. “So, when the turbidity’s relaxed, we pump water and fill the reservoirs.”

NRRM does hear concerns from Fort Nelson residents about the amount of water being used for hydraulic fracturing, although Horn River Basin developments are still relatively far from town and oil and gas companies do not presently draw water from the Muskwa River.

“The water that is being used in the Horn River Basin is a long way off from our residential source,” said Arnold. “But, I mean, the concerns about disturbing ecosystems and surface water reduction and what they’re consuming for fraccing in the Horn, I think there’s valid concerns

with that. I mean, that’s probably areas that we’ll never see, but it’s traditional use areas for some people. And there’s different reasons why it’s important to make sure that it’s being monitored rather than just a free for all.”

There are also concerns about bulk water consumption and the fact that some of that water is going to the work camps. Eleven per cent of water consumption in 2010 was bulk water, only a small percentage of which was for residential use. The town consumed 1,297,820 cubic metres of water in 2010. Bulk water accounted for 118,031 cubic metres out of the total consumption.

“There’s some pretty big numbers there for bulk water use,” said Arnold, noting that all bulk water is also potable water that has gone through the water treatment facility. continued pg 11 28231

www.pimms.ca

4 • PIPELINE NEWS NORTH I August 2011 special features 12 A thirsty issue - water,

water, everywhere 18 Carbon capture - GHG

reductions and shale gas

opinion 6 Columnist: John Carruthers

community 3

8

28

29

Getting ready - Fort Nelson is expecting a boom Past Practices - Fernie’s derrick restoration Barbie breakout - Encana’s Community “Pardner” BBQ PSAC golf - a mix of fun and funding

industry news Geomatics open for 5 Quest

business 7 Making the call - CCGA

applies for 811 number 10 Energy strategy- ministers

meet in Kananaskis 24 Megaminded - TCL’s got a

new truck 27 Talisman is betting on

the play

environment 22 Finding a balance - land

protection and development

careers & training 16 NLC courses for Sept-Oct 29 Labour market - hard to

recruit engineers

technology 20 Don’t flare up - Spectra’s

new turnaround process

profiles 15 Wise water use - Talisman is

leading the way 25 A model citizen - Jason

Richter works to scale 30 TA Structures - home away

from home

safety 26 Be bear aware - training for

that up close encounter

industry news

geoscience

– is climate making a change? james waterman Pipeline News North

Water use and management is becoming a bigger subject of concern in British Columbia, particularly in the northeast corner of the province where significant amounts of water are being used by oil and gas companies in their hydraulic fracturing operations.

In response, organizations such as Geoscience BC and the Pacific Climate Impacts Consortium (PCIC) are starting to take a closer look at the relationship between our surface water resources and our weather.

It is work that could prove very important as our climate continues to change.

“We’re just moving forward with a surface water monitoring program,” said ‘Lyn Anglin, President and CEO of Geoscience BC, discussing work that is just beginning this summer.

“Installing some new climate stations and hydrometric stations in the Horn River Basin to help augment some of the data that industry’s already collecting, fill in the gaps so that we can develop a good and more robust model of the Horn River Basin and, again, the water resource that’s there.”

“It’s just trying to develop good, basic climate and precipitation models for the area,” she continued. “It’s essentially collecting all that baseline information that will allow us to better understand how much water is there and how might it be impacted by the various users of water. Certainly, in the Horn River Basin, the primary user right now is the [oil and gas] industry.”

The monitoring study is expected to last for only two or three years. So, the timeline is too short to gain much useful information in terms of the impact of climate change.

“Climates change on the order of thousands to tens of thousands of years,” said Anglin. “If there’s any variability over three years, it’s going to be pretty tough to decide whether that’s natural variability or whether it’s anything that’s part of a more significant long term trend.

It doesn’t hurt to have more data to help answer those questions, but it’s going to be a very short term, at least the part that Geoscience BC’s involved with right now.

Hopefully, these climate stations that we’re installing now may be able to be used over a longer term so that we will have more data in that area, because chances are the development is going to continue beyond the next three years.”

Although Geoscience BC’s monitoring study isn’t specifically concerned with climate change, that isn’t the case with another recent PCIC study led by Mark Schnorbus, who heads up the organization’s Hydrologic Impacts program. The study examined the hydrologic impacts of climate change on water resources in the province, focusing on the Columbia, Campbell, and Peace River watersheds.

The study was funded by a grant contribution by BC Hydro, who has facilities in those three watersheds, and the findings were reported in April, 2011.

The focus of the study was the middle of this century.

“In order to do this we have to obtain projections of what the climate is going to look like in that timeframe,” Schnorbus explained. “And a lot of this information is produced by these global climate modeling centres

around the world. They use these large-scale global climate models that are driven by emissions scenarios.

There’s all sorts of different emissions scenarios that just kind of look into the future and say what if population did this, what if economic development looked like this, what if our emissions looked like this.”

The models are based on a range of emissions scenarios.

“Then these modeling centres take these emissions scenarios and sort of put them into their global climate models and then come up with projections on what the climate is going to look like in the future, or what it would look like if these emissions were to take place,” said Schnorbus.

PCIC examined 23 different climate projections generated by eight different global climate models.

“A whole range of possible futures,” he added.

PCIC then had to downscale the models to look specifically at the impacts on those three river watersheds in B.C. A consensus estimate of the 23 climate projects downscaled to fit regional perspectives provided a glimpse of the year 2050 considering the impacts of climate change.

“There’s a consistent trend toward warmer temperatures throughout B.C.,” said Schnorbus. “And, depending on the season, in parts of northeastern B.C. where the Peace is, it looks like there’s a tendency for the climate to get a bit wetter as well.”

Actually, the model suggests that there will be less precipitation in summer, but winter is a different story entirely.

“As it gets warmer, there will tend to be more rain and less snow in the winter,” Schnorbus explained.

“So, what happens is, under sort of a normal climate or historical climate, temperatures are typically cold enough that most winter precipitation falls as snow, stays on the ground as snowpack, and doesn’t melt off until the spring. Then you get that big … runoff in the springtime.”

If the projections hold true, the region may no longer have a big spring runoff, but intermittent small runoffs throughout the winter.

“I think it’s good information for people to know how the seasonal availability of water is possibly going to change in the future,” said Schnorbus, cautioning these are just projections based on emissions scenarios and not weather forecasts.

“I think it behooves people to have an understanding, at least at a strategic level, how the results overall may vary on an annual basis,” he continued. “But perhaps particularly on a seasonal basis. I mean, what we’re showing is, it’s probably not hugely dramatic in the Peace, but you are starting to see a shift in the timing of stream flow. And I suspect what this says is, if we go into a future where emissions are increasing, where we continue to emit greenhouse gases into the atmosphere – which is what the emissions scenarios are essentially prescribing – what we’re seeing is that in northeastern B.C. … the climate will get warmer. It suggests that it will be wetter as well. And that’s going to start to affect when discharge takes place throughout the year.”

Interestingly, the results for 2050 are essentially the same for all emissions scenarios.

“As long as our emissions are increasing, we’re going to see these changes,” said Schnorbus, adding that the scenarios start to diverge further into the future, where higher levels of emissions are expected to have much greater impacts than lower levels of emissions. continued pg 5

August 2011

pipeline news north •

5

cont’d from pg 4 Presently, Geoscience BC is also involved in a study concerning airborne electromagnetic surveys of near surface groundwater, along with the Horn River Basin Producers Group, four other individual companies, and their partner, a company known as SkyTEM. “They flew four test areas in the Horn River Basin to assess the applicability of that particular airborne geophysical tool for helping us to map near surface groundwater,” said Anglin. “And so we are in the process just, actually, now of putting together an interpretation project on that data. The data’s been delivered to the individual companies.

Then it’s going to be shared with the Producers Group, because they were a funding partner. And then hopefully by December we’ll be making all of that data public.”

“The goal is to figure out whether flying airborne EM is going to allow us to map near surface groundwater aquifers,” she continued. “And that’s going to be pretty key. Now, we’re doing this in the Horn River Basin, but if this technique works, there’s a chance that we could be using that in areas where there is a greater population and a greater reliance on those groundwater aquifers for drinking water. Because they are quite often … potable. Usable water. Because it’s closer to surface.”

The groundwater of interest is between 150 and 200 metres underground.

“Below that,” Anglin explained, “most water ends up getting too saline to be useful, either for human consumption or for agriculture. Because once you get below, I think, about 300 [to] 350 metres, groundwater tends to get pretty saline.”

“It’s very interesting,” she added, referring to the study. “And while we haven’t done any detailed analyses of the results, I could say they look pretty promising. We’re impressed with the quality of the data. And it looks like it may be a useful tool, though we have a lot more work to do in comparing what other data sets we have on those four pilot or test areas.” •

Quest Geomatics open for business james waterman Pipeline News North

A new geomatics company is now offering its surveying services to the oil and gas industry in Alberta.

Quest Geomatics – which was officially open for business on July 1 – hit the ground on July 18 to do their first surveying work as a new company. They are trying to bring a new approach to geomatics services – such as surveying for wells, pipelines and other facilities – that are increasingly in high demand in the sector and the province.

“The new approach is personalized service that a small company can offer [with] a single point of contact,” said Danny Trautman, Vice President of Operations at Quest Geomatics.

Their small company has a staff of only twelve people at this point.

“There’s so few of us here that you’re able to offer more of a direct approach to the client and they know who to call,” he continued. “That’s kind of what our big claim is out there, is the person who comes to see you to ask for your work is going to be the same person who you phone up when there’s a problem or what have you. A lot of companies have someone who does sales marketing and then a completely different person does the work. Well, that’s not

the case here.”

Trautman noted that that approach helps minimize Quest’s costs while also improving efficiency for their clients. At the same time, Trautman is thrilled that Quest has been able to build a staff of twelve people so quickly considering the labour shortage in the oil and gas industry as a whole, including the geomatics sector.

“It’s definitely tight,” said Trautman, discussing the labour pool.

“It’s pretty good to just start out and actually have twelve people already,” he added.

The demand for geomatics services in Alberta is being driven by the oil side. Trautman estimates eighty per cent of the business is driven by oil exploration and production, while the remaining twenty per cent is driven by the natural gas sector.

Presently, Quest is focused on providing a “made in Alberta product” for industry in that province, but does have plans to expand beyond those borders down the road, according to Trautman.

Trautman is part of a management team that brings a wealth of experience on the geomatics end of the oil and gas industry to the new company.

“I was a senior project manager with a company called Focus Geomatics, which is one of the larger companies in the geomatics industry,” said Trautman, adding that he

essentially spent seven years with Focus, starting with a surveying company that Focus acquired during his tenure. He has been in the industry with three different companies, including Crape Geomatics, for the past 27 years.

“When I got out of high school, I took some surveying courses in another technology and I really liked surveying,” Trautman recalled.

“So, I went back to school, because I’d gotten a building construction technology diploma, and the part that I liked the most was the surveying components. And I went back to NAIT (Northern Alberta Institute of Tehchnology) for three years. And twenty-some years later and still loving what I do.”

Trautman worked with Jim MacLeod, Quest’s President, and Joe Longo, Quest’s Vice President of Field Operations, for about ten years at Crape Geomatics. MacLeod also worked with Trautman at Focus, while Longo has worked for Altus Geomatics and, most recently, Precision Geomatics.

Although the Calgary-based company didn’t officially open its doors until July 1, Trautman remarked that the trio spent most of June working at a card table in their new office, developing their process and procedures as furniture was gradually filling the space around them.

“Pretty excited to finally get actually doing some work,” he said. •

Dawson Co-op Petroleum

CALL ASHLEY TODAY TO SEE HOW WE CAN BEST SERVE YOUR BUSINESS:

250-782-3106 24 HOUR CARDLOCK - CONVENIENCE STORE - DELIVERY - TANK RENTALS EASY ACCESS @ 801 ADAMS RD DAWSON CREEK

605574

6 • PIPELINE NEWS NORTH I

August 2011

h t r o N William Julian Regional Manager 250-785-5631 wjulian@ pipelinenewsnorth.ca

Wendy Webb Managing Editor 250-785-5631 editor@ pipelinenewsnorth.ca

James Waterman Reporter 250-785-5631 cell:250-263-1878 jwaterman@ pipelinenewsnorth.ca

Dan Przybylski Sales 250-782-4888 ext 101 cell: 250-784-4319 dcsales@ pipelinenewsnorth.ca

Ryan Wallace Sales 250-785-5631 cell:250-261-1143 rw.fsjsales@ pipelinenewsnorth.ca

Tom Kirschner Alberta Sales cell:780-625-2717 tk.fsjsales@ pipelinenewsnorth.ca

Published Monthly

by Glacier Ventures International Corp.

The Pipeline News North is politically independent and a member of the B.C. Press Council.

The Pipeline News North retains sole copyright of advertising, news stories and photography produced by staff. Reproduction is prohibited without written consent of the editor.

CONTACT US:

Phone: (250) 785-5631 Fax: (250) 785-3522 www.pipelinenewsnorth.ca

billing:

Lisa Smith Accounting Manager 250-562-2441 ext 352 Fax:250-960-2762 accounting@pipelinenewsnorth.ca

opinion Market Diversity for the Canadian Energy Industry The necessity to diversify markets and respond to growing Pacific Rim demand for Canadian oil has never been clearer.

Delivering Western Canadian crude oil to emerging Pacific Rim economies will allow Canada’s oil producers become global players rather than solely continental ones.

The U.S. and Canada are two of the strongest economies in the world. Each is blessed with an excellent neighbour in the other, and we both benefit tremendously from our energy trading relationship. In Canada, we have among the world’s largest petroleum reserves, and the U.S. is a huge market and the primary customer for our oil.

But while Canada is America’s largest supplier of crude, the U.S. has a multitude of suppliers.

Canada, meanwhile, has but a single customer as almost 99 per cent of our nation’s petroleum exports flow into the United States. The result is that Canada is at the mercy of a landlocked North American market where Canadian crude is discounted against world oil prices.

That renders Canada a “price-taker”, suffering the double-whammy hit of the WTI discount plus a discount off that. Further, the U.S. market for Canadian crude, important though it is, is a more challenging environment due to a number of factors, from domestic production to opposition to oil sands development.

Most significant is the impact of the growing U.S. crude oil production coming out of the Bakken region and Eagle Ford play as well as the massive new shale gas reserves unlocked over the past few years. While the U.S. values Canada’s oil, America’s domestic production will certainly grab market share.

There are a number of factors that threaten to erode Canada’s U.S. market for crude.

• • •

•

Flat to dropping U.S. demand; Rising U.S. domestic production The U.S. ethanol mandate and other biofuels, which replace crude oil at a rate of two barrels for one The possible conversion of the U.S. heavy truck fleet to natural gas;

wendy webb Founding Editor of Pipeline News North

In light of his recent retirement as President of the Oil Sands Development Group, Don Thompson will no longer be submitting a monthly column to our publication. I would like to take a moment to thank Don for his dedicated and informative column and to wish him well in his future endeavours.

On behalf of the staff at Pipeline News North I would also like to extend a warm welcome to John Carruthers, President of Enbridge Northern Gateway Pipelines, to our publication.

Enbridge has been kind enough to step up to the plate and offer an insider view of the oil industry and its issues of the day to our readers.

•

Growing opposition to “tar sands” crude in the U.S., in excess of opposition to their own heavy oil production

Not only does Canada need new markets to diversify beyond a single customer, we will soon be in need of new markets to meet forecasted production volume increases from Canada’s oil sands reserves.

Canada’s energy market options will be diversified by connecting this country’s crude oil resources to important, emerging markets in Asia. Having

Guest Column john caRruthers President of Enbridge Northern Gateway Pipelines

access to these high energy-demand Asian markets will boost oil prices for all Western Canadian producers by an estimated $2 to $3 a barrel. The result will render Canada a projected $270 billion increase to Canada’s GDP over 30 years.

Canada needs to diversify its crude oil export markets beyond North America by building new market access along the Pacific Rim where demand for oil is undeniable. Market diversification will mitigate the risks associated with having a single customer and it will ensure competitive pricing for Canadian oil.

John Carruthers is President of Enbridge Northern Gateway Pipelines, a $5.5 billion Project which involves construction of a twin pipeline system to export petroleum and import condensate. The proposed pipeline will run from Bruderheim, Alta. to a new marine terminal in Kitimat, B.C.

Short n’ sweet As the eyes of the nation and, indeed, the international world are turning with greater interest toward the challenges and concerns of our water supply in Western Canada, we deemed it prudent to take a closer look at it ourselves.

In this issue, our readers will find the subject of water supply examined from a number of angles.

In “A Thirsty Issue” (pg 12) we take an in-depth look at the concerns being raised regarding the possible impact of resource development on local waters, and how industry is responding to them.

“Wise Water Use” (pg 15) highlights some of the strategies one major industry player is encouraging, while “Getting Ready” (pg 3) discusses a community’s proactive approach to the future of water use in their growing town.

You may already have read “Geoscience” on page 3 that provides insight into one of the studies presently being conducted to determine if and what the impact of climate change is having on the water supply in some of our resource development areas.

As always, we welcome comments or questions from our readers on any of the articles and issues covered in the Pipeline News North. Please feel free to email a Letter to the Editor to editor@ pipelinenewsnorth.ca or post a comment on our website: www.pipelinenewsnorth.ca

industry news making the call

August 2011 I pipeline news north •

7

- CCGA applies for 811 number

james waterman Pipeline News North

The Canadian Common Ground Alliance (CCGA) is trying to find some common ground with tele-health services.

The group, which works to prevent damage to buried utilities and infrastructure, has applied to the Canadian Radio-Television and Telecommunications Commission (CRTC) to share 811 with tele-health services and make it a new nationwide “call before you dig” telephone number.

Mike Sullivan, Chair of CCGA and President of Alberta One-Call Corporation, believes this could also be a first step toward damage prevention legislation.

“First and foremost,” said Sullivan, “what we’re trying to do at the end of the day, if you look at the big picture, is we are trying to put in place the elements to create legislation down the road.”

“The governing bodies for buried utilities are rather split up in Canada,” he continued, discussing the difficulty Canada faces in establishing such legistion. “You have the National Energy Board (NEB) that regulates pipelines that cross provincial and national borders. Then you have the CRTC regulating fibre optics cable, that kind of thing. Then you get the provincial – so, in Alberta you have the ERCB – governing pipelines that are intraprovincial.”

Between the provinces, territories, the federal government, and institutions such as NEB and CRTC, there are numerous parties that need to agree on the language of that legislation. The main ingredient of that legislation would be that any company or organization who owns or operates a buried utility would be a member of a national One-Call system. Also, it would be law to call that One-Call system prior to digging.

“Those are the most basic principal elements,” said Sullivan. “But there’s more to it than that. What we thought at the CCGA [was] what do we go after first here? Is it legislation? Or is it three-digit dialling? And after a lot of discussion, going back and forth, we decided that threedigit dialling made the most sense, because what it does it creates public expectation that the person dialling 811 or whatever that number is, that they will get all buried facilities located.”

Sullivan feels that the simplicity and recognisability of 811 could encourage new members to join One-Call, just as it will encourage individuals or companies to call the number. “And once you’ve got to that critical mass,” he added, “legislation becomes much easier. So, the legislation will take care of the stragglers. That’s why we’re going about it this way.”

Presently, Canada has One-Call centres in British Columbia, Alberta, Saskatchewan, Ontario and Quebec. St. John, New Brunswick also established a One-Call Centre after Maritimes and Northeast Pipeline installed a natural gas transmission line through the city. Manitoba expects to have a One-Call number in operation in 2012. Every one of those locations has its own unique ten-digit toll free “call before you dig” number. Sullivan suggested that that is problematic, as many residents of those jurisdictions don’t know the One-Call numbers by heart and, according to Sullivan, aren’t likely to look for those numbers.

“That the person is now digging blind,” he said, “you’re increasing risk not just to yourself, but to your community.”

Conversely, a three-digit number such as 811 would be well promoted and easy to remember, consequently reducing that risk. So, the question that remains is why CCGA wants to use 811, which is now designated as use for tele-health services in Canada by the North American Numbering Plan, and share the number with that service.

“The common element, the common thread, is public safety,” Sullivan explained. “Some people, they don’t see that right away. Others have. But the common element here is public safety. And the fact of the matter is there aren’t N11 numbers left. They’ve all been assigned.”

“So, we had to seek joint use with one of the existing assignees,” he added. “And 811, because of the North American Numbering Plan ... it just made all the sense in the world.”

Sullivan noted that 811 is also already used as the “call before you dig” number in the United States.

The 811 number has been available for tele-health services in Canada since the CRTC approved it for that use in 2005, but only B.C., Quebec, Nova Scotia, New Brunswick and Yukon are using it presently. Northwest Territories had been using the number, but abandoned it due to lack of use. Also, as an example, Ontario has its own toll free number for tele-health services, but it hasn’t taken advantage of 811 to date.

Alberta applied to use 811 for tele-health services in 2005, but never implemented the system.

“If the CRTC agrees with our application,” said Sullivan, “we would love to work hand in hand with Alberta Health Services to roll out both at the same time, because then there’s greater public benefit by broadening its use.”

Sullivan suggested that jurisdictions currently using 811 for tele-health could then set it up so that callers would simply press the number one for that service and press number two for the “call before you dig” service. It is part of an idea that tele-health should not only be about addressing existing health issues, but preventing health issues as well.

Sullivan has been told that the application process should take about ten months. CCGA has to satisfy a list of criteria in the application in order to be successful. Sullivan is confident that those criteria have been adequately satisfied.

“I’m confident we have a very good application,” he said. “We answered all the questions that need to be answered. The person that we hired – the lawyer that we hired – to assist us to prepare this application is very familiar with the CRTC process. He’s worked on a couple of N11 applications before. And each one, incidentally, was successful. But no other request to our

Our Service Makes The Difference

®

knowledge has ever sought joint use. This will be breaking new territory, new ground. And what we’re expecting now – I understand that the CRTC is receiving comments and is open to comments. Our application has been posted on the CRTC’s website, is available for public viewing and comment. We are expecting at some point to receive some interrogatories or information requests, perhaps in clarification of what our application is referring to. Or maybe the application was perhaps unclear. And that happens. It’s not unexpected. And then the CRTC, once that process – interrogatories process – is closed, it will make its decision. And I’m hopeful. I really am.”

“At the end of the day,” Sullivan continued, “we need a collaborative solution with the health authorities. I’ll be really disappointed, obviously, if we don’t get a positive response from the CRTC. Because this will ... begin to open the doors to effective damage prevention legislation, and that’s where we need to go.”

“You know,” Sullivan added, “there’s been catalysts before in the U.S. that created the need for a Common Ground Alliance in the U.S., that created a need for threedigit dialling. We haven’t had something so catastrophic in Canada yet that would be the precursor for something like this. Why wait? In 2003, there was a horrible incident in Etobicoke, Ontario where seven people lost their lives.

And that was a catalyst for the Common Ground Alliance to come into Canada. And it began in Ontario. And it expanded across the country. And incidents do happen. But, again, why wait for something deadly? We’re trying to avoid that. And we have the means in our hands, on paper right now, and it’s at the CRTC. All it takes is will.”

Sullivan believes that a successful application could lead to increased use of both tele-health and “call before you dig” services, which will help Canadians avoid unnecessary risk and danger. “When you call before you dig,” said Sullivan, “you’re initiating a process to identify the buried utilities. And if you don’t do that, you’re digging blind. So, the things we’re trying to avoid are from the disruptions to buried services, be it electricity or cable, fiber optics, gas, water, all the essential services that feed the building you’re in right now, that feed our hospitals, our airlines, our airports, you name it. And interestingly enough, tele-health services relies on all of those things. We’re helping to protect the infrastructure that allows them to do their business. And so, at the end of the day, I believe we will save lives. And whose life? We will never know. We will never know.

But, guaranteed, it will save a life. At least one. And probably many.” •

• Windshield Replacement • Windshield Repair • Mobile Service • Safety Glass • 24hr emergency call Service • Remote Car Starters • Interlock Representative • Residential and Commercial Glass “Locally owned and operated.” www.appleautoglass.com

www.appleautoglass.com 605573

Windshields Insurance Claims Honoured

HOURS OF OPERATION: Mon to Fri 8 to 5, Sat 9 to 1 11308 - 8th St., Dawson Creek • 250 782-9496 • Fax: 250-782-2830 • 1 800 506-5665

8 • PIPELINE NEWS NORTH I

August 2011

community

past practices

- Fernie’s derrick restoration james waterman Pipeline News North

About one hundred years ago, aspiring oilmen tried their luck in the environs of Akamina Creek and Sage Creek in the Flathead River Valley of British Columbia.

They didn’t discover any commercial quantities of oil during the period from 1907 to 1930, but the remnants from the rigs they used to drill 23 wells still persist today, now greeting travelers as they enter the nearby town of Fernie on Highway 3.

It is the last standing wooden oil derrick in B.C. “Some of the parts came from Oil City over there in Waterton,” said Alex Miller, who has been involved with the most recent Fernie Derrick Society initiative to restore the rig, a project that has been assisted by funding from the oil and gas industry sponsored Science and Community Environmental Knowledge (SCEK) Fund.

Oil City, Alberta, the home to the first producing oil well in western Canada, is now situated in Waterton Lakes National Park, just across the Alberta-B.C. border from the Flathead River Valley region. Exploration in Oil City dates back to 1891. Drilling really began in earnest ten years later, only to see those wells

abandoned in 1906.

“And then [those parts] sort of migrated over when they were doing the drilling in B.C. in the twenties,” Miller added. “So, what we have there is basically components from a number of the derricks that were used out on the Flathead.”

Miller wasn’t involved in the first rebuild of the wooden derrick in 1984, when a number of components from the old rigs also found their way to Heritage Park in Calgary.

“At Heritage Park, there’s actually an operational wooden derrick drilling rig that got put together in the eighties using the metal components that were salvaged from the Flathead,” said Miller. “The reason the components stayed [in Flathead Valley] is because they were remote enough that the scrap metal guys didn’t get them in the war. Most of that stuff, anything on the prairies, any metal, got scrounged up, because it was easy to get to.”

For years, the only people really aware of the existence of those old parts were backcountry explorers like hunters and fishermen.

“Shell was doing some exploration,” said Miller, beginning to explain how those parts finally wound up in Fernie. “And, actually, Shell drilled a lot in this area. … And Chevron was in this area too, trying to find commercial quantities. And nobody ever did. The wells are sitting Work crews recovered an old wooden oil derrick from the Akiminia Creek area around and they’re capped. And I’m assuming

in the Flathead River Valley in 1984. The components made their way to Fernie, where the derrick has been resurrected to become a popular tourist attraction.

continued pg 9

Photos courtesy of Fernie Derrick Society.

www.fortcitychrysler.ca

August 2011 I pipeline news north •

cont’d from pg 8 they never did [find commercial quantities of oil], because they never came back.”

Shell didn’t find oil, but they did find the remains of the old rigs, and decided to help bring them into Fernie.

“When they put the rig up, I was living here,” recalled Mary Guiliano, who is virtually a lifetime Fernie resident. “And that was something that the [city] council of the day decided would be a good thing, because it was donated to the city. And they thought it would be a good tourist attraction. So, they put it up, they put a big fence around it, and promptly forgot it.”

“So,” she continued, “in the 21 years that it was sitting there, it was in the midst of tall grasses, rust – you know, it was total neglect.”

The derrick shares a piece of property that includes the building that houses the local Chamber of Commerce, which had a new manager – whose office had a window directly facing the rig – at a time when the site had already suffered those years of neglect.

“It looked pretty awful,” Guiliano admitted, “because it did have this huge wire fence. You know, that ugly mesh wire fence. And it had tall grasses. Everything had rusted.”

So, the Chamber of Commerce was insisting that the derrick be torn down, but Guiliano, a city councillor both then and now, was adamantly opposed to the idea.

“I said, ‘No! That is a big part of British Columbia history. And it’s not going to go anywhere,’” she said.

A three-year struggle ensued, culminating in an ultimatum from the Chamber of Commerce, demanding that the rig finally be removed.

“So, I got myself a committee,” said Guiliano. “We formed a society. And after many presentations to council, we were given the go ahead by council in a motion to take over the derrick and the rehabilitation of the site. And that’s what we did. I managed to get some funding from a few different sources. And we tore down the fence. We trimmed bushes. We moved all kinds of things. We secured the structure.”

“We had an engineer check the rig out,” added Miller. “John Turcasso, one of the local engineers, donated his services …

He donated his services to do an assessment and make sure that it was structurally sound. And he said it’s in excellent shape.”

Miller became involved in preserving the derrick when he heard the news that some members of the community were eager to tear it down.

“I was out of Red Deer,” he said. “I retired down here about five years ago. And that was a real neat landmark when we come into town. So, I got involved.”

“We secured any loose ends that needed to be tightened up,” Guiliano continued. “That’s where Alex came in because he has a business and he had all kinds of machinery and equipment where he was able to dig out posts and remove bushes and [do] things you didn’t want to do by hand. And a work party was organized a few times. And the whole area was cleaned up. The committee members tore down some of the wood platform that was around the derrick and re-did it. Put up a new railing. Put up new stairs.”

The site was originally constructed to appear as though it was actually an operating oil derrick, which means that it occupied a considerable amount of space on the property and elements such as the engine were directly on the ground, allowing them to rust. So, as part of the restoration, those parts were moved closer to the rig and placed on new cement pads.

Various other artifacts were also restored.

Now the Fernie Derrick Society is only waiting on racks on which to display those

pieces, which should mark the end of the restoration process this fall. If they can secure the funding, they would also like to print brochures.

The exhibit now features signage to inform visitors about the history of the derrick and is equipped with spotlights inside the structure so the rig is clearly visible at night.

“We were hoping to have lights put on the perimeter,” said Guiliano. “Because there’s guy wires holding this on all four sides, we couldn’t get the fire department engine to go close enough to have anybody climb up. And we couldn’t get any electricians who were willing to risk life and limb to go and do the work. But the spotlights work really well because they still light it. And then, of course, we put a flag up on top. So, it’s looking pretty nice, pretty neat now.”

“And,” she added, “I know that as soon as we took down that fence and cleaned it up and people were able to go near it, it instantly became more appealing. And we have been told by the Chamber of Commerce that many people stop and read and want to know more. There’s a miniature model of it inside the Chamber that was built at the same time as this big one was put up.”

Guiliano is very grateful that SCEK was willing to contribute funding to the project, as it likely wouldn’t have been completed without their support.

“It’s amazing how construction costs are so high even for just cement,” she said. “You know, just the basics, right?

So, they came through for us. And they actually said they would support us to the tune of $23,000. And then I got funding from some oil companies and from some private donations. And we got a lot of volunteer help. We actually had BP give us a work party twice. And they probably would have given us a lot more financial help. I don’t know if you’re aware, but down here in Fernie, we have a very strong environmental group who hated BP with a passion. And BP was a little bit worried that they would look like they were trying to buy favouritism from the community. So, they quietly helped us out by giving us a small amount of funding and sending a work party, which we really appreciated.”

The derrick has become an important local landmark for the community.

“It’s been a real positive thing for the tourism now,” said Miller.

“It’s part of B.C.’s history,” he added.

“And it’s the only one standing. And the reality is, today, unless somebody comes along with a big grant or something like that, probably nobody’s going to build another wooden drilling rig in British Columbia.”

“Obviously, most of the oil and gas activity’s up in northern B.C. now,” Miller concluded. “But it is part of our heritage.”

Miller remarked that it can also be a good way to show today’s generation of oilmen how the industry first began in western Canada.

“In the space of a lifetime,” he said, “we’ve gone from just pounding holes in the ground with a steam powered engine to drilling down horizontal and directional. The guys back then couldn’t even imagine.”

“The young guys today have a hard time imagining how the industry got started.”

“It is the history of the Flathead,” Guiliano echoed. “And we’re not that far from the Flathead.”

“And Fernie is surrounded by coal, right?” she continued. “But coal and oil and gas are not unrelated. I mean, this is part of our history. And even if although we don’t have oil here in our close vicinity – and we’re thankful enough that we have coal mining – it is still a part of British Columbia history.

“History is valuable. And I just believe

9

Workers pouring concrete pads as part of the Fernie Derrick restoration. Equipment had been left on the ground to rust in 1984, but are now protected from the damp earth.

The freshly painted boiler resting on a new concrete pad at the Fernie Derrick site.

that preserving history is a way to move forward in the future. Because unless you know where you came from and what your history is, really, I don’t know if you’re able to really move forward and progress as well as you could.”

A couple years ago, the old wooden derrick was central to the search for eight young snowmobilers who died that winter.

“They had a big search and rescue operation,” said Guiliano. “And it was carried out on the grounds of where the derrick was and out of the Chamber [of Com-

merce]. And people came with all kinds of media. And there was just all kinds of search and rescue people from all over.

And it was said by all of them that as soon as they were told [to] come [to] the oil derrick, it was like a beacon for them. It was so very easy for them to find it.”

“That was the headquarters for the search and rescue operation,” she added.

“And it just became iconic for everybody because they knew that’s where they could find the headquarters, that’s where they knew where to go.” •

10 • PIPELINE NEWS NORTH I

August 2011

industry news

energy strategy

- ministers meet in Kananaskis

The Honourable Shawn Skinner, Minister of Natural Resources, Newfoundland and Labrador ● The Honourable Robert R. McLeod, Minister of Industry, Tourism and Investment, Northwest Territories ● The Honourable Serge Simard, Minister responsible for Natural Resources and Wildlife, Quebec ● The Honourable Peter Taptuna, Minister of Economic Development and Transportation, Nunavut ● The Honourable Bill Boyd, Minister of Energy and Resources, Saskatchewan ● The Honourable Joe Oliver, Minister of Natural Resources Canada ● The Honourable Ron Liepert, Minister of Energy, Alberta ● The Honourable Richard Brown, Minister of Environment, Energy and Forestry, Prince Edward Island ● The Honourable Dave Chomiak, Minister of Innovation, Energy and Mines, Manitoba ● The Honourable Charlie Parker, Minister of Energy, Nova Scotia ● The Honourable Nathalie Normandeau, Minister of Natural Resources and Wildlife, Quebec ● The Honourable Craig Leonard, Minister of Energy, New Brunswick ● The Honourable Bruce Northrup, Minister of Natural Resources, New Brunswick.

Photo courtesy of Alberta Energy.

james waterman Pipeline News North

It was a mix of business and pleasure as provincial, territorial and federal ministers of energy, natural resources and other relevant portfolios gathered in Kananaskis, Alberta in mid July.

They were gathered to discuss the development of a Canadian national energy strategy, the predetermined main topic of conversation for the 2011 Energy and Mines Ministers’ Conference.

Before the ministers really set to work on the afternoon of Monday, July 18, they enjoyed chuck wagon races at the Calgary Stampede on July 16 and a glimpse of the oil sands operations in northern Alberta on July 17 and the morning of July 18. The ministers from Quebec, Ontario, Manitoba and British Columbia didn’t participate in the oil sands excursion, which included a look at in situ oil sands development and a reclaimed oil sands mining site that is now home to 300 wood bison, an aerial tour of the region, and a visit to Canadian Natural Resource’s (CNRL) Horizon operation.

The ministers from Ontario and B.C. didn’t attend the conference.

“I know in [B.C. Minister of Energy and Mines] Rich Coleman’s case, I had met

with him in Vancouver just a few weeks ago and he was fully intending on coming to the conference,” said Alberta Minister of Energy Ron Liepert, discussing the absence of those two provincial ministers.

“So, there was, as I understand it, two complicating factors. He had an important cabinet meeting that day. And secondly, he had just been in a car accident … and so I fully understand that.”

“Ontario’s case, I think, is a matter of politics over policy,” he continued. “Because they’re heading into a provincial election, which is not going to be easy for them. So, that’s a decision you have to make.”

Liepert described the delegates’ response to the oil sands tour as “very positive.”

“I don’t want to speak for the participants,” he said, “but, certainly, the comments I heard were that they were generally surprised at how small an area the mining operations actually are compared to the overall boreal forest.”

Liepert also noted that the delegates were generally appreciative of the land reclamation efforts and impressed by the scale of the equipment involved in extracting bitumen from the oil sands.

“Overall,” he said, “I believe everyone found it an incredible learning experience. And I don’t think there was anyone – even though it was quite a long day – that was regretting taking the trip.”

The Conference employed a new format this year after Liepert had heard

complaints from Albertans about the number of closed sessions during the meetings in Montreal last year. Those individuals had paid for what is known as “observer status,” but had basically been shut out of the proceedings by the lack of open sessions.

“So, we did not do that this year,” said Liepert. “We only had, I think, in total, one hour at the end of each session, Monday and Tuesday, that was closed. And, as a matter of fact, we had three presenters [from outside of government] on the Monday.”

The three presenters on July 18 included the Energy Policy Institute of Canada (EPIC).

“One of the first groups that have been calling for a national energy strategy,” Liepert remarked.

The second presentation was by the Winnipeg Consensus, a group of organizations including the Canada West Foundation and the Pembina Institute that first convened in Winnipeg in October, 2009 to discuss Canadian energy policy.

The third presentation was led by Tides Canada.

“The delegates at the table were [then] given an opportunity to ask questions,” said Liepert. “And then we also gave the observers opportunity to ask questions of the presenters, which was clearly a new format.”

Liepert indicated that one of the key benefits of this new format is that it allowed industry organizations such as

the Canadian Association of Petroleum Producers (CAPP) and the Canadian Energy Pipeline Association (CEPA) – whose members will be directly impacted by any sort of national energy strategy that Canada may ultimately adopt – an opportunity to observe the majority of the sessions as well as ask questions of the presenters and the ministers.

“I think it certainly brought all of the stakeholders in the energy industry to the table and not just thirteen governments,” he said.

A document titled Canada as a Global Energy Leader: Toward Greater PanCanadian Collaboration was released on Tuesday, July 19, which discussed Canada’s energy future at home and as part of the global market, as well five key areas of potential collaboration that should be priorities heading into the next conference in Charlottetown, Prince Edward Island in September, 2012. Those areas are regulatory reform, energy efficiency, energy information and awareness, new markets and international trade, and smart grids and electricity reliability.

“Let’s set oil and gas aside for a minute,” said Liepert, describing the energy information and awareness issue. “Let’s take electricity. Because electricity’s clearly an important part of our energy mix. For the most part, the average Canadian, the only thing he or she knows or cares about is, when I walk in the house, I continued pg 11

August 2011 I pipeline news north •

cont’d from pg 10 flick the switch on, and I want the light to go on. And I don’t want my bill at the end of the month to be too high. That really is what most Canadians know about electricity. Or frankly want to know. And I think we need to do a better job of engaging Canadians.”

“Not exactly sure what that would entail,” he continued, “but it could even be, over the period of time, trying to introduce more into the curriculum about electricity usage and conservation and maybe even the need to produce electricity cleaner. Those are the kinds of things that we need to work on and say, ‘How is it that we can get Canadians to think more about electricity rather than just not wanting to pay too much at the end of the month?’”

CAPP has already taken a step in that direction by offering an Energy in Action program that teaches elementary school students about energy, sustainability and the oil and gas industry. Liepert noted that that program is a “good first step,” but also indicated that the energy sector needs to take a broader approach.

“That’s only part of the model,” he said. “There’s got to be a much broader ability to get the attention of Canadians.

Let’s take pipelines for instance. I mean, there’s an awful lot of media attention these days to pipelines. Well, for the most part, over the past fifty years, oil and gas were piped under the earth, and unless somebody hit a pipeline with a backhoe, you really didn’t pay much attention to it.”

However, recent incidents such as the Plains Midstream Canada’s Rainbow pipeline leak that spilled about 28,000 barrels of oil near Peace River, Alberta this spring have led to increasing discussion about pipelines and pipeline safety, particularly considering the debate throughout North America over TransCanada’s proposed Keystone XL pipeline to ship oil sands bitumen from northern Alberta to Texas refineries. Liepert’s opinion is that part of the information and awareness piece should be better educating Canadians about the function of transmission pipelines and dispelling some of the safety myths.

“Canadians need to better understand how their energy sources get from Point A to Point B,” he said. “And need to understand more about some of the security measures that are taken with pipelines.

So, that’s the kind of thing I think we need to do a better job of.”

Certainly, any conversation about accessing new markets that takes place in western Canada includes discussion of exporting petroleum products to Asia, but there is also more and more talk across the country about increasing domestic

use of natural gas for transportation and power generation. However, those options weren’t discussed in any detail during the conference.

“I don’t think anything is off the table,” said Liepert, “but we didn’t want to get bogged down in specific details or we would have not even gotten to step one.”

“Clearly,” he continued, “at a session like that, your objective is kind of let’s at least get everybody aligned in the same direction and then we can work over the next year on what the next steps are. And that was the objective and I believe we accomplished that.”

During a speech to the Calgary Chamber of Commerce in June, Liepert clearly stated his hopes for the conference when he said: “In Kananaskis, if we can agree to some basic principles, some goals and objectives of what this should look like, and get the dialogue started, I’ll consider it a success.”

By those standards, according to Liepert, the conference was a success.

However, there are definitely some challenges ahead, not the least of which is convincing the rest of the nation of the role of Alberta’s oil sands in Canada’s energy future. For example, Ed Whittingham, executive director of the Pembina Institute, was critical of the inclusion of the idea that the oil sands can be part of an energy future with a greater emphasis on environmental protection and sustainability.

“While the ministers expressed interest in reducing greenhouse gas emissions from energy production, their decision to call Canada’s oil sands a ‘sustainable’ source of energy for the world raises serious questions about that goal,” Whittingham said in a statement posted on the Pembina Institute’s website after the conference.

“Non-renewable, high-carbon sources of energy are by their very nature unsustainable,” he added. “Canada needs to plan for a transition away from depending on exports of such sources, like the oil sands.”

Liepert’s side of the argument is that petroleum resources are necessary for the transition to “green” energy and the oil sands are a significant resource.

“We have to recognize that there are groups who believe that we can shift from a fossil fuel based economy to something different overnight,” he said.

“And that isn’t going to happen. And so they can cling to that view, but I don’t believe they’re in the majority. In fact, I’d say they’re in the very small minority that believe that. What we need to ensure is we’re continuing to make the progress to develop our resources and, in our case, fossil fuel resources, in a cleaner way.

And we’re doing that through a number of initiatives.”

Getting ready - cont’d cont’d from pg 3 “But that being said, not every camp in the Basin is using our potable water,” Arnold continued. “A lot of them have their own wells. They have a treatment facility onsite and they basically draw and treat their own water onsite.”

NRRM has instituted water conservation initiative such as a season water restriction bylaw that is in effect from May to December.

“There’s the seasonal water restriction bylaw, so that’s effective May to December. “So, that’s the odd days of watering,” Arnold explained. “Restrictions in terms of not using it for car washing.

And there’s criteria for newly sodded lawns or new landscaping or whatever.

And so that’s enforced throughout the summer months.”

They are considering other options as well, including water metres.

“Commercial and industry are metered,” said Stevenson. “But, right now, we don’t have residences on meters.

So, that’s something that we’re looking at in terms of when do we take that next step. Because we know there’s real success stories in Dawson Creek and Fort St. John. They’ve seen a dramatic reduction in use of water when water metering has been brought in during growth periods. Fort St. John has shown growth, but still a reduction in water usage. You know, that twenty to thirty per cent type number keeps coming up. So, again, if we can put off doing capital projects to expand the water infrastructure by bringing in metering, I think we need to look at that as a regional municipality.” •

For example, Alberta has a $15 per tonne carbon tax and is actively pursuing carbon capture and storage (CCS) projects.

“So,” Liepert added, “we believe that fossil fuels can and will play an important part of the future energy mix. But we also recognize that we have to continue to work with industry and to do better.”

Ontario Minister of Energy Brad Duguid also took exception to the language in that document concerning in the oil sands “We just weren’t comfortable with the wording that the oil sands are sustainable and responsible,” Duguid was quoted as saying in the Globe and Mail on July 19.

“It was disappointing to see the comments from the Ontario minister after about the fact they didn’t support it because oil sands was included in the document,” said Liepert.

“I think what they’re saying is they don’t believe oil sands plays a part in a clean energy future,” he added. “We happen to disagree. And my guess is that that’s clearly one of the situations where we’re not going to bicker back and forth. Let them get their election out of the way. And then I think you might see a different government there with a different philosophy.”

Canada West Foundation President Roger Gibbins also criticized the language of the document, but only terms of the use of the phrase “collaborative approach” instead of “national energy strategy.”

“Part of the issue – and this is what happens in this country – is that Quebec would have no part of something that said national,” explained Liepert.

“If you’re going to get everybody aligned,” he continued, “there has to be some give and take. And, clearly, is it the document that Alberta would have written? No. But we have to recognize

11

that we’re dealing with ten provinces, a federal government, and three territories.

And so you try to go back and forth and get consensus around what will work.

And I would not disagree with Roger that, clearly, Alberta would seek stronger wording going forward. That will be our task as we move through the next year to try and strengthen areas where we can and get agreement on it.”

Despite these issues, Liepert felt the conference was a good first step toward realizing a national energy strategy.

However, that process is going to be complicated between now and the next conference in September 2012, as Newfoundland and Labrador, Prince Edward Island, Ontario, Manitoba, Saskatchewan and Northwest Territories are all facing provincial or territorial elections this fall.

New Brunswick is due for a provincial election in May, 2012. Yukon could have an election this year, while provincial elections may be imminent in Alberta and British Columbia as a result to changes in the premier’s offices of those provinces.

Consequently, there could be a number of new ministers attending the conference in Charlottetown next September.

“This work probably will lay dormant at the government level until 2012 because everybody is preoccupied with their elections in their own provinces and territories,” Liepert admitted. “And so there’s no sense trying to push that ball up hill. I think what you’re going to have is … a different set of players in January 2012 than you’ve got in July of 2011.”

“I think each individual province is going to pursue their own strategies,” he added.

“But from a national level, it’s going to be difficult to try and gain any consensus until all of these elections are out of the way.

I just don’t see much getting done.” • 30583

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 Toll-free 1.855.436.3676 (855.4ENFORM) Email bc@enform.ca FortSt.St.John John 250.785.6009 Toll-free 1.855.436.3676 (855.4ENFORM) Email bc@enform.ca Fort250.785.6009 St. John 250.785.6009 Toll-free 1.800.667.5557 www.enformbc.ca www.enformbc.ca www.enformbc.ca

12 • PIPELINE NEWS NORTH I

August 2011

special feature

a thirsty issue

- water, water everywhere...

The Deer River in northeast British Columbia in April, 2011, still anticipating the runoff from spring rain and snowmelt. The Deer River connects to the Fort Nelson River not far from Encana’s Kiwigana Project. Encana has applied to the BC Oil and Gas Commission to withdraw water from the Fort Nelson River for that operation. Photo by James Waterman.

james waterman Pipeline News North

“Water, water, everywhere, Nor any drop to drink.”

The famous lines from Samuel Taylor Coleridge’s poem The Rime of the Ancient Mariner may also reflect certain concerns about the use of freshwater for hydraulic fracturing in the shale gas play of the Horn River Basin in northeast British Columbia.

Specifically, the issue is that frac water might stay in the Horn River Basin, sequestered deep underground in the very formations from which the gas has been extracted, but it will no longer be “freshwater” after it has been contaminated with salt, minerals and metals from shale gas reservoirs, along with chemicals used in the hydraulic fracturing process. It is certainly an issue that the energy sector, the provincial government, and other stakeholders will have to address since increasing natural gas production in the Northeast – which is still fairly early in the development stage – will also be accompanied by increased industrial water use.

Lana Lowe, Lands Director with the Fort Nelson First Nation, is among those most concerned about the impacts of freshwater use.

“My big concern is the volumes of water that are required to do the shale gas development that the companies want to do up here,” said Lowe. “There’s like twenty oil and gas companies up here with tenure. All of them plan to drill for shale gas over the next 20 to 50 years, using billions and billions and billions of gallons of freshwater in the fraccing process, which means that water can’t be put back into the environment. Some of it doesn’t come back. And then stuff that does come back, they reuse as much as they can, I suppose, but ultimately it will be going down into the subsurface, because it’s too contaminated to be treated and put back into the environment. So, over the course of 50 years, the water cycle of the entire planet is going to be disrupted because of the loss of that water.”

Lowe believes that the onus is on the provincial government to redirect some of the money that goes toward royalty credits and other measures to encourage shale gas development in the Horn River Basin toward infrastructure necessary for recycling and reusing frac water.

“Shale gas development up here is heavily subsidized by B.C. taxpayers,” she said. “And none of those subsidies are going to address the impacts of the water [consumption]. When they did the Water Act revitalization road show, some of the statistics that B.C. came up with is that 97 per cent of British Columbians believe that water is a precious resource and place a high prior-

ity on its conservation. And yet they’re subsidizing this huge development without any concern as to how to mitigate the water issue.”

Indeed, the BC Oil and Gas Commission (the Commission), which is under the Ministry of Energy and Mines and is tasked with regulating the oil and gas industry in the province, including handling Section 8 applications for short term water use approvals, only hired its first hydrologist, Allan Chapman, just last year.

Additionally, it is only now launching a full scale hydrologic modelling study – after a preliminary pilot project in the Horn River basin during February and March of this year – in order to determine how much water is present in areas of natural gas development in B.C. Lowe is concerned about the timing of that study – which Chapman intends to have completed by the end of this year – considering the amount of work that has already been done in the Horn River Basin and that development is really expected to peak between 2015 and 2018. It also seems to her that a pair of companies, Nexen and Spectra Energy, are pushing hard to obtain long term water licenses through the Water Stewardship Branch of the Ministry of Forests, Lands and Natural Resource Operations before the hydrologic modeling is complete.

“And for this one company alone, there’s 8 million [cubic metres of water] per year,” she said.

Lowe is particularly curious about Spectra’s water license application, since it is the first one to her knowledge asking for approval to use water from muskeg.

“I’ve asked them to withdraw their … application for the permanent license and put in a short term [application] until the baselines [from the hydrologic modeling] come in,” she said.

That request reflects Lowe’s stance on the water issue. She understands the economic benefits of shale gas development to the province, as well as her own community, and she isn’t suggesting that development should stop completely. Lowe is only concerned with the pace of development, particularly in terms of how freshwater has been and is being allocated without a thorough understanding of the volumes of water resources available in the Horn River Basin and the cumulative effects of using freshwater for fraccing.

“These are the water licenses that have been applied for,” she said, presenting a list of long term water license applications that included the Nexen and Spectra applications. “And there’s no cumulative effects assessment. So, if you look at this, all you see is how much they want. You don’t actually see – and this is from the Water Stewardship Branch – you don’t actually see how much is there. So, they’re making blind decisions with their precious resource.”

“Way back in 2008,” Lowe continued, “when industry was buying up all this land, they recognized that water was the limiting factor to development. And they’ve been working since then to overcome that limiting factor.”

However, Lowe feels that the industry remains determined to develop the resource as quickly as possible.

“I was at a conference where they were talking about the pace of development,” she added. “And industry is really upset about the price of gas right now, because they can’t develop as fast as they want … If they develop the resource at this pace, it will take them 300 years to get it all out of here. They want it out in 50. And they totally aim for that pace of development.”

Ben Parfitt, Resource Policy Analyst with the Canadian Centre for Policy Alternatives, sums up public concerns about how the government is handling water use and management with the story of a record breaking frac operation in the area of Two Island Lake, about a four and half hour drive north of Fort Nelson, B.C. “In the space of 24 hours,” Parfitt explained, “the company applied for an amendment to its water permit that effectively allowed it to increase its water takings by 50 per cent. And that application was made one day and the next day it was signed off on. Why is it that the [Commission] decided that it was acceptable to take the lake’s drawdown from 10 centimetres to 15 centimetres overnight with no public consultation? And the company eventually had to stop water takings because it withdrew down to the maximum. So, I think that the public has reason to be concerned when very large quantities of water [are being allocated] through repeated issuance of short term permits by the [Commission].”

Additionally, Parfitt really takes issue with the fact that these sorts of approvals are granted without public consultation.

However, the provincial government – particularly, the Commission – is working toward a greater level of accountability and transparency.

“What we’re seeing right now in the Horn River Basin is an individual well is taking anywhere between about 30,000 and 70,000 cubic metres of water to complete,” said Chapman, discussing the volumes of water used in the Horn River Basin. “So, to do the hydraulic fracturing.

And that number is on an upward trend. And the reason for that is the length of the horizontal laterals that the companies are putting in for their wells is increasing.

So, they’re putting in their vertical well and then they’re extending the horizontal legs off of it. And they’re pushing those horizontals out farther. And so that means that there’s an increasing number of frac stages per continued pg 13

August 2011 I pipeline news north •

13

cont’d from pg 12 well. And each frac stage uses, usually, about the same volume of water. So, the wells are using an increasing amount of water because of the increasing number of frac stages and the length of laterals.”

“Up until about 2008 the water use by the oil and gas industry in B.C. was generally pretty small,” he continued. “And then the unconventional gas kind of started to ramp up in about 2008. And the water use started to go up. And the projections of future water use started going up. And the Oil and Gas Commission recognized that water is going to be a critical issue.”

Responding to the increased level of water use, the Commission hired Chapman as its first hydrologist last year and subsequently modified Section 8 of the Water Act in March of this year. The changes created the Basin Section 8 application, meaning that Section 8 applications are now done on a basin-by-basin basis, rather than blanket approvals for the full northeast corner of the province.

Now the Commission is embarking on its hydrologic modeling project to ascertain the volumes of water in the river basins of northeast B.C. The project, which was announced on July 15, uses a modelling approach that incorporates climate, topography and land cover information that can be transformed into a Geographic Information System (GIS) tool capable of producing estimates for stream flow for the province’s rivers and lakes for monthly, annual and seasonal time frames.

“One of the big gaps that we knew that we needed to fill was this question of how much water is there,” said Chapman, noting that the Commission could previously only project the amount of water industry might use.

“And so that was the question that we had in our minds when we did the pilot project back in February-March,” he continued. “It was to answer that question of what is the natural water supply and the natural water availability at a river basin scale throughout northeast B.C. “What that tells us then is how much water is there. It allows us to then define thresholds, whatever they might be. If X volume is there over the course of a season or a year, what’s the maximum volume of water that would be licensed? It allows us to communicate on water management to First Nations and the communities and the residents of northeast B.C. So, we can communicate on how much water the oil and gas industry uses in relation to what is there, instead of people speculating or scratching their heads.”

Essentially, the results of the project will simplify the decision-making process at the Commission, while raising public confidence that the correct decision was made.

Geoscience BC, which has experience with water related studies in the Horn River Basin and the Montney formation, is also participating in this project.

“What Geoscience BC is supporting with that one is the funding and also, essentially, the consultation with industry and our partners around the value of doing that kind of work,” said ‘Lyn Anglin, President and CEO of Geoscience BC. “And pretty much there was a very strong consensus that this is a very good thing to be doing now, sooner rather than later, so we can get a broader understanding of the northeast B.C. water regime.”

Geoscience BC is contributing $50,000 to the project, which was made possible by $12 million in funding provided to the organization by the provincial government this May. Chapman has found the results of the pilot project sufficiently encouraging to be confident that the full scale study will yield useful results.

29329

The Debolt water plant, an Encana and Apache joint venture, allows both companies to drastically reduce their freshwater consumption in their Two Island Lake operations in the Horn River Basin. The plant can provide about 16,000 cubic metres of water per day, accounting for about 95 per cent of Encana’s water requirements at that site.

Photo courtesy of Encana.

“For the pilot study,” he said, “we compared the modeled monthly and annual runoff with data measured at about seven or eight sites on rivers. And we were very happy with how well the model actually fit the observations. So, it indicated that the model is a good representation of actually what is occurring on the ground and what the stream flow is. So, that gave us confidence that the model would likely be reasonable in applying more broadly to the rest of northeast B.C.” “Using this model then – which we calibrated to the limited data we had, but where the fit was good – we determined that the average annual runoff of water through the rivers and streams and lakes up in the Horn River Basin amounted to about 1.2 billion cubic metres of water,” Chapman continued. “And then when we projected a high level of use for well completions and a high volume of water per well, we estimated that unconventional gas would use less than one percent of the average annual runoff in the Horn. So, at a high level of development and a high water use per well, the total use would be less than one percent of the average annual runoff in the Horn.”

Chapman cites the Fort Nelson River as an example of how little water the industry is actually using relative to the total stream flow of rivers in the Horn River Basin.

“The Fort Nelson River is a very large river,” he said.

“It has extremely large volumes of water. And there’s absolutely no potential for oil and gas industry water use to have any impact on the flow of the Fort Nelson River.”

Chapman explained that all the Section 8 water approvals for the Fort Nelson River only amount to 0.13 per cent of the flow of the river. He also stated that water use in all other river basins besides the Kiwigana River is less that 0.1 per cent of the flow of the river. The Kiwigana River is at 0.59 per cent.

Lowe takes exception to Chapman’s assertion that

oil and gas activity will have no real impact on the Fort Nelson River or other water resources in the Horn River Basin, partly because she doesn’t see that the modeling is necessarily taking the cumulative effect of water use into account. Also, her understanding is that the current Section 8 approvals for the Fort Nelson River on which Chapman bases his numbers are just a drop in the bucket compared to what the industrial use of water from that river could be when all the other companies with land tenures in that area start receiving Section 8 approvals as well.

Lowe has also been given the impression that all Section 8 applications are simply rubber stamped by the Commission. Indeed, between January 1 and March 31, 2011, the Commission authorized 28 Section 8 applications, while not refusing any. Five incomplete applications were initially refused, but were later approved when complete applications were submitted.

“The Oil and Gas Commission,” said Lowe, “they’re approving water permits all over the place. They don’t consult with us on water at all … So, that’s another thing I want to do, is convince them that we’re not going to let this issue go and that we want to be consulted on all water licensing and permitting in our territory.”

“I think there’s a fundamental rights issue there where the government is reluctant to consult with First Nations on water because they don’t want to acknowledge that we have rights to water,” she continued. “They think the water belongs to them and it’s their water to do whatever they will with it. And so why should they consult with the First Nations on water? ‘We’ll consult you on land, but water doesn’t belong to you.’ However, we can’t practice our rights without water. We use it for drinking. We use it for travel. The animals need it to survive.” continued pg 14

14 • PIPELINE NEWS NORTH I

August 2011

A thirsty issue - cont’d cont’d from pg 13

Although it would seem that the Commission is granting the overwhelming majority of Section 8 approvals for which oil and gas companies applies, it is likely just that they are simply acting as is dictated by provincial legislation that is beyond their power to control. So, if the Fort Nelson First Nation has an issue, it is really with the policymakers, not the regulators.

“We have authority for Section 8 of the Water Act for short term water use approvals,” Chapman explained.

“And our approvals, probably 75 to 80 per cent of them tend to be for small volumes of water. Water for seismic exploration and water for freezing roads and hydrostatic testing and machine washing and things like that. And maybe 20 [to] 25 per cent for larger volumes. That’s the water for the hydraulic fracturing.

“So, when we make a decision on a Section 8 application, we do look at other users of water in those river basins, how much is already licensed or used, how much is available, what the current demands are and [what] the projected demands are.”

Obviously, the water issue doesn’t just concern the Oil and Gas Commission and the Fort Nelson First Nation. The oil and gas industry itself is making an effort to minimize its use of freshwater, not only in the Horn River Basin, but throughout their areas of operation.

“I make a statement that I’m quite comfortable making,” said Steve Dunk, Manager of B.C. Operations for the Canadian Association of Petroleum Producers (CAPP), “which is industry and stakeholders are aligned on minimization of freshwater use. It’s not a case that we don’t want to use non-freshwater. We’re aligned. We get it, of course, that we need to have responsible water use.”

“Industry is looking more and more at non-surface water sources, not rivers or lakes or that type of thing,” he continued. “But we’re looking at sort of more deep saline water sources. The Debolt, specifically.”

Nexen is looking at using Debolt water for fraccing, while Encana and Apache have already built a plant as a joint venture to ready Debolt water for fraccing for their Two Island Lake area operations.

“Right now, basically, all our water is treated from the Debolt reservoir, and capacity there is around 16,000 cubic metres per day,” said John Hogran, Lead, Environmental Health and Safety, Water, Encana’s Canadian Division. “That’s a reasonable number for our rough number use at the moment. That only occurs when we’re actually doing our hydraulic fracturing, of course.”

“I think we’ve been running it, recently, fairly close to full capacity,” he added, noting that that accounts for about 95 per cent of Encana’s water needs for Two Island Lake.

Dunk pointed out that the oil and gas industry is also

involved in a Hydraulic Fracture Water Reuse Feasibility Study sponsored by the Alberta Upstream Petroleum Research Fund (AUBRF) and the Science and Community Environmental Knowledge (SCEK) Fund, and coordinated by Petroleum Technology Alliance Canada (PTAC), to test the limits of reusing recycled frac water.

“This study is intended to provide guidance to the exploration and production companies to allow greater reuse of hydraulic fracture fluid flowback,” said Phoebe Buckland, a spokesperson for Talisman Energy, one of the leaders of the study. “Reuse of flowback reduces or eliminates disposal and also reduces the demand for freshwater.”

“This project will consolidate information related to hydraulic fracturing, additives, flowback, and treatment of flowback into a single document that will provide guidance on flowback issues, treatment and management,” she continued.

“The study will identify a methodology so that producers can work with service companies to determine the limiting factors and mitigation or control scenarios for using water with high salinity or other constituents for making up hydraulic fracturing fluid,” Buckland concluded.

Obviously, a lot of work still has to be done for all parties to be confident that shale gas development can continue in the Horn River Basin in a sustainable matter, particularly in terms of water usage, but the work has begun, and there seems to be a willingness on all sides to do the heavy lifting.

After all, nobody wants to be accused of shooting the albatross, stranding northeast B.C. in a sea of undrinkable water, and depriving the province of its economic potential. •

Scamming the big boys not a great idea james waterman Pipeline News North

A recent attempt to bilk oil and gas industry companies out of millions of dollars was a failure according to Alberta Environment.

An incorporated company calling itself Alberta Environmental Registry allegedly sent invoices to several industry companies instructing them to wire an “environmental compliance fee” into a bank account by a specific date. The invoices, which demanded payments ranging from $400,000 to $3.3 million, implied that Alberta Environmental Registry is affiliated with the provincial government, but that isn’t the case.

“Basically, we have no affiliation with that registry or the programs that they refer to,” said Alberta Environment spokesperson Jessica Potter.

Alberta Environment learned of the scam very quickly, when a few of the companies that had received invoices promptly called Alberta Environment’s regional managers to get to the bottom of the matter.

The companies immediately knew that the invoices were suspicious.

“We set out whatever fees are associated with doing business in Alberta,” Potter explained. “They have a pretty good idea of what to expect based on their approvals.”

“I don’t know how many companies received it,” she added. “However, we do know that nobody paid it.”

Alberta Environment first heard of the scam on July 27 and released a bulletin on July 28.

The ensuing investigation by the Calgary Police Service Economic Crimes Unit Fraud Details has led to the arrest of John Edward Wilson, 41, of Calgary. Wilson has been charged with three counts of fraud over $5000. Further charges are possible. •

What about the borrow pits?

Oil and gas companies frequently dig borrow pits to collect water from rain and snowmelt that they can later use in their operations. Considering the volumes of water that is caught in these often large pits, it is reasonable to wonder if they have any adverse effect on groundwater and surface water recharge.

“Difficult question,” said BC Oil and Gas Commission hydrologist Allan Chapman.

“So, the borrow pits basically fill up during springtime,” he continued. “And so the volume of water that they contain would generally then be isolated from the deeper groundwater.”

Chapman added that a lot of the groundwater in the Fort St. John and Dawson Creek area is at a depth of approximately 100 metres to 150 metres underground.

“What effect the storage of that water has on that deep groundwater would depend what the volume of the borrow pits are relative to the volume of water that would normally infiltrate into the ground,” he said. “And so you could estimate that by looking at the area of borrow pits in relation to the area of the watershed that the groundwater aquifer is contained in. It’s a very, very, very, very small number. So, if we look at the percentage of land area that’s in a borrow pit as a percentage of the area of a watershed or the recharge area of an aquifer, it would be a tiny fraction of a per cent.”

“I haven’t looked at it specifically to try and answer that question,” Chapman continued, “but my first sort of back of the envelope calculation is that there would be no impact. There would be no measurable, quantifiable impact.”

Borrow pits would only have an impact on lakes or rivers if they are in an area where rain and snowmelt would ordinarily runoff into those water bodies, which isn’t often the case.

“I’m aware of a couple of borrow pits up in the Halfway River that are fairly close to the river,” said Chapman.

“A borrow pit right down near the bank of the river could be capturing water that would normally be part of the river,” he continued. “But most borrow pits that we talk about for the gas industry are not like that.

Most of them are constructed along road right-ofways because they borrow material used to construct the road or used to construct the well pad. And so they’re not located in those areas beside rivers.

The one that I’m most aware of is a dugout that’s located on private land down on the Halfway. So, it’s down on a farm.” •

August 2011 I pipeline news north •

profiles

15

wise water use - Talisman is leading the way

james waterman Pipeline News North

Talisman Energy is taking the water issue seriously.

In addition to taking the lead in the Hydraulic Fracture Reuse Feasibility Study designed to determine the limits of recycling frac water in the natural gas plays of western Canada, they are also involved in a number of water use and management initiatives that range from the very local to the truly global.

“Talisman’s water strategy is focused on working to secure environmentally sustainable and operationally reliable sources,” said Talisman spokesperson Phoebe Buckland.

“Key objectives are to optimize water use while reusing as much water as possible, and safely dispose of any water that we can no longer reuse.”

It begins at the grassroots level with projects such as the Rainwater Harvesting Initiative in Fort St. John, British Columbia, where Talisman has their field office for their operations in the Montney formation.

“As part of our sponsorship of the Pomeroy Sport Centre,” said Buckland, “Talisman is the title sponsor of the Rainwater Harvesting Initiative, a program that uses the facility’s assets to aid in the collection of rainwater to augment the water needed for landscaping needs in the community. The initiative has several benefits, as it reduces the amount of water required from the city’s water source, retaining the water supply for other uses and reducing energy costs.”

“The harvesting program actually prevented flooding in the region this year and all of the water tanks will be used to water the edible garden at the [Pomeroy] Centre,” she added.

Talisman is also discussing other waterrelated partnership opportunities with communities in areas where they work, including providing emergency assistance in cases such as firefighting. Similarly, the company initiated conversations with stakeholders concerning its Farrell Creek operations in B.C. since they drilled their first pilot wells in that area.

“We have discussed legitimate concerns about shale gas development and we continue to offer information about our practices on water withdrawal, reuse, disposal and conservation,” said Buckland. “At the same time, we have received positive feedback on Talisman’s approach to safe and responsible operations, our philosophy towards working with local landowners, communities and

As a sponsor of the Pomeroy Sports Centre in Fort St. John, Talisman Energy leads the Rainwater Harvesting Initiative, which uses that facility to collect rainwater for landscaping throughout the community. The City has landscaped the grounds at the Pomeroy Sports Centre with edible plants such as the woodland strawberry.

Photo by James Waterman.

other stakeholders, and the work we have done to mitigate the impacts from our operations through our Good Neighbour Program.”

Buckland stated that Talisman uses about 15,000 to 20,000 cubic metres of water for every well that they frac, which, according to BC Oil and Gas Commission hydrologist Allan Chapman, is below the average. They recover approximately 80 per cent of that amount as flowback water, nearly all of which is reused in subsequent fraccing operations. Talisman pipes that water from Williston Reservoir – the site of BC Hydro’s Bennet Dam – to Farrell Creek via pipeline, thereby reducing truck traffic on local roadways.

“Talisman’s daily allocation of water for the Williston [Reservoir Water] Pipeline is the equivalent of nine seconds worth of flow over the Bennett Dam,” said Buckland.

However, Talisman’s interest in water conservation goes beyond the natural gas plays of northern B.C. The company

was recently invited to represent the oil and gas industry in the World Resources Institute’s Aqueduct Alliance.

“As an international corporate citizen,” Buckland explained, “Talisman understands and recognizes the need for water management practices in our global operations that includes water conservation and protection. Our sponsorship of the Aqueduct Alliance is multi-faceted, covering cash and in-kind donations, as well as employee participation on a technical working group. The technical working groups are entrusted with providing design, validation, and sector indicator weighting expertise.”

“The objectives of the Aqueduct Alliance,” she continued, “are to measure, map, and report on Global Water Risk, providing accurate, high quality information together with a platform for businesses and governments to address water risks beyond physical water scarcity, including regulatory and reputational risks.”

Furthermore, Talisman is involved with the Global Environmental Management

Initiative (GEMI) and the International Petroleum Industry Environmental Conservation Association (IPIECA).

Talisman has been working with GEMI to help develop a Local Water Tool (TWL). “[It] helps companies evaluate the external impacts, business risks, opportunities and management plans related to water use and discharge at a specific site or operation,” said Buckland. “Talisman has participated in the development of basis of design for use by all industries and will also participate in tailoring the LWT specifically to the oil and gas sector in late 2011.”

The company has been doing similar work with IPIECA, including developing a Global Water Tool (GWT) for the oil and gas industry that will be made public this August during World Water Week in Stockholm, Sweden.

“The purpose of this project is to help companies manage their fresh water use and provide a narrative for corporate reporting,” Buckland explained. •

605640

16 • PIPELINE NEWS NORTH I

August 2011

careers & training September Course offerings

S u n D ay

m o n D ay

t u e S D ay

W e D n e S D ay

t h u r S D ay

2

3

8

9

10

Forklift safety DC oFA 1 CH oFA 1 DC h2s Alive CH h2s Alive DC oFA 1 FN oFA te FN Air Brakes FSJ Fall Protection FSJ

s-100 Fire supression CH WhMis DC Fall Protection FN oFA 1 FSJ

CPr C CH

oFA 1 FN

oFA te FSJ

15

16

17

responsibilities of Joint health and safety Committees FN

oFA 1 FN

Dawson creek petroleum Safety training WhmiS transportation of Dangerous goods ground Disturbance

5 LABOUR DAY

S at u r D ay

1

ONgOINg COuRSES

4

f r i D ay

6

tumbler ridge ofa 1 ofa te h2S alive

7

11

12

13

14

oFA te FN

oFA 3 starts CH oFA 1 DC heavy Duty Boom truck DC oFA 1 FN

h2s Alive DC heavy Duty Boom truck DC Fall Protection DC

heavy Duty Boom truck DC Forklift safety FSJ

Confined Space FN

PAL FSJ

h2s Alive FSJ

18

19

20

21

22

oFA 1 DC

Forklift safety DC h2s Alive DC

oFA te FN

Fall Protection CH Non-restricted Firearms FN Aerial Work Platform FN supervisor safety training FN Fall Protection FSJ

oFA 1 FN oFA 1 FN

25

26

27

28

29

AtV safety FN

oFA 1 DC oFA 1 FN oFA 3 FN Air Brakes FN eMP 3 TR

AtV safety CH

Confined Space CH

Basic Fire extinguisher FN

Management skills for supervisors FSJ

Confined Space FN Forklift safety FN

23

24

30

CH – Chetwynd Campus DC – Dawson Creek Campus FN – Fort Nelson News Campus FSJ – Fort st. John Campus TR – tumbler ridge Campus

courSeS

campuSeS

h2s Alive FN OFA – occupational First Aid OFA TE – occupational First Aid transportation endorsement PAL – Possession and Acquisition License (Canadian Firearms safety Course) EMP 3 – emergency Medical Personnel Advanced First Aid Level 3 WHMIS – Workplace hazardous Materials information system

NortherN Lights CoLLege

Workforce training Customized Industry Services.

We can provide your business with customized training in the classroom or on-site.

Find out how we an help improve your employees’ skillset and efficiency with training developed specifically for your company by calling the Workforce training Department located at your nearest Campus.

Dawson creek 250-784-7576 Hugh McNair hmcnair@nlc.bc.ca

chetwynd 250-788-2248 Verna Rowsell vrowsell@nlc.bc.ca

fort nelson 250-774-2741 Ramona Nehring rnehring@nlc.bc.ca

tumbler ridge 250-242-5591 Donna Merry dmerry@nlc.bc.ca

fort St. John 250-785-6981 Rick Newlove rnewlove@nlc.bc.ca

fort nelson 250-774-2741 Kate Ring kring@nlc.bc.ca

August 2011 I pipeline news north •

upComing in

october

oct 1, 12, 29 oFA 1 CH oct 2, 30 oFA te CH oct 6 h2s Alive CH oct 18 AtV safety CH oct 25-28 Management skills for supervisors 2 FSJ oct 26-27 Building your Communication toolbox FSJ

ON-LiNe sAfeTY TRAiNiNg THROUgH NLC (Morning start times recommended).

• WHMis • Bear Aware • ground Disturbance • psT (petroleum safety Training iRp #16) • CsTs (Construction safety Training system) • Transportation of Dangerous goods (TDg)

Call the Workforce training Department at your nearest Campus.

NLC’s WORKfORCe TRAiNiNg DepARTMeNT

Your local provider delivering the right training to suit industries needs our Workforce training Department can organize a wide variety of courses for industry, business and the community

soMe exAMPLes: • Air Brakes • ATV Rider • Boom Truck Operator • snowmobile Rider safety • Confined Space • Construction safety Training • COR/seCOR • Detection and Control of flammable substances • Driver Training • electrical Code Update • electrical Course for instrumentation personnel • enform Courses • enform Chainsaw safety • fall protection • Firefighting • first Aid • forklift safety • gas processing (all levels online) • gps • General Oilfield Driver improvement (gODi)

• ground Disturbance – global • Hazard Assessment • Hoisting and Rigging • H2s Alive • H2s Awareness • incident and Accident investigations • Management skills • Oilfield Hauler • Oilfield Swamper • petroleum safety Training (psT.iRp #16) • pesticide Applications • Portable Extinguisher Firefighting • power engineering (all levels online) • private security Training • s100 fire suppression • safety program Development • safety Training for Wellsite supervisors • scaffolding • seismic Blaster safety • Track inspection • Traffic Control • Transportation of Dangerous goods (TDg) • Well Blowout prevention…and more!

call the Workforce training Department at your nearest campus.

For more information or to register for any course listed in the monthly calendar:

Are you interested in:

• call the appropriate Workforce Training coordinator • call toll free 1-866-463-6652 and ask for the Workforce Training department at the campus where the course is offered • check the website at nlc.bc.ca, and click on the Workforce Training logo.

• taking a course that currently is not scheduled?

the courses listed in the monthly calendar are accurate as of May 16. however, new courses are being added on a regular basis at each NLC campus. For updated schedules, go to nlc.bc.ca and click on the Workforce training logo.

• having a course designed specifically for your company?

• having a course offered at your workplace?

Contact the Workforce training coordinator at your local campus.

We will work with you to meet your needs.

17

18 • PIPELINE NEWS NORTH I

August 2011

special feature

carbon capture

- GHG reductions and shale gas

Spectra Energy’s natural gas processing plant in Fort Nelson. Spectra is working on attaching a carbon capture and storage facility to the plant, which could sequester as much as 2.2 megatonnes of carbon dioxide per year.

Photo courtesy of Spectra Energy.

james waterman Pipeline News North

British Columbia is facing a dilemma.

The issue was described in an August, 2010 report released by the Pacific Institute for Climate Solutions, titled “Shale Gas and Climate Targets: Can They Be Reconciled?” Essentially, the issue is that the B.C. government has committed to reducing greenhouse gas (GHG) emissions to 33 per cent below 2007 levels by 2020 and 80 percent below 2007 levels by 2050. At the same time, shale gas development in the Horn River Basin of northeast B.C. is expected to increase throughout that period and become a progressively important contributor to the provincial economy.

The concern, as discussed in the report, is that the CO2 content of Horn River Basin shale gas is about ten to twelve per cent. The CO2 content of B.C.’s conventional natural gas reservoirs can be as low as two per cent and tend to be lower than five per cent. That is a significant amount of additional CO2 that must be separated from shale gas in order to get down to the two per cent CO2 limit desirable for household heating and pipeline restrictions. Commonly, that waste CO2 has been vented into the atmosphere, thereby contributing to raising GHG emissions

levels.

The Horn River Basin is estimated to have shale gas reservoirs amounting to at least 144 trillion cubic feet (tcf) and as much as 1000 tcf. Estimates of recoverable volumes range from 75 to 200 tcf with the existing technology. The Pacific Institute report quotes Canadian Association of Petroleum Producers (CAPP) forecasts that indicate that development of Horn River Basin shale gas could be 1.0 billion cubic feet (bcf) per day in 2015 and 2.0 bcf per day in 2020.

Based on those CAPP forecasts and the need to reduce the CO2 content of the shale gas from twelve per cent to two per cent, the Pacific Institute determined that the vented GHG emissions from the Horn River Basin could total 4.3 megatonnes (Mt) per year. If the province is going to achieve its 33 per cent below 2007 level GHG emissions target for 2020, it has to reduce emissions by 33.6 Mt per year. However, according to the Pacific Institute report, the above volume of CO2 emissions from the Horn River Basin will actually slightly increase GHG emissions in B.C. by 2020.

“People have generally confirmed what we’ve been saying,” said Mark Jaccard, one of the co-authors of the report and a professor at Simon Fraser University with a doctorate in economics. “I’ve even had some industry people – so, not just environmentalists – say to me, actually, our numbers are conservative.”

“We were speculating not the total potential,” he added, “but what could happen under sort of reasonable market conditions. And people said to us, if anything, we might end up being conservative.”

It was Jaccard’s goal to be as conservative as possible, since it was becoming apparent that shale gas development could make it very difficult for B.C. to achieve its GHG reduction targets, and he was eager to avoid appearing as though he was “deliberately padding the numbers” in order to prove that case. After all, his reputation was at stake. Jaccard has made a name for himself as a proponent of both fossil fuels and GHG reduction strategies such as carbon capture and storage (CCS), which he illustrated in his book, Sustainable Fossil Fuels, the winner of the Donner Prize for the best policy book in Canada in 2007.

“I basically said that the environmentalists were wrong in their sort of pure hatred of fossil fuels,” he explained. “Fossil fuels are a wonderful, rich energy source.

We can get them out of the ground with almost no emissions, but we have to regulate ourselves. Industry’s not going to do it. And then we can convert the fossil fuels into electricity, maybe hydrogen, heat, which is a secondary source of energy that would go to our equipment, our factories, our appliances, and we could use without causing greenhouse gas emissions.

“We could capture the carbon and store

it. And, in fact, all of the technologies needed for that are commercially available. And so I do believe that if humanity cared about acting on the planet – it cares about the planet, but not enough to act on it – that we would do carbon capture and storage to a significant extent. And that’s why I wrote a book on it.”

Jaccard has also been critical of governments who have made GHG reduction commitments, which he illustrated in a book, Hot Air, which he co-authored with Globe and Mail columnist Jeffrey Simpson.

“In there we had a figure that shows even within Canada – but I do this globally as well – that governments have promised things as early as 1988,” Jaccard said of the book.

Canadian governments had set emissions targets for 2000, 2005 and 2010, the latter being part of the 1997 Kyoto Protocol.

“And now Stephen Harper has a target for 2020 and one for 2050,” he added.

“His target for 2050 is a 65 per cent reduction of Canadian greenhouse gas emissions from where they are now.”

“I’m a modeller,” Jaccard continued.

“And I’m part of an international team of modellers. It’s people at MIT in Boston, at Resources for the Future in Washington, and Stanford University in San Francisco, and an institute in Paris, another continued pg 19

August 2011 I pipeline news north •

cont’d from pg 18 one in Vienna, and another one in Berlin. And we mostly do a lot of the modeling of energy economy systems. And what we really try to get across to people is that systems are inertial. They are like a big ship – slow to turn around.”

The fact that that big ship is so slow to turn around is part of the reason for the impotence of many governments when it comes to setting and achieving GHG emissions targets. So, Jaccard made recommendations in the Pacific Institute report designed to encourage that ship to turn more quickly. CCS is at the heart of those recommendations. Encana’s new Cabin gas plant and Spectra Energy’s natural gas processing plant in Fort Nelson are singled out as facilities that should be equipped with CCS. In fact, the first of three specific recommendations outlined in the report is that the Environmental Assessment Certificate of Encana’s Cabin gas plant should be amended by the provincial government to demand that it include CCS, which apparently was not the case originally.

That first recommendation also stated that CCS should be added to all new and existing shale gas processing facilities.

“When we do something like approve a plant – like Encana’s plant – today, our job is to say, ‘How does that accord with your promise for the year 2020 and your promise for the year 2050?’” said Jaccard. “Because we simulate the entire system, all of its infrastructure, all of its individual plants.

And if we work backwards, we can say to people, ‘Oh, here’s what you should have done today if you’re serious about meeting that target.’ And we noticed that all the preceding politicians didn’t meet the targets, which means they lied.

Mark Jaccard, co-author of the report “Shale Gas and Climate Targets: “What they did today would not have achieved Can They Be Reconciled?” the targets. So, we’re going to help you out so that photo courtesy of simon fraser university you don’t become a liar. And we’re going to point out that you approving an Encana plant without capturing its extra CO2 emissions means that in North America. you’re on the path to not reach a 2020 target, to “To make it feasible,” said Spectra spokesperson Rosemary Silva, not reach a 2050 target. So, that’s the incentive “you have to look at all aspects. Like the commercial, the environthat goes behind looking at analyses like this. It’s mental, the geological, and the technical [elements] of adding CCS to because I’m a total energy system modeller.” just all facilities.”

Interestingly, although Jaccard suggested in his Commercial viability does tend to be a sticking point.

August, 2010 report that Enanca’s Cabin plant was “Right now,” she continued, “one of the biggest problems is that not required to include CCS capacity, an informathere’s not a price on carbon. And so you have to look at the whole tion bulletin released by the Ministry of Environpicture and make sure that we’re not making B.C. natural gas uncomment’ Environmental Assessment Office (EAO) on petitive on the global scale.”

January 28, 2010 concerning Encana’s application “Right now, just in terms of the technical and feasibility assessment for approval to build the gas processing plant indifor Fort Nelson CCS, it’s about $22 million,” Silva added, discussing cated that the facility would be built “capture ready.” the cost of CCS in Fort Nelson.

In fact, the bulletin indicated that the only sigSpectra has established partnerships in order to meet that cost, nificant environmental problem posed by the plant including one with the province, with whom they are still discussing was CO2 emissions inherent in developing and the level of financial commitment. processing shale gas from the Horn River Basin.

Jaccard is inclined to remain sceptical of Spectra installing CCS at Encana subsequently agreed to build a “capture their Fort Nelson plant until the actual construction begins. ready” plant and further work with the provincial “Industry people will tell the media – and they’ve been doing it for government to study CCS options for their operaat least twelve [to] fourteen years now – we’re working on a carbon tions. The province’s Greenhouse Gas Reduction capture and storage project,” he said. “Now, there actually are a few, Act also applies to the facility, for which Encana is but nine times out of ten you need to ask: has shovel gone into the presently seeking a buyer. ground? And so I did have an ex-student who was helping on the deSpectra already has CCS at eight of their facilisign of a carbon capture and storage facility for Spectra, but the last I ties in northeast B.C., sequestering about 190,000 heard, at least a year ago, there was no shovel in the ground.” kilotonnes of carbon per year, but that doesn’t yet According to Silva, Spectra began considering this project in 2008. include their Fort Nelson gas processing plant that handles Horn River Basin shale gas. However, they The serious work really began in 2009 with feasibility assessments, which suggested that CCS at the Fort Nelson plant could sequester are also currently working at attaching CCS to that 2.2 Mt of CO2 per year, an amount that is about three per cent of facility, which they readily admit is one of the most overall CO2 reduction targets set out by the province. significant emitters of CO2. That isn’t surprising, Still, it is a long process to get from idea to construction and finally considering that it is also the largest sour gas plant

19

to completion.

“In 2011,” said Silva, “we’re submitting a land tenure application to [the Land Title and Survey Authority of British Columbia]. Still negotiating on funding. Still working on a commercial model that will support project development. Later this year, in winter 2011-2012 – so, December-January – we’ll be drilling and testing a second test well. And in 2012, conducting ... 3D seismic assessments of the injection site. And finalizing the data from the seismic program. The area that we’re looking at is, actually, from our early assessments, very suitable from a seismic position. In 2012, we would also still need to seek internal and external projects approvals and applications to go to a full scale project. Right now, it’s the feasibility assessment.

This project could come into fruition and be in operation as early as 2015.”

“There’s a lot of different challenges for full scale deployment of CCS,” she continued. “The cost of the project. This requires a public-private partnership because there is no cost of carbon right now.”

“The economic feasibility is probably the big thing,” Silva concluded. “We’re focused on developing an economic model that doesn’t rely on carbon pricing. And so we’re working with the federal and provincial government and private sector to look at the commercial solution for that.”

The CCS process involves technology that Spectra uses on a regular basis, as they already have to strip the CO2 from the natural gas regardless. CCS simply involves transporting that CO2 by pipeline to an underground injection site, likely a deep subsurface saline aquifer that contains water that isn’t suitable for uses such as drinking or watering crops. Spectra has considerable experience with the technology from its use at other locations. The new challenge with Fort Nelson is the sheer volume of gas at the largest sour gas processing plant in North America, where production could double in the next ten years. The big task is finding a suitable reservoir for CO2 injection. That work is well underway.

As Silva explained, Spectra is willing to install CCS at their plants because they take their environment responsibilities seriously and recognize the positive role they can play in the province achieving its GHG targets.

“Another impetus is we’re recognized as a world leader in CCS and acid gas re-injection because of our other facilities,” she added. “So, we’ve got that know-how, we’ve got that experience, and so we’re kind of a logical choice to move forward on it.”

However, Spectra still disagrees with the part of Jaccard’s recommendations that insists that CCS be required at all natural gas processing plants.

First of all, there is a feasibility issue in terms of whether or not the location is suitable for CCS. The second concern is the cost, as requiring CCS would likely add millions of dollars to the cost of developing natural gas in B.C. According to Silva, that would likely lead to three negative outcomes: oil and gas companies that are working in B.C. would slow or stop operations in the province in favour of areas where CCS isn’t a requirement; B.C. will play a lesser role in providing energy security; and B.C. natural gas could lose its role in transitioning from higher carbon fossil fuels to renewable energy. continued pg 21 28392

www.trojansafety.com

20 • PIPELINE NEWS NORTH I

August 2011

technology

don’t flare up

- Spectra’s new turnaround process

Spectra Energy’s McMahon natural gas processing plant in Taylor, British Columbia. Spectra used a new process of re-injecting raw gas into a gas reservoir instead of flaring for the first time during turnaround at the facility this summer.

Photo courtesy of Spectra Energy.

james waterman Pipeline News North

During turnaround at Spectra Energy’s McMahon natural gas processing plant in Taylor, British Columbia this June, the company introduced a new process designed to eliminate flaring of sour gas at the facility.

The process was actually used at their Grizzly Valley natural gas gathering system near Chetwynd, B.C. last summer, but this is the first time it has been used at McMahon. It involves purging the raw gas from the pipelines and re-injecting it into gas reservoirs instead of incinerating the gas – sour gas can’t be vented for health and safety reasons – prior to the maintenance work that must be performed at the facility on a regular basis.

The initiative began with the Area Operating Committee (AOC), a group consisting of Spectra and area gas producers who meet a few times every year to discuss a range of topics related to gas production in that region. It was during one of those meetings prior to the Grizzly Valley turnaround last year that one of those producers, ConocoPhillips, suggested re-injecting the sour gas into a reservoir. The preparation for the new process was done in partnership with the AOC companies and the BC Oil and Gas

Commission.

“Basically,” said Doug Gulevich, Spectra’s Area Business Leader in Fort St. John, who previously held that position for the Grizzly Valley operating area, “what they do is they turn their compressors around. And instead of compressing [gas] from their well sites, they compress [gas] back into their well sites. So, we went through the whole process with [the Commission, ConocoPhillips] and the rest of the producers. And it was the first trial at doing this. It worked very successfully.”

The process purged approximately 100 million cubic feet (mmcf) of gas from Spectra’s pipelines, re-injecting it into two of ConocoPhillips’ reservoirs.

Gulevich noted that all the companies operating in the area were onboard with the project.

“I think it’s a great thing that the producers are doing this,” he remarked.

The main motivation for developing the process was to reduce flaring of sour gas.

“We have to draw the pipelines right down to zero to work on them,” said Gulevich, “We’re always trying to, not necessarily save gas, but do the right thing and come up with new ways instead of flaring off, which is not a good thing,” he added.

“We have to actually incinerate the gas, it’s so sour.”

So, the process does help Spectra and the producers reduce their environmental footprint, but saving 100 mmcf from the

flare stack is also a significant benefit.

That amount constitutes approximately one third of the daily natural gas production in the area.

“There would be no carbon tax paid on it by all of the producers,” said Gulevich, addressing the economic side of the new process. “When we flare it, they have to pay carbon tax.”

Gulevich admitted that ConocoPhillips did incur a substantial cost during the Grizzly Valley turnaround last year, considering they had to turn their compressor around to redirect the flow of gas.

“But there was a small benefit to them,” he added. “But the idea right from the start was getting rid of our flaring.”

Spectra did face a few challenges bringing this process from Grizzly Valley to McMahon, particularly considering that Grizzly Valley’s total daily production is about 440 mmcf – and it is currently processing about 300 mmcf per day – and the total daily production at the McMahon plant is in the neighbourhood of 750 mmcf.

“McMahon is a lot larger gathering area,” said Gulevich. “We have a spiderwork of pipes in the ground and then a command area [that is] fifty years old. … We’ve got old pipes, new pipes.

So, not everything’s connected as nicely as Grizzly Valley. And instead of having ten producers, we’ve got forty producers.

And getting them all onside. So, it was fairly well received at the AOC. We had a bunch of companies put their name forward to help us out. And what we had

to do was coordinate our work.”

The trick was finding the companies that were able to help with gas reinjection where maintenance was being conducted.

“It turned out there was basically one company [who] was able to help us out in two or three of the areas,” said Gulevich.

Gulevich began discussing the idea as a possibility for McMahon as soon as he arrived from Grizzly Valley and encouraging the local producers to commit to the plan.

“The problem going forward is then you have to plan all of your maintenance,” he said. “And your maintenance [planning] is probably done three to four months ahead of the turnaround.”

So, there was a tight timeline for bringing the producers onboard. Also, complicating the matter for Spectra this year was the fact that they had plans for a major project on their sour gas mainline.

“Which isn’t normal for us,” said Gulevich. “We don’t normally cut out big sections of mainline.”

“The outage didn’t only include the regular integrity and maintenance projects that we typically address with an outage,” added Rosemary Silva, Team Leader for External Communications at Spectra.

“It also included the facility upgrade to accommodate the new projects coming online.”

“When we have an outage the size of McMahon, when the plant is totally shut down, there’s opportunities to do some continued pg 21

August 2011 I pipeline news north •

cont’d from pg 20 tie in work,” Gulevich continued.

“When we’re flowing, you don’t have the ability to do that,” he concluded.

The new re-injection process added four days to Grizzly Valley turnaround last year. It only added two days to McMahon turnaround this summer, however. Partial outage was from June 10 to 15. Full outage was from June 15 to 29.

“We actually had crews in the area for about six weeks because we were doing single train turnarounds and prep work and everything else,” Gulevich explained.

“We had a large contingency of pipeline crews and our maintenance crews

21

here at the plant probably six weeks in advance.”

At the peak of turnaround, there were approximately 600 workers per day at McMahon and 200 additional workers at other locations. The new re-injection process didn’t require any additional manpower, just additional time.

“Last year was 100 million standard cubic feet,” said Gulevich, describing the difference in natural gas volumes re-injected between Grizzly Valley in 2010 and McMahon in 2011. “This year was a little less. We did about 30 million of sweet gas on the mainline. And we did about 35 million of raw gas this year.”

“Those are just estimates,” he added. •

Doug Gulevich, Spectra Energy’s Area Business Leader for Fort St. John, discusses the turnaround process at Spectra’s McMahon natural gas processing plant during a Chamber of Commerce lunch this May.

Photo by James Waterman.

Quote of the Month

cont’d from pg 19 Jaccard contends that cost shouldn’t be an excuse.

“Before 2007,” he explained, “you could build a coal plant in British Columbia to generate electricity. You could build a natural gas plant to generate electricity.”

During that period, Jaccard was one of several people who were writing opinion pieces, working with environmental groups, and speaking with government officials to encourage the government to adopt a new policy for clean energy generation, which finally happened in January, 2007.

“It didn’t say you’re not allowed to use fossil fuels,” Jaccard said of that policy. “Because now you know I’ve written a book in favour of fossil fuels. What it said was, if you want to generate electricity in British Columbia, it can’t emit greenhouse gases.

Otherwise, we’re not serious about the planet. And they passed this.

“That’s why in B.C. today we’re doing a lot of run-of-river hydro projects.

We’re doing wind projects. And I think one day we will do fossil fuel projects with carbon capture and storage.

“But what it did mean is that two coal plants that had already signed letters of intent with B.C. Hydro to get built and provide electricity were shelved for the time being while they look into carbon capture and storage. A major natural gas plant was shelved.

“And so we brought in, basically, a regulation which said, ‘Sorry, you can’t generate electricity if you’re going to emit while you’re doing it.’ And we need the same regulation for the natural gas industry. And it basically says, ‘Sorry, you can’t take natural gas out of the ground to send to the United States, to replace coal plants or whatever, unless in taking it out of the ground you effectively have no emissions. Or very little. We’ll set

some standard for you.’ So, I would go with a regulation there.”

“If I can’t extract natural gas and send it to the United States without destroying the planet, that is an economic activity that should not occur,” he continued. “I want to build a coal plant tomorrow. And for me to put carbon capture and storage on that coal plant is going to be really expensive.

“So, I won’t be able to build my coal plant. What are you going to do for me? Your answer should be, ‘Sorry, if it costs you a lot to generate electricity in a way that doesn’t destroy the planet, than you shouldn’t be generating electricity in that way.’”

“Industry will always say, ‘It’s really expensive. So, what are we going to do?’ Well, I guess you’re not in business,” he concluded.

Clearly, this isn’t an easy matter to resolve. Obviously, the provincial government has a role to play in finding a solution, particularly since the problem of reconciling GHG targets and shale gas development is largely one of their own creation, while climate change should be a huge concern for all British Columbians.

The government is at least trying to do its part. It invested $94.5 million dollars to create the Pacific Institute for Climate Solutions in 2008, which has certainly facilitated this discussion.

“The research conducted at the Institute helps to inform the public, and government’s future decision,” said B.C. Minister of Energy and Mines Rich Coleman.

Coleman also noted the positive steps taken by Spectra to implement CCS at their Fort Nelson processing plant.

“The Ministry of Energy and Mines is developing a comprehensive, safe and responsible policy framework to facilitate carbon capture and storage in B.C.,” he added. “ The new framework, once completed, will be based on national and international standards.” •

31282

Carbon capture - cont’d

“Concern for man himself and his fate must always form the chief interest of all technical endeavors, concern for the great unsolved problems of the organization of labor and the distribution of goods - in order that the creations of our mind shall be a blessing and not a curse to mankind. Never forget this in the midst of your diagrams and equations.” - Albert Einstein

www.arctech-welding.com

22 • PIPELINE NEWS NORTH I

August 2011

environment

finding a balance - land protection and development

james waterman Pipeline News North

It wouldn’t be wrong to call Canada a big small country.

After all, according to Statistics Canada, the total land and freshwater area of Canada is almost 10 million square kilometres or about 1 billion hectares, but its population is only about 35 million people. That is almost 30 hectares per Canadian.

That is why Peter Lee, Executive Director of Global Forest Watch Canada, is so troubled by the relatively small percentage of Canada’s total area that is designated as protected. Along with his colleague, Ryan Cheng, Lee co-authored the Global Forest Watch Canada report titled “Canada’s Terrestrial Protected Areas Status Report 2010: Number, Area and Naturalness” that was released on June 29, 2011. The report noted that Canada falls below the global average of national land mass designated as protected, which is 12.9 per cent.

Canada currently sits at only 8.5 percent, accounting for 84.5 million hectares. If the 37.5 million hectares under interim protection join the other permanently protected areas, the percentage will climb to 12.2 per cent, which is still slightly below the global average.

Lee’s concern is that it should be easier for Canada to establish more and larger protected areas considering our huge land mass and our relatively low population.

“And we’re a first world country,” he added. “Well educated. So, yeah, you would think that we would be at least above third world countries.”

A related concern involves our natural resource industries.

The report indicates that protected areas are becoming increasingly important to protecting global biodiversity as agriculture, forestry, mining, energy developments and urbanization consume other lands. Although the majority of Canada’s protected areas are free from natural resource development, which is the international standard for protected areas, there are exceptions, just as there are exceptions in the United States and Russia.

For example, logging is permitted in sections of Ontario’s Algonquin Provincial Park.

“It certainly diminishes the credibility when resource development occurs in areas that are called protected areas, because then it raises the question, well, what does protected area mean if resource development is allowed

to occur?” said Lee. “So, the credibility is reduced tremendously. And it becomes very difficult for governments and industry and society to defend what they’re calling protected areas if resource development is allowed to occur.”

However, it isn’t exactly easy to gain permission to develop resources in these areas.

“Generally, resource development is not allowed in protected areas,” said Environment Canada spokesperson Henry Lau. “When development is proposed for a protected area, the proposal is subject to an environmental assessment and further assessment under the permitting process required under the applicable legislation. In general terms, the proposal must demonstrate that the conservation objectives of the site will not be compromised and mitigation measures must be established to lessen any residual impacts of the proposed project.”

“In Canada,” he added, “surface rights are held separately from mineral and oil and gas title. Resource development in protected areas depends on the legislation under which the protected area was established and the province in which the protected area is situated.

Generally, the designation of a protected area applies to the surface of the land only and, unless withdrawn, the mineral resources remain with the provincial or federal crown. However, in most cases, the development of subsurface resources – minerals or oil and gas – requires surface access and disturbance and, therefore, necessitates a permit from the department or agency responsible for the surface lands. A permit would not normally be issued if resource development had a significant impact on the protected area. The need for a permit may also trigger the requirement to complete an environmental assessment. In National Parks, all sub-surface resources are withdrawn so no resource development is allowed.”

The Global Forest Watch report also noted that even though human access to protected areas is relatively low, which means those areas tend to be more “natural” than the rest of Canada, almost half of the land within the ten kilometre buffer around protected lands are accessed.

Furthermore, while there is a push to protect larger tracts of the boreal forest in Canada, that is also a region that is rich in natural resources, including the oil sands of northern Alberta and the natural gas reservoirs of northeast British Columbia.

“Certainly, in big pockets here and there, there are areas very rich in resources up north,” said Lee. This raises a pair of issues concerning the acceptable distance between

resource development and protected areas and whether the economic benefits of resource development trump the ecological benefits of designating a tract of land as a protected area.

Chloe O’Loughlin, BC Terrestrial Conservation Director for the Canadian Parks and Wilderness Society (CPAWS), believes that money usually wins the debate.

“Absolutely in British Columbia,” she said, “because the oil and gas industry is a very important revenue source for the province. It takes a lot of planning to manage both the natural resources and the [environment].

So, right now, what’s happening is they are trying to get as much revenue as they possibly can from that area.

And then it will be gone. And if they actually thought proactively into the future and took the resources out over a longer period of time, that would be better for the province in the long run, and then it would certainly allow them to properly protect the wilderness that’s up there.

The wildlife values. The conservation values.

“But governments don’t tend to think: in fifty years from now, are we going to have enough revenue for the province? Are we going to have enough resources for the province?”

According to Canadian Association of Petroleum Producers (CAPP) spokesperson Travis Davies, the oil and gas industry is trying to balance economic and ecological concerns by managing its environmental footprint where companies are operating.

He cites industry activity in the Muskwa-Kechika region of northeast B.C. as an example.

“That’s one example,” he said, “of an area that’s specific to the stone sheep, where you’ve got a special management area. And industry, although there’s interests, have said, ‘Okay, fine, we’ll step back and wait for the requisite biological information and studies to be completed on the sheep. And, in a lot of cases, fund it.

To wait until that comes out and we’ve got all the data to sort of put forth our proposal on the best way to develop it and minimize our impact.’”

However, O’Loughlin and CPAWS have larger issues for which they would like to see more permanent solutions. One example of that is the fate of the Flathead River Valley in the southeast corner of B.C., a situation that suggests the greater implications of how Canada manages its own environment.

In February, 2010, the provincial government put a ban on resource development in the Flathead River Valley, where there has long been pressure to mine for coal, gold and phosphate, but a permanent ban has not yet been legislated. The initial ban was part of a Memorandum of Understanding on Environmental Protection, Climate Action and Energy with Montana.

The B.C. government announced plans to introduce legislation in support of that MOU on February 15, 2011.

Justin Black Photo

August 2011 I pipeline news north •

23

cont’d from pg 22 O’Loughlin is hopeful that that legislation will be completed this fall.

“The Flathead River begins in B.C. and then flows south into Montana,” said O’Loughlin. “So, just the headwaters are in B.C. And then when you go down to the Flathead River watershed in Montana, that’s where the big watershed is.

“And when you say north fork of the Flathead in the United States, that’s like saying Banff in Canada. It’s that important. It’s the most protected area in the United States. The rivers are all protected. It’s immensely important for tourism in the United States. And in B.C., for thirty years, they wanted to mine in the headwaters and put the Montana protected areas and World Heritage Sites in danger.

“So, the World Heritage Committee was petitioned by the environmental groups and they sent scientists over to see whether this actually was going to put the Glacier World Heritage Site in danger. And they said, yes, it would. So, as a result of that, and many requests from Montana and the government of the United States, they agreed to not develop oil and gas and mines in the Flathead Valley. Just north of that is the Elk Valley, which has lots and lots of coal mines and lots of mining.”

“It’s got the greatest number of inland grizzly bears in North America,” O’Loughlin continued, discussing the ecological importance of the region. “And they travel back and forth from Glacier in Montana, up through the Flathead, up to the Rocky Mountain Park. And so that same bear in Glacier is protected as an endangered bear, it crosses the border into the Flathead, and it can be hunted. So, the Flathead Valley has been identified by the World Heritage Committee as equally important as Waterton and Glacier, which Waterton is just in the very corner of Alberta and Glacier is just below that. And so the B.C. portion of that ecosystem is completely unprotected. And that’s why the World Heritage Committee, President [Barrack] Obama, [Prime Minister] Stephen Harper have all asked British Columbia to protect that area. And it should be protected as a National Park. And then it can be designated as World Heritage Site. It’s that important.”

Maintaining that continuity and connectivity between areas where wildlife such as grizzly bears reside, thereby creating travel corridors for the wide-ranging animals, is also a concern for the oil and gas industry.

“I was just talking with some folks about that,” said Davies. “And the way we’re approaching it now is you look east-west first and then north-south. Obviously, it’s a cost issue for industry too. The less we have to pay to put infrastructure in, the better. So, it’s about working with your peers and with the government and say, okay, well, instead of each of us having access roads here, let’s have one and let’s make it not conducive to line of sight.

We’ll make it zig-zaggy. Or ... when we do the seismic, we’ll share it and we’ll do low cut or we’ll do no cut as it might relate to whatever the government says we have to do for that area.”

“When you start talking about that sort of connectivity stuff, you look at a very broad group of users,” he added, noting that forestry, recreation, and even urban sprawl can all negatively impact those corridors.

So, it is a fairly large and complex issue to address, and the potential consequences of climate change are part of that issue. “In British Columbia,” said O’Loughlin, we are about average in the world in the percentage of protected areas for the province.”

Based on a percentage of land mass, B.C. ranks second among jurisdictions in Canada in terms of protected land, right behind the Northwest Territories.

“B.C. has done better than the other provinces,” O’Loughlin continued. “But as climate is changing and temperatures are rising, we need to look at taking caring of at least fifty per cent of British Columbia. It may not be new protected areas, but we’ve got to provide corridors and connectivity so as the temperature changes, wildlife can move.”

“I don’t know what’s going to happen in the Northeast,” she added.

O’Loughlin is concerned about three protected areas in northeast B.C. – Peace River-Boudreau, Beatton-Doig Canyon, and Chinchaga Lakes, which is an important area for caribou – that have long been slated to become Class A parks, but that has yet to happen. Indeed, the Fort St. John Land and Resource Management Plan includes fourteen new protected areas, eleven of which have been formally established.

The three that have not been formally established are Peace River-Boudreau, Beatton-Doig Canyon, and Chinchaga Lakes. Currently, there is no resource development in any of those areas, but directional drilling may be going underneath that land. The distances from

Two generations of mountain goat peer over the edge of a cliff in the Flathead River Valley. Resource-rich wild spaces like the Flathead River Valley in southeast B.C. and the Muskwa-Kechika Management Area in northern B.C. demonstrate the challenges the province faces in developing its resources – and its economic potential – while protecting wildlife and their habitats.

Photo by Joe Riis/iLCP.

development to the boundaries of the areas varies from case to case.

“They are established as protected areas until the proper legal boundaries are figured out and all of the tenures are removed,” said O’Loughlin. “And then they become a Class A park, which is much more significant than a protected area. When they’re a Class A park, then they’re managed by BC Parks, they get staff funding, supposedly. And they’ve just let those three protected areas up there just lag. They just haven’t turned them into parks, which was approved by cabinet a long time ago.”

The Ministry of Environment is working toward formal designation of those three areas, but the timeline for that is still uncertain. According to Davies, that uncertainty is also an issue for the oil and gas industry.

“It’s always good for industry to have clarity,” he said.

Obviously, a key element of this issue is impact of roads, pipelines and seismic lines on caribou herds in northeast B.C. “The province has recognized that the boreal caribou in British Columbia ... is the most endangered caribou in all of Canada,” said O’Loughlin.

O’Loughlin is encouraged by the fact that the government has recognized that the survival of the caribou is severely threatened and that action is required, but she isn’t entirely impressed with what she understands to be the game plan for protecting the species in B.C. “They expect several of the herds to become extirpated and most of the herds to decline significantly in numbers over the next fifty years,” she said. “And then when all the oil and gas is gone, then they expect to restore the caribou that are still surviving. So, it’s a plan that took the government a lot of courage, I think. But it needs more. And it needs definitely more from the industry to work.”

“They have these models that they run,” she continued, “and they predict that these two herds will become extirpated and this biggest herd is going to go down to fifty animals. They predict these things, but you don’t know. And you need to be on the safe side. And models won’t tell you. You just need to make sure that the caribou habitat is kept intact. And it’s not.”

The government has established Resource Review Areas (RRA) in the Horn River Basin that will be free from

land tenure for five years so that the impacts of resource development on the caribou can be studied more thoroughly. O’Loughlin and CPAWS would like to see greater action, which should include the oil and gas industry taking their cue from the forestry sector.

“There is an agreement between the forest industry and the environmental groups to protect 30 million hectares in the boreal forest,” she explained. “So, there is a major, major precedent of the forest industry proactively working together to develop protected areas. There is not that equivalent with the oil and gas industry.”

Finally, O’Loughlin suggested that if British Columbians don’t have a constructive attitude towards their parks and protected areas, it may be actually be part of a systemic provincial problem.

“BC Parks are probably the lowest funded park system per hectare in Canada,” she said. “I don’t know that for sure. Actually, we’re trying to figure out those figures.

But it is one of the lowest funded park systems in all of Canada. And the park interpreters – you know, when you used to go to parks, you would go to the evening sessions around the campfire and you would learn all about [wildlife] from interpreters? We’re one of two jurisdictions in North America that don’t have interpreters. And that’s us and Mississippi. So, in many ways, we have at least the average amount set aside, which is especially important in British Columbia, because we’ve got the most diverse ecosystems in North America. It’s most important to protect B.C. Many of the big carnivores will only exist in British Columbia as climate changes. So, it’s crucial that B.C. protects and manages wildlife as climate change changes. But then, we have very, very little funding to actually staff that to assure that things are monitored.”

O’Loughlin seems to feel as though the province is in such a rush to reap the financial rewards of the natural gas boom that they are neglecting the economic opportunities – and ecological importance – of relatively pristine wild spaces, particularly in the northeast.

“People come to parks because of the interpretation,” she added. “And they learn more. So, they come back to parks as well. And visitation is really important for government revenue. If you look at the parks system, it’s the largest hotel in the province by far.” •

24 • PIPELINE NEWS NORTH I

August 2011

industry news

megaminded

- TCL’s got a new truck james waterman Pipeline News North

It took almost five years of planning, but Trans Carrier Limited (TCL) finally has their new truck.

The oilfield trucking, hauling and sand and gravel company introduced the newest addition to their fleet during a barbecue at their Fort St. John location on Friday, July 22. The first truck of its kind in Canada, the new addition – a 55 ton National Picker – boasts 128 feet of boom, a 45 foot jib and the ability to haul a tank as large as 440 barrels (bbl) to location and set it down as far as sixty feet from the truck.

“It’s the largest tractor-mounted boom truck in all of North America,” said TCL’s General Manager, Tyler Kosick. “They are producing these boom trucks out of the U.S. right now for sale, but this is the first one that has ever been cut down and has the ability to pull a trailer. And then we had some engineering feats to get through. We had to add the third steering axle to get the weights proper so that we could legally run it on the roads in B.C.” “Basically,” he continued, “the size of this crane, if we had a shorter boom, no jib, no counterweight, we would have ended up with a short-boom 45 ton. So, we added counterweight. We added the jib on the side. And we added a fifth section of boom, which made the weight of the crane quite heavy.”

“To allow for room for the fifth wheel,” Kosick added, “we had to put it forward far enough that it would have weighed too much TCL unveiled their mammoth new 55 tonne National Picker during a barbecue at their Fort St. John location on to get onto a tandem steer. So, we got Raydan [Manufacturing] Friday, July 22.

Photos by James Waterman. out of Nisku [Alberta] to design a tridem steer, obviously within the engineering confines that the B.C. government has laid out with us. We worked with Ministry of Transportation head engineer Sam Lam out of Victoria. And we worked The new truck with him on the spacings and sizing and everything like offers 128 feet that to make this truck roadworthy.”

The truck was delivered to TCL in the spring of 2010, of boom, a 45 but was promptly shipped to Raydan. It found its way to foot jib and Surrey in the fall, which was also when the parts of the crane began arriving. the ability to “The truck started in Seattle,” said Kosick. “It came to haul a tank Nisku. It went back to Surrey. The crane came in from as large as Pennsylvania. And was mounted on the truck and rigged up down in Surrey.”

440 barrels to The truck cost over $750,000 to build. location and “It will lift heavier weights, along with being able to carry set it down as that freight out to the job site and set it in place,” said Kosick, discussing the unique applications of the new far as sixty equipment. “But the main thing is that the stuff that we’re feet from the picking right now, with containment and issues such as truck. that, now with the new environmental laws, we’re lifting the same weight, but it’s getting farther away.”

Flare stacks are also getting longer due to regulations demanding that emissions be higher in the atmosphere.

“You’re getting 120 [to] 150 foot flare stacks and haul it also. I guess that’s what sets this apart within chart, but now the oil companies are telling on a regular basis,” Kosick continued. “Now, from anything else. There’s cranes out there that us, ‘No, we only want you to lift eighty per cent of with this unit, as opposed to bringing a crane max.’ So, now that’s where this unit can move in will do the same job, but they don’t have the abilin, you can take down a big flare stack with ity to haul the freight.” and take the place of our 40 ton.” this truck, load it up on the trailer, and haul Ultimately, the new truck helps TCL diversify The new truck was available for work on July it to the next location, whereas they were 25.

As of July 22, Kosick noted that they only their business. using a lot of crane work. Same with had a few tentative jobs, but that interest was “We’ve been in the area for over 27 years pulling motors. You know, we can pull increasing, partly due to the new workplace safety now,” said Kosick. “And we’re known for our good a motor out of a compressor that was requirements of the oil and gas companies. picker service. We’ve got a lot of good operators, blocked by a cooler ... and throw it employees, apprentices coming through the ranks “A lot of them won’t let you lift to max capacon the trailer and haul it to town” ity anymore,” he explained. “They want you to right now. And we like to be known as one of the “It’s not a new change,” he be peaked at eighty per cent capacity.

So, now leaders in the boom truck industry in our area. So, added. “It’s just things that we were lifting with a 40 ton before, all it does, I think, is it puts another dimension to we can lift more our operation.” • they’re crept back. You know, you could lift them weight at a farther distance

August 2011 I pipeline news north •

profiles

25

a model citizen

- Jason Richter works to scale james waterman Pipeline News North

Jason Richter has always had a keen interest in the equipment that has long been the backbone of the oil and gas industry in northeast British Columbia.

He has lived near the oil patch since he was three years old, spending his childhood in Jedney, not far from Fort St. John. His father was a truck driver for Husky Energy in those days. It wasn’t long until the senior Richer was taking his son out into the patch to get a glimpse of the machinery that drives the industry. Richter has since worked in the oil patch as a welder’s helper and pipeline construction labourer.

His experiences have sparked his creativity too.

“I [started] drawing them to detail over ten years ago,” said Richter. “And then I wondered what it would be like to actually build one.”

Around that time, he was part of a construction crew working on a project in Taylor, which allowed him to see a model on the boardroom table of one of the local energy company’s offices detailing one of their operations.

“I wondered about that,” said Richter. “So, ever since then, I sort of took the ideas from my drawings to building actual scale models. And it’s more interesting to have something that you

can touch than just see.”

Richter has now built two model work sites, one featuring an actual operating pumpjack and the other featuring a dehydrator, all done perfectly to scale and painted appropriately.

“Between a month and three months,” he said of the time it takes to build one of the models. “Just a little bit every day.”

He recreates the landscapes with model trees and kitty litter painted brown. He salvages parts from other models, changing the components that aren’t a perfect fit, building the unique parts that can’t be found elsewhere. It is all an effort to accurately reproduce in miniature the sites that fascinated him as a kid.

Richter considers his work to be “realistic art.”

However, he has had trouble convincing others of that notion. “I’ve been trying my luck in town,” he said, admitting a lack of interest so far.

“I’m the only person doing something with the oil patch,” he added. “An actual model. And no one else in town would actually think of doing something like that or has done something like that.”

“It is art,” he concluded.

Richter would eventually like to do projects just like the model on the boardroom table that inspired him to move from drawing to building. Until then, it will continue to be a sort of labour of love, an expression of his childhood fascination with the industry.

Jason Richter makes adjustments to his natural gas wellsite model.

Photo by James Waterman

“When you do something like that, it’s not like you can just quickly put it together,” he said. “You have to know exactly what it’s like out there. You have to have the experience that I have from not only working out there, but the trips you’ve had to see it and everything. And you kind of just – you have it solidly remembered.

Because, if not, you wouldn’t know how to get everything to scale. •

Steel prices and the WTO james waterman Pipeline News North

Canadian steel producers and the industries that use their products could be entering an interesting period of uncertainty.

Ziff Energy Group released a report titled Pipeline Cost in Shale Gas Regions on June 29 that stated that the average cost of shale gas pipeline construction in 2011 is $200,000 per inch-mile, a number that is three times higher than the cost in 2004.

Part of that cost increase is due to the fact that the price of steel had climbed to $703 per tonne this year, a thirty per cent increase over last year. However, as explained by Ron Kane, Director of Trade and Economics for the Canadian Steel Producers Association (CSPA), although steel prices have escalated since the recent economic downturn, the recent peak is not as high as it was during 2006 and 2007 when both production and demand were high.

Also, the price varies depending on the manufacturing process – hot rolled or cold rolled, for example – and the product itself.

“So, there would be a vast range of prices depending on the particular product involved,” said Kane.

Enter China and the World Trade Organization (WTO). The WTO released a panel report on Tuesday, July 5 stating that China was in contravention of WTO rules by restricting exports of certain raw materials, including rare earth materials that are necessary for steel production.

It was determined that China was doing so in order to drive up the cost of those commodities and create an unfair advantage for Chinese industry. China can appeal the ruling and so it is uncertain as to when this matter will finally be resolved.

That is leading to considerable debate as to what the direction of steel prices might be.

“The big question is what is China’s response to that,” said Kane. “They can go through an appeal process that could drag out for several years. Or they could just stop their practice immediately. So, that uncertainty will certainly still play out in the market over the next while until there’s a firm sign which way China’s going to react. Is it going to quickly comply with the finding or is it just going to go through the appeal process and drag it on and on and on?”

He also mentioned that it is widely thought that China will appeal the ruling.

“Obviously, we thought that the panel finding was the correct finding,” said CSPA President Ron Watkins, discussing the possibility of an appeal from China.

“And if an appellate body somehow came to a different conclusion, then that would obviously be a concern. I mean,

otherwise, then it’s just simply the issues of the measure necessary to deal with the outcome of the case being delayed if there’s an appeal.”

One of the raw materials to which China has restricted access is zinc, which is important to the Canadian steel industry as a component of various alloys. Canada does have zinc resources, but not to the extent necessary to supply its steel industry.

“Our steel companies don’t sit on zinc mines,” said Watkins. “So, it’s not the same as a country where everything might be controlled by the same group, so to speak. Meaning the government.”

“The restrictions China was placing on raw materials covered about nine different categories,” added Kane. “And those categories are kind of in scarcity. And in some cases they’re defined as rare earth materials. And the only major source for those materials is China.”

“What China was doing was putting restrictions – duties and restrictions – on the export of certain raw materials from China,” he continued. “And you can’t do that. If you’re commercially mining the raw materials, you cannot restrict those entering the marketplace.”

The ultimate impact of the WTO decision is still unknown.

“A lot of the materials are now bought on futures and that kind of thing,” explained Kane. “So, trying to forecast the price of the raw materials … is very difficult when you have still some uncer-

tainties in the marketplace as a result of the WTO decision on China and how it’s going to react.”

However, that uncertainty doesn’t appear to be affecting Canadian pipeline companies – big users of steel products – or their plans.

“It’s really not a concern for us right now, based on what we’re seeing,” said Alliance Pipeline spokesperson Rob Gray.

“I can tell you that we have not been impacted on the increases in steel prices due to our procurement initiatives combined with the competitive pricing available due to the high mill capacity versus low demand in the [pipeline] marketplace,” said TransCanada Pipeline spokesperson Terry Cunha.

However, Watkins suggested that there could be concerns.

“Anything that, of course, drives up price of steel available in the open market – because we do operate in open markets – that obviously has a potential impact on customer industries that use steel,” he explained. “It’s kind of a flowthrough concern.”

“Certainly,” echoed Kane, “the steel producers have that uncertainty in terms of the price of raw materials, but then that carries along the supply chain to end users – people in the oil and gas industry. For Canadian steel output, a lot of that goes to the automotive sector. They will also have that uncertainty as it’s carried along the supply chain.” •

26 • PIPELINE NEWS NORTH I

August 2011

Health insurance: jl

peace of mind in today’s uncertain world Most of you wouldn’t gamble your valuables, your homes, or your families.

But when you’re not prepared for dramatic changes that may affect your health, you’re gambling that you’ll always have enough income to take care of the most important aspects of your life.

Sadly, many people lose this bet. Accidents and critical illnesses can strike at any time. And when they happen, the impact on lifestyles and finances is usually staggering.

What are the chances of you needing extra care? A quick view of some recent statistics shows how often Canadians face serious health challenges: 1. Every 10 minutes, a person has a stroke in Canada.

2. 39 per cent of women and 44 per cent of men will develop some form of cancer. The good news is that cancer survival rates have increased significantly in recent years. The bad news is that all will require some level of care during the treatment phase of the illness.

3. Major illnesses such as Multiple Sclerosis, ALS (Lou Gehrig’s disease), Parkinson’s Disease or Alzheimer Disease are life-altering experiences for the individual, family members, and friends who may be called on for support.

Alzheimer’s and other dementias affect 1 in 9 people between the ages of 75 and 84, and 1 in 3 over age 85.

4. Falls and accidents among older Canadians are a leading cause of the growing number of elderly people in long-term care facilities. About 25,000 hip fractures occur in Canada every year, causing death in up to 20 per cent of the cases, and disability in half of those who survive.

You might want to ask yourself the following questions about your financial security: • How long could you afford your mortgage payments and regular bills if faced with a major medical emergency?

• How would you meet extra expenses for medical equipment or medications not covered by your health plan?

• Who would care for you, and for how long, if you became incapacitated?

If you can’t answer these questions with confidence about the outcome, you need to increase your health insurance coverage. Studies show that removing financial stress at a time of serious illness improves survival rates. Health insurance does just that. It can provide security and financial stability during times of rapidly shifting priorities and worry.

Some of the available health insurance plans that can help get you through those worrisome times: Critical illness insurance provides a lump sum benefit to the insured if they are diagnosed with one of the covered illnesses. The benefit can be used to pay down debt, such as a mortgage, or pay for care or treatment, or to cover the costs of home renovations to make wheelchair access possible.

Long term care insurance provides weekly payments if the insured is unable to do at least two out of six daily living activities (bathing, dressing, eating, toileting, continence, moving to or from bed or chair) or if they suffered from a senile dementia. An income plan allows the recipient to choose how the benefit is spent.

Personal health insurance offers a preventative approach to medical and dental coverage. It’s perfect for the self-employed, contract or part-time workers or for those without group insurance. Professionals and small business owners can realize tax advantages by having plans for themselves and their employees.

The average health care costs for Canadians increase as they reach their 60s and continue to climb as they get older. Medical advances are increasing life expectancy. As our population ages, there will be fewer working Canadians to support a larger retired population. As a result, the costs of health care will likely increase.

It’s important that you assess your needs and all the health insurance options available before making any decision. Investing in health insurance will help offset financial hardship and bring peace of mind that will enable you to enjoy your future to the fullest.

Sources: 1. Heart and Stroke Foundation of Canada, Annual Report 2004. 2.Canadian Cancer Society, 2007 3. Alzheimer Society of Canada, 2007 4. Osteoporosis Society of Canada, 2007.

Submitted by: First Choice Insurance & Investment Services Inc. ©Sun Life Assurance Company of Canada, 2007.

Group Benefits Made Easy Contact us for a FREE QUOTE: group@canwestgroup.com

www.canwestgroup.com www.canwestgroup.com

1-866-408-4999

28381

safety

be bear aware

- training for that up close encounter

james waterman Pipeline News North

It isn’t uncommon for the men and women who work in the oil and gas industry in northeast British Columbia to see bears when they’re on the job.

Actually, Amit Saxena, an environmental advisor and wildlife biologist with Devon Energy, believes that is exactly how it should be.

“I think it’s cool that people see bears out there,” he said. “Bears are a symbol of wilderness to me. So, the minute we stop seeing them, something’s wrong.

So, as long as we can keep seeing bears, we’re good.”

However, that doesn’t mean that working in bear country isn’t an occupational health and safety issue for the oil and gas industry, because Saxena readily admits that that is certainly the case. That is precisely why he traveled up to northeast B.C. in early July to visit Devon worksites and talk to crews from other energy sector companies. The bear expert has been doing these bear awareness training programs for fifteen years, the last five of those years as a member of the Devon team.

According to Saxena, Devon crews encounter bears “pretty regularly.”

“I don’t know if I can give you a number,” he added, “but our guys are working out in bear country and traveling from site to site. They see them very often.”

The program is designed to teach workers how to avoid negative encounters with bears, which includes managing bear attractants such as food and garbage, as well as making an effort to not work alone where bears are known to reside.

“The main risk is simply running into bears and not understanding what the bears’ motivation is and what the bears are doing there,” said Saxena. “And not being able to respond accordingly.”

Saxena even does classes for people who work at Devon’s head office in Calgary who may not spend much time in the field, but simply enjoy activities such as fishing, hiking and camping in bear country.

Kendra Thompson, a maintenance and integrity planner with Apache in Fort Nelson, who also participated in one of Saxena’s most recent training sessions, has had just that sort of experience.

She was fishing when a black bear began to swim cross the river towards her.

“I always thought – or somebody told me – that bears couldn’t swim,” she said.

Thompson has been given a lot of misinformation about bears over the years, which is why she finds Saxena’s bear awareness training so valuable.

“There was lots of stuff there that were like myths,” said Thompson, adding that Saxena debunks many of those myths, including one about the best bear deterrent.

“Before bear awareness training … a lot

of people assumed that firearms are the number one bear deterrent,” said Saxena.

“And I think, after my course, I get a lot of people walking out of there going, ‘Huh, maybe firearms aren’t the best solution and bear spray is actually better.’ And, of course, when we use bear spray instead of firearms, we are also helping the bears, for sure, because firearms are, of course, lethal, and bear spray is not.”

“I always felt that a gun would do a better job,” said Thompson. “But I’ve never, ever – thank God – had the experience of using bear spray, or a gun for that matter, regarding a bear.”

Saxena has certainly had his fair share of such experiences and Thompson attributes the impact of his program to his firsthand knowledge.

“I’ve been to lots of bear awareness training,” said Thompson. “But this one is by far the best one that I’ve ever taken.

It’s interesting. I guess he’s more experienced. He’s actually out there and he knows what to expect and everything. So, I think this is the best one.”

“The information coming from him,” she added, “where he has the experience, has a really great impact on the people listening or taking that training.”

Much of his experience hasn’t been for the faint of heart either.

“I myself have spent a couple of years even testing bear spray and testing bear deterrents,” said Saxena. “And I’ve worked all over North America on bears – grizzly bears, black bears and polar bears – testing what deterrents work and what don’t work.”

“I haven’t had a lot of experience with predatory bears, per se,” he continued.

“But certainly lots of experience with bears defending cubs and defending territory.”

That defensive behavior is one important topic that Saxena discusses during his bear awareness training.

“The main thing to look for in bear’s behavior is whether he or she might be defending something,” he explained. “Defending their territory or food or cubs. And if she’s defending something, that’s when you have to really be aware of what her body language is saying and how you’re going to respond to it.”

“Defensive behavior is really blustery behavior,” he continued. “A lot of hooing and hawing. And a lot of noise. A lot of jaw popping and clicking. And lifting up front feet, slapping the ground, all those kinds of things.”

Predatory bears can be an issue, particularly in the area around the Liard hot springs, where the local bears have traditionally exhibited that sort of behavior, according to Saxena. He also explained that predator bears may be older animals who have trouble finding food or they may simply have a taste for meat.

“And, quite honestly, humans are the easiest catch of the bunch,” he admitted.

That is a significant reason why Saxena continued pg 27

August 2011 I pipeline news north •

27

A grizzly bear roams the wilderness of British Columbia. Amit Saxena, an environmental advisor and wildlife biologist with Devon Energy, helps his colleagues in the company avoid dangerous encounters with bears through his bear awareness training.

Photo by Joe Riis/iLCP.

tries to bring his program to Devon’s crews every two years, particularly in the spring.

“If a bear’s not defending her territory, food or cubs, than she’s being non-defensive,” he said, continuing to explain aggressive behavior. “And, usually, that’s a combination of either young, curious bears or just bears that are doing some dominance testing, trying to figure out their place in the pecking order. Or they’re certainly food conditioned, used to getting food from people. And that’s why it’s really important to know if she’s showing defensive behavior or not.”

Unfortunately, Saxena and Devon have been involved in incidents in the past where an aggressive bear has had to be destroyed, which is a fate that they try to avoid a all costs. When they decide that that course of action is necessary, they work with the conservation officers to make sure that the job is done properly. They also thoroughly review the incident to improve their training and determine how they can avoid repeating that outcome in the future. After all, Devon isn’t only committed to protecting its staff, but the bears as well.

“When we’re working in grizzly bear country, as an example, we do have sort of a process that we go through in terms of identifying risk to grizzly bears,” Saxena explained. “Mortality risk. Mortality risk based on things like access road density and things like that.

And trying to avoid grizzly bear habitat where we can.

And then we actually go through the process of making sure our workers are trained. We have sort of a bear safe practices policy in place where we can manage our attractants. We’re looking at putting up electric fences in some spots where there’s hotspots for bears.

And electric fences do work really well for both blacks and grizzly bears.”

“Very few animals actually get hit by vehicles,” he added. “The number one mortality [risk] for grizzly bears is grizzly bears getting shot on the side of the road. In B.C., there’s actually a legal hunting season for grizzly bears, but in Alberta there is not. So, most of it’s illegal killing. And that’s something that we make sure doesn’t happen on Devon properties. And also trying to educate people about why grizzly bears are prone to that kind of behavior and that kind of mortality level.” •

For information on Membership

contact Art Jarvis, Executive Director South or Laurie Dolan, Executive Director North for contact information see www.energyservicesbc.org www.energyservicesbc.org

31664

cont’d from pg 26

(780) 538-1987

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

Talisman is betting on the play james waterman Pipeline News North

Liquids-rich plays continue to attract the attention of oil and gas companies and the Duvernay shale gas play of central Alberta is no exception.

Talisman Energy is betting that their recent land acquisitions in the play will be a fruitful new addition to their North American shale gas portfolio, largely due to the known presence of liquid hydrocarbons that have been discovered by industry tests. Liquids are becoming an increasingly hot commodity during a period of depressed prices for dry natural gas.

“Talisman spent $510 million on land acquisitions in Alberta during the second quarter of 2011,” said Talis-

man spokesperson Phoebe Buckland in an email. “The company’s position in the Duvernay shale now totals 360,000 net acres, with an average acquisition cost of approximately $2,000 per acre.

“We have built our Duvernay land position thanks to our active new plays group that looks at emerging shale plays and through a combination of legacy land position from our conventional business and crown land sales over the past couple of years,” she added.

Talisman is planning to start drilling into the Duvernay during the second half of 2011, utilizing two drilling rigs. The company will discuss the results only after the completion of numerous pilot wells.

“The Duvernay is a rich source rock that is responsible for hydrocarbons in the prolific Leduc aged oil fields of Alberta,” said Buckland, describing the geology of the play. •

PROFESSIONAL SALES & INSTALLATIONS

• Ardent Energy • RSF Energy • Blaze King • Valley Comfort • Jotul Cast Iron Stoves • Bosch Water Heater

• Wood & Gas Stoves • Fireplaces & Inserts • Chimney Systems • Heartland Cookstoves • Kingman Fireplaces

LENNOX HEARTH STONE TRAGER BBQs HARMAN PELLET STOVES

29807

605650

email: maelco@xplanet.com

28 • PIPELINE NEWS NORTH I

August 2011

community

barbie breakout - Encana’s Community “Pardner” BBQ james waterman Pipeline News North

Encana and the World Professional Chuckwagon Association (WPCA) were rustling up donations for the local food bank at Encana’s Community “Pardner” BBQ at the Dawson Creek Exhibition Fair Grounds on August 10.

The event – part of the kick-off to the annual Dawson Creek Agricultural Fair, Rodeo and Exhibition – was in support of the Race Against Hunger campaign that was launched by Encana and the WPCA last year. Members of the community were invited to enjoy a free barbecue and a night of WPCA races in exchange for a contribution to the food drive. “It was kind of an evolution of things, because Encana’s had a partnership with the WPCA sine about 2004,” said Darcie Erhardt, Community Investment Advisor with Encana, describing how the Race Against Hunger campaign was born.

“Rural lifestyle is one of the key pillars we try to support through our community investment program,” she continued. “And so we’ve always supported them. And we do stakeholder barbecues in our key operating communities, just so that we have a chance to interact with people in sort of a non-business setting.

“And then, last year, we sat down and thought, ‘We need a way to make this more meaningful to the communities. And we need a way to show them that we’re here for the long haul and we want to help benefit the communities where we operate.’

So, we decided, with the big gathering of people and the fall fair in town, that it’s a perfect time for a food drive.

And so we started doing Race Against Hunger last year in our five key communities.”

Meghan McIvor, Marketing Manager with the WPCA, noted that the campaign is a perfect fit with the traditional western Canadian culture of helping your neighbour and supporting your community that is part of the chuck wagon racing lifestyle.

“It’s helping the local communities that we go into, keeping that culture alive, and giving back to the local food banks,” she said. “And it all stays within the communities where we are. And I think that’s really important to our drivers and our association.”

McIvor remarked that working with Encana on this initiative was also a good fit for the WPCA. “Encana’s really good at community investment and this was a great opportunity for us to partner up on something,” she said.

Race Against Hunger visited Grande Prairie, Drumheller, Ponoka and Strathmore in Alberta and Dawson Creek in British Columbia both this year and last year.

Dawson Creek is the last stop for the campaign this year.

Through the food drives in the other four locations, Race Against Hunger has already raised over $41,000 and 9000 pounds of food with Encana matching donations either dollar for dollar if guests choose to contribute cash or at a rate of $2 per pound of food.

Encana also held a barbecue in Calgary during the Calgary Stampede this year that raised 3500 pounds of food for the food bank.

The total amount of food and money raised this year will not be known for a few days.

“We work closely with the local food banks,” Erhardt explained. “So, in Dawson Creek, we’re working with the Salvation Army food bank. They’re a volunteer-run organization. So, usually, it’s a couple days after the event closes that we get a final tally.”

Also, the barbecue is only part of the food drive. Encana’s natural gas powered Race Against Hunger Truck Wagon – which was at the fair on Wednesday night – will be in town throughout the weekend to collect donations.

(Above) Encana and the World Professional Chuckwagon Association were collecting donations for the local food bank during their Community “Pardners” BBQ at the Dawson Creek Agricultural Fair, Rodeo and Exhibition. The food drive is part of their Race Against Hunger campaign that began in 2010.

Photos by James Waterman.

among the guys.”

Popular chuckwagon driver Mark Sutherland appeared to have the lead as of Wednesday night.

“These drivers are very competitive and they definitely keep their competitive spirits up with anything,” added McIvor. “And to get that going in them, it just drives them to do more and succeed more.”

“At every stop we’ve had,” she continued, “they go to the grocery stores. And there’s two guys at a time that participate in bagging groceries over four hours. So, eight guys total for the day. And they are trying to sell food donations at the grocery stores. So, the grocery stores have been super about participating, having pre-made donation bags ready to give out. And so these guys are working at selling them, but they’re also really working at beating the other driver who’s there selling them.

It gets (Above) very Chuckwagon funny. driver Mark Sutherland And they spoke on the all have a importance lot of fun.” of the Race “At first, Against they’re like, Hunger.

‘Really? I’m going to bag groceries?’

And then, by Morg the end of it, a bank n Thom as a they’re like, w i t h n the fi d E rst n nanca’s Hayley ‘That was an i S g n a h at n t of t winner he fa ural gas dboe fro hour? It flew by!’ m En ir in p of the Food Daw owered cana Because they get son R co ace A Cree Driver of the Year gain llected d competitive, they k. s o t Hu competition is yet to be decided. nger nations get selling, and they fo Truc “Since we’ve had such a longstanding k Wa r the foo start having fun. And gon d durin partnership with the WPCA, this year, to kind of kick g the customers love it. the Race Against Hunger into full gear, and really get They’re like, ‘Are you kidthe drivers engaged, we issued sort of a friendly chalding me? Mark Sutherland’s here bagging lenge, and we’ve been calling it the Food Driver of the my groceries?’ They just think that’s so exciting too.”

Year Challenge,” Erhardt explained. “So, the driver who Finally, Encana and the WPCA feel this is an important best engages his friends, family and sponsors to donate time of year to do a food drive. to the Race Against Hunger, at the end of the year, gets “Most organizations get their big push of donations a matching donation from Encana, up to $10,000, to the between Thanksgiving and Christmas,” said Erhardt. “So, food bank of their choice, and a belt buckle, and $1000 this kind of just helps them round out throughout the rest cash prize. So, it’s really sparked some competition of the year.” •

Erhardt noted that youth from local 4H Clubs volunteered to man the Truck Wagon in other communities, but local Encana employees “stepped up” to lend a hand in Dawson Creek. Furthermore, the

careers & training

August 2011 I pipeline news north •

29

labour market - hard to recruit engineers

james waterman Pipeline News North

Everyone’s been saying it – and now it’s official.

The Petroleum Human Resources Council of Canada released their latest labour market information update in April, indicating the difficulty that virtually every sector of the Canadian oil and gas industry is experiencing in hiring for certain types of engineers.

Their new report on human resources trends for the first two quarters of 2011 – titled Current and Short Term HR Trends within the Canadian Petroleum Industry – noted trouble recruiting production and exploitation engineers for the onshore exploration and production (E&P) sector; petroleum, thermal and power engineers for the oil sands sector; offshore drilling engineers; and pipeline engineers.

The labour market information was gathered through a survey sent to 140 companies, of which 43 responded, a one hundred per cent increase in the number of respondents over the survey for the third and fourth quarter of 2010. That response also represents approximately 40,000 employees in the five industry sectors mentioned above, as well as the drilling and completions sector and geophysical services.

As Cheryl Knight, Executive Director and CEO of the Petroleum Human Resources Council of Canada, explained, it is a multi-faceted problem, but also one for which there are solutions.

“The technical skill requirements are based on industry specific technological advancements or issues,” she said, indicating one facet of the problem.

Essentially, skills and knowledge required in areas such as in situ oil sands development, hydraulic fracturing and water treatment are very specific to those fields and are not presently abundant in the labour pool. Similarly, the pipeline industry requires engineers with the ability to deal with problems such as corrosion that come with aging infrastructure.

“It’s tending to be people that have worked in industry and have industry specific experience,” Knight said of those individuals recruited for those engineering jobs. “The tendency is to hire a qualified engineer from a competitor. For us, that’s not increasing the labour supply. So, we identify that as part of the gaps between supply and demand. Putting it differently, there isn’t a good source of supply for those highly technological jobs in other sectors.

So, either hire a skilled person from a competitor or develop them from school through internal training and development.”

“We could use more engineering graduates,” she added.

However, Knight also noted that the industry is not yet taking full advantage one segment of the labour market that already possesses relevant skills and training. “We are probably not utilizing skilled immigrant engineers that are already in Canada to the extent that we ought to,” she said. “Because they

may come to us with some of those technical skills given that they’ve worked in oil and gas industry in other countries. So, that’s an opportunity to fill some of those technical gaps.”

“The way engineers tend to be hired is either from the competition or from school,” Knight reiterated. “And then trained up. The strategy of hiring people right from school has some risks with it today because of how many people we’re losing to retirements. So, it creates some productivity issues if you’re simply relying on new entrants.

“The pipeline sector is the oldest sector of the industry. So, that’s a sector where, I think, if they want to step up hiring from the competition, they’ll be faced with increased labour costs. A better strategy for them would be looking at skilled immigrants.

And I think they’ve really got an opportunity there – because there are pipelines all over the world. I think that particular skill set is not as unique as in situ development is in the oil sands, where you might need specific – really specific – types of engineering.”

Obviously, Canada does present unique challenges that don’t exist in all countries, such as cold temperature and permafrost.

“There are some technological challenges based on the Canadian oil and gas industry that means that we’ve got some unique skill requirements that can limit us,” Knight admitted.

It has been suggested that labour shortages in certain sectors of the oil and gas industry can be partly addressed by recruiting and retraining workers from other industries, but Knight mentioned that that isn’t necessarily a good fit with engineers.

“That’s probably not the top occupation we would focus on for recruiting and retraining,” she said. “It’s more of a sector thing. So, for example, pulp and paper has some really great skilled workers that transition very well into the oil sands as operators or trades people. Certain types of field workers would translate from forestry to the well services, oilfield services and drilling sectors. For engineering, it’s less of an opportunity because, again, a lot of those engineering jobs are very industry specific. So, it’s more of an opportunity in jobs that exist in other sectors more generically such as trades, operators, heavy equipment. Those sorts of jobs.”

The new labour market information indicates that it is more difficult to recruit for certain locations such as remote northern regions, but Knight doesn’t believe that is an issue with engineers, as many of those positions are head office jobs in cities like Calgary.

“There certainly are engineers working in the oil patch in Fort St. John,” said Knight, “but it’s more those that are involved directly in field operations.

And many of the companies would have more of their engineering staff in a head office environment so that they’re available to work on B.C. projects, Alberta projects, Saskatchewan projects.”

A bigger issue may be that engineering graduates from colleges and universities in Ontario and Quebec, where the opinion of hydraulic fracturing and oil

Cheryl Knight, Executive Director and CEO of the Petroleum Human Resources Council of Canada. A recent addition to the Council’s Labour Market Information noted that a number of sectors of the oil and gas industry are experiencing difficulty recruiting for certain types of engineers. courtesy of Petroleum Human Resources Council of Canada.

sands developments tends to be negative, have been less likely to pursue careers in the petroleum sector. Furthermore, the Petroleum Human Resources Council has seen that those students and graduates aren’t very aware of the opportunities that exist in the oil and gas industry.

“We did some focus groups in the Greater Toronto Area (GTA),” said Knight. “And it was mainly young people, but we included people in technical schools like Humber College. … People that would be in schools were you’d think that they’d be interested in going where the greatest opportunities were. And we found, firstly, that there was little awareness of the oil and gas industry and the size and breadth of the opportunities. And if there was an understanding or awareness, the perception was almost entirely negative.”

That perception isn’t such an issue in Atlantic Canada. In fact, the new labour market information lists St. John’s, Newfoundland as one of the regions reporting the greatest recruiting activity, along with northeast British Columbia, Alberta, eastern and southern Saskatchewan, and Minnedosa, Manitoba.

“The east coast is used to being more responsive and mobile to the opportunities in the economy,” Knight explained. continued pg 31

33551

leong@swmw.net

www.steelproducts.ab.ca

30 • PIPELINE NEWS NORTH I

August 2011

profiles

ta structures - home away from home

Like so many eureka moments, Greg Kyllo, President of TA Structures, had his while enjoying a beer with an old friend in the great outdoors.

However, the story really began long before that day, when Kyllo was born in Fort St. John, British Columbia. He subsequently lived in nearby Taylor, where his father was the mayor, until 1979. Although he hasn’t lived in the area since he was about twelve years old – Sicamouse is now his home – he still has strong ties to his old stomping grounds, including the old friend with whom he was relaxing that fateful day.The duo was sitting on one of the houseboats that had been the foundation of Kyllo’s business since 1993. The old friend, an oilfield consultant, was complaining about the “decrepit, old shack” that was his home for 326 days that year.

“And he said, ‘Why can’t they make them look like the interior of these houseboats?’” said Kyllo. “These houseboats are beautiful.’ I looked at him and said, ‘I don’t know. Maybe we can.’”

Peak Energy Drill Camp, Grande Prairie, Alberta

satisfy individuals like his old friend who had lost patience with the status quo of work camp accommodations.

“Obviously, there are different certification requirements and that sort of thing, but we already had all of our major skill sets in place,” he said.

“So, for welding for the skids, and the construction department, and the Peak Energy Drill Camp, Grande Prairie, Alberta interior finishing, and the cabinets and millwork. All those departments and all those skill sets already existed within our facility. It That was how his company started to branch into man- was just a matter of applying for the ufacturing trailers for the oil and gas industry that are now different certifications. And away we being used in Mexico and Columbia in Latin America, went.”

Texas, Arkansas and North Dakota in the United States, The work began just prior to an and extensively in northern Canadian locales such as oil and gas trade show in Calgary in Fort McMurray and Fort Nelson.

2005.

“It was a really good fit for us,” Kyllo continued. “The “It was about four weeks to the U.S. dollar was continuing to decline as far as the show,” Kyllo recalled. “We called strength of the U.S. dollar against the Canadian. … And and were able to book some outside we knew that we needed to diversify and start building space. And we built our first unit in more Canadian product, because the exchange was about three and a half weeks, start really hitting us. So, back like ten years ago, a $100,000 to finish, and had it in the show in US houseboat would fetch about as high as $143,000 Calgary. That first year, we only built Canadian. And today a $100,000 US houseboat is only three units and obviously it’s continworth about $97,000 Canadian. So, huge swing in the ued to grow since then.” pricing. So, it was very difficult to remain competitive.”

Kyllo and his crew have used The houseboat business took a big hit during the early their expertise as manufacturers of days of the recent economic downturn in 2007 and 2008. high-end houseboats that can range That segment of Kyllo’s operations has declined by sevin price from $200,000 to over $1 enty per cent in that time.” million to produce unique trailers that “So, we were looking at increasing our Canadian are easily identifiable as their own sales,” he said. “We already were Canada’s largest work. houseboat rental company. There weren’t a lot of other “On most of the wellsites that you houseboat companies or [more] houseboat market in see out in the industry, until you get Canada. We couldn’t just start pushing more of our up and see the nametag, you can’t houseboat product into Canada. So, we determined that tell the difference between [the differwe needed to find another product that we could manuent manufacturers],” Kyllo explained. facture at our facility that could be sold in Canada. And at “They all basically look the same. the same time we were looking for product that physically Also, one of the items that we’d fits in the confines of our two production lines and also heard from some of our perspective required skill sets of all the major areas within our plant. clients was that there’s a lot of main“To just starting building, I don’t know, say, steel skid tenance on the exterior as far as rust. assemblies or something like that, that would be great to So, lots of painting and sanding, and keep the weld shop busy, but that wouldn’t necessarily it’s just ongoing maintenance.” help keep our carpenters and our electricians and our “We have a really good welding plumbers busy.” facility,” he continued. “And we do a Ultimately, the trades that Kyllo had at his disposal lot of aluminum work, obviously, with were the very trades necessary to build wellsite trailers to the hulls and our railings and spiral

staircases.

“So, we basically decided that we’d use aluminum for all of our exterior accessories and trim.

There’s no rusting, obviously.

There’s no painting. There’s no ongoing maintenance. And, plus, it’s a little bit lighter.”

Kyllo admits that he has moved into a “very competitive” market in his effort to diversify his business, but he also feels that TA Structures is developing a strong relationship with the energy sector.

“Obviously, we haven’t been at it forever,” he added. “So, we’re the still the small guys. But we definitely build a very high quality product.” •

Five Star Energy, Fort Nelson, B.C.

TA Structures began as manufacturers of high end houseboats and feel they bring that same attention to detail to this new venture.

Photos courtesy of TA Structures.

Peace Camp Horn River Basin, British Columbia

Sundance Energy, Northern Alberta

August 2011 I pipeline news north •

community

31

psac golf

- a mix of fun and funding

james waterman Pipeline News North

Birdies and bogies added up to about $50,000 for postsecondary students in western Canada on July 31.

The Petroleum Services Association of Canada (PSAC) held their annual Education Fund Golf Classic at the Elks Lodge in Golf Club in Calgary that day, raising money for a scholarship program that helps students associated with PSAC member companies pursue their career goals through post-secondary education.

The tournament is the only source of funding for the PSAC Education Fund.

The PSAC Education Fund has awarded five students with $1000 scholarships this year. The recipients don’t need to be studying a subject related to the petroleum industry, but they do need to be affiliated with a PSAC member company.

Also, five post-secondary schools, including Northern Lights College, have each received four scholarships worth $1500, the recipients of which are yet to be determined.

The five $1000 scholarship winners are University of Calgary mechanical engineering student Stuart Harris, whose connection to PSAC is through Weatherford Canada; Tiffany Huard,who is pursuing a degree in commerce and marketing and is affiliated with Apex Distribution; University of Alberta dentistry student Shivangi Nagarajan, who is associated with Varco Canada; Clinton Potts, who is studying engineering at the University of Alberta and is affiliated with Bonnett’s Energy Services; and Chelsea Ritter, another University of Alberta student, who is pursuing a dgree in Petroleum Engineering and is connected to PSAC through Weatherford Canada.

Harris and Huard were able to attend the tournament to accept their awards in-person.

“I thought it was really good,” said Mark Salkeld, President and CEO of PSAC, discussing the attendance of those scholarship winners. “I was really glad they could make it. And their families.”

Morgan Holman, the first winner of the $2500 Roger Soucy Legacy Scholarship – which is funded by KPMG – was also present at the event to receive her award.

Holman, who is associated with PSAC through Sanjel Corporation, is studying power engineering at Northern Lakes College in Slave Lake, Alberta.

The Roger Soucy Legacy Scholarship was created in honour of past PSAC president and Salkeld’s predecessor, Roger Soucy.

“If I could get that, I’d be a happy camper as well,” Salkeld said with a laugh, discussing the new award. “If I could be remembered in that way. But I don’t think I’m going to serve thirty years. I think it’s very, very important and it’s a tribute to Roger and his efforts. And the generosity of KPMG to recognize him for that – it’s significant. I mean, he essentially is the starting force behind PSAC and built it up to what it is today. And I got big shoes to fill.”

Salkeld noted that the scholarship selection process is fairly rigorous and that he is very pleased with the caliber of

students who were chosen to receive the awards.

“I sat through that process,” he said.

“And we pull a number. It’s just done random. I was the one driving everybody nuts with numbered poker chips in a tin can, shaking them up. So, we draw a bunch of names. And then it’s a good representation from KPMG and from PSAC and from the golf committee. And we go through them. We go through all the applicants and screen them out and get them down to the priorities based on the qualifications. And then it’s a real hard – it was a lot harder than I thought.

“Because you’ve got such good talent.

And you’re going through and you’re looking at their education levels, what they’re going into to a certain degree, then their community involvement in the communities they’re from. It’s fairly stringent. And it’s not that easy for me, my first time at it, and figuring it was just going to be a walk in the park.”

“You all pick your top five [candidates],” he continued. “And there’s differing opinions. And it makes for some good discussion. But, at the end of the day, I was really, really pleased with the students that were picked. And then got proof of the pudding when I sat with three of them at the golf tournament.”

“Really great young people,” Salkeld added, “that just in meeting them I knew they were well deserving of it.”

Salkeld was also impressed with his first Golf Classic as president.

“I’m impressed to say the very least,” he said, noting that the weather and course conditions were just about perfect that day, including warm sunshine and a light breeze to combat the mosquitoes. “I was told that it was a very popular event and there was going to be no problem selling out the slots. And within three or four days of us sending the first notifications out, our communications group came back to me and said, ‘We’re sold.

It’s done.’ That fast.”

The ninth hole was the “Beat the President” hole. It offered players a chance to win $2000 courtesy of CMA Alberta just by getting closer to the pin than Salkeld.

“And I got a chance to meet every single player in that tournament right from senior executives to major service companies here in Canada and right through to newspapers and the smaller outfits,” said Salkeld. “All of our members. A real good broad range of memberships. And each and every one of them just couldn’t say enough good things about the tournament. It was a great day for me. Except that I lost to everybody.”

“The president’s going to be tougher to beat next year,” he added. “It was my first year and I was going easy on everybody.”

The tournament featured a wide range of golfers, including those who were out on the links for their first time, which is also a reflection of the popularity of the event. Salkeld believes it is so popular simply because it is raising funds to help young people earn an education and pursue their career goals.

“Planting the seeds for future talent for the oil and gas services sector,” he said.

“And I think that’s a big priority here in Canada, because the energy sector’s so big and so important, grown so much, and the services sector’s a big part of that.” •

The PSAC Roger Soucy Legacy Scholarship funded by KPMG is presented by Roger Soucy to Morgan Holman, a power engineering student at Northern Lakes College in Slave Lake, Alberta.

Photos courtesy of PSAC.

Two of the five PSAC Education Fund Member Scholarship recipients – Tiffany Huard and Stuart Harris – are presented with their $1,000 cheques by Education Fund Committee Chair Travis Strube (centre).

Labour market - cont’d cont’d from pg 29 “They’re just used to it, whereas in Ontario – you know, Ontario has some very large manufacturing industries.

And so for the most part there’s been fairly steady employment even if you have to sort of move around a bit. So, a lot of commerce goes on there,” Knight commented.

However, the manufacturing sector in Ontario took a significant hit during the recent economic downturn.

“And that’s why we went to [the GTA] and we did a career fair in Windsor,” Knight continued. “I’m not saying that [manufacturing is] dead, but we actually did take a look at the transferability of skills from certain industries that are more based in central Canada. So, automotive manufacturing, chemical processing. And looked at the transferability of skills. And then looked at the motivation, the willingness of people to consider it. And

so on the skill side, there was some transferability, although there’s a lot of differences between an automotive plant and anything in oil and gas. And then there’s the unionization. On the mobility or the motivation, we found that people really were – even when the economy [was struggling] with a lot of closures [and] high unemployment – there really seemed to be limited interest in making a move.

“Since then, we’ve started talking to colleges again and asking them what they think. And they feel that perhaps things have shifted a bit. So, we may try that again. But for us to do that sort of testing, marketing, it’s quite expensive. So, we do promote oil and gas industry jobs via the web [at] careersinoilandgas.com. So, that’s obviously a cheap way for us to get information to people and promote it. But we think in order to sort of make any headways, you need to be a little more hands-on and on-the-ground.” •

32 • PIPELINE NEWS NORTH I

August 2011

#1 PRODUCT #1 SERVICE #1 AFTER SALES SERVICE

Come in and see why we are the fastest growing full line dealership in the Peace Country #11117

#11144

4WD Air cond.

35818$

LEASE $ FOR

+ TAXES & FEES FOR 60 MONTHS 2,500 down

2011 Tacoma

Up to $6,000 in savings

31551$

LEASE $ FOR

+ TAXES & FEES FOR 60 MONTHS 2,500 down

2011 Camry

Up to $2,000 in savings

#1115

#11100

2.5 litre 4 Cylinder FWD

LEASE FOR

32649$

$

+ TAXES & FEES FOR 60 MONTHS 2,000 down

2011 RAV 4

44000$

LEASE $ FOR 3.5 litre 6 Cylinder FWD

+ TAXES & FEES FOR 60 MONTHS 500 down

2011 SIENNA

Demo Model

#11137

SAVE UP TO

Demo Special

9,000

$

2011 Sequoia

Trevor Haney

Call Trevor To Get Pre-approved Today 1.800.663.3895

LEASE FOR Limited Ed. Nav. Pkg. 4.0 litre

57536$

$

+ TAXES & FEES FOR 60 MONTHS 3,000 down

2011 4Runner

FEATURING THE PEACE COUNTRY’S BEST SELECTION OF PRE-OWNED VEHICLES

www.peacecountrytoyota.ca www.peacecountrytoyota.ca

72 Hour Sale this weekend 10,000

Everyone who buys this weekend will win a prize Grand prize is $1,000 or an iPad 2

Energy 95.3 on location

Every vehicle on the lot discounted for this sale including used

$

Save up to

www.peacecountrytoyota.ca www.peacecountrytoyota.ca 801 - 118th Ave Dawson Creek, BC

Mon to Fri 8am - 6pm Sat 9am - 5pm

1-800-663-3895 250-782-6614

“Incentives will be deducted from the negotiated price after taxes and for some models all or a specified portion of the incentives cannot be combined with special lease and finance offers (i.e. is “noncombinable”). Quantities of certain vehicles are limited and dealer trade may be required. Dealer trade availability may also be limited and will vary by model. Offers subject to change; cancellation without notice. Offers valid on retail delivery of select new 2011 unregistered Toyota vehicles when purchased/financed/leased, registered and delivered by August 31, 2011. For all available incentives and rates on 2011 Toyotas, contact your dealer today.

Doug Peters

Ed McCoy

General Sales Manager

Product Advisor

Adam Hayward

Product Advisor • Internet Sales • Finance Advisor

Jay Luu

Dion Girard

Product Advisor

Product Advisor